Council finance and corporate development group manager Paul Hope said the council's quarterly treasury report reflected a recently adopted treasury strategy to keep "as little cash" as possible in the accounts that paid no interest.
"It's really just testing the mood of the elected members," Mr Hope said.
"We may [take on an external loan]. But councillors may say `Just run with the overdraft; get the overdraft limit increased and we're happy to use that'. It's still another form of external borrowing - it's just an overdraft versus a loan, which will say `let's borrow say $1million for six months'. It really is getting into semantics what you want to call it."
The council had been free from external loans since a community housing loan (of less than $3000 in its final year) was paid off in 2014.
And in recent years it had carried between $26million and $28million in internal loans.
The council's quarterly treasury report, tabled at the council's latest finance, audit and risk committee meeting at the end of May, noted the council's operating cash "is now well down on historic levels, increasing the risk that the cheque account will go into overdraft".
"The cost of operating in overdraft has not proven particularly significant, but it is anticipated this will increase as council is likely to spend longer in overdraft over the next few months," the report said.
The cheque account operated in overdraft for just four days in the third quarter this year, at a maximum of $114,791 overdrawn.
From April to May 8, the account was in overdraft for five days, averaging $312,749 overdrawn.
Accordingly, the 2020 annual plan would allow for $10,000 for overdraft interest, compared with the current $2000.
"Depending also on funding available at the time, council may have to consider obtaining external loan funding for certain projects, particularly in the harbour area," the report said.
Mr Hope said it was also likely the council would increase its overdraft limit and not take on term debt as it went "in and out" of overdraft.
"Money comes in, money goes out - we're a $50million enterprise."
A surplus better than budgeted for was anticipated this year.
