The Waitaki District Council could reverse cuts made to the trust that operates Oamaru's recycling park.
Councillors would be asked to return the trust to 2014-15 funding levels when they discuss the 2016-17 draft annual plan at their March 16 meeting, council assets group manager Neil Jorgensen said.
The quarterly report of the Waitaki Resource Recovery Trust (WRRT), received by the council at the beginning of February, states the trust "has been unable to meet cash depreciation commitments for asset replacement and the continuance of these trends will eventually point to liquidation''.
It says markets were "very fickle'', especially for plastics, and metal prices were very low.
Many commodity prices had halved over the past several months, while paper and cardboard remained stable.
The trust's budgeted operating loss was $76,000.
The trust's chairman Neville Langrish, who did not write the report, said the $76,000 budgeted loss was not reflective of a true cash loss and the request the board had submitted to the council for reinstated funding had a lot to do with inflation and increased wages, and the council was "sympathetic to that''.
On Monday, Mr Jorgensen said he would recommend the council paid an additional $20,000 this year to support the Waitaki Resource Recovery Trust.
"WRRT was trying to be less reliant on funding from [the] council. However, market conditions have continued to be tight and WRRT have struggled to keep a balanced budget without the additional $20,000 of funding,'' he said.
Historically, the council gave the equivalent of $290,000 to the trust.
This amount included a $240,000 cash grant, plus $40,000 worth of rent for the site, based on the council's assessed value of a commercial lease for the property, and $10,000 worth of maintenance at the site.
In 2011-12, the $240,000 cash grant was reduced to $220,000.
In 2014-15, the cash component was further reduced to $200,000.
At the time, however, a $20,000 lump sum additional payment was approved to maintain the $220,000 funding for the 2014-15 year.
Councillors agreed at the council's February 3 meeting to a 2016-17 pre-draft plan that offered ratepayers an average 0.06% rates reduction, which did not include the additional funding for the trust.
The average rates increase would be adjusted to a 0.13% overall increase if the council also approves an Oamaru ratepayer-funded $60,000 Oamaru Creek vehicle-capable pedestrian bridge, as recommended by the council's assets committee, at today's council meeting.
