THERE is no way the council can keep its planned services and capital programs without annual rates and utility increases well beyond inflation and a continued reliance on borrowing, says the report.
If councillors decide to rein back on rates increases they will have to slash services.
And if operating costs can't be brought under control, the reduction in services will have to be even more dramatic.
The treasury report repeatedly states the importance of re-negotiating the enterprise bargaining agreement.
"Overall, the council will be unable to return to an operating surplus if it is unable to curtail annual increases in wages and salary to forecast levels."
There is already a plan to reduce capital spending. The capital program has averaged close to $120 million a year over the past three years, but the council is now forecasting cuts at a level the treasury experts doubt will be possible.
"As part of returning the budget to an operating surplus the council has forecast to reduce capital expenditure in future years," says the report.
"A reduced capital program of this scale may be difficult to implement given the need to maintain existing infrastructure and community expectations and in the light of capital cost pressures resulting from existing activity in the region including flood recovery works and nearby LNG activity."
The implication is that there is very little room for flexibility.
The report warns that in the council's forecast to 2021 the ratio of net financial liabilities to operating revenue increases to levels "significantly higher than the benchmark of 60%".
This indicates, it says, there is a real risk that net financial liabilities "are reaching levels that will be difficult to be serviced from operating revenues."
Overall, the council will be unable to return to an operating surplus if it is unable to curtail annual increases in wages and salary to forecast levels.