Christchurch Mayor Lianne Dalziel says the cost-sharing agreement between the previous council and the Government to help rebuild the city, has left the council in the red.
The itnerim findings of a KordaMentha report show the ongoing operating costs of anchor projects such as the metro sports facility have not been factored into the council's agreement with the Government.
The new council has opened the books on the spending promises and debt left behind by the old council.
Also, the cost of repairing underground infrastructure such as pipes is rising and previous estimates are already out of date.
Dalziel says that has left a shortfall in what the council can afford.
She says the final KordaMentha report will look at ways to meet the funding shortfall that do not involve more debt.