Queenstown Lakes District councillors will be asked to vote in cost-cutting measures designed to avoid going into debt by up to $500 million.
Forecasts predict the council could be $392 million in the red within the next 10 years, putting it nearly $200 million outside its own guidelines.
The cost-cutting proposals include reducing spending on water management and community services and ranking new council projects more vigourously.
Queentstown Lakes District finance manager Stewart Burns says the savings of nearly $130 million would bring the council's total debt back to within justifiable limits.
Mr Burns says the council has the option to meter households' water-use but would first ask ratepayers to conserve and therefore avoid spending over $70 million upgrading water infrastructure.
But the council has not ruled out charging for water-used in the future, if householders do not adhere to conservation measures now.