Central Otago WasteBusters will get a bail-out from the Central Otago District Council to prevent it from becoming insolvent, but its future remains uncertain.
The council yesterday agreed to meet any operational deficits for the non-profit group on a month-by-month basis, and to review recycling services.
WasteBusters board chairwoman Ruth McNamara said the organisation's finances had been ''quite a concern'' since prices fetched for material recycled by the centre fell about five years ago.
The group's financial problems have been accentuated by the growth of its services and ''drastic'' increases in compliance costs, the cost of maintaining its ageing vehicles and wage rises.
The WasteBusters board would work with the council to ensure ratepayers got value for money, Mrs McNamara said.
Council infrastructure services manager Jon Kingsford said in a report the review would focus on the validity and sustainability of WasteBusters' business model and its ability to meet the demand compared with a commercial operator.
Options could include having WasteBusters continue to handle recycling, or joint management by WasteBusters and a contractor, or sole management by a contractor.
Mrs McNamara said WasteBusters provided services to the community a contractor could not, such as education, a place for people to carry out community service, and work for people with disabilities.
During a long discussion yesterday, Cr Stu Duncan questioned the need for an external contractor to handle the review.
Council chief executive Phil Melhopt said the council did not have the capacity to handle the review itself.
WasteBusters, established in 2000, was the only recycling operator in the region and had faced ''a number of challenges'' over the past 15 months, his report said.
Income from recycling was under budget, but monthly expenses were over budget.
The total cash deficit for the 2013-14 financial year was estimated at $164,400, but there was no clear understanding of the extent of the organisation's deficit.
Despite budgeting $516,750 for the past financial year, the council paid another $79,000 in June.
The payment included money to help WasteBusters cope when the council's rubbish collection changed to a fortnightly system in July.
When contacted for comment, Wastebusters general manager Glenys Byrne said she had been directed by the group's board not to respond.
The findings of the recycling review must be reported to the council by November 7.
