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The Government plans to merge the country's 16 polytechnics into a single national institute, the New Zealand Institute of Skills and Technology.
Otago Polytechnic chief executive Phil Ker has been working on an alternative plan, allowing polytechnics to keep control of their decision-making and budgets.
A DCC draft submission, which arose out of discussions between Mayor Dave Cull, deputy mayor Chris Staynes, DCC staff, Mr Ker, and Grow Dunedin Partners, said weakening the polytechnic's partnerships and relationships would affect social and economic outcomes and dent Dunedin's reputation as an attractive place to live and study.
"It is unclear how the Government's proposal for a single and fully-centralised organisation would be able to maintain those partnerships within Dunedin and the Otago region.''
The council is due to consider the draft submission, supporting Mr Ker's proposal, today. The new deadline for submissions is April 5.
The polytechnic's role in the community included meeting the requirements of learners and industry, developing innovative and industry-focused programmes, enhancing the city's reputation and brand, events like the iD Dunedin Fashion Week, maintaining global city partnerships and the growth of business start-ups, the draft submission said.
The polytechnic also contributed about $300million each year to the regional economy.
It was one of the DCC's key partners, and the current model of delegated decision-making had allowed the polytechnic to contribute to a range of "innovative economic, social and cultural initiatives beneficial to both Dunedin and New Zealand''.
The DCC draft submission said Otago faced a broad range of growth challenges in the next 10 to 30 years, particularly in relation to investment in network and social infrastructure, such as the $1.4 billion Dunedin Hospital redevelopment.
Innovation was important if Dunedin was to thrive in the future, and it was vital to foster an environment where that could happen.
"Research activity about to be commissioned by the DCC and Ministry of Social Development estimates that wider levels of investment are expected to exceed $6.8 billion in Otago over the next 15 years,'' the draft submission said.
"Credible, innovative and responsive models of skills development and delivery will be required from the Otago Polytechnic across both its Dunedin and Cromwell campuses to meet this demand and create local workforce opportunities.''
Under Mr Ker's alternative plan - which the council submission said had "significant value'' - parent entity Polytechnics New Zealand would be responsible for the planning, co-ordination and oversight of the providers, which would each retain operational control and independence, as well as their own unique character and branding.
Among the things Mr Ker has suggested could work under a centralised system are a shared curriculum service, which could be located in an entirely different part of New Zealand, or with an existing sector support entity such as Ako Aotearoa, and shared back-of-house services such as IT, finance, HR and payroll.
The council's draft submission was a "very supportive report which is very good to see'', Mr Ker said.
He was optimistic councillors would approve of it.