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The trust officially receives $59,200 a year from the council's events and community development budget, but it received a one-off $30,000 grant from the council this financial year.
The council owns the building. The Otago Theatre Trust operates and maintains the theatre, although the council has increasingly been contributing funding to ensure the building is maintained at an acceptable level.
It now receives $100,000 a year from the council's city property budget, to cover building insurance, warrant of fitness and mechanical maintenance, although a deed with the trust says the council is responsible for exterior maintenance only.
City property also pays the theatre's rates of $60,500, although that is offset by a rates relief grant to the trust of $15,876, and meets loan charges and depreciation costs associated with the building.
The arrangement between the council and the trust is partially documented in a service level agreement and partially in a deed.
Council community arts adviser Cara Paterson said staff proposed to update the service level agreement by July this year so it clearly outlined all the roles and responsibilities of the trust, the events and community development and city property departments.
Staff had already included an extra $30,000, matching the one-off grant given by the council this year, in the draft 2014-15 budget, but recommended the council top that up by a further $40,000.
For the past three years, the trust had indicated the current level of support was not adequately matching increased costs, especially compliance costs related specifically to the redevelopment of the theatre in 2011, she said.
She noted other cities covered the operational costs of their premiere theatres.
In Invercargill, for example, the Civic Theatre was council-owned and managed and funded 30% by user charges and 70% by rates.
The $59,200 officially provided by the council through the trust's service level agreement equated to about 5.75% of the trust's total operating costs.
The trust had managed to cope over the years due to a large volunteer contingent that worked on every level at the theatre, but that could not necessarily be relied on into the future, Ms Paterson said.
Councillors will consider the request as part of the pre-draft annual plan meeting starting today.