The council, which is set to go out of business within two years under the proposal, will discuss its submission on the changes to local government at a meeting today.
The proposal would see a combined territories board replace the Otago Regional Council, which may also include a Crown commissioner.
The board would then develop a regional reorganisation plan to improve service delivery.
The council said designing future governance arrangements was a complex and sensitive task requiring impartiality, expertise and balanced representation.
"It is therefore better suited to an independent body or to a South Island-wide process involving the Crown, regional and territorial councils, iwi/Māori and independent experts.
"Such an approach would provide greater legitimacy, reduce conflicts of interest, and allow for more innovative and regionally appropriate solutions," the council said.
In answering specific questions about the proposal, the council said it supported the government’s initiatives to review and reform local government.
"[The council] considers that simplification can be beneficial where it reduces duplication, reduces costs, gains efficiencies and strengthens public understanding."
But the council was firmly against the combined territories board model, which would see district mayors involved.
"Territorial mayors are elected to represent their own districts or cities, not their region.
"[The council] is concerned that the combined territories model would create unavoidable conflicts of interest and undermine the integrity of regional decision-making and regional democracy.
"[The council] considers that regional council governance functions should remain with those holding a regional mandate from the community or, as a fallback position, commissioners operating in a caretaker capacity."
No matter what the voting structure of the combined territories board was, it could not resolve the underlying structural issues associated with the proposal, the council said.
"For any combined territories to work effectively, members would require clear statutory expectations to act for the regional interest rather than their territorial constituencies.
"Without such expectations, adjusted voting risks reinforcing the territorial bias it seeks to overcome."
The council did not think the re-organisation process should be constrained by current regional boundaries, stressing a catchment approach.
"Looking beyond boundaries would provide for innovation and an opportunity to reset the local government model for the future.
"It would also provide an opportunity to look how to best govern catchment scale opportunities, environmental issues that go beyond current regional boundaries, infrastructure requirements and social impacts on communities of interest."
In a letter on the proposal, council chairwoman Hilary Calvert said designing a future system is a separate and specialised task and that work was best undertaken through an independent or alternative process.
"The next local government election would be a good time to begin the new structure for governance and the transition phase for operational activities.
"Retaining regional councillors, as part of the ongoing regional council business as usual activities, would also enable them to be part of the reorganisation processes, which we think is important ...
"[The council] considers that the reorganisation process should not be constrained by existing regional boundaries.
"Looking beyond current lines on a map would enable fresh thinking and allow governance arrangements to better reflect catchment-scale issues."
