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The council's message followed the addition of the Hotel St Moritz Queenstown and Queenstown Airport to the Ministry of Health's locations of interest earlier today.
Council chief executive Mike Theelen said planning for the shift to the red traffic light started well in advance to ensure key services - including recycling, maintaining water supply infrastructure, and repairing local roads - could continue.
"We are concerned that a significant outbreak here could mean we don't have the staff available to maintain levels of service," Theelen said.
The council had stepped in with a plan to reduce how many people could be in their office to ensure physical distancing and reduce to risk of its becoming a 'super spreader' environment, with many teams working in bubbles.
"The goal here is to make sure we always have staff available to deliver the services needed by locals."
While a lot of work and planning had been done, he said locals should be prepared for possible temporary facility closures or reduced levels of service.
"Covid modellers are currently predicting rapid growth in case numbers, with daily cases in the thousands within weeks," he said.
Overseas, rising case numbers have meant significant staff shortages as people isolate or take sick leave.
"So, there is a possibility that due to similar staff shortages through illness or the need to isolate we may need to temporarily close a gym or a library, limit our reception desks at council offices, or pause some services."
The council's priority was to maintain and deliver critical lifeline services at all times, Theelen said.
He asked for people to be patient if there were reductions in service.
"At the end of last year, we saw some unacceptable behaviour towards council staff including abusive and threatening language, and that is never ok.
"Council staff are just doing their jobs and potentially doing them in some pretty tough circumstances.
"Please remember we are all in this together and doing our best to keep supporting and providing services to the community."