Westland District Council may be left out of pocket because of storm damage which could cost up to $3.8 million, it says.
Conservation Minister Eugenie Sage blamed the council's poor financial management for it being unable to clean up Fox River.
But the council's chief executive Simon Bastion has said it has not mismanaged clean-up funds, and the ongoing costs were above and beyond what the small council could afford.
"There is no impropriety in terms of financial management.
"What's been done through this event is all above board and there's no double dipping in terms of asking for further funds."
"The issue here is if we had to continue [paying to clean up] the river. That cost is unattainable for us.
"That's why we put our hand up for additional funding from the government originally, to carry on doing that work.
"As it has been forecast, it's taken a long time and will continue to take some time to complete, so we couldn't continue to keep bleeding that cost at the cost of the ratepayer."
Mr Bastion said the emergency reserves were severely diminished and despite assistance from the government ratepayers would still had to carry a large portion of the ongoing clean-up costs including rebuilding a landfill, which could take the cost up to $3.8m.
He said while the council could cover the cost of rebuilding the landfill, any costs above that would put future plans or investment in the region in jeopardy.
"We're one of the smallest councils in New Zealand - just 6500 ratepayers - so it really is a significant burden on us and we've been with weather events in the last 18 months: Two cyclones last year and this year as well, plus a few other minor flooding events.
"It all starts building up and our cash reserves are pretty well strapped."
He hoped that 80 percent of the $2.5m to repair the roads would be reimbursed by New Zealand Transport Agency.