The Coober Pedy council has put up its water network as security in a debt refinancing deal. 

The council - which has been in administration since 2019 after findings of maladministration and concern about its financial management - has sought to have about $8 million in debt refinanced through the Local Government Finance Authority (LGFA). 

The LGFA has agreed to a deal on the basis that council assets are used as security for the loan.

“It's unusual,” council administrator Tim Jackson has told the ABC. 

“Generally, the rate revenue of the council is the security for the loan. Our rate revenue is pretty small compared to our overall operations, because of the fact that we run electricity and water.

“Because of that nervousness, they're looking to use some of our assets as security.”

The assets to use as security include the town’s water system, which is in urgent need of repairs and upgrades.

“We are proposing to sell that, and it is worth about $9.5 million, so as you can see it would clear our debt, so that's the path I'm going down,” Mr Jackson said.

Mr Jackson said he is confident there is no prospect of the council defaulting on its loan and having to surrender community assets.

Residents will go to the polls in November to elect new councillors across the state, including for Coober Pedy.