Asbestos poses little risk if it is contained, but chief executive Gareth Green said on many areas of the front section of the Lake Tce council building, the asbestos was exposed and flaking with a likely consequence of significant harm to staff.
However, the ageing building has a number of other issues including leaks, obsolete cabling in the ceiling that poses a fire risk, problems with air conditioning and poor use of space.
On Thursday councillors will also be asked to consider whether the building should be partially or fully refurbished, or considering the likely cost, completely pulled down and a new one built - and if so, where.
The recommendation from council officers is to build a new building on its existing site. A new building would be more efficient and cheaper to operate, would meet earthquake standards and would have a new foyer, new council chambers and new meeting spaces but less space per person.
The cost would be around $15 million, plus an extra $1 million required for the estimated 32 months council staff would need to be housed elsewhere.
Mr Green said although the option of a new building was most expensive, it was not much more than the sum estimated for a complete refurbishment and avoided the significant uncertainty that currently existed about what the extent of the repairs would be.
The report to councillors says the varying ages of the buildings that make up the overall main office - there are five in all, constructed between 1968 and 2011 - meant that there was significant uncertainly about the extent of the work that would be required and it would be difficult to know exactly what was needed until parts of the building were opened up as part of the repair process.
Councillors have held two workshops to discuss the building issues and a council report says those have led to a preference for a new building, either at Lake Tce or in conjunction with the Great Lake Centre, i-Site and Library.
The Great Lake Centre site was proposed several years ago but was strongly opposed by the community.
Mr Green said all the options were affordable but the council would have to work out where the majority of the money would come from. It would be loan funded over the life of the building and to build new would mean a one-off 2 per cent rates rise.
The council's level of debt at June 2016 was $148 million, which is ahead of the position forecast in its Long Term Plan.
"Timing-wise it's not a bad time to be having to do it but the decision is we have to do it, it's just about which option we take: a short term view or a longer-term view," Mr Green said.
"But the bottom line is that we have to spend some money on it. This building houses 125 to 130 staff and that's a lot of people and that does cost money. My obligation is that we have to keep our staff safe and at the moment we're not."
