The report stated both clubs could not afford to replace or upgrade capital items, or further develop club infrastructure once operational costs had been paid.
"The clubs possess no financial buffer against the effects of further recession," the report stated.
The report went on to suggest some of the problems could be remedied with a "one club - two courses" concept where a single board would oversee both clubs.
"The consensus of both clubs' boards is that a unification of Springfield Golf Club and Rotorua Golf Club is necessary. Failure for this to occur will likely result in Springfield ceasing to trade and the consequential loss of Springfield's resources to Rotorua," the report said.
The council's parks and recreation manager Garry Page said the council was keen to work with both parties.
"The clubs approached Rotorua District Council to assist with the undertaking of this study to identify the options available to all parties with the ultimate aim of recommending a business model for the future of golf in Rotorua," he said.
Councillors voted to support both clubs by facilitating talks between them. No financial assistance has been promised.
Springfield Golf Club spokesman Gary Gillespie said the issues were not just confined to golf, or to Rotorua. "Both clubs have recognised the current model we are using is not working economically, but this is the same all over New Zealand and not only in golf clubs.
"Times have definitely changed and during these tough times people are struggling to find $800-$900 in fees. At the end of the day if we want assistance from the council, such as relief from water rates, we need to show them we are doing the most we can to help ourselves."
Mr Gillespie said an amalgamation of the two clubs could work but, said if Springfield was to close there would be no going back.
Mr Gillespie said the club had tightened its belt in the past few years and lots of work on the course had been done by volunteers.
"We need to set up a model that works for both clubs," he said.
Rotorua Golf Club board chairman Martin Lobb said a lot of talking was yet to be done, but said he wanted to see both clubs survive in the future.
He said the "one club - two courses" concept was a possibility.
"It's not as if we are in dire straits but, we are not sure if an amalgamation of the clubs would bring in the savings we are looking for."
He said the board had to look after the interest of their members while coming up with a solution for golf in Rotorua.
"They are both small businesses and have to survive ... there is still a lot of talking to be done," Mr Lobb said.
Infrastructure services committee chairwoman Glenys Searancke said the parties still had a lot of talking to do.
"There are a lot of questions yet to be answered ... and the council have given both clubs some relief in the past with water rate remissions."
