A $3.7 million Napier City Council rates surplus could be used for the proposed velodrome, chief executive Wayne Jack says.

Yesterday, councillors decided that the 2014-15 net surplus of $3,678,600 be transferred to the Capital Reserve Account where it is available for future commitments.

Mr Jack said one of those future commitments could be the proposed Hawke's Bay Multiuse Velodrome facility, which the council was currently undertaking a business case on. The council had other funding which it could use for the velodrome but it would be the council's decision whether to use it.

Just last week an eight-strong council delegation descended on the regional council asking for $3 million to help pay for the proposed facility. As it was just a presentation on the city council's part, no decision was made at the time on whether the regional council would commit ratepayers to this financial support.


"We have got some recommendations which we are going to put to them around utilisation of those funds, and that will come out during the annual plan."

Mr Jack also made mention of the Parklands account.

"One of the things you have probably picked up on is that we have got a lot of money sitting in our Parklands account," he said.

The amount of the transfer was unusual, with the chief executive saying it was "a review of capital projects which have been carried forward".

According to the council's corporate services director Adele Henderson, the transfer to the Capital Reserve was to provide for items previously committed from the reserve.

"Interest income has been allocated to special funds in line with council's policy for allocating interest. However, for this year, there has been no interest allocation to the Infrastructural Asset Renewals or Financial Contribution Accounts," she said.

"The rating surplus arises primarily from additional interest income from general treasury funds, approximately $2.4 million, and unspent carry forward funds from prior years, approximately $3.5 million, no longer required."

Ms Henderson said council should note that in previous years the rating surplus has provided funding for council's contingency account.

"However, as this is now provided within the Long Term Plan, funding from year end surpluses is no longer required for this purpose," she said.