The Dunedin City Council voted this week to add $704,000 interest on funds given to the Carisbrook Stadium Trust to the overall budget of the project.
And a question of whether the plan was a possible breach of the council's commitment to keep the project under $188 million came to light during a discussion in an annual plan committee hearing this week about how to rein in the rate increase for Dunedin for the next financial year.
Cr Paul Hudson suggested interest payments for the stadium be capitalised, which was approved by the committee, but Cr Hudson said during debate the move might breach a resolution confirming the cost of the project.
That resolution is the first of nine agreed on March 17, and reads: "The project cost is confirmed at not exceeding $188 million."
Mayor Peter Chin responded it would be fair comment the commitment might technically be breached.
Asked about the issue after the meeting, he said it would not breach the commitment at the moment, as the $188 million was "the total budget we are working towards".
How it was made up was still not decided.
"The capital interest may well form part of the $188 million, but whether it gets to that depends on the value of the land, the guaranteed maximum price, where that falls in . . .
"All that together, hopefully, doesn't exceed $188 million.
Asked whether savings might need to be made in the project to make way for the $704,000,he said they might.
Finance and corporate support general manager Athol Stephens said banks would often advise property developers to wrap interest payments from early stages of projects into the principal.
He said the decision to capitalise the interest meant the amount of debt to be serviced was higher.
Staff had indicated to the council the debt servicing the council's holding companies could manage was "a pretty fine balance".
"I wouldn't want [capitalising debt] to become a habit-forming exercise," Mr Stephens said.
