The Wauchope Olympic Pool upgrade, including a heating system and a filtration system compliant with NSW Health guidelines, has been identified as a priority using money from the sale of Timbertown in 2010.

That does not include an indoor heated pool.

Wauchope Community Heated Indoor Pool Association president Diane Gilbert said the community had always expected the money from the sale of Timbertown would be put towards the 25 metre heated indoor pool.

Mrs Gilbert said at all times through the public exhibition stage and all funding applications to date, the 25 metre heated indoor pool had been included in stage one of the pool upgrade project.

"If they use the Timbertown money, there will be no lump sum we can use for a negotiation to get [state and federal] funding," she said.

The indoor heated pool project has an estimated cost of $3.19 million.

The 50 metre pool upgrade, as adopted by Port Macquarie-Hastings Council, is estimated at about $2.1 million.

There is $1.348 million held in reserve from the Timbertown sale, which leaves a shortfall of some $800,000.

The council will consider the provision of extra funding in the development of the 2015-2016 budget.

Mayor Peter Besseling said the council, in its decision, was being consistent with the publicly stated position of a previous administrator about the use of the Timbertown funds.

"It is important to understand the [existing] pool itself is fundamental to the Wauchope community and requires urgent repair," he said.

"We have tried on a number of occasions to seek further funding assistance for the entire project and it is evident that is not going to come through in the short term."

Cr Besseling said the decision didn't mean the push for an indoor heated centre dropped off the radar and the council would continue to seek available funding to support that project.

Wauchope Community Heated Indoor Pool Association has $24,000 in a term deposit, the Lodge Star of Wauchope holds $13,000 in trust and the Wauchope Lions Club is prepared to donate $10,000 towards the indoor heated pool project.

Cr Lisa Intemann said in an ideal world, grant funding would have come forward to support the indoor heated pool but that was not the case.

"For the preservation of the Wauchope pool, I have to support the recommendation [before council] at this stage with the undertaking to liaise with the staff about how we might best assist the community towards a heated indoor pool in the future," she said.

Cr Justin Levido said the council had a fixed amount of money and time was passing by.

"It's a difficult day but I think we need to do the best we can with the money we've got," he said.

Cr Adam Roberts favoured further community consultation.

"I see no reason we shouldn't liaise with the community on this occasion before allocating funds that are held in trust," he said.

lisa.tisdell@fairfaxmedia.com.au