A lot has changed at City Hall since Winslow Way reconstruction was delayed last November, but when it reappeared in front of the City Council Tuesday, the same questions surfaced.

Finance and the scope of the project headlined council concerns at a workshop on the project, which was the first of two to help the council decide whether or not to pursue Winslow Way reconstruction now. Next Tuesday the council will suggest ideas on how to handle the various remaining issues associated with the project. The goal is for the council to make a decision on whether or not to go forward with the project by its May 12 business meeting.

The one-year delay of the nearly $10 million utility reconstruction project didn’t void any of the outside funding sources (approximately $4.8 million in state and federal grants and $1 million in a voluntary Local Improvement District for the full project).

But should the council decide not to begin construction next year, it would likely have to return the grant funds and re-enter competition for them when reconstruction goes back online.

“The reality is, when you turn down grants, the ability to go back and compete is really limited,” Councilor Hilary Franz said.

If started on time, the project would involve eight months of construction, from March until November of 2011.

Should the council decide to go through with the project, it still has to come up with approximately $1 million. The money was to be contributed by the sewer fund, which isn’t possible given current revenue.

“The sewer component has nothing,” interim City Engineer Chris Wierzbicki said. “By the end of the year, it’s got zip.”

Wierzbicki presented an option that would handle the sewer component and not require any further loans or bond financing. He suggested going to the surrounding property owners, who voluntarily pledged $1 million for an LID, and ask them to shift that money to cover the sewer costs and reduce the scope of the project – making that a financially feasible option.

It remains unclear whether or not the property owners will agree to that option, he said, since it involves eliminating moving power lines underground, something the property owners supported.

Wierzbicki’s idea was met with mixed reviews. Some councilors applauded the potential of not placing the burden of the project on the sewer ratepayers, while others thought moving power lines underground shouldn’t be sacrificed.

“This is a project you’re going to live with for 30, 40, 50 years,” said Councilor Barry Peters. “You don’t want to leave a lot of little wires laying around,” he said.

Throughout the debate, council members raised the issue of finances. The city just finished a painful budget session, and the bills, specifically for the utilities, continue to stack up.

The city has to pay back $1.9 million for a bond anticipation note it obtained to cover the final costs of the Waste Water Treatment Plant upgrades. It also owes $3 million to the water fund, which was borrowed to keep the sewer fund solvent after the lawsuit brought forth by the Bainbridge Ratepayers Alliance blocked the city from replenishing the faltering fund with bond proceeds.

Lastly, it has to come up with funding to do the Wing Point Way reconstruction project, after electing to use the federal funds obtained for that project on Winslow Way.

“We’re hung out here on the string on all this, and I don’t know how we’re going to get all the books balanced again,” said City Councilor Bill Knobloch.

Prior to Tuesday’s meeting, city Finance Director Elray Konkel suggested that the best way to repay all these costs is with one large non-voter bond, which was the city’s plan before the Ratepayers Alliance lawsuit was filed. Konkel said the interfund loan and the bond anticipation note will have to be repaid once the lawsuit concludes.

Should the city decide it can’t do Wing Point Way now, it would most likely have to return the $800,000 in federal funding originally issued for the possibly $1.2-million project, said Larry Burris, of Puget Sound Regional Council.

Even if the city solves the financial situation, some councilors wondered if the project was worth the risk. A portion of the property, called pothole 15, near Winslow Green, was found to be contaminated with diesel particles at the depth of 12 feet. The sewer trench the city plans to dig goes down 14 feet. That soil will have to be removed during the reconstruction process.

“There’s a big difference between fixing something, or building something on the surface, and digging up something and not knowing what you’re going to find, particularly when there’s contamination,” said Mayor Bob Scales.

Scales worried that when the city encountered the contaminated area, a 20 percent contingency wouldn’t be enough to finish everything, and then what happens?

“My greatest concern is that we dig up a street and we don’t have enough to put it back together,” Scales said.

Wierzbicki assured the council that the project was not an extraordinarily risky one, but one that needed to happen, especially with the recent rash of earthquakes in mind.

“It’s starting to feel like we might have an earthquake,” Wierzbicki said. “And if you have 60-year-old asbestos pipes, you could very well have an issue if there’s an earthquake there. You’re not going to know where the breaks are. You’re just going to be out there putting a hose down to get water down to those businesses.”

Once the funding and specifics of the project are figured out, it remains to be seen which councilors will or will not support the reconstruction.

Wierzbicki, who has seen the public and political tension over Winslow Way for a number of years, said a 4-3 vote won’t get it done. For this to work, and be accepted by the community, the council has to find consensus, he said.

“I would like all of you to come along if we’re going to go forward with this,” he said. “I want to find a way to satisfy all of you. I don’t think the city has the capacity to pull off a project of this magnitude without full political support.”