There are options, but not the kind that elicit fuzzy feelings.

And so, visibly frustrated by a so far fruitless search for agreeable solutions to the city’s financial woes, leaders spent a long evening Wednesday exchanging confused looks, sighs, whispers and, more than occasionally, exasperated statements.

“This is stupid,” said City Councilman Kjell Stoknes, as leaders struggled through an exercise designed to show councilors various spending scenarios. Stoknes’ criticism was aimed not at the exercise, but at a suggestion that councilors – in the hypothetical scenario – not include $2.5 million in grant money that the city is looking to shift between projects. Some of Stoknes’ colleagues concurred with his assessment. Others thought the city should define where it stands minus any and all unconfirmed funding sources, before diving into spending details.

The result of that and other disagreements was that, by the end of the night, a first draft of the city’s long-term capital plan had only half emerged. The plan is required by state law, and in order to receive funding, a project must be included on the list. Councilors ultimately forwarded a list of projects to the city Planning Commission for initial review, but they couldn’t agree to forward a list for their own scheduled First Reading next week.

Instead, they’ll hold a lengthy workshop on June 4 in hopes of staying on schedule for passage of the plan by the end of June.

Funding sources for projects remains the major hang-up.

In particular, councilors fretted over what all agree are three vital projects – infrastructure repairs to Winslow Way, Wing Point Way and Rockaway Beach – none of which can be funded as scheduled without the establishment of new revenue sources, finance staff said.

In fact, staff said almost no capital work – save a few required preservation projects – can be funded in 2009 or 2010 without tapping new revenue sources.

Enter grant money, a Local Improvement District for Winslow Way and a possible $20 per car local Motor Vehicle Excise Tax that could be imposed by the council.

The controversial MVET option would raise some much needed money for road repairs, but some councilors oppose the idea of imposing a new tax on islanders during already tight financial times.

Anti-tax activist Tim Eyman, who in 1999 spearheaded a voter initiative that successfully limited yearly license tab fees to $30, joined the fray Thursday by sending mass emails to the press and island and county officials opposing the idea.

“I’m going to do my dead level best to make sure the voters of Kitsap County know about your upcoming tax increase every step of the way,” Eyman wrote.

The council on Wednesday was split along familiar lines, with Bill Knobloch, Debbie Vancil and Kim Brackett urging a slowdown, and Chris Snow, Kjell Stoknes, Barry Peters and Hilary Franz voting to send the draft CFP to the Planning Commission.

Franz later voted not to send the plan back to the council next week. She said that even though funding details aren’t yet final, the city still has a legal obligation to move ahead with infrastructure fixes like those slated for Winslow Way.

Planning Commissioners don’t consider funding, but will review the draft to see if it meets the requirements set out in the city’s Comprehensive Plan.

City leaders have spent recent meetings trying to adjust to lagging revenue. The council approved $1.866 million worth of cuts last week. As they work on the capital plan, some are lamenting a lack of appealing options.

“When you don’t have any choices it’s very aggravating,” Knobloch said. “I think that’s where we’re at.”

Other councilors remain more optimistic. Given the choice of consolidating grant money or refusing it, Peters agreed with Stoknes.

“In an era when money is tight it’s stupid to give back $2.5 million in grant money,” he said. “I think it’s premature to conclude we don’t have any choices.”

Those who voted against moving the plan ahead said they worried about tagging on funding sources that hadn’t been discussed. As usual, Winslow Way set the tone for discussions.

Planners are drafting a new design contract for the project after councilors voted last week to send the old one back to committee for more work. In the interim, design firm Heery International wrote a letter to the city withdrawing the contract due to continued delays and uncertainty surrounding the project.

Leaders hope the capital plan and the Winslow Way effort will gain clarity over the next month.

Finance Director Elray Konkel said the capital plan is far from finished and still could change, depending on what the council decides to do.

Vancil said she’s worried about the council’s actions Wednesday.

“They have done something very scary,” she said, of her colleagues’ vote on the capital plan. “We’re sort of in no man’s land right now.”