The City Council Wednesday unanimously decided to delay the reconstruction of Winslow Way for one year, into 2011.

“It is with a heavy heart that we’re doing this, but the economic times and what’s going on with the Ratepayers Alliance are doing this to us,” said former Mayor Darlene Kordonowy.

The project was delayed because the city was unable to secure the final piece of funding, just over $1 million, which had to be in place or a source of funding had to be agreed upon, before the state grant could be awarded.

The timing of the project also figured into the delay. Interim City Manager Lee Walton said the project would have had to be done in phases, which would violate the city’s good-faith promise to the business community to complete the project as quickly as possible.

“If we were to proceed now, we would not be able to follow the schedule to minimize the impact on the business community,” Walton said.

Chris Wierzbicki, who manages the project for the city, said in discussions with representatives of both the federal and state grants involved in the project that both should be able to be moved to 2011, though he had not received written confirmation on the state grant.

A proposed local improvement district, a collection of Winslow businesses, which would contribute $1 million to the project, has a public hearing scheduled for Monday. Should the LID be formed in the next few weeks, it won’t be an issue, Wierzbicki said, because the LID is good for 18 months.

The city’s effort to secure the final funding for the Winslow Way project has been bogged down since the filing of the Bainbridge Ratepayers Alliance lawsuit in April.

Alliance Secretary Sally Adams said the lawsuit was in no way intended to stop or delay the project.

“The Ratepayers Alliance lawsuit has nothing to do with Winslow Way; it’s about how the city has been misusing funds,” she said.

Councilor Barry Peters said representatives on both sides worked tirelessly to invent a solution to the lawsuit, but those efforts have been unsuccessful so far.

“There is only one reason we’re moving the project out a year. Even though there has been a remarkable good faith effort between a lot of good people at the city and a lot of good people in the Ratepayers Alliance, that effort was not enough to settle on the appeal,” Peters said.

Adams said the Ratepayers Alliance hasn’t heard from the city since submitting a written response to a city offer on Nov. 2.

Councilor Bill Knobloch said the financial problems associated with the project ultimately led to the delay.

“There are some serious questions that have to be resolved, and we were unable to resolve them,” he said. “I’m hopeful the new council will be able to resolve the situation.”

Completion of the project will now be the responsibility of the new council. Kordonowy, a council member until the end of the year, said how the council handles the issue will be telling in whether Winslow Way continues to be as divisive as it has been in the past.

“A fresh face can be put on the project and on city government,” she said. “Everything’s in place. It’s always fallen in the lap of the council and will again next year.”

Some of the councilors expressed concerns that bidding for the project next year could be more expensive as construction costs rise.

Wierzbicki said the combination of available funds that could rollover and the state grant, which is good for 28.9 percent of the project up to $3.5 million, should offset the possibility of increased costs. Currently, the state grant is worth $2.04 million.

Peters urged the administration to use what has happened with the project as a lesson for the next time. He found it imperative to secure bonding in 2010 before the project begins.

The Capital Improvement Plan, which the council debated at the same meeting, showed a total expenditure of $7,532,314 on the project in 2010. On the tax supported side, the city was slated to spend $5,290,698, with all but the $1 million from the LID coming from the two grants. From the sewer fund, the city sought a bond of $1,011,745. From the stormwater utility, a total of $366,349 would have been contributed, with all but $75,000 coming from the federal grant. The majority of the money contributed by the city ($863,522) for 2010 would have come from the water utility.