Lebanon — Faced with a state funding shortfall, city officials were asked this week to choose a single portion of Lebanon’s long-awaited Mechanic Street improvement project to move forward, leaving existing plans to rebuild the road in limbo.

The City Council voted unanimously on Wednesday to recommend construction of a roundabout that would reconfigure the Mechanic, Mascoma and High street intersection.

The recommendation for Mechanic Street, which also is Route 4, now will go to the state Department of Transportation, which ultimately is responsible for approving the plans. Construction on the roundabout could begin in 2021 under the governor’s draft 10-year transportation plan.

Costs are estimated at $2.9 million, with the state picking up the tab for up to $3 million. The town would be saddled with any cost above the $3 million figure. However, city officials are hoping more money will someday be available to complete a more sweeping overhaul of Mechanic Street.

Officials had hoped to rebuild the existing road between downtown and Exit 19 on Interstate 89, widen it, and add bike lanes and a sidewalk. Two roundabouts also are planned along the roughly 1¼-mile route.

The state, however, doesn’t have the funds for all that work, City Engineer Christina Hall said.

“The DOT has actually asked us to close down the large project and then to choose a smaller project in that corridor,” she told the council on Wednesday.

Along with engineering firm Stantec, Hall offered four options that could be funded in the state’s 2020 fiscal year, when funds will be available for Route 4.

Councilors chose a plan that would replace the existing High, Mechanic and Mascoma street intersection with a roundabout that would eliminate “confusion” and allow for greater pedestrian and bike use.

As it stands now, the intersection is delineated by planters and uneven grading.

Dave McNamara, a consultant with Stantec, said the project likely would require the city to purchase two properties.

The triangular building that houses Phnom Penh Sandwich Station likely would need to be razed, he said, and the NAPA Auto Parts building across the street would lose some of its parking lot.

About $815,000 is earmarked for purchasing the two buildings either through a sale or eminent domain, McNamara said.

But the notion of compelling property owners to sell worried Councilor Sarah Welsch, who advocated for a deal to be worked out.

“It sends a really bad message if we’re telling a business owner they can’t keep their store in there because we need that space,” she said.

The property owners have been aware of the city’s plans for years, said Hall, who added that both expressed a willingness to sell to the city in the past.

Street improvements on Mechanic Street have long been a priority for Lebanon officials and first appeared on state improvement lists in 1987.

However, area lawmakers and planners have continually had to fight to keep the project alive. It’s been among the projects routinely postponed when the state prioritizes its 10-year transportation spending.

As that time has passed, projected construction costs have increased.

The city estimated in 2015 that the total project — from Exit 19 to downtown — would cost $12.4 million.

On Wednesday, engineers presented the City Council with a $16.6 million price tag using 2017 costs. If the project waits until 2022, they predict it would require $21.2 million. Federal transportation dollars are expected to pick up 80 percent of those costs, with the remaining 20 percent coming from city tax dollars and state transportation aid.

Lebanon Public Works Director Mike Lavalla said on Wednesday that he intends to continue advocating for completion of the full project.

Tim Camerato can be reached at tcamerato@vnews.com or 603-727-3223.