Budget cuts will reduce the amount of federal money for a project to widen and re-surface a portion of Highway 3 in Le Mars next spring.
City leaders hope recent savings on a street road project, which used federal money might offset some of the budget cut impact.
The work proposed on Highway 3 West would widen the paving beginning about 50 feet east of the Highway 3 bridge over the Floyd River to 600 feet east of the Ninth Avenue intersection.
The plans also include right-turn lanes at the entrance to the Riverview Ball Complex and at 16th Avenue Northwest.
The total project cost estimate is $900,000.
Le Mars City Administrator Scott Langel reviewed a change in the amount of money the city will contribute for the project during the city council meeting Tuesday.
"With the ailing federal fund, the Federal Highway Administration announced the funding coming down was going to be less than originally predicted," Langel said.
Federal money distributed to the state and then in the northwest Iowa region would have provided $315,000 for the Highway 3 project.
The budget cuts trimmed the federal money to $227,000, he said.
"We were only having to spend local money of $135,000 -- that had to be increased to $223,000 because of the federal cutbacks," Langel told the council.
He suggested a way to reduce some of the city's costs.
The plan to trim the city's contribution from $223,000 down to $181,000 uses savings on a recent street project.
The cost for the 12th Street Southeast project, east of Seventh Avenue Southeast, was $42,000 less than expected.
Langel has asked a regional group distributing transportation funds to allow the savings to be transferred to the Highway 3 project.
He described the group as favorable toward the transfer, but said no decision had been made.
Councilwoman Delana Ihrke asked if the city could realize savings by combining the highway project and a rec trail extension and sidewalk project planned near the highway project.
Langel said a requirement from Councilman Rex Knapp to limit the engineering cost of the rec trail and sidewalk project to $5,000 had not been met, and it didn't look like that would happen.
The city needs to pin down that original engineering cost to have the savings of doing two projects at the same time, Councilman John Leonard said.
Langel said he'd make that cost negotiation with an engineering firm a priority.
Bids for the Highway 3 West widening and resurfacing are to be opened in January 2012 for construction in the spring.
In other action Tuesday the council:
* Renewed the city's liability insurance with the Iowa Communities Assurance Pool at a cost of $92,860.98 and property insurance with Cincinnati at a cost of $100,264. The coverage costs will be approximately $825 more than last year.
* Approved the second consideration of a city ordinance which will extend the time undeveloped lots may be assessed as ag rather than residential lots. The Iowa Legislature this year passed a measure giving cities authority to extend the time property platted into a subdivision for development of housing may be taxed at rural assessment rates. The change would be in effect in the city, after the council gives a third consideration to the ordinance and votes to adopt it.