The Park Rapids City Council is divided over whether to move forward with a Heartland Trail extension on Kaywood Drive.
The council needs to decide whether it should take $80,000 out of reserves to continue with the project or lose an 80 percent matching federal grant.
The council was told it needed to make a decision to move forward or drop the project Tuesday night.
"We're just out of time," city administrator Bill Smith told the council. "A decision needs to be made."
A motion was made to suspend the project but when a vote was called the tally was 2-2, with councilman David W. Konshok absent. Councilmen Ted Godfrey and Pat Mikesh voted to suspend the project and mayor Nancy Carroll and councilwoman Sue Tomte were in favor of moving forward with the project.
The issue was tabled and a decision will be made at the next meeting.
The main concern of the council is losing federal funding for part of the project.
Federal funding is only available as a matching grant of 80 percent federal and 20 percent local funding.
"We did, at the urging of the transportation partnership, look into scaling the project back," Smith said. "...They were happy to approve a scaled down version."
With the adjustment, the city's estimated portion of 20 percent is about $80,000, with all coming from reserves, Smith said.
The scaled down project includes extending the Heartland Trail along Kaywood Drive but not continuing the trail south on Henrietta Avenue toward the Wal-Mart.
"I don't think the city wins, either way you go," Smith said.
If the city takes money from reserves, it could be in a bad position next year, if even more Local Government Aid is taken away, Smith said. And if the city drops the project, it could jeopardize future grant opportunities, he said.
"Either way, it's a tough decision for the city but we need to decide," Smith said.
City planner Dan Walker said he tried to find alternative funding options but there is nothing available this year.
"We also looked at delaying the project into next year but then with that there's no guarantee of how much money we're going to get back," he said.
The city has already spent about $44,500 on engineering, planning and right-of-way acquisition for the project, Smith said.
Mayor Carroll said she is torn over the project. The Legislature hasn't made any decisions about LGA so the future is uncertain, she said.
"I'm concerned about that. But I am also concerned about the federal money that we have a possibility of bringing into town," she said.
The project would create some jobs, Carroll said.
"It's part of the city trail plan, we're positioning ourselves, this is the first time we were approved for a trail grant," she said. "I hate to lose it... Yes, our future is uncertain but it would be a big opportunity for our community too."
Councilwoman Tomte would also like to see the project move forward.
"My thoughts are to be fiscally responsible but ... we are a trail area, this is what brings people to our community, this is what brings life to our area," she said. "If we aren't looking forward ... and we're cutting ourselves off there's a risk there too."
On the other hand, councilmen Godfrey and Mikesh said the city simply can't afford the project.
"To be very truthful, we can't afford it," Godfrey said. "If we come into next year with our reserve funds gone ... we'll be in a world of hurt."
"I don't see how we could put that money out and put ourselves at that big of a risk," Mikesh said.
The city could pick up the plan in the future and continue, Godfrey said. A lot of the preliminary work has been done already.
City planner Walker said he will need to know the council's decision fairly soon.
"The later we go without a decision on this then we're really putting ourselves in a precarious position," Walker said. "There's not going to be winners on this decision. There will be losers both ways."
After the motion to suspend the project failed on a split decision, the issue was tabled. Carroll said the council could make a decision at the next meeting with a full council.