MEDWAY – Town officials are facing another funding problem with the fire station-town garage project, the fate of which will be decided by residents during a special town meeting scheduled May 7.

The latest bids are higher than those the town received more than six months ago, despite the fact that a portion of the project – the groundwork – is complete.

The new bids are between $133,000 and $196,000 higher than the $291,000 in available funding the town has for the building project. The five bids range from $424,000 to $487,000.

Bruce Jones, chairman of the Board of Selectmen, said the town had solicited bids for the “complete” project last year. “What really bugs me is the groundwork is all done, yet the new bids came in higher than the first time around,” he said. “Why? They should have come in lower.”

Last fall, officials decided to seek new bids for the building project. They hoped to receive lower bids for the construction season ahead. The town proceeded with the groundwork, hoping prospective bidders would have more information about the site, which could lead to lower bids.

In an effort to bring the costs down, selectmen held a special meeting Tuesday with its engineer and officials of a Holden construction company, which appears to be the lowest bidder.

Officials of Kenduskeag Engineering told selectmen there was little to cut from the price.

Selectmen and a few residents discussed several alternatives. These included constructing only the fire station portion of the building now, then constructing the town garage portion in a few years, or reducing the size of the building by eliminating two of the four truck bays and delaying completion of some of the interior of the building.

An official of the Holden firm said it would take drastic cuts in the building project to save $133,000 to $135,000. The official said the town would not save a substantial amount of money because there would be additional costs to revise the plans.

Selectman Darrell Lyons suggested using some of the town’s surplus money to help fund the additional building costs. Officials estimated the town has $600,000 in surplus and agreed to consult with the town’s auditor to determine how much might be available to use for the building project.

Jones said officials could not spend the town’s entire surplus. He said it was important for the town to maintain an amount equal to what would be needed over three months to cover expenses while it awaits tax revenues.

Selectmen said the fate of the project ultimately would be left up to voters. Officials said they likely would ask voters for permission to spend some surplus funds for the project and for authorization to borrow additional money for it. The exact amounts were not readily available Tuesday night.

In the next few weeks, residents will receive letters from selectmen explaining the funding dilemma. Officials also plan to hold a public hearing on May 7, with a special town meeting to be held immediately afterward.

Jones said the building is in its present shape because officials earlier chose not to put money into maintenance.

The chairman said officials have been criticized in the past for holding special town meetings rather than bringing issues to the annual town meeting in June. He said waiting until June would delay the project further.

“If we don’t get started until June, you’re talking late November or December before this project is a go,” he said. Jones said he hoped the town would not have to seek another extension from the state’s Department of Economic and Community Development.

Plans call for building the new fire station-town garage on a more than 2-acre parcel owned by the town, located a few hundred feet from the intersection of Routes 11 and 157.

Officials said the new metal building would measure about 60 by 160 feet. A new heating system installed in the old building will be removed and used in the new facility. The new building would provide enough space to house all of the town’s vehicles.

In February 2001, residents approved the $350,000 fire station-town garage project.

Residents authorized selectmen to accept a $175,000 Public Facility Grant from the state’s Department of Economic and Community Development. The grant money will be used to fund the fire station portion of the new building. Also, residents authorized selectmen to seek bonds of up to $175,000 to fund the town garage portion of the new building.