POULSBO — The Poulsbo City Council approved a nearly $8.3 million construction contract Wednesday night, taking a giant lunge forward in replacing an aging city hall.

The contract was awarded to Seattle-based JTM Construction, and came in $1.3 million — or 14 percent — lower than the city anticipated.

“It’s really our own little economic stimulus package,” said Poulsbo Mayor Kathryn Quade.

City Public Works director Barry Loveless said 15 bids were submitted in “tight competition,” with only $100,000 separating JTM Construction from the next lowest bidder. The city planned for a roughly $9.5 million construction estimate, and council members discussed what to do with the savings.

Councilwoman Becky Erickson called for a “careful anaylsis of what we do with that difference,” saying it doesn’t necessarily have to be spent.

The project, with a total budget of nearly $15.9 million, is expected to be complete by the end of summer 2010.

According to a city press release, construction work at the Moe Street and Third Avenue site is set to begin soon, and will mean regular construction traffic in the area during working hours. One lane will be blocked on both Moe and Third for the duration of the project.

The bid award marks a significant step for the city, which has worked toward replacing its current Jensen Way structure for years. Due to a council whose opinions often differed, Quade said, the city examined each of its project options.

“Even though we didn’t always agree on all the points, the benefit was we looked at every possible angle,” she noted, adding, “It’s been a long time coming.”

To learn more on the new city hall project, visit www.cityofpoulsbo.com.