POULSBO — The 6th Avenue project, under way for nearly five months, is $340,000 over budget.

The Poulsbo City Council approved, on Wednesday, a series of budget amendments proposed by the Public Works Department.

“Very little of that money will come from the general fund,” Mayor Becky Erickson said. “Most will come from the utilities. We also made decisions to pay for more, such as extending water lines into the side streets, and we fixed things while we were there.”

Fixing aspects of the street while in the area will end up saving the city money in the future, Erickson noted.

The 6th Avenue project is comprehensive. The contractor, Primo Construction of Sequim, is replacing water, wastewater and stormwater pipes under 6th Avenue; and installing five hydrants, 16 wheelchair-accessible sidewalk ramps, rain gardens to filter storm water, a raised crosswalk at 6th and Matson Street, and new asphalt road surface. Sixth Avenue has been partially closed in phases.

Primo’s bid of $1.3 million was approved by the City Council June 12. The project is funded by city funds and a $250,000 grant from the state Department of Ecology.

The project mainly came in over budget because of unforeseen challenges the contractor faced when digging in older parts of the street.

The poor quality of local soils led the contractor to import soil for backfill, and old utility infrastructure caused crews to dig further than anticipated. A creek that the road crosses twice was also troublesome; the pipe that diverts the creek under the road was made from clay and broke apart when crews excavated it. The city expected the pipe to be concrete.

“I think it’s important that we learn from this. It is more than we expected,” Councilwoman Linda Berry-Maraist said Wednesday night. “We need to have a large contingency fund for when we are digging in the dirt around old town.” She added, “It is what it is — we have to move forward.”

Public Works asked for the following amounts to cover cost overages: $185,000, stormwater; $115,000, water; $30,000, sewer; $10,000, raised crosswalk.