KEENE, N.H. — A City Council committee has recommended moving ahead with Keene’s long-planned downtown infrastructure overhaul, selecting Casella Construction, Inc. as the apparent low bidder for the massive reconstruction effort beneath Main Street and Central Square.

The recommendation came Wednesday night during a special meeting of the Municipal Services, Facilities and Infrastructure Committee at Keene City Hall. Councilors voted unanimously to support authorizing City Manager Elizabeth Ferland to negotiate and execute the construction contract.

Casella submitted a bid of about $26.1 million, roughly $3.8 million lower than a competing proposal from Albanese D&S, Inc., which came in at nearly $29.9 million.

Public Works Director Don Lussier told councilors the latest bid was approximately $2 million less than estimates received during earlier rounds of bidding, but still above the city’s currently available project funding.

City officials said about $24.6 million has already been set aside for the downtown reconstruction effort, while the total amount tied to construction contracts and related project costs is expected to reach nearly $27.9 million.

To close the funding gap, officials plan to shift roughly $2.3 million in unused balances from completed capital projects, including work on Upper Winchester Street and Thompson Road. Another $1.2 million would come from the city’s unallocated fund balance.

Lussier said the city does not anticipate increasing bond amounts or adding pressure to the proposed fiscal year 2027 budget or tax rate.

“We are not recommending any increases to bond funding,” Lussier said during the meeting. “We think we can make up the shortage with a reallocation of project balances, as well as some money coming from that unallocated fund.”

Officials said the plan would leave about $250,000 in contingency funding available as a cushion for unexpected costs.

Ferland urged councilors not to delay the work further, warning that postponing construction would likely drive costs even higher.

“This project is not getting any cheaper,” Ferland said. “Delaying it is only going to create more issues down the road.”

The project has faced several setbacks over the past year. Earlier bidding rounds either exceeded the city’s budget expectations or failed to produce qualifying submissions. In response, the city scaled back portions of the project and extended the construction schedule from two years to three years in an effort to reduce costs and attract more competitive bids.

The reconstruction project includes replacement of aging underground sewer, water and drainage infrastructure beneath downtown streets, along with streetscape upgrades and bicycle accommodations.

During Wednesday’s discussion, some councilors questioned why the city could not simply replace underground pipes without rebuilding the streetscape above them. Lussier said that approach would still require extensive trenching throughout downtown and would leave behind a patchwork appearance after repeated roadway cuts and repairs.

City Engineer Brian Ruoff said Casella’s proposal produced major savings in areas including sidewalk work and concrete structures compared to the competing bid.

Councilors also discussed contractor qualifications and references. Lussier noted Casella recently completed a successful project at the airport for the city, while Albanese has not previously worked on municipal projects in Keene.

If approved by the full City Council, construction is expected to begin sometime between mid- and late July.

Before the next council meeting, staff members plan to prepare resolutions reallocating project funds and appropriating money from the city’s unassigned fund balance. Officials also intend to release detailed bid tabulations and provide additional project timelines and background information for councilors and the public.

The city’s project ombudsman, George Downing, is expected to continue outreach efforts with downtown businesses as the project moves toward construction.