CAPE ELIZABETH — Town councilors on Monday said they will decide in August whether to put a traffic light at the intersection of Route 77, Shore and Scott Dyer roads.

The Town Council last November postponed the decision until May, and in the meantime approved funding for passive pedestrian safety measures like improved crosswalks and flags for walkers to carry across the road. In May, councilors again postponed until this November, hoping to have a full year to evaluate those efforts. They voted to create a committee charged with doing that evaluation, but that committee has not yet begun work.

Shortly after the second postponement, the Maine Department of Transportation sent a letter to the town demanding a decision sooner. At risk is a $400,000 grant for the project from MDOT and the Portland Area Comprehensive Transportation System. With a waiting list of approved projects but little funding, MDOT said it can’t let that money sit in limbo any longer.

Threatened with the loss of at least a third of the project funding – the total project was estimated in September at $1.2 million – the Town Council held a workshop Monday with representatives of MDOT and PACTS to discuss how the town might move forward, and what the consequences are for waiting.

Because it’s rare for a town to turn down funding for a project that’s been approved, John Duncan from PACTS and Kat Fuller from MDOT could give few answers to questions about the financial ramifications of halting the project.

Councilors were told last November that by cancelling the project, they’d have to pay back about $30,000 (the local share) of the funds already spent. In May, they were told they’d need to pay back the full $130,000 expended so far. Questioned about that discrepancy, Fuller said she’d take the matter to MDOT’s executive management team and have a concrete number by the end of the week.

While Councilors David Sherman and Anne Swift-Kayata said that in thinking about cancelling the project for lack of local funds, $30,000 was easier to swallow than $130,000, Councilor Sara Lennon reminded everyone that in this case, it’s not just about money.

The town center intersection has been recommended for a traffic signal since the 1980s, is part of the Town Center Plan. Asked why the town couldn’t just come up with more creative options to increase pedestrian and vehicular safety, Town Manager Mike McGovern said “we’ve studied creative options since 1984, and all were dismissed aside from the small things we’ve done. We need to make a decision – do we want a light or not.”

Though the price tag for the project has been publicized as around $1.2 million, MDOT Project Manager Shawn Smith said that number may no longer be accurate because the cost was estimated in September, when crude oil was at its peak price. Bids on other projects recently have been coming in 10 percent to 20 percent lower than last year’s estimates, he said, which could put the town’s share for the project closer to $500,000.

And, Swift-Kayatta pointed out, there’s close to $500,000 already allocated to the project through a 2008 bond issue. McGovern plans to bring to the August meeting a list of all possible sources of funds for the project, which includes the borrowed money and $300,000 of unallocated bond funds.

The intersection is not the only big-ticket project the town is considering. It has recently heard proposals for a pathway along Shore Road, work to be done on Goddard Mansion, and will soon hear one for a new Thomas Memorial Library.

Councilors did not set a meeting date for their decision, but said they’d work to find a day in August when all seven councilors are available. Some were concerned that without the full council, they might deadlock and have to return to the same question again.

Sarah Trent can be reached at 781-3661 ext. 108 or strent@theforecaster.net.