POULSBO — The Poulsbo City Council has awarded two contracts totalling $1.49 million for renovation of South Viking Avenue.

Both contracts were awarded to Bellevue-based contractor Tri-State Construction. The contracts are for a third phase of Viking Avenue work, which began in the spring of 2009.

A $767,765 contract was awarded to Tri-State in February for Phase 3A. That roadwork will be fully funded by a federal stimulus money left over from phase two of the Viking project.

On Wednesday, the council approved a contract of $723,181 with Tri-State for a “Phase 3B” contract. That work is being funded to 60 percent by an Urban Vitality grant from the state Public Works Board. Additional money will come from the city’s street, sewer and water funds.

Phase 3 work on Viking Avenue is expected to run from mid-April through October. The work will limit Viking to one-way traffic from 9 a.m. to 3 p.m. Monday through Saturday during most construction days.

The construction includes new sidewalks, bike lanes, a center turn lane, storm drain improvements, traffic medians, sewer and water main extensions and street lighting. A welcome sign also will be added.

Tri-State was the lowest bidder among 15 suitors for the Phase 3A contract.

The city put Phase 3B to bid Feb. 5 and received eight proposals. All eight were more than $100,000 lower than the city’s estimated cost, Assistant Public Works Director Andrzej Kasiniak said. Kasiniak attributed the low bids to the competitiveness of the construction market and a conservative estimate by his department.

The two lowest bids for Phase 3B were separated by $800. Seton Construction, which submitted the second lowest bid, contested Tri-State’s proposal, claiming the company had been late in naming a subcontractor.

After reviewing state code governing bidding, the city rejected Seton’s protest.