DADE CITY - Contingent upon grant funding, a new $4 million city hall and police station is likely in Dade City's future.

At Tuesday night's City Commission meeting, commissioners approved Wannemacher Jensen Architects' proposal to design the new 21,740-square-foot building. Commissioners authorized spending $100,000 for a schematic and final cost estimate that will eventually be submitted for federal grant funding.

The city staff is confident the grants will be approved, but without them, the project stops until other funds can be found.

"Wannemacher Jensen is well aware of that," said City Manager Billy Poe.

Construction costs are an estimated $3.8 million, which does not include demolition of existing buildings, moving costs or design service fees. Those could cost an additional $300,000, Poe said.

In its report, Wannemacher Jensen noted that it is "highly probable" that the existing City Hall was built with materials containing asbestos. The proposal does not include asbestos survey or removal.

The city budgeted $100,000 this year for fees related to the project.

The U.S. Department of Agriculture provides grant programs for rural areas like Dade City to build community buildings. The city staff hopes 55 percent of the project's funding would come from USDA grants, the rest from loans.

"The reality is we will never build this building this cheap unless the economy continues to go down," Poe said Tuesday.

Depending on funding, the project could start within a year. Wannemacher Jensen estimates it will take 11 months to finish.

The new building will be on the site of the existing City Hall, which will eventually be demolished. The firm recommended closing Fourth Street and building the new complex to the east of the current City Hall so as not to interrupt city business.

However, Poe said the existing City Hall might come down sooner than expected. It is a possibility the staff might have to move temporarily to a county facility.

That will be decided in the next few weeks, he said.