UPDATE AT 3:30 P.M.

A Seattle City Council plan to delay signing Highway 99 tunnel agreements with the state is a change of course that would allow the state to seek bids for the project without worrying about two threats: a mayoral veto or a public vote.

The council has insisted for months that it must sign the contracts this summer so the state can seek bids on the tunnel planned to replace the Alaskan Way Viaduct. But instead, the council said it will pass a resolution soon showing its commitment to the tunnel and saying the city isn't responsible for cost overruns, and wait to sign the contracts until January or February, after the state gets bids.

Councilmembers say the delay won’t slow the project.

Mayor Mike McGinn has been pushing the council to insist the state Legislature first remove a law that says Seattle-area property owners who benefit from the tunnel should pay cost overruns on the state project. He has said he would veto any ordinance approving contracts between the city and the state unless the cost-overrun issue is resolved.

Some activists in Seattle also are considering a referendum against the tunnel unless the council places conditions on the agreements so they don't take effect unless the state guarantees it will not saddle city taxpayers with any overruns.

While the council’s new plan isn’t likely to satisfy the mayor, it does give him more time to push his agenda.

“I think this is truly a win-win development, and it’s an example of trying to address the merits of some of the issues that are being raised,” City Attorney Pete Holmes told the council Monday. “It means that we can all continue to do our work, and at the same time let this very real issue about cost overruns work itself out.”

He said delay -- which apparently the state has agreed to -- will let the city see how the bids come in before signing the contracts.

Exactly how the cost-overruns issue will be resolved is still unclear. At a news conference, councilmembers wouldn’t say whether they will use the extra time to lobby the state Legislature to clarify who will pay for cost overruns.

Councilmembers — along with Holmes, Gov. Chris Gregoire and state Attorney General Rob McKenna — agree that the language of the state law is not enforceable. Still, some argue that it demonstrates “legislative intent” that state lawmakers could point to later if project costs spin out of control.

McGinn has not yet commented on the council’s plan, which was unveiled at a meeting Monday morning.

Councilmember Mike O’Brien, the council’s lone tunnel-detractor, said he will push the city to lobby to change the law to make certain the city doesn’t get stuck paying overruns.

The council’s resolution is explicit about cost overruns: “It is the City’s policy that the State is solely responsible for all costs, including cost overruns,” it says.

But O’Brien and McGinn say legislators, who control the state budget, should also clarify who is on the hook.

Since a resolution is not law, a group of residents planning to run a citizens referendum on the contracts would not be able to do that until at least January, when the council votes to actually sign the contracts.

ORIGINAL POST:

The Seattle City Council intends to postpone signing three tunnel agreements with the state until January or February, Councilmember Sally Bagshaw just announced. The council will vote next week on a resolution instead, showing its commitment to the tunnel and saying the city isn't responsible for cost overruns.

Over on Slog, Dominic Holden has been reporting all morning that the council is trying to get around a threatened citizen's referendum on the tunnel agreements.

This will likely do that, for now. But it also seems like a victory for the mayor. The council won't sign its contracts until January or February, giving the mayor time to lobby the state Legislature to change state law, which he has insisted is necessary to protect the city from cost overruns.

In a short briefing this morning, City Attorney Pete Holmes said he doesn't think the city is on the hook for cost overruns. But he said the delay -- which apparently the state has agreed to -- will let the city see how the bids come in. (Since bids are expected to come in low, the council may find itself in a better political position after they're opened, anyway.)

"It means that we can all continue to do our work and at the same time let this very real issue about cost overruns work itself out," he said.

The council is holding a press conference at 11:30 a.m. to discuss its plan further.