(AP) — Gov. Dave Heineman says a local proposal to renovate the Grand Island Veterans Home rather than build a replacement home in Kearney could jeopardize federal funding.

The governor told a meeting of Buffalo County Republicans on Monday that he feared the proposal could create confusion at the federal level.

Nebraska officials have awarded the $121 million veterans home project to Kearney to replace the outdated Grand Island facility. But some Grand Island and Hall County officials and residents have criticized the bidding process and decried the relocation of the veterans.

The local proposal sent Sep. 26 to Veterans Affairs Secretary Eric Shinseki in Washington suggests a $75 million renovation of the Grand Island campus.

The governor says Grand Island officials favored building a replacement until they didn’t win the bidding.