Philip Brown from Papamoa Progressive Association was "surprised" the council was funding the investigation.
"It makes more sense to put that money into the underpass itself. I can't see why the Transport Agency can't fund its own investigation."
Tauranga Sustainable Business Network spokesman Glen Crowther said the council's update was "good news and bad news".
"It is encouraging that the council is still supporting the Transport Agency to find a good solution but also a bit concerning that all these months later they are needing to spend millions to see whether it is feasible [to have an underpass]."
Tauranga City councillor Heidi Hughes said five possible solutions were on the table and "we are following every opportunity we can".
"The [$2 million] contribution is to make sure a solution progresses."
New Zealand Transport Agency portfolio manager Darryl Coalter acknowledged the time it had taken to do the feasibility work. "This process has identified issues requiring more time... relating to the ground conditions surrounding the underpass and the complex design work for extending the spans of the bridge overhead.
"We are committed to doing what we can to make this option achievable and expect to have an update in early March."
Phase 2 of the crossing, the temporary closure of the underpass, is on hold pending the decision on the overall design.