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Over the next two decades, nearly $30 million of transportation money that could go to projects in Missoula will instead go to the Montana Department of Transportation, a local official said Wednesday.

Office of Planning and Grants director Roger Millar pointed out the loss while talking with a Missoula City Council committee about the distrustful and inefficient relationship between the state agency and Missoula, Great Falls and Billings.

He said each local authority has run into problems when working on projects with the state department. Millar also said officials from those metropolitan areas are proposing solutions.

"It's not a train wreck. It's just there are things that need to be resolved," Millar said.

For example, Missoula and the MDT have a planning agreement, but it doesn't include dispute resolution. And it should, he said.

When Millar used some planning money toward the long-range transportation update - which ties land use and transportation - the agency didn't like it, he said.

"I wouldn't say that they threatened me," Millar said. But he said one option from the department was dissolving the agreement.

At one point, he said an agency official also talked about not funneling federal money to the local body. And the threat of removing money shouldn't be on the table, Millar said.

The state also is adding 14 percent to the cost of every local project or program that uses federal money, he said. That means in the next 20 years, an estimated $28 million that could be used on the ground in Missoula will go back to Helena instead, Millar said.

And he said state oversight of locally managed projects is burdensome. In fact, he said every MPO, or metropolitan planning organization, has had a bad experience with MDT when asked to direct its own projects.

He has worked with half a dozen other state transportation agencies and sees much room for improvement.

"I've seen the delegation of authority work a lot better," Millar said.

But Ward 5 Councilman Dick Haines said some problems start in Missoula. In the case of reconstruction at Malfunction Junction, or Brooks-South-Russell, poor local management was to blame and not an overbearing state agency.

"I think we brought a lot of it on ourselves," Haines said.

Ward 3 Councilwoman Stacy Rye, though, said the project earned national recognition and didn't deserve an audit or a $250,000 fine.

"A lot of us felt that punitive measure was far more excessive than was merited," Rye said.

She pushed for more local control.

Representatives from Missoula, Billings and Great Falls aired their concerns to MDT director Jim Lynch in April and will continue working on the problem, Millar said.

"We're frustrated by things. I think the DOT is frustrated as well," he said.

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