The city of Sullivan will lose out on over $128,000 in grant funding which would have been used to pay the local match of a road relocation project that has now fallen through.

The proposed North Service Road realignment project, which was set to begin construction this summer, was canceled by MoDOT in February.

State officials said in a statement at the time that the funding needed for the cost-share wasn’t available. The estimated project cost was $5.7 million.

The city was unable to gain the desired right of way, Sullivan officials said at the time.

“One of the major owners of the desired right of way felt it was in their best interest to not have the North Outer Road built through their property,” officials said.

The city had secured $128,446 from the county’s transportation sales tax grant program in 2009 and 2010.

That money will now be returned to the program’s pool. Members of the county’s transportation committee unanimously approved the move Thursday night.

Committee Chairman Jonathan Zimmermann said the city may be allowed to reapply for funding for a different project, but it wasn’t yet clear if the money would be returned to a pool made available to all of the county’s cities, villages and special road districts, nor whether or not the city would get preferential treatment in a future project funding request.

Sullivan City Administrator J.T. Hardy said previously the city wants to use a portion of the funding to buy and install traffic lights at the intersection of the outer road and the east Interstate 44 overpass — the site where a MoDOT project already was completed last year.

City Engineer Robert Schaffer said the signalization project would cost $250,000 to $300,000, with the city seeking the $124,000-plus figure from the county.

“At some point a road may still be built through the bit of ground (at the other outer road intersection),” Schaffer said.

A scaled-back version of the original project could be completed at an estimated cost of $800,000, he said, but the city would have to apply for funding from MoDOT by early June.

Those funds would be through the Congestion Mitigation and Air Quality Improvement Program, or CMAQ.

Schaffer said the east overpass signalization is likely the project the city will seek county grant funding for.

“Since this appears to be a totally different project, it should be given the same scrutiny as other projects are given when submitted before the transportation committee,” said committee member Jay Schultehenrich via email.

Schultehenrich said the county highway department should review the request before the committee makes a final decision.

John Griesheimer, Franklin County presiding commissioner, said the transportation committee’s bylaws currently don’t address what is done with money that is either left over or not disbursed because of project cancellations.

“We’re already halfway through 2012. It might just be that we return the money to the fund,” Zimmermann said.

The county is in the process of updating the committee’s bylaws.

This year the committee won’t be awarding any grants because members voted last year to allocate all of the funding to enhancements on the Missouri River bridge at Washington.

Normally, however, the committee allocates grants to entities funded by 5 percent of a half-cent transportation sales tax approved by county voters in 2007. The grant pool totals about $250,000 a year.