Funding to close $534 million Southwest Light Rail shortfall to be identified by year end

The Metropolitan Council plans to reveal by the end of the year how it will fill a $534 million funding shortfall needed to complete the $2.74 billion Southwest light rail line.

“This gap is something we are actively working on with our partners,” Met Council Chairman Charlie Zelle said during a one hour meeting Thursday of the Legislative Verification Commission. “I am convinced that we will have an answer by the end of the year. It is important that the project moves forward. It is in the interest of the region.”

Zelle declined to identify a potential source of funding, which remains a mystery at this point. Until now, the 14.5-mile line between downtown Minneapolis and Eden Prairie has been funded by federal, state and local coffers.

The bipartisan commission met on Thursday after the publication last week of a special examination of the Southwest project by the Office of the Legislative Auditor.

This review noted that Southwest’s cost to build has more than doubled since 2011 and its opening date has been delayed by nine years, with passenger service now scheduled for 2027.

A second report, or series of reports, exploring how and why the project fell short of schedule is expected after the legislature meets Jan. 3, according to legislative auditor Judy Randall.

Lawmakers on both sides of the aisle were clearly hungry for answers Thursday.

Senator Scott Newman, R-Hutchinson, chairman of the Senate Finance and Transportation Policy Committee, asked Zelle if $534 million would be enough to complete the project.

Zelle noted that he was unaware of the additional costs, but there were still risks associated with the project, especially with the construction of the light rail tunnel in the narrow Kenilworth Corridor in Minneapolis. . “We hope we are on the right track,” he said.

The $2.74 billion project is now more than 60% complete, and Zelle said it would cost “significantly more” to scrap the project now. The report notes that the Met Council has yet to approve a final price; at this stage, this figure is still unknown.

The Federal Transit Administration (FTA), which funded $929 million of the project’s costs, is unlikely to contribute more. The state is legally prohibited from doing so.

And Hennepin County, which has contributed nearly $1 billion so far, appears to oppose any additional contributions; a spokesperson said last week that the county had “fulfilled our financial commitment to this project.”

A financial wild card is a possible settlement with the owners of the Cedar Isles condominium complex along the Kenilworth Corridor. Residents discovered cracks in their building last winter when the light rail tunnel was under construction nearby. The council hired a nationally recognized engineering firm to investigate, which concluded that the construction of the light rail was not a major cause of the damage.

Newman, who toured the condo building, said what he saw “was really, really disturbing. For these people, their biggest major asset in their wallet is probably their home, and the value of their homes has drastically reduced.”

The Met Council and Cedar Isles owners are currently engaged in mediation led by former Minnesota Supreme Court Chief Justice Kathleen Blatz. “It’s not about lawyers, it’s about doing what’s right,” Zelle said.

Several lawmakers wondered on Thursday why the project hadn’t been audited throughout its decades-long history, a process they said may have revealed its challenges sooner.

This type of monitoring, they said, would likely have signaled problems with tunnel construction in Minneapolis, as well as a protective wall required by BNSF Railway west of Target Field to separate freight trains and trains. lightweights that cost $93 million.

“There clearly seems to be a lack of oversight with this project,” said Sen. Michelle Benson, R-Ham Lake. The legislative auditor’s review comes, she said, “after the horse was released from the stable. There should have been a structure in place” for an audit.

Zelle replied that the FTA and the state auditor were reviewing the project and that there had been oversight by “engineers in Metro Transit’s orbit.” He also noted that the Minnesota Department of Transportation, which he previously led as commissioner, is now conducting a “peer review” of the project.

“Inside people don’t count,” Benson said. “The definition of an audit is independence.”

Jose P. Rogers