Audit shows that the Southwest light rail extension project is nine years overdue and $1.5 billion over budget

[THEME MUSIC PLAYING] CATHY WURZER: There was a report from the Legislative Auditor released Friday, and it's likely you missed it, since it was the start of a holiday weekend. It was a long awaited report on the Southwest light rail Green Line Extension. That train line is supposed to connect downtown Minneapolis with Eden Prairie, Hopkins, Minnetonka, and St. Louis Park.

The project, the most expensive in state history, is 9 years behind schedule and $1.5 billion over budget. That's not all, there are questions about where the money will come from to finish the project.

Judy Randall is Minnesota's Legislative Auditor. She's here to talk about the findings of the report. We'll talk with Auditor Randall first, and then we'll be joined by DFL State Representative Frank Hornstein of Minneapolis, who along with other lawmakers pushed to make the audit happen.

Auditor Randall, thanks for joining us.

JUDY RANDALL: Thanks for having me. Nice to talk with you.

CATHY WURZER: Likewise, thank you. Well your office is the gold standard in Minnesota in terms of objective, nonpartisan reports. What are the key issues you identified?

JUDY RANDALL: Well, Cathy, as you identified at the top of the segment, the key issues are the project is 9 years delayed. It is nearly or more than double in budget from $1.25 billion, that was estimated in 2011, to now it's estimated at $2.75 billion. And $500 million of that budget is-- it's not clear where it's coming from. So I think there's some significant concerns around where that $500 million is going to come from.

CATHY WURZER: Have you determined the reasons behind the delays and the other issues?

JUDY RANDALL: There are several reasons for the delays and the cost increases. But what we identified is freight rail, the existence of freight rail through the same corridor as where the light rail is going is really one of the key issues that drove both the cost increases and the delays. And the way we're thinking about it is, it's like dominoes-- when you play dominoes, you set them up, and you click one down, and then the rest fall-- and freight rail is kind of that first domino that fell.

And there are a couple of issues related to freight rail. One is when the project was first being designed and planned, it was just kind of assumed that freight rail would get moved out of the corridor. And so the details behind that were not included in the project, they were not included in the design, in the cost, et cetera. It was just assumed it would get taken care of as part of a different project. But when the FTA started looking at the project, they said, no, you actually have to figure out how that's going to happen, and you have to account for that in the project.

And it's kind of one of those things where the devil's in the details. So as more and more studies started happening, it became evident that actually freight rail was not going to get moved out of the corridor, it was going to stay in the same corridor. And so now different design and engineering had to happen to accommodate for that. So that led to the decision to build a tunnel through the Kenilworth Corridor, and then as I'm sure you and your listeners know, there were problems with the construction of that tunnel. So it led to having to do a different type of tunnel. So it was just one of the ways that the intersection with freight rail and light rail had an impact.

CATHY WURZER: And the agency with the accountability on this issue, this whole project, is the Met Council.

JUDY RANDALL: That is correct. Prior to 2012, there were different lead organizations, especially, Hennepin County. But at 2012, the FTA named Met Council the project sponsor. So since that time, Met Council is the key state agency or state entity with responsibility for all aspects of this project.

CATHY WURZER: What has the Met Council said about the audit?

JUDY RANDALL: They agree that it is accurate. They agree that they have not yet identified a source for that $500 million. And, really, I think that's one of the key issues that the state and the legislature is going to have to grapple with in the coming year.

CATHY WURZER: You know, each auditor's report comes out with various recommendations for the state legislature. What are your recommendations in this problem? And then will there be other reports forthcoming?

JUDY RANDALL: Yeah. Thanks, Cathy. It's a great question. Typically our reports do have findings and recommendations. This report is a little different, as you probably know, this past session, the legislature asked us to do a special review and a program evaluation or both to answer about 20 different areas of concern or questions they had. And they outlined those 20 areas in law.

This special review is our first report, we are thinking of it as the background chapter, if you will. And, so, it's kind of the pieces of information that we could pull off the quickest to provide the public and the legislature some answers right away. So we don't have findings and recommendations the way we normally do, this is providing that foundational information so that we all have the same knowledge base as we go forward making decisions. So, again, we don't have the typical findings and recommendations, but I do think the biggest area for the public and the legislature to think about, based on this report, is the funding source for that $500 million.

CATHY WURZER: All right. And we're going to ask a lawmaker about that next. Judy Randall, thank you for your time.

JUDY RANDALL: Thanks, Kathy. Nice to talk with you.

CATHY WURZER: Likewise. Joining us next is Minnesota State Representative Frank Hornstein of Minneapolis. He is a Democrat, he's the House Transportation Committee Chairman, and one of those who pushed for the Legislative Auditor to look at the Southwest light rail line. Representative, welcome to the program.

FRANK HORNSTEIN: Thank you so much, Cathy. Good afternoon.

CATHY WURZER: Good afternoon. Say what do you make of the Legislative Auditor's findings at this point?

FRANK HORNSTEIN: Well, we really appreciate the report. We in the legislature appreciate this report very much and looking towards January or February or early part of next year for the final report that Auditor Randall mentioned. They did a good job, as was mentioned, at providing this important background information.

Now there are several items contained in what was released Friday that are of real concern. One has to do with how the bidding was done on the project, and secondly, as Auditor Randall mentioned, the decision to colocate light rail and freight rail together is hugely problematic. And, I think, that the report shows how that decision making process happened, and it seemed to be, in my reading, no much more of a political decision rather than one based on technical concerns. And then finally, as you mentioned, the issue of where this money will come from.

So those are three issues that, I think, are very important in the report that was released on Friday.

CATHY WURZER: Well, let's talk about that $500 million. That's a gap, and the Met Council doesn't seem to have a source for that money. Who's going to pay to finish this project?

FRANK HORNSTEIN: Well, it's my understanding, again primarily based on the press reports on Friday, that the funders, the Met Council, Hennepin County, federal partners are working on a plan. I don't know any details of the plan or when it will be released. But there does need to be a plan, this is a huge funding gap, and this is, again, as a result of the things that Auditor Randall mentioned. Primarily, the problems with the tunnel, and then there's a freight rail wall here closer to downtown, and then there's also significant cost overruns with a station in Eden Prairie.

So those are the three, taken together. That account for this overrun.

CATHY WURZER: You know, this isn't a new project, it's been around for years. Where was the legislative oversight on it?

FRANK HORNSTEIN: Well, the legislative oversight, again, the Met Council is a creature of the legislature. And all along, myself and Senator Dibble, who represent the area where this line is going through, we're very concerned and raised red flags, particularly about the colocation piece, and had proposed a number of alternatives and options, those were rejected by the Met Council. And so, here we are.

And, I think, that with this audit, you are going to see quite a bit more scrutiny. And we look very forward to the recommendations of the Legislative Auditor. Auditor Randall said typically these reports to the legislature contain several ideas for new legislation, and I anticipate we're going to see those when this report is released in early 2023.

CATHY WURZER: Because you say the Met Council is a creature of the legislature, the legislature can giveth and taketh away as it were. Do you think members of the Met Council should be elected by the people instead of appointed by the Governor?

FRANK HORNSTEIN: Yes, absolutely. And that is another-- that is legislation I can guarantee you that Senator Dibble and I and others will be bringing in the 2023 Legislative Session. This is a very large entity, a very large level of government. I believe in regional government, we should have it, it was originally created to make regional governance more efficient and effective, it was a Republican legislature, in fact in 1967, Charley Weaver Sr. that proposed the Met council. And so it is a needed form of government but to have it unelected has, I think, in many ways led to problems on this line and other projects.

They have huge taxation responsibility, or taxation powers, and so we basically have a system where we have taxation without representation. And so direct election, I think, provides a layer of transparency and accountability that we currently don't have with the Metropolitan Council.

CATHY WURZER: Getting back to the project itself, of course, there's still that $500 million gap. I'm wondering, given changes in mass transit since the pandemic, given the cost overruns, mismanagement, is it worth abandoning the project?

FRANK HORNSTEIN: Well, and that is, again, a question that we're asked to ask the Legislative Auditor to do a cost benefit analysis. And clearly, there are costs to this project but the benefits as well. And so, we really need a lot more in-depth scrutiny and analysis before that kind of decision can be made. There is a lot of money that's already been expended on this project, and so, we're just going to have to look at that question a lot more closely.

CATHY WURZER: All right. Representative, thank you for your time.

FRANK HORNSTEIN: Thank you so much and appreciate your interest in the story.

CATHY WURZER: I'm sure we'll follow it, thank you. That's Minnesota DFL State Representative Frank Hornstein of Minneapolis, he's the House Transportation Committee Chair.