Southwest Light Rail project: New report outlines nearly a dozen major issues

TIM NELSON: And this is Minnesota Now. I'm Tim Nelson in for Cathy Wurzer. For our top story today, we're looking at the Southwest Light Rail Transit project. It's a 14.5 mile extension of the Green line from Minneapolis to Eden Prairie. A new 59 page state report lays out nearly a dozen ongoing problems with the project.

It estimates the price tag for the project is now at $2.7 billion, with no firm completion date in sight. The report from the Office of the Legislative Auditor looks at the planning, cost, estimates, and how the Metropolitan Council has managed the many turns this project has taken since it broke ground in 2018.

Minnpost's Peter Callahan has been following the fallout from the project's huge cost overruns and delays. He's at the Capitol where lawmakers got the report this morning. Welcome to Minnesota Now, Peter.

PETER CALLAGHAN: Hello, Tim.

TIM NELSON: As I said in the intro, the Southwest Light Rail Project, 14.5 miles long, runs from Minneapolis to Eden Prairie, planning and construction have been plagued by issues. Can you just give me a quick overview of the project?

PETER CALLAGHAN: A quick overview of a project that's been 20 plus years in the making. Let's just go to one point in time. It's not the best point in time, it's not the cheapest point in time, but it was when the Met Council got its full funding grant agreement with the federal government. At that point, it was a $2 billion project.

It was supposed to be carrying its first passengers in 2023, which I think is this year. It now has an open date of 2027. It has a cost of $2.767 billion. And the Met Council does not completely where that money is going to come from.

TIM NELSON: So much to say about this project by so many people, but the Office of the Legislative Auditor is charged with kind of getting to the bottom of some of these issues. What were the top concerns they took to lawmakers today?

PETER CALLAGHAN: Well, I think part of it that I just referenced was that they are continuing construction on this project when they don't have the funds committed to pay for the rest of it. They're still several hundred million dollars short of commitments from its funding partners, which are, fundamentally, the federal government at about $930 million and Hennepin County.

And there was some money back aways when we used to have the county's Transportation Improvement Board. But they do not yet have the total budget, but they are continuing to construct. One of the recommendations they made was that Met Council is sort of just the builder. It's the general contractor, if you will.

But Met Council is not paying for anything. There is some money from the Met Council into this project. But the auditor suggested that the people building it should have skin in the game, should have some of their money involved-- meaning then if they're budget they feel the pain directly. And if they're under budget, they get rewarded for that.

That would take significant changes because the Met Council really doesn't have a lot of funding sources. And then they had some things that contractors and auditors might care more about, but they considered significant. You had, say, a $90 million change to the construction bid when they had to build that wall between Burlington Northern Santa Fe tracks and the lightrail tracks south of Target Field. That was processed as a change order in the contract. And the auditor thought that was big enough that maybe you should have gone out to bid separately on that contract.

TIM NELSON: Now, we've talked a little bit about the money here, this price tag of $2.7 billion. We've learned from this project that whatever figure you get, it will not be a final figure. I mean, is there any indication that's close to the final price tag? Any idea of who's going to keep paying this?

PETER CALLAGHAN: Well, that raises another question. One of the findings of the auditor was that the Met Council hasn't been especially transparent about information like this-- that the Met Council knew that they had time and budget problems, due mostly to problems in the Kenilworth corridor where they're building the shallow tunnel, and really didn't tell anybody. They were talking with Hennepin County, they were talking with the feds, but they weren't really talking with the legislature, they weren't talking with the public, and, by extension, they weren't talking to the media about the specifics of those issues.

So given that background, we maybe don't know. They're saying that this seems to be a budget that they can keep. They say they have captured the problems with the soils and other issues in the Kenilworth corridor. But given the track record, I guess nobody knows for sure.

TIM NELSON: Now, Met Council Chair Charlie Zelle, I saw him at the Capitol this morning, what was his response to this report about his agency?

PETER CALLAGHAN: He's been before the legislature many times. And he takes accountability. He says that he's the person who's responsible for this. He does point a lot to the problems in the Kenilworth corridor as the issue that is costing most of the extra money and most of the time delays.

And he'll even go back to a decision made many, many years ago to co-locate freight rail and lightrail tracks in that same narrow corridor. If they had been allowed to keep freight in a nearby but separate corridor, they wouldn't have needed this tunnel, they wouldn't have needed to go down into these soils, they wouldn't have needed to, perhaps, still undecided, threaten the foundations of a condo building near there. But that decision was made and they're sort of living with it.

He did object somewhat to the accusations that they weren't transparent, claiming that they have Met Council meetings, they have corridor management meetings, they have reports, and that he felt that the Council was more transparent than the auditor was giving them credit for. But basically, he goes before these things and he just kind of throws himself at the mercy of the court. And there's not much he can do or say to satisfy a very frustrated legislature, and just kind of says, we're plugging away and we'll do better.

TIM NELSON: Speaking of that, we've heard a lot of clamor in the past, particularly from Senate Republicans, about changing the Metropolitan Council. Now, some senior DFLers like Senator Scott Dibble are particularly critical. He talked about Met Council reform this morning.

SCOTT DIBBLE: Don't talk to me about council of governments, or staggered terms-- these things don't get us. So I just would turn the microphone back on ourselves and ask us to come forward in good faith with reform ideas. If it's not elected, come up with a better idea. We need reform, we need accountability, need transparency full stop, bottom line.

TIM NELSON: So could the DFL capital trifecta in this report maybe trigger a changeup there?

PETER CALLAGHAN: Well, that's been talked about for so long. There was actually an office of legislative auditor report a decade ago that recommended electing the Metropolitan Council and has not happened up till now. The Governor, Tim Walz, it's interesting that he is open to this.

Frankly, I think he would like to not have the Met Council on his plate and not have this project on his plate. The Dibble bill would separate it from the governor. All 17 members of the Council would be elected. They would choose a chair from among themselves.

It would no longer be a cabinet level agency as it is now. It feels like there's more momentum behind it, but it's still problematic for a lot of people. We'd heard that maybe they were going to do a study of this concept yet again. But today's audit certainly doesn't hurt Senator Dibble's push to make significant changes.

TIM NELSON: Well, there's a lot more to be seen on this project. We'll keep following this story. Thanks so much, Peter.

PETER CALLAGHAN: Thanks for having me, Tim.

TIM NELSON: Peter Callaghan covers state government for Minnpost.