The Office of the Legislative Auditor said in a new report that the Metropolitan Council was not fully transparent with the public about significant cost overruns for the Southwest Light Rail Transit project.
Wednesday’s highly-anticipated report is the first of two that the legislative auditor plans to release this year on the $2.76 billion light rail extension between Minneapolis and Eden Prairie, which is about $700 million over budget and four years behind schedule.
By January 2022, the Met Council had reached the point where it was obligated to spend more funds than had been committed to the project, David Kerchner, one of the authors of the report, told lawmakers Wednesday morning.
“It could not go forward; it could not go backward. It could not complete the project nor could it pause or halt the project,” he said.
The fact that the Met Council has to look to others for funding is an “accountability problem,” he added, noting that the council has very little of its own money in the project.
As an example of Met Council’s lack of transparency, Kerchner pointed to the construction of a tunnel in Minneapolis’ Kenilworth corridor. By October 2020, the Met Council’s civil construction contractor was projecting a 25-month delay due to issues with the tunnel. In January 2021, the Met Council announced a “potential” delay. The announcement said nothing about the length of the delay or its cost impacts.
The report also says the Met Council knew it would have to make significant changes to the civil construction contract even before it began the bidding process.
Other key findings from the report include:
- Met Council added work to the project after the bidding process was finished, which led to increased costs and delays.
- The Met Council solicited bids for the project with construction plans that it knew were incomplete.
- It continued to make decisions that increased the cost even as its committed funding dried up.
- Before construction started, the Federal Transit Administration raised concerns about the Met Council’s ability to cover unexpected cost overruns.
- The Met Council did not hold its civil construction contractor accountable for repeated failures to provide an acceptable project schedule.
- The Met Council has not adequately communicated to the public the uncertainty surrounding its estimates of future costs.
- The Met Council has not been fully transparent about the project’s increasing costs and delays.
Reacting to the report, Sen. John Jasinski, R-Faribault, said the Met Council has “utterly failed in its management of the project.”
“Not another penny of state money should be spent on Southwest Light Rail. That should go without saying. We have no confidence in the Metropolitan Council to properly manage or complete the project, let alone to do so with any fiscal prudence or at any value to the taxpayers. There should be absolutely no more state dollars contributed to this project,” said Jasinski, the ranking Republican on the Senate Transportation Committee.
He said other transit projects, including those in Gov. Tim Walz’s budget proposal, “should not go forward without a serious change in the legislative and administrative process.”
“Taxpayer dollars shouldn’t get sent down the drain on unused train projects instead of repairing potholes, improving our roads and bridges, and increasing safety in our transportation system,” he said.
Met Council Chair Charles Zelle, who is appointed by the governor, said the report “minimizes” the council’s transparency and accountability “to our funding partners.”
“Decision making is well documented within grant agreements and board actions and is practiced through regular decision meetings by embedded partner representatives in daily project activities,” he said in a letter included in the report.
The full report can be read here.