What’s new – and not new – in Southwest light rail auditor report

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The Southwest lightrail transit project is seldom mentioned without its precursor “troubled”. This report from the Office of Legislative Auditor, which was ordered by a rare bipartisan state House-Senate agreement, must include the precursor “much anticipated.”

The Senate’s Legislative Audit Commission discussed the special review last week, and it was released last week. It was a disappointment. Instead of following the usual pattern of recommendations and findings, the review explained a lot of what was already known about the project’s timeline and budget.


Judy Randall (a legislative auditor, a different office from State Auditor Julie Blaha) told the commission that the scope of the audit was limited and that more work is planned.


span style=”font weight: 400 We have a team that is still working on a program assessment and that’s still in progress. Randall stated that they decided to conduct a special review in order to provide information to members and the general public as quickly as possible.

Randall stated that of the almost twenty questions posed to the Legislature span style=”font weight: 400 ;”>, “we decided not to answer all the questions quickly.” What is the budget? What has changed in the budget? Who pays for Southwest? What’s the timeline and how has it affected span>


The cover letter of the report by the Office of the Legislative Auditor acknowledged other limitations. “We didn’t evaluate whether cost overruns and cost delays were justified. We did not also evaluate the quality or engineering of project designs; the adequacy or route-selection process; and whether different designs, engineering or routes could have led to lower costs or fewer delays span>

Source: Analysis of Metropolitan Council data by the Office of the Legislative Auditor
Sources for the Southwest LRT Project Budget March 2022


The project will link Target Field Station and Eden Prairie. The line, which will run 14.5 miles, will have 16 stations and two rail tunnels. It also includes six pedestrian tunnels. It is expected to open in 2027, according to the Met Council.


Due to the limited scope of the report, we’ll take a look at what the readers didn’t know, what they did, and what’s yet to be learned.

We Didn’t Learn:

1. Any evidence or fraud. Many people who expected the Met Council to be attacked or hoped to see evidence of wrongdoing that would lead to the project being scrapped were likely disappointed. This doesn’t necessarily mean that such evidence isn’t present in the history of this project, which was approved by the Federal Transit Administration in 2011. The auditors did not go there, at least not yet.

2. There is a lot of new information. The special review is not an audit, which is a more thorough examination of a program. This report is the legislative auditor’s attempt to understand this project’s long history, including how its price tag was doubled and how the projected opening was extended nine years.

3. How the project’s cost grew and why it was delayed. The Met Council had already revealed in January that the project’s budget has risen to $2.74 trillion. The Met Council then revealed that there is no source of money to cover the $534 million gap between new budget and available money. The Met Council projected that the first paid riders wouldn’t be able to board trains until 2027 when it announced the new budget and timeline. In reality, it was these admissions made by Met Council leadership which sparked the flames under the council and led to the request of the legislative auditor’s report.

4. Reasons why the budget grew while the project was on track. The Met Council already provided detailed explanations of the reasons for delays and time.


  • It was a long debate over whether the freight lines that run through the corridor should be moved. Or co-locating lightrail and freight within the narrow corridor.

  • Construction of tunnels for light rail trains along the Kenilworth Corridor. These tunnels were necessary due to the decision to place freight and passengers together.

  • BNSF demanded that light rail be allowed to share its right of way with the railroad. It would have to construct a costly wall to stop collisions between freight trains and light rail if one train is stalled.

Source: Analysis of Metropolitan Council data by the Office of the Legislative Auditor
Cumulative Cost of Change Orders – Months, March 2019 to April 2022


Here are four things that we love.



was



learn:

1. There is still a funding gap. This report confirmed what the Met Council stated in January. The gap has not been closed since January, when the staff of the council pointed out some sources to fund the $80 million. Charlie Zelle, Chair of the Met Council, said that he is currently working on this question. He said that he was confident that a solution will be found and that it would be available by the end of this year.

2. The Met Council staff made costly decisions that led to higher costs.

Metropolitan Council
Interior of the SouthWest Station

The staff informed the legislative auditor that neither of them had been fully designed at the time the civil construction contract was opened for bidding. The bid process would have been delayed if full design work was not completed. Delays have always been costly to the project. Both of these costs were later added to the change orders. Senator Scott Dibble (DFL-Minneapolis), has called this deceptive. Dibble stated that the budget was artificially low because it paid for known costs using contingency funds, which are funds intended to cover unexpected expenses.

3. Hennepin County and the Met Council have a bad relationship. This is a negative development because Hennepin County Regional Rail Authority and Hennepin County have the only source of additional funds. This is because the federal contribution is generally frozen once funding agreements have been signed.


Hennepin County assumed the duties of the largest county in the state when the Counties Transit Improvement Board, a five-county funding body for regional transit projects, was disbanded. With the doubling of county’s transportation sales taxes, the situation improved. This funding source does not only cover SWLRT, but also the Blue Line extension and operating costs for lightrail within the county. It also covers Northstar commuter rail and bus rapid transit projects.

Source: Analysis of Metropolitan Council data by the Office of the Legislative Auditor
Available Contingency funds, July 2019 to Feb 2022


The county board of commissioners refused to transfer some federal funds related to pandemics from the county to the Met Council’s request this spring.


According to Hennepin County officials, the county would not be able to provide additional funding for Southwest LRT if it would affect the county’s ability meet any other commitments,” the report of the legislative auditor stated.

4. The Met Council is still all in. Zelle stated that the council is confident Southwest LRT will be a benefit to the region as both a transportation infrastructure and a driver for economic growth. He stated that it would be more expensive to kill it now than it would be to complete it.


There are two things we might still learn from the next report.

1. A review of Met Council staff actions. “OLA’s program evaluation plans to assess whether the Council adequately accounted to these expected change orders within the project’s budget and contingency fund and/or timeline.”

The Legislature wants more answers to the 20 questions. The legislative auditor should also conduct a cost-benefit assessment.

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