Legislative auditor evaluation: Met Council hasn't been fully transparent in SWLRT cost overruns and delays

MINNEAPOLIS -- The Met Council wasn't fully transparent about the cost overruns and years of delays associated with the Southwest Light Rail transit line and proceeded with construction even though it did not have all the funds necessary to complete the project, a new report found.

The 14.5-mile extension of the Metro Green Line from downtown Minneapolis to Eden Prairie is the most expensive public works project in state history, with costs already more than double the initial estimates. Since construction began five years ago, expenses have swelled by 38%, according to the 40-page report the Office of the Legislative Auditor, to a total of $2.77 billion.

The report determined that the Met Council, a regional planning entity for the Twin Cities metro, did not hold contractors accountable for changes to the timeline and solicited bids for construction leaving out key parts of the project.

The Met Council announced in January of 2022 that there would be significant changes to the construction timeline and budget, but the project's key funders were aware for many months that the project was facing problems, the report found. The project was already behind as early as the fall of 2020.

The auditor's office also said that governor-appointed panel did not have a contingency plan in place to address funding gaps—and it didn't have money to halt the project either.

Instead, "throughout 2020 and 2021, the Council continued to make construction decisions as if the project's resources would increase." As of January, there is still a $272 million shortfall.

"By the time of the January 2022 announcement, the Metropolitan Council had already painted itself and its funding partners into a corner: some undetermined entity would have to spend hundreds of millions of dollars in additional public monies regardless of whether the project continued," the report says.

The probe is part one of a program evaluation by the state government watchdogs, which was authorized in by the Legislature with overwhelming bipartisan support last year. It made several recommendations to legislators, including that they require the council inform them of significant cost increases and delays to future projects.

It also suggests state lawmakers "create a framework in which the government entity responsible for light rail transit construction also bears some financial responsibility for construction costs and any potential cost increases." The largest funders of the project are the federal government and Hennepin County.

Republicans and Democrats at the state capitol were both critical of the report's findings, which they said illustrate the deep problems associated with the project and the lack of transparency on part of the Met Council.

"Southwest Light Rail is a boondoggle of historic proportions, and the Metropolitan Council has utterly failed in its management of the project. This has been glaringly obvious, but the Legislative Auditor's report is an important chronicle for the history books," said Sen. John John Jasinski, R-Faribault.

Charlie Zelle, chair of the Met Council, agreed with some of the auditor's recommendations, but defended some the council's decisions in a letter to the auditor and in public comments to the Legislative Audit Commission during a Wednesday meeting.

"We disagree that there's a lack of transparency," Zelle told lawmakers on the commission. "We think that they've minimized the amount of transparency we've taken very closer to our funding partners."

Sen. Scott Dibble, DFL-Minneapolis, is renewing his call to make members of the Met Council elected by taxpayers, instead of appointed by the governor, to address the "culture of indifference" and "lack of accountability." He introduced legislation to change this.

"[The report] is a signal to the legislature that the governance and oversight of this body has to be fundamentally changed," he said. "It has to be an elected body. There is no alternative to that."

Judy Randall, the legislative auditor, told lawmakers that the Met Council was slow to provide certain information her team asked for, which is why the program evaluation will be released in two parts. Her office already released a special review last fall.

"We did not find them as cooperative as most other agencies," she said.