Hennepin County seeks $200 million for Blue Line extension, as Met Council scrambles to fill SWLRT funding gap

(FOX 9) - The Hennepin County Board's support for rail projects hasn't dimmed despite Southwest Light Rail's issues – and its looming new costs to county taxpayers. 

Tuesday, board members asked key state lawmakers to pass $200 million in state funding requested by Gov. Tim Walz for the Blue Line extension from Minneapolis to Brooklyn Park. But state funding for a future rail line is uncertain at best because of the problems with Southwest Light Rail, also known as the Green Line extension, that's currently under construction.

Met Council, which oversees the project, estimates that Southwest Light Rail's cost has ballooned to $2.75 billion, including $500 million that the agency does not have. Hennepin County taxpayers appear to be a likely source of additional funding.

Republican lawmakers want the state to shut down construction on the Minneapolis-to-Eden Prairie line instead of finding a funding source to finish it. But Met Council Chairman Charlie Zelle has vowed to press on with the project. 

"Chair Zelle, where the heck are you going to get the money?" asked state Rep. Paul Torkelson, R-Hanska, at a hearing of the House Transportation committee on Tuesday.

The $500 million will likely come from more than one source, Zelle responded. He said he is working closely with Hennepin County officials, who have already committed more than $1 billion.

"We know that it is a gap that needs to be filled, and I have been assured by county commissioners and everyone I talk to that stopping the project will not benefit anybody," Zelle said. "We’ll have to solve that puzzle."

It's not clear if Hennepin County has the money to pay for the Green Line extension's cost overruns while planning for the Blue Line extension. The county's sales tax for transit and transportation projects yields $135 million a year, MinnPost has reported.

Zelle said Met Council is also talking with federal officials about kicking in some of the $500 million. But that option is complicated by the 2020 funding agreement with the Federal Transit Administration, in which the FTA committed $928 million but put Met Council on the hook for all cost overruns.

It's possible that the feds could use other funding sources, such as the 2021 federal infrastructure law, to commit additional cash to Southwest Light Rail.

Zelle and GOP lawmakers are at odds over the future of the project. Republicans view what's already been spent as a sunk cost and say Met Council shouldn't spend additional money until an audit can be done. 

Zelle has said Met Council would have to give the FTA's money back if it abandons the project. Yet during a February hearing, he acknowledged that no one has ever asked the federal government for a waiver.

"We did not ask a question that we were not ever seeing as an opportunity to ask," Zelle said after repeated questions from GOP members.

"You might want to ask that question," responded state Sen. Dave Osmek, R-Mound, a leading critic of the project.

What Met Council would have to repay is also in question. To date, the FTA has only provided $203 million to the project of the $928 million committed, an agency spokesman said in February. 

But Met Council has borrowed $500 million against the FTA's funding guarantee to keep the project going, a Met Council spokeswoman told FOX 9. It would be required to repay its lender if the state forces construction to stop, she said.