Plagued by cost overruns, Southwest light rail taps budget reserve

(FOX 9) - Southwest Light Rail, the biggest public works project in Minnesota history, tapped a lifeline Tuesday to keep construction of the over-budget and behind-schedule line moving.

The Hennepin County Board of Commissioners unanimously voted to commit the final $200 million contingency fund set aside in 2018. Much of the contingency will be used on change orders related to what a project spokesman called "unforeseen conditions" in the Kenilworth corridor of south Minneapolis.

The half-finished Green Line extension, which will exceed its original $2 billion budget and will not meet its projected 2023 opening, is under construction from Target Field to Eden Prairie. No one from the Metropolitan Council, which will operate the line, has publicly given a revised budget or timeline.

"If we don’t get a handle on it, who knows how many delays we’ll have and how high the price will go," said state Rep. Frank Hornstein, DFL-Minneapolis, a light rail supporter who has questioned the routing of the line through the Kenilworth corridor.

Hornstein and state Sen. Scott Dibble, DFL-Minneapolis, have asked the Legislative Auditor's office to conduct a special review of the project's cost overruns, delays and management. Joel Alter, the office's director of special reviews, said auditors had not decided whether to conduct a review but had requested some initial information from the Met Council.

The Met Council is doing its own analysis of the revised budget and timeline and hopes to have that information by the end of 2021, said Trevor Roy, a project spokesman.

Many of the cost overruns center around two issues: the Kenilworth tunnel near Cedar Lake, and a so-called crash wall that will separate freight rail traffic from passenger trains west of downtown Minneapolis. Unforeseen issues with the tunnel wall construction have forced multiple costly change orders.

By July, the project's contingency fund had dropped to 3 percent of the overall $2 billion budget. That prompted a request from the Federal Transit Administration that the rest of the contingency money set aside in 2018 be tapped, Dan Soler, a Hennepin County senior program administrator, told county commissioners last week.

County Board Chair Marion Greene voiced confidence in the Met Council's ongoing review of project costs and said she looked forward to the updated budget and timeline.

"I don’t feel that the county or the public is being kept in the dark in any way. They’re doing the diligence that’s needed to figure out what those dollar figures and dates are," Greene said.

Hennepin County is now all-in at $878 million for the project. Greene declined to say what she thought the county's budget cap should be.

"I don't have a crystal ball about what's ahead," she said.

If the final $200 million contingency isn't enough, Hennepin County would be responsible for overruns unless the FTA chips in more. Conversations are happening with the feds, though no formal request has been made, Roy said.

"Part of our discussions include the possibility of additional federal funding for the project. It is not clear at this time whether that could be through the federal infrastructure bill or some other means," Roy said, referencing an infrastructure package that's long been stalled in Congress but gained traction in the Senate this week.

Southwest LRT's routing between Cedar Lake and Lake of the Isles has been a source of contention for at least a decade. The line will ultimately have stations in Minneapolis, St. Louis Park, Hopkins, Minnetonka, and Eden Prairie and connect with the existing Green Line that runs between Minneapolis and St. Paul's downtowns.