Met Council secures additional local funding commitments for Southwest LRT

The graph depicts a breakdown of where the $1.858 billion in funding will come from for the SWLRT project.

Metropolitan Council

The inability of Minnesota lawmakers to hold a special session will not result in the doom of the Southwest LRT project.

The Metropolitan Council (Met Council) said the project is officially moving forward, after securing the remaining local funding commitments. The Met Council, Counties Transit Improvement Board (CTIB) and Hennepin County Regional Railroad Authority each approved additional funding commitments to position Southwest LRT to secure more than $900 million in federal funds for half the construction costs.

Met Council voted Aug. 31 to authorize the future issuance of Certificates of Participation for $103.5 million. CTIB and Hennepin County each agreed to contribute an additional $20.5 million. These contributions will together fill a $144.5 million funding gap, made up by the remaining necessary state match of $135 million plus $9.5 million in local delay costs caused by the legislature’s inaction in May.

Met Council will issue the certificates in July 2017, which gives time for the legislature to weigh in during the next legislative session, at which time the council hopes it will vote to approve increased transit funding and make the certifications unnecessary. If the certificates are issued, the council will finance $91.75 million of the certificates, while CTIB will finance $11.75 million.

The federal government will now prepare to execute an agreement next year to pay half the project’s costs, which amount to nearly $929 million of the $1.858 billion project, as a result of these actions.

“We are close to completing the design and beginning to prepare final specifications for the blueprints for potential contractors to examine and prepare their bids,” said Met Council Chair Adam Duininck. “Restarting the project at a later date would have been nearly impossible and abandoning the work would have jeopardized our relationship with the Federal Transit Administration. Quitting now would have left uncertain the fate of other regional transit projects such as the Metro Blue Line LRT Extension, the Gateway bus rapid transit line and the entire transitway system.”

The local funding commitments were made following a public discussion on Aug. 25 called by Gov. Mark Dayton, where he expressed support for the option. As laid out at the meeting, without the stopgap funding, the project would have been forced to lay off 45 agency staff and permanently reassign 86 consultants, incurring $5 million in shutdown costs and likely permanently killing the project. To date, local partners have spent more than $140 million on design and environmental work.

“There was a huge show of support at that meeting, from business, labor, local elected officials, and communities of color, who together advocated for SWLRT,” said Duininck. “They understand that we need to expand the Green Line to connect people in St. Paul and Minneapolis, as well as those along the future Blue Line Extension, to the jobs-rich southwest communities. This line will connect people with jobs and provide another transit option for southwest commuters. It will also advance equity, providing transit options to the many people of color living along the corridor throughout Minneapolis, St. Louis Park, Minnetonka, Hopkins and Eden Prairie.”

Certificates of Participation function similar to bonds. Duininck says while they were not an ideal path forward, it was a better option than shutting down the project or facing additional delay costs, amounting to $1 million a week since the end of the previous legislative session.

“I remain hopeful that the legislature will act next year to approve a regional transit sales tax. This would not only make it unnecessary to issue the certificates, but would provide the capital and operating costs necessary for SWLRT and future transit investments,” he said.