Metropolitan Council accrues $19M cost delay due to funding limbo

Written by Mischa Wanek-Libman, editor
image description
A rendering of the Southwest LRT project.
Metropolitan Council

The planned Southwest Light Rail Transit (SWLRT) project to expand METRO rail service from downtown Minneapolis, Minn., to Eden Prairie will now cost $19 million more.

 

The Metropolitan Council says inaction by state House leadership to provide the remaining state share of funding has resulted in the cost delays, which will continue to increase until final local funding is secured.

The Corridor Management Committee (CMC) approved the pre-delay cost estimate of $1.839 billion in late July. The Southwest LRT Project is currently in the Project Development phase of the Federal Transit Administration’s (FTA) New Starts funding process. Local funding must be secured before FTA provides its funds. The Metropolitan Council had planned to secure the remaining $135 million state share during the 2016 legislation session. However, the legislature adjourned before passing any funding for the SWLRT project, putting its timeline and future in jeopardy.

Factoring in the cost of delay, so far, the project will now cost an estimated $1.858 billion. The Metropolitan Council says the federal match will cover half of the $19 million in delay costs, but the increase will create an additional local funding shortfall of $9.5 million.

“The cost of inaction is real, large and one that falls on the taxpayers of this region,” said Metropolitan Council Chair Adam Duininck. “We have been very clear that SWLRT needed to secure the remaining funding during the 2016 legislative schedule to stay on time, avoid delay costs and remain a strong project with the FTA. We negotiated in good faith with this deadline in mind. This project has wide and bipartisan support in every community it travels through – it’s time for action.”

The Metropolitan Council will vote Monday at Transportation Committee and Wednesday at the full council on approving the updated project scope, schedule and cost estimate. The Metropolitan Council will also vote to authorize staff to submit the application to the FTA requesting entry into engineering. This is the next to last step in the federal process that will allow the Metropolitan Council to finalize the plans, issue the construction bids and submit the full funding grant application to the federal government. This step effectively locks in the cost estimate of $1.858 billion as the project budget. However, without the remaining local funding, none of this can move forward and the delay costs will continue to increase.

“With this week’s votes, the only remaining obstacle for SWLRT project advancement and federal approval is the funding gap,” Duininck continued. “The FTA issued its Record of Decision earlier this summer – by the end of this week we will have completed the entire environmental process and are ready to enter the next phase of the project. Instead, we are stalled, watching the cost continue to rise with each day there’s no solution.”

The $19 million in cost delays is due to slowdowns in the project resulting from cash flow limitations. This number is accurate through October 1, 2016.

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