Former SWLRT Project Controls Manager Files Lawsuit Against Met Council, Alleging Retaliation

Photo: metrocouncil.org

MINNEAPOLIS, Minn. – The former project controls manager for the SWLRT project has filed a lawsuit against the Met Council in Hennepin County.

Michael Janish, an engineer and project controls manager for the Southwest Light Rail Extension for seven years, is accusing his employer of retaliation. According to KSTP, Janish oversaw project controls and flagged potential illegal cost manipulation by the Metropolitan Council. Part of his job description included making sure the project complied with FTA requirements for funding. One requirement was “that the application for federal funding accurately reflects the timetable and cost of the project.”

Now, according to the lawsuit filed in federal court, Janish says he was moved away from that role and “suffered an effective demotion after he repeatedly raised concerns that the agency was artificially inflating costs on the project and was breaking its agreement with the federal government by doing so.” The lawsuit alleges that leadership within the Met Council, namely Project Director Jim Alexander, Deputy Project Director Joan Hollick, and Director of Construction Brian Runzel, “’did not want to push for compliance’ from the outset and went ahead with the federal grant application without establishing a full baseline schedule for the project.”

RT&S reported on the recent approval of $100 million that was approved by Hennepin County Board Commissioners for the Green Line light rail extension. The estimated higher cost of the project is $2.86 billion with an estimated opening in 2027. Planning for the project began in 2015 with construction starting four years later. According to the report, the Met Council hired AECOM Technical Services to design the project and provide cost estimates for any change orders for $140 million. However, each time the civil contractor, Lunda/C.S. McCrossan Joint Venture would submit a request for a change order proposal, “Lunda-McCrossan and AECOM would formulate their own estimates for how much the change would cost. Janish alleged Lunda-McCrossan’s estimates consistently ‘dwarfed’ AECOM’s figures.”

The lawsuit went on to say that Met Council leaders “conspired to keep the government’s money flowing by subverting its own project controls,” and accused the Council of “going around established procedures to inflate change order costs and directing AECOM to bake automatic markups into its change order estimates.”

When Janish raised his concerns about these to Deputy Project Director Joan Hollick, he was told “to pretend as if the manipulated cost estimate was the ‘only’ number.” Janish reached out to federal officials after the FTA approved the full funding grant agreement back in September 2020. According to the report, by April 2022, Janish says the Met Council “approved 622 change orders totaling hundreds of millions of dollars.” Defense attorneys for the Met Council have said that change orders at that point had reached an estimated $225 million. 

Janish had also observed times when the contractor had overbilled for completed work, but “rather than investigate his claims, the Met Council converted the change orders into a lump sum for approval.” Attorneys for the Met Council have alleged that Janish’s objections “reflected a fundamental lack of understanding.” When Janish notified the Met Council that it was entitled to $130 million in liquidated damages from the civil contractor, the Met Council entered into a settled agreement instead of assessing damages. The settled agreement extended the completion date to 2025 and “promised to pay another $40 to $210 million.” Met Council has denied the entitlement to damages in the contract.

From September 2020 to May 2021, Janish says he had corresponded with federal officials and provided them with “documentation of suspected illicit activities.” He also sat with them for interviews. By July 2021, Minnesota State Senator Scott Dibble, Rep. Frank Hornstein asked the State Legislative Auditor for a review of the project. Afterward, Janish realized Hollick “began assigning him additional job duties” that were not in his original job description. These included “reviewing SWLRT change orders and writing analyses about whether the changes fell within government guidelines.”

When he reviewed these change orders, Janish says he saw “two totals for each change order, one that assumed maximum allowable markups and another that had been ‘augmented and manipulated by arbitrary markups’.” He then consulted AECOM about said discrepancies where he then “learned the lower number was AECOM’s actual cost estimate and the higher number was the result of ‘offline manipulation’ by construction contractors.”

In September 2021, Joan Hollick sent a memo to Janish about job performance in which she “told him he was being investigated for failing to complete a change order by ‘approving it as fair and reasonable’.” Janish was then investigated twice during that time for failing to complete change orders. Each time, Janish “claimed he could not approve them because the charge orders did not comport with the federal requirements of being fair and reasonable.”

The State Legislative Auditor released a memo to State Senator Dibble and Rep. Hornstein “that outlined a discrepancy between AECOM and Met Council on how change order price estimates should be prepared.” On November 1^st, Janish “was notified of a second investigation for not completing a change order.” Janish says he wrote to the Met Council about his concerns on “signing off on what he believed was illegal activity.” Allegedly, Hollick told Janish the next day to “ignore any markups and ‘get the change orders to be fair and reasonable’.” In 2023, the Auditor reported that the Met Council did not enforce its contract to hold its contractors accountable for change order requirements. 

In November 2021, Janish was told he was being “temporarily reassigned and that he would no longer review change orders or report to Hollick.” He alleges that the Met Council said the decision “was made partly because he had flagged concerns about the SWLRT; the agen’y’s rebuttal denies any mention of SWLRt in the decision and claims the reassignment was because Janish ‘refused to perform his current job duties’.” In December 2021, Jim Alexander had reportedly told Janish that he would not be involved in any project controls meetings for the SWLRT and would be taken off his current role. Janish alleges that the Met Council “reduced his job duties to menial tasks like archiving emails and data entry.”

Then, in 2022, Janish was transferred to a non-managerial position wherein he performed site inspections at a bus depot. In the lawsuit, Janish says “he would lose hi union representation and would have to commute twice as far” due to the transfer, so he rejected it. When Janish was approached to join the Blue Line Extension team in April, he had to consider the offer. However, that same day, he says he received an email “with a ‘confirmation of transfer’ attached. He lost access to all SWLRT-related materials the next day.” The HR Director had emailed Janish the next day and said the transfer was final.” The work would be the same, only that it was a different project under a different manager.

Howver, Janish says the work on the Blue Line Extension is not the same as his previous one. When he worked on the SWLRT, he “oversaw an entire department, but he didn’t supervise anyone in his new job until several months in.” Met Council’s attorneys have said the difference is because the Blue Line Extension project is in “early stages” with only 10 people on the team when Janish joined. The lawsuit alleges that Hollick and the Met Council “violated state and federal law by retaliating against him and is asking for a jury to award him damages for an alleged loss of income and other harms, including emotional distress and loss of reputation.”

Met Council attorneys have responded saying that Janish did not suffer any “adverse action or loss of pay and deny the agency retaliated against him in any way.” While the lawsuit was filed in Hennepin County, it has been moved to a federal jurisdiction as of reporting.