Minnesota Legislature places new requirements on Met Council for spending, light rail construction

Minneapolis Sen. Scott Dibble didn’t get all that he wanted in legislation to change how the Met Council manages light rail construction projects. The chair of the Senate Transportation Committee had wanted to turn over the planning and construction of future projects to the state Department of Transportation.

But the DFL lawmaker and critic of the structure of the regional government did insert requirements into transportation budget language to require MnDOT to provide more extensive consulting on future projects like the Blue Line extension from Target Center to Brooklyn Park as well as highway bus rapid transit.

The same legislation restricts how the Met Council can spend money from a seven-county transportation sales tax adopted last year. The bill says that before the council can spend any of that money on light rail construction, it would need to receive legislative approval.

“It’s not an outright takeover of construction of light rail and heavy BRT but I think it is a very meaningful authority that MnDOT would have, being involved every step of the way from the very beginning,” Dibble said. “It would make sure that professional expertise, culture of accountability, responsiveness, innovation, everything we are looking for would be strongly present, with some real teeth in it.”

“Ideally, we won’t have the same experiences we have had in the past,” Dibble said.

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The bill would require the involvement of MnDOT in the early risk assessments and cost projections of new projects, the contractor bidding process, review of change orders in excess of $500,000 and schedule delays of more than 30 days. The state agency would also be party to any dispute resolutions, such as what went on between the Met Council and its contractors on Southwest Light Rail Transit (SWLRT) that led to a revised budget and timeline.

It would also direct MnDOT to make “recommendations to address or manage cost overruns or discrepancies, funding sources, contingency funding sources and availability, and the management of state or county financial resources.” Finally, it requires Met Council to reimburse MnDOT for any costs it runs up due to the new duties it received under the law.

Unlike Dibble’s previous bill language that would have taken the Met Council out of future light rail projects, the commissioner of the MnDOT is OK with the new version.

“Yes, I was supportive of the language in the final bill and very appreciative of Sen. Dibble’s efforts to work with the department to leverage additional MnDOT expertise to meet his goals of providing more accountability and oversight on the Blue Line Extension and potential, future Light Rail Transit projects,” said Commissioner Nancy Daubenberger in a statement released to MinnPost.

She had testified against Dibble’s plan to put MnDOT in charge of the Blue Line extension and any other light rail projects, such as the Riverview Corridor between downtown St. Paul and MSP airport. Daubenberger cited MnDOT’s already full plate and the increased staff levels that would be needed to take over regional light rail projects. 

Terri Dresen, the director of communications for the Met Council, said the council supports the language.

“As part of our commitment of building and maintaining trust while working on some of the state’s most complex transportation projects, it’s important we continually collaborate with our partners to provide expertise where appropriate,” Dresen wrote. “The Met Council and MnDOT have a long history of collaboration and expertise and this language provides additional responsibilities and formalizes the existing partnership. It’s a value we support.”

MnDOT has recently been involved in reviewing SWLRT at the Met Council’s invitation. In December 2022, it released a review of the settlement between the council and the project’s civil engineering contractor, Lunda/McCrossan Joint Venture. 

The new bill language, part of a 1,430-page mega omnibus bill approved in the waning minutes of the 2024 legislative session Sunday night, would not apply to the project that has attracted most of the criticism of the council. The SWLRT project, because it is already under construction, would not be subject to the new requirements.

Gov. Tim Walz indicated Monday that he would sign the bill that contained nine different significant policy bills and omnibus bills, each of which contains dozens of spending and policy bills.

Dibble and House Transportation Committee Chair Frank Hornstein have both been critical not only of the Met Council’s management of SWLRT but of the culture and governance of the council itself. A task force the two chairs convened to look at whether the seven-county organization should be governed by elected rather than appointed commissioners ended in a stalemate earlier this year. Dibble introduced a bill last year to transfer light rail construction to MnDOT. But he said earlier in the session his motivation for pushing the issue again stems from the failure of the task force and his belief that the Met Council worked against a resolution.

The Dibble bill to have MnDOT plan and construct light rail — as it did with the original Twin Cities LRT, the Hiawatha Line between downtown Minneapolis and the Mall of America — echoed statements made by Judy Randall, the state’s legislative auditor.

“The council and the state have other light rail transit projects coming up, that are being discussed, that are being vetted,” Randall said last June after presenting one of three audits conducted by the Office of Legislative Auditor. “Now is the time to think hard about who should be the responsible party for those projects.

“Based on what we’ve seen and based on the structure that we have for funding and building, I’m not convinced that Met Council is the right entity to be the responsible authority for those projects,” Randall said. 

On Tuesday, Randall said the adopted language is somewhat responsive to several OLA recommendations.

“Yes, we believe that some of the new language is responsive to recommendations OLA has made, notably some of the recommendations in our March report, Southwest Light Rail Transit Construction:  Metropolitan Council Decision Making,” Randall wrote. One example is bill language requiring MnDOT to provide what are called peer reviews and value engineering reviews at various stages of the project.

Randall said provisions that require reports to the two legislative transportation committees should increase transparency for the project and the council. One report would come from MnDOT and include all recommendations it makes to the council. The second, after requiring that Met Council give “strong consideration to utilize input or recommendations developed by the commissioner of transportation,” said the council must first try to reconcile differences of opinion and then report to the Legislature if it decides not to follow MnDOT advice.

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One sentence in the bill also clarifies how the Met Council uses local transportation taxes for light rail and highway BRT projects. It states that the council “must only use direct appropriations in law or federal sources to pay its portion of light rail transit construction. Dibble said that will require that if the council wants to use some of the proceeds from a 0.75% sales tax (75 cents on each $100 purchase) collected in the seven-county metro area, it must get permission from the Legislature.

Dibble said there are two significant sales taxes that pay for transit and transportation in the Twin Cities. One is a county-by-county sales tax of up to 0.50% that can be used for transportation projects. That tax raises about $170 million a year for Hennepin County and is a major contributor to the funds Hennepin County is using to match federal dollars for SWLRT and the Blue Line extension.

The second tax source is last year’s 0.75% tax, which is collected regionwide by the Met Council and will raise about $500 million a year. Dibble said that money, the first dedicated funds for transit, was first meant to cover a looming deficit in the cost of running the regular bus service by Metro Transit, as well as to build out its planned arterial bus rapid transit system. Other proceeds were to cover operating and capital maintenance of light rail and highway BRT lines.

If the Met Council needs additional funds to cover construction cost shortfall for light rail or BRT, it could do so but only after winning approval from the Legislature. That, Dibble said, was always the intent. But the bill language adopted Sunday night makes it clear.

Editor’s note: Peter Callaghan wrote this story for MinnPost.com. Callaghan covers state government for MinnPost.

This article first appeared on MinnPost and is republished here under a Creative Commons license.

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