Southwest light rail: New report questions Met Council oversight

Updated 12:30 p.m.

A new audit of the Southwest Corridor light rail project raises concerns about the Metropolitan Council’s oversight of its contractors, specifically regarding change orders on the massive transit project.

The Office of the Legislative Auditor issued its report Wednesday, the latest in a series of reviews of the light rail project between Minneapolis and Eden Prairie that’s years behind schedule and hundreds of millions of dollars over budget.

The new audit found the Met Council did not hold contractors accountable to contract requirements and paid contractors for changes without ensuring those added costs were valid.

Changes were supposed to be proposed in detail and explained in writing with a cost estimate. A consultant was supposed to come up with an independent cost estimate and the project staff was supposed to come up with a final figure.

Instead, the council was sometimes coming up with its own cost figures, often simply matching the builder’s estimates. In other cases, crews started making the changes without any estimates of cost or how long it would take, the review found.

‘It always was going to cost more’

Auditors said they didn’t find anything illegal but that neither the Met Council project staff nor members of the council kept their eye on the ball, and the council wasn’t prepared to bring the project to a halt to fix these problems.

“They were very reluctant to use the tools they had withholding money or deducting funds, and they were very reluctant to do so in fear of potential litigation or the contractor walking away,” Judy Randall, the legislative auditor, said Wednesday.

Charlie Zelle, chair of the Met Council and a former state transportation commissioner, told lawmakers Wednesday morning that a settlement with the contractor last year to finish the project addressed a lot of the issues and noted the council has a new arbitration process and has retained a new independent cost estimator.

The initial budget and schedule didn’t align well with how the project would look, and the decision to go through the Minneapolis Chain of Lakes district created unexpected problems, he said, adding that the project is comparable with other rail projects around the country on a per-mile basis.

“This actual project is costing more because it always was going to cost more … it simply is not a $2 billion project,” he said. “It is much closer to what we are projecting now.”

The Met Council still doesn’t know if the current estimate of $2.7 billion to build the 14 1/2 mile line will be enough to complete the project, or if it will be done by 2027, the current expected finish date.

Randall on Wednesday suggested that it may be time to take big transit construction projects away from the Met Council. She didn’t offer an alternative, but there have been official comparisons with how the Minnesota Department of Transportation handles big projects.

The Legislature this year put $50 million toward building another light rail line, the Blue Line extension from downtown through north Minneapolis, Robbinsdale and Crystal to Brooklyn Park.

Lawmakers on Wednesday expressed anger and also repeated suggestions that this was a sign that the Metropolitan Council, which is appointed by the governor and not elected, needs to be fundamentally changed to be more responsible to taxpayers.

One more review — a financial audit of the Southwest Corridor light rail project’s books — is still in the works.