Auditor’s Office on SWLRT project: Met Council wasn’t fully transparent on costs, didn’t hold contractor accountable
[anvplayer video=”5167818″ station=”998122″]
A new report has shed a light on the Metropolitan Council’s handling of the Southwest Light Rail Project.
The Minnesota Legislative Auditor’s Office released a report at 8 a.m. Wednesday that details how the group wants to spend hundreds of millions of dollars in additional funding on a project that is already years behind schedule and over budget.
In its report, the Auditor’s Office says it is recommended that the state legislature create a framework where the government entity that is responsible for light rail transit construction also shares some financial responsibility for costs and potential cost increases for construction. That recommendation was made due to the framework for developing these projects has a “mismatch between the entities that fund the construction of transit projects and the entities that are responsible for constructing them.”
The audit also states the Metropolitan Council was obligated to spend additional funds on the project for increased costs than what had already been committed because it didn’t have enough money to finish or halt the project.
RELATED: Condo owners report worsening damage along ‘pinch point’ for light rail construction
The Southwest Light Rail project remains under construction as more lawmakers call for an audit of the project. (KSTP/FILE)
RELATED: Businesses breathe sigh of relief after a busy road in Hopkins reopens
The project is a billion dollars over budget – more than double at this point – and has been a concern with lawmakers. It was supposed to be done by 2018 for $1.25 billion, and now it sits at $2.74 billion and is scheduled to be finished in 2027.
Construction on the light rail project – which will connect Eden Prairie, Hopkins and Minnetonka to the Twin Cities – didn’t even start until 2019.
RELATED: New ‘impediment’ pauses SWLRT construction, length of delay unclear
RELATED: Met Council Committee approves $211 million for Southwest Light Rail
RELATED: Southwest Light Rail gets more money from Hennepin County as handling of project faces new questions
Additionally, the report says the Met Council “did not hold its civil construction contractor accountable for repeated failures to provide an acceptable project schedule” and the “civil construction contractor claimed that construction delays were primarily the responsibility of the Metropolitan Council”, which the Council agreed to.
The auditor’s office went on to say the Council “has not been fully transparent about the project’s increasing costs and delays” and has not “adequately communicated to the public the uncertainty surrounding the estimates of future costs.”
Wednesday’s report also said “preconstruction engineering analyses done by Metropolitan Council contractors didn’t predict the Kenilworth LRT tunnel construction challenges that seriously delayed the project.”
The audit then recommends the legislature require the Metropolitan Council – or other authorities responsible for light rail projects – to let lawmakers know if cost overruns or delays reach certain thresholds. It also suggests the Metropolitan Council should clearly communicate the amount of uncertainty surrounding the estimates of future costs.
RELATED: Review of SWLRT points to 3 major reasons for project delays, cost increases
RELATED: Met Council chair: Answers about southwest Light Rail funding gap coming by end of year
According to the report, the Auditor’s Office also recommends the Metropolitan Council make better efforts to avoid introducing major project changes once a competitive bidding process ends, enforce the schedule requirements of a contract and consider additional outside review for both high-risk and high-cost projects.
That suggestion was made due to the Council soliciting bids for the civil construction portion of transit project, despite knowing some project specifications were incomplete, and also adding new or changed work after the bidding process was done, causing the project schedule to be delayed and increasing the cost.
Wednesday’s report is the first of two evaluations on the project to be released this year, according to the Auditor’s Office. An evaluation of the SWLRT’s construction and the Metropolitan Council’s oversight of contractors is still in progress, as well as a financial audit of the Council for the project.
“We have to make sure that moving forward, all of the mistakes that got us to this place – and they were mistakes there’s no question – you don’t have a project that is 5-10 years late and almost a billion dollars over budget, without mistakes,” said DFL Rep. Frank Hornstein.
5 EYEWITNESS NEWS reached out to the Metropolitan Council for comment on the report released Wednesday and was referred to a letter sent from Chair Charles Zelle to Judy Randall, the legislative auditor. In that letter, Zelle wrote the report minimized “the Metropolitan Council’s transparency and accountability to our funding partners for shared decision making. While project funding is shared between multiple parties, risk and accountability resides with the Met Council.”
The letter also addressed risk management, saying the Council “generally agrees with the recommendations regarding scheduling and delays”, adding it had started to take steps to address them before the audit began”, and cited changes done for the Orange Line, D Line, Gold Line and the extension of the Blue Line, adding it adopted a Transitway Advancement Policy to address and manage risk for projects related to the transitway.
In addition, the Council’s response said the project cost comparisons omit other mega projects across the country, and the characterization of change orders after bidding solicitation doesn’t accurately reflect limitations.
The full letter from the Metropolitan Council in response to the audit, as well as the report itself, can be found by CLICKING HERE, or by scrolling below.
CLICK HERE for KSTP’s complete Southwest Light Rail coverage.