Despite strong support from the business community and local elected officials, the Metropolitan Council announced Monday that the Southwest Light Rail Transit (SWLRT) project has incurred $19 million in cost delays, due to inaction by House leadership to provide the remaining state share of funding. Those costs will continue to increase each week the final local funding is not secured. SEE Green Line Extension Final Scope, Cost Estimate, Project Budget for Engineering Application (2 pages, PDF).
Prior to adding in delay costs, the cost estimate was $1.839 billion. The Corridor Management Committee (CMC) approved this cost estimate in late July, incorporating $69 million of in-kind land donations to the project. Factoring in the cost of delay, the project now has a cost estimate of $1.858 billion. Half of the $19 million in delay costs will be covered by the federal match; 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 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 Council will vote Monday at Transportation Committee and Wednesday at the full Council on approving the updated project scope, schedule and cost estimate. The 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 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.
The 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. The line enjoys broad support from the region’s business community, as well as the local communities along the line.