Gov. Mark Dayton and Metropolitan Council Chair Adam Duininck unveiled their stopgap funding solution for Southwest light rail Thursday.

Dayton pushes SWLRT funding solution

Updated: August 30, 2016 - 4:25 pm

Stopgap would replace state dollars with county and Met Council funds

Facing a potential idling of the Southwest Light Rail Transit project next month, Gov. Mark Dayton and Metropolitan Council Chair Adam Duininck on Thursday unveiled a stopgap funding solution to keep the $1.86-billion project on track.

The plan involves Met Council, the Counties Transit Improvement Board and Hennepin County partnering to contribute an additional $144.5-million to the project. That amount would cover the state’s unfulfilled 10-percent commitment to the 14.5-mile extension of the Metro Green Line between Minneapolis and Eden Prairie, plus additional costs incurred due to delays.

“I believe this project is in the best interests of the metropolitan region, I believe it’s in the best interests of Minnesota and it is very important that it go forward,” Dayton said Thursday. He said the plan was hammered-out in an eight-hour meeting in his office just the day before.

Met Council is poised to submit its application for a $928.5-million Federal Transit Administration grant meant to cover half the cost of SWLRT, but it needs to shore-up local financial commitments first. Duininck said he was “cautiously optimistic” the boards of all three bodies would approve the plan — which involves the sale of certificates of participation, a form of government financing similar to bonding — by Wednesday.

To cover the state’s remaining $135-million contribution, plus $9.5 million in delay-related costs, Met Council would issue $103.5 million in certificates of participation. In addition, both Hennepin County, through the Hennepin County Railroad Authority, and the Counties Transit Improvement Board would raise their contributions to the project by $20.5 million.

The alternative, to shut down the project, would probably kill SWLRT permanently, according to Met Council. A shutdown would cost the agency $5 million, lead to layoffs of 45 project staffers, essentially forfeit the roughly $140 million already spent on SWLRT and jeopardize the agency’s relationship with the FTA, an essential partner in several other major transit projects still in development, including Bottineau light rail (an extension of the Metro Blue Line) and Orange Line bus rapid transit.

Dayton said the plan revealed Thursday was the fifth of five options floated to close the funding gap. Republican lawmakers rejected four previous options raised during the last legislative session. Dayton ended months of negotiations for a special session on Aug. 18 when it appeared Republicans wouldn’t budge in their opposition to funding SWLRT with state dollars.

Rep. Linda Runbeck (GOP–Circle Pines) made clear during the Thursday meeting that opposition hadn’t softened. Citing an email from Duininck to Dayton that surfaced during an ongoing lawsuit over the project’s environmental review, Runbeck questioned whether the FTA was really willing to release grant dollars before that case goes to court in September 2017.

“We have tremendous questions, we don’t understand the urgency and we think there are flaws in the process,” she said Thursday.

Responding to questions about the email, Met Council spokeswoman Kate Brickman acknowledged on Thursday that the FTA had pushed back the date it intends to release federal funds for SWLRT to 2017. But Brickman said that was due to an extended environmental review process, not the lawsuit.

Brickman noted there were two pending lawsuits when construction began on Central Corridor light rail, the first segment of the Metro Green Line, and “as recently as last week” the FTA said securing all local funding was the only remaining hurdle in the grant application process.

The plan outlined Thursday could ultimately be a placeholder, something to stick in the federal grant application for now and keep the project alive. Hennepin County Commissioner Peter McLaughlin said the FTA was “very open” to reinserting state funds into the mix if the legislature could agree on a funding solution when it meets again next year.

Shifting more of the funding responsibility onto the metro-area agencies could impact other transit projects. CTIB, which collects metro-only tax revenue and directs it into transit, is already adjusting its spending priorities in the wake of Dakota County’s recent announcement it will withdraw from the five-county partnership in 2019.

“This is going to stretch CTIB resources, but we have got a situation where we’ve got a project that is teed-up right now that needs action, and we can’t afford to whiff on that project this year,” McLaughlin, a CTIB board member, said.