Friends and neighbors,
The Minnesota Office of the Legislative Auditor (OLA) recently released a new program evaluation report titled Southwest Light Rail Transit Construction: Metropolitan Council Oversight of Contractors. The report found that the Met Council purposefully inflated cost estimates that drove up the cost of the project, failed to properly hold contractors accountable for cost changes, and lacked proper documentation.
In 70% of cases, the Met Council directed its Independent Cost Estimator (ICE) to systematically increase its project estimates to add more profit and overhead, unused equipment, and extra funding for women- and minority-owned businesses – even when none of those businesses existed or were used. In one example, the final cost was nearly three times the original ICE estimate.
Additionally, the OLA change order costs were not properly handled and decisions were not documented. The report also found the Met Council failed to hold contractors accountable, allowed schedule delays to remain unresolved, failed to limit risk for future cost increases, and paid contractors despite being unable to validate that costs were accurate. On top of wasteful spending, these issues caused Republicans to question whether or not the Council is able to manage large projects in a timely, efficient manner to minimize fraud and waste.
The Met Council’s handling of the Southwest Light Rail project has been a catastrophe in every conceivable way. We already knew their failures and mismanagement cost taxpayers billions; now we learn that the Met Council failed to provide any adequate oversight of the construction process and even padded the numbers to add more profit for contractors and for disadvantaged businesses even when none were used. It has been ludicrously bad management from start to finish, and we have zero confidence in the Met Council’s ability to successfully manage any train projects moving forward.
Unfortunately, this session Democrats and Gov. Walz lifted the ban on state money going to Southwest Light Rail and failed to enact systematic changes to how the Met Council administers taxpayer dollars. In light of this and previous reports, I encourage them to reinstitute that ban next session. Not another dime of state taxpayer money should ever go to this project. Legislative Auditor Judy Randall even said, “I am not convinced the Met Council is the right entity to be the responsible party for [light rail] projects.”