Twin Cities transit board under fire by Minnesota lawmakers

A powerful metro-area public body that has contributed more than $1 billion to Twin Cities transit projects, including the Green Line light rail, would be disbanded under a measure pending at the Minnesota Legislature.

In response, lawyers for the Counties Transit Improvement Board (CTIB) claim in a memo to Gov. Mark Dayton and Republican leaders that legislative meddling could have a chilling effect on hundreds of "joint powers agreements," which are used by local governments and school boards across Minnesota to pool resources and provide efficient services. They called the pending legislation "unprecedented action" by Republicans and warned that it could have serious financial consequences and provoke legal challenges.

The lead sponsor of the bill, Rep. Jon Koznick, R-Lake-ville, responded that members of the transit board already had proposed dissolving the body. "We're helping them," Koznick said. "They should like the idea."

If the state is going to pay millions to help operate transit lines, then it should have a say in transportation planning, Koznick said.

This week, Dayton said serious talks with Republican leadership over a broader transportation bill won't progress until the CTIB provision, as well as another that overhauls the Metropolitan Council, are stripped away.

CTIB, created in 2008 as part of a comprehensive transportation bill that was passed by lawmakers after the Interstate 35W bridge collapse, is among the more sophisticated joint-powers boards formed over the past 70 years.

The agreement resulted in five metro counties — Hennepin, Ramsey, Dakota, Anoka and Washington — imposing a quarter-cent sales tax for transit, as well as a $20 fee on new car sales. The mantra: Invest in mass transit, such as the Southwest and Bottineau light-rail lines, and the Orange and Gold bus-rapid transit projects.

While no one knows for sure, there are likely hundreds of similar (albeit smaller) joint-powers agreements across Minnesota where cities, counties, school boards and others have banded together to share costs and provide services ranging from snowplowing to police protection.

Just this week, Blue Earth, Nicollet and Le Sueur counties entered into a joint-powers agreement to form a transit network in southern Minnesota.

"Most often they're organically and locally driven," said Julie Ring, executive director of the Association of Minnesota Counties. "I'm a huge fan of joint-powers arrangements. In order to be both efficient and get the best quality of work we have to be creative."

Steve Kelley, a senior fellow at the University of Minnesota's Humphrey School of Public Affairs, points to Alexandria-based PrimeWest Health as an example of a successful joint-powers agreement. A partnership of 13 rural counties, PrimeWest operates a health plan for about 38,500 residents.

"They have been super successful in providing care and helping reduce the cost of publicly provided health care by purchasing it through a joint-powers consortium," Kelley said.

The down side? Citizens "don't have the same influence over a joint-powers organization as you would over county or city," Kelley said. "Some people could see that as being less accountable to the public."

CTIB's lawyers with Dorsey & Whitney say that if legislators terminate a big joint-powers board, it would set a precedent that could have "significant financial and policy ramifications." They wrote that altering the contracts of municipalities or its own contracts with bondholders could cause "a negative reaction of the bond market," including higher interest rates on bonds issued for public projects.

Until recently, CTIB operated quietly. The board decided to dissolve itself late last year, a move that would permit Hennepin and Ramsey counties to raise their transit sales tax to a half-cent, the maximum allowed by law. But the effort died when the board couldn't agree on a payout to Dakota County, which had announced plans to leave the agreement because it was dissatisfied with what it was getting for its money.

Koznick's bill prevents CTIB from levying a tax and lays out how more than $200 million in CTIB money would be paid out.

CTIB member and Washington County Commissioner Karla Bigham said the bill was "a punch to the gut to local control. I'm astonished they don't trust us to make our own decisions."

At a CTIB meeting this week, Dorsey & Whitney attorney Jay Lindgren quipped that the fallout, if the bill is successful, would be a "litigator's dream."

But Anoka County Commissioner Matt Look, who serves on the CTIB, was suspicious of the CTIB lawyers' memo. "Essentially this is just political leverage for the upcoming 2½ weeks of the legislative session," Look said.

Janet Moore • 612-673-7752 @MooreStrib