Unexpected $21 million charge for Southwest LRT prompts concern

Nearly $24 million in unexpected construction costs was added to the Southwest light-rail budget this week, a move that prompted frustration and pointed questions from some elected officials.

The $2 billion Green Line extension connecting downtown Minneapolis and Eden Prairie — the most expensive public works project in Minnesota history — began construction three years ago with a $204 million contingency budget to cover unexpected expenses.

But with nearly half the 14.5-mile line built, about 30% remains in the contingency fund, or roughly $61 million. About $21 million of the recently approved change orders is related to an unanticipated amount of contaminated soil that must be removed from work sites along the line.

"This really should have been caught," said Hennepin County Commissioner Irene Fernando at a special meeting Monday of the Southwest LRT Executive Change Control Board, which considers significant budget changes. "Twenty-one million dollars is no small number."

Hennepin County Commissioner Debbie Goettel, another member of the change board, called the soil issue a "huge miss."

Nonetheless, the committee unanimously approved the change order, as did the Metropolitan Council and its Transportation Committee in the past month.

The remaining $3 million approved by the control board was related to road and elevator construction, as well as other unforeseen conditions.

Project Director Jim Alexander said a Southwest consultant initially estimated that about 853,000 tons of contaminated soil would need to be removed during construction. But, he said, the real amount was more than double that.

"It is a miss. It is something we're not pleased with," Alexander said at the meeting.

A spokesman for the project's engineering and architectural consultant, AECOM, a global firm based in Los Angeles, referred all questions to the Southwest project office.

Fernando said after the meeting that she remains "deeply committed" to completing the Southwest line, but wants "to make sure this doesn't happen again."

"No one is happy about the need for this major change order," Hennepin County spokesman Kyle Mianulli said in a statement, "but we appreciate the magnitude and complexity of the [Southwest] construction project, and recognize that unforeseen challenges are bound to arise."

Should the money in the contingency fund be exhausted, the county has set aside an extra $200 million to cover costs at the behest of the Federal Transit Administration (FTA), which is helping to fund the project.

If that money is spent, it's unclear where additional funds would come from. The federal grant of $929 million is fixed, and state law bars the Legislature from any further contributions to the project.

In January, the Met Council said difficulties building the line through tight quarters in the Kenilworth corridor in Minneapolis had caused an unforeseen delay. The opening date had been 2023, but now it's unclear when the line will begin service.

And planners can't say how much the $2 billion project ultimately will cost. Alexander said Wednesday that his office is working with the project's general contractor, Lunda McCrossan Joint Venture, to update the budget and opening date.

Change orders aren't unusual for large construction projects. But the Southwest line is challenging because it includes construction of 16 stations, 29 bridges, two tunnels for light-rail trains, six pedestrian tunnels and more than 100 retaining walls.

As of mid-May, 331 change orders totaling $133 million had been approved, Southwest spokesman Trevor Roy said.