Gov. Walz supports independent audit of Southwest light-rail project

Gov. Tim Walz said Wednesday that he supports an independent audit of the Southwest light-rail project, which has been beset with delays, cost overruns and a burgeoning budget.

"This is a project that has been going on a better part of a decade, long before us, much like the MNLARS project, that I do think it makes sense to audit," Walz said, referring to the state's troubled efforts to adopt a new system for vehicle licensing and registration several years ago.

But Republicans at the State Capitol are pushing to either pause work on the $2.7 billion-plus line while an audit is conducted, or shut it down altogether. The most expensive public works project in state history, Southwest's price tag a year ago was $2 billion.

"We need a pause on this permanently. This project should have never happened," said House Minority Leader Kurt Daudt, R-Crown.

The debate in St. Paul comes after the Metropolitan Council announced last week that the 14.5-mile line between downtown Minneapolis and Eden Prairie would cost an additional $450 million to $550 million and take another four years to complete.

To date, $1.38 billion has been spent on construction and the project is more than 60% complete. Passenger service now is expected to begin in 2027.

Last month, the council reached a $210 million settlement with its civil contractor, Lunda McCrossan Joint Venture, that sets forth construction milestones and creates a dispute resolution process as the project moves forward.

The council said that construction of a tunnel in the narrow Kenilworth corridor of Minneapolis, the addition of a station in Eden Prairie, and the need for a $93 million mile-long crash protection wall to separate freight and light-rail trains near Target Field had contributed to the project's expanding bottom line.

Last summer, two Minneapolis DFL lawmakers, Sen. Scott Dibble and Rep. Frank Hornstein, called on the Office of the Legislative Auditor to conduct an independent audit of the project's management and burgeoning budget.

Their request came after transit planners tapped $200 million in contingency funds from Hennepin County to help cover construction costs.

A preliminary Legislative Auditor's memorandum released last fall gave some hint of the issues dogging construction of the line. The memo focused on the strained relationship between the Met Council and its main architectural and engineering contractor, AECOM Technical Services (ATS).

Now, with the recent news of increasing costs and an extended timeline, there is bipartisan support at the Legislature for an audit.

House Majority Leader Ryan Winkler, DFL-Golden Valley, said there's a need to learn from mistakes and cost overruns of this project. But Winkler stressed that investment in mass transit, including light rail, needs to continue. Some Republican leaders disagreed.

"I think people fall in love with these projects because they are glamorous," Daudt said. "You know what, I have model train sets at home. I love trains, but I love them as model trains, not something [like this]. This is the most inefficient thing that government could do and we should pull the pin on this now."

Or, as GOP Senate Majority Leader Jeremy Miller put it, "Pause and audit." But several Democrats were cool to the notion of suspending the project.

Senate Minority Leader Melisa López Franzen, DFL-Edina, whose district would be served by the line, said she's hesitant to put the project on hold because it could "cost a lot of money" to do so.

Walz didn't commit to a pause, saying he preferred to hear more from experts first. Large projects like Southwest often have cost overruns, he said, but "that doesn't make it excusable."

Met Council Chair Charlie Zelle said in an interview Wednesday that the council is "very open to additional scrutiny, including a legislative audit. We have nothing to hide."

But, he added, to stop the project would be "financially irresponsible" and lead to even greater costs. For example, the $929 million grant from the Federal Transit Administration awarded to the project would have to be repaid, as well as other expenses.

Any pause or disruption, Zelle said, would result in an "extravagant increase in cost and even more delays."