Item Description:
title
Neg Amd 2 to Agmt PR00005488 with Met Council and HCRRA for Blue Line Extension Project, ext end date to 06/30/27; no increase to the NTE
end
WHEREAS, there exists a Capital Grant Agreement for the METRO Blue Line Extension Light Rail Transit Project (Capital Project 1005877) with the Metropolitan Council and the Hennepin County Regional Railroad Authority (HCRRA); and
WHEREAS, Resolution 24-0513 authorized an increase of the combined County and HCRRA maximum grant amount to $248,905,000, and subsequently a combined grant amount of $208,100,000 was memorialized in Amendment One to Agreement PR00005488; and
WHEREAS, an extension of the grant activity period and a combined amount of $40,805,000 in previously authorized County and HCRRA funds will be memorialized in Amendment Two to Agreement PR00005488
Resolution:
body
BE IT RESOLVED, that the Hennepin County Board of Commissioners authorizes the County Administrator to negotiate Amendment 2 to Agreement PR00005488, Capital Grant Agreement for the METRO Blue Line Extension Light Rail Transit Project with the Metropolitan Council and the Hennepin County Regional Railroad Authority (HCRRA), memorializing a maximum grant amount of $248,905,000 and extending the grant activity period to June 30, 2027; and
BE IT FURTHER RESOLVED, that the Board authorizes the Chair to execute Amendment 2 to Agreement PR00005488 on behalf of the County, after review and approval by the County Attorney’s Office; and
BE IT FURTHER RESOLVED, that the Board authorizes the Controller to transfer and disburse funds as necessary to carry out the intent of this Resolution.
end
Background:
Resolution 17-0207, on June 13, 2017, approved the assumption of certain not-yet paid funding commitments for the METRO Blue Line Extension Light Rail Transit Project (Capital Project 1005877) (“Project”), of the 2017 Counties Transit Improvement Board (CTIB) Capital Grant Agreement (CTIB 02201701/Met Council 174I001/County A177882A) with the Metropolitan Council for the Project, and the imposition of the 0.5% Transportation Sales and Use Tax and $20 motor vehicle excise tax that are the primary sources of funds for Hennepin County contributions to the Project. Through these and other actions, Hennepin County agreed to take responsibility for the remainder of the project funding formerly committed by CTIB and the remainder of funding formerly anticipated from the State of Minnesota.
Agreement A177882A set the maximum grant amount at $66 million, to be paid with a mixture of CTIB and County funds. The parties subsequently amended Agreement A177882A twelve times to extend the agreement’s end date, as well as to authorize the expenditure of $30,887,084 in county funds, in addition to the maximum grant amount. The most recent amendment to this Agreement, approved by Resolution 23-0188 R1, extended the end date to August 31, 2023, with no increase to the maximum grant amount.
On August 22, 2023, the County adopted Resolution 23-0323, which authorized execution of a new grant agreement, Agreement PR00005488, with the Metropolitan Council and HCRRA to supersede prior agreements and become the vehicle for all future County and HCRRA contributions to the Project. This Agreement provided for a maximum grant amount of $75,305,000, of which the County contributed $60,244,000 and HCRRA contributed $15,061,000. The Agreement also put in place several important project governance requirements, including the creation of a Project Decisions Board, which is empowered to make a range of critical decisions related to the Project. The Project Decisions Board consists of two Metropolitan Council members, two Hennepin County commissioners, and one HCRRA commissioner. The Agreement’s initial end date was December 31, 2024.
The agreement has been amended once. Hennepin County Regional Railroad Authority likewise approved negotiation of the same amendment on the same day as Hennepin County Board approval. The amendment was as follows:
• Amendment One extended the term through June 30, 2026, and despite a county-authorized increase to $248,905,000, Amendment One increased the maximum grant amount to $208,100,000
• Amendment One further authorized the Project Decisions Board, subject to certain requirements, to utilize grant funds for project expenditures that could not be paid with use of federal funds (Resolution 24-0513).
This Resolution would authorize negotiation of Amendment 2 to Agreement PR00005488. This Amendment would extend the grant activity period to June 30, 2027, and would increase the maximum grant amount to the previously authorized sum of $248,905,000.
Upon approval of Amendment 2, approximately $398.6 million of CTIB, County and HCRRA funds will be committed to the project. This amount includes $248.9 million committed by the Capital Grant Agreement PR00005488; $82.8 million in CTIB funding through earlier agreements, nearly $18.1 million provided by the County and CTIB pursuant to Agreement A177882A; and $48.8 million in HCRRA funding through three separate agreements, most recently Agreement A176897.
The Blue Line Extension Project is currently in the engineering phase, at approximately 90% design. Primary activities during the grant activity period under the proposed Amendment would include final route design and engineering. Also included in the grant activity period would be the acquisition of project right of way and early construction work in the North Loop neighborhood.
The official budget for the Project has not been updated since 2016. At that time, the total Project budget was $1.536 billion, including a commitment of $530.1 million from the County and $149.6 million from HCRRA. These numbers do not reflect the current alignment, nor the cost escalation that has occurred over the past ten years.
Project staff estimate that the current project budget, after accounting for price escalation and the new alignment, will be approximately $3.2 billion, including a project contingency factor of 37.5%. New funding commitments, including from the County and HCRRA, will thus be required to complete the Project. Staff expect to seek updated commitments from the County and HCRRA after a project budget is finalized and prior to applying for a federal Full Funding Grant Agreement.
Current Request: Authorization to negotiate and execute Amendment Two to Agreement PR00005488 with the Metropolitan Council and Hennepin County Regional Railroad Authority for the METRO Blue Line Extension Project (CP 1005877), extending the grant activity period from June 30, 2026, to June 30, 2027, with no newly approved funding. The agreement will allow for continued work on the METRO Blue Line Extension Project.
Impact/Outcomes: This action supports the county’s disparity elimination and climate action efforts by investing in clean-energy transit infrastructure that expands transportation options and strengthens regional connections to housing, jobs, education, healthcare, and other essential destinations.
This request funds services that are: core services
recommendation
Recommendation from County Administrator: Recommend Approval