Item Description:
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Neg Amd 1 to Agmt PR00005488 with Met Council and HC for Blue Line Extension Project, extend to 06/30/26, incr NTE to $248,905,000
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Resolution:
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BE IT RESOLVED, that the Hennepin County Regional Railroad Authority authorizes the Executive Director to negotiate Amendment One to Agreement PR00005488, Capital Grant Agreement for the METRO Blue Line Extension Light Rail Transit Project with the Metropolitan Council and Hennepin County, extending the grant activity period to June 30, 2026; increasing the Maximum Grant Amount by $173,600,000 for a new Maximum Grant Amount of $248,905,000, of which the Authority will contribute up to $50,661,000 (CP 1000941) and the County will contribute up to $198,244,000 (CP 1005877); and allowing the Project Decisions Board to authorize use of grant funds for project expenditures that cannot be paid with federal funds; and
BE IT FURTHER RESOLVED, that the Authority authorizes the Chair to execute Amendment One to Agreement PR00005488, after review and approval by the County Attorney’s Office; and
BE IT FURTHER RESOLVED, that the Authority authorizes the Controller to transfer and disburse funds as necessary to carry out the intent of this Resolution.
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Background:
Since the inception of the METRO Blue Line Extension Light Rail Transit (LRT) Project (CP 1000941), HCRRA has disbursed approximately $54 million to the project through four separate agreements with the Metropolitan Council. The most recent agreement is PR00005488, Capital Grant Agreement for the Project, with the Metropolitan Council and Hennepin County. This Agreement established a maximum grant amount of $75,305,000, of which the HCRRA contributed up to $15,061,000 and the County contributed up to $60,244,000. The Agreement’s end date is December 31, 2024.
To date, approximately $225 million has been obligated to the Project. This amount includes $75 million from the current Capital Grant Agreement PR00005488; $18.1 million provided by Hennepin County and CTIB pursuant to Agreement A177882A (nearly $17 million in Hennepin County funds and nearly $47 million in CTIB funds); $82.8 million in CTIB funding through earlier agreements; and $48.8 million in HCRRA funding through three separate agreements, most recently Agreement A176897.
This Resolution would authorize negotiation of Amendment One to Agreement PR00005488. This Amendment would extend the grant activity period to June 30, 2026, and increase the maximum grant amount by $173,600,000, for a new maximum grant amount of $248,905,000. Of this amount, Hennepin County would contribute $198,244,000 and HCRRA would contribute $50,661,000. The Amendment would also authorize the Project Decisions Board, subject to certain requirements, to approve use of grant funds for project expenditures that could not be paid for with federal funds.
The Blue Line Extension Project is currently in the engineering phase and published a Supplemental Draft Environmental Impact Statement on June 14, 2024. Primary activities during the grant activity period under the proposed Amendment would include preparation of final environmental documentation and final design and engineering of the new route. Also included in the grant activity period would be the acquisition of project right of way. These activities would support the application for a Full Funding Grant Agreement (FFGA) to the Federal Transit Administration.
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 eight years.
Project staff roughly 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 Hennepin 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 an FFGA.
Current Request: Authorization to negotiate and execute Amendment One to Agreement PR00005488 with the Metropolitan Council and Hennepin County for the METRO Blue Line Extension Project (CP 1000941), extending the grant activity period through June 30, 2026, and increasing the maximum grant amount to $248,905,000. The agreement will allow for continued work on the METRO Blue Line Extension Project.
Impact/Outcomes: This action supports the county’s disparity reduction efforts by investing in transportation infrastructure that reduces climate impacts and gives people transportation choices and access to housing, jobs, schools, medical facilities, and other destinations of choice.
recommendation
Recommendation from County Administrator: Recommend Approval