Item Description:
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Neg Agmt PR00005641 with Met Council for operations funding of METRO Orange Line BRT; neg Agmt A2311956 with Met Council pertaining to termination of agmts A188684, PR00004836, PR00004837 and PR00004835
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Resolution:
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BE IT RESOLVED, that the County Administrator be authorized to negotiate Agreement PR00005641 with the Metropolitan Council for operations of the METRO Orange Line Bus Rapid Transit from December 2021 through September 2023, with an estimated contract amount of $2,917,947; and that following review and approval by the County Attorney’s Office, the Chair be authorized to sign the amendment on behalf of the County; and
BE IT FURTHER RESOLVED, that the County Administrator be authorized to negotiate Agreement A2311956, a memorandum of understanding with the Metropolitan Council pertaining to the termination of Agreements A188684 [Master Operations Funding Agreement], PR00004836 [Green Line light rail transit operating grant], PR00004837 [Blue Line light rail transit operating grant], and PR00004835 [North Star commuter rail transit operating grant] on October 1, 2023, pursuant to Laws of Minnesota 2023, Chapter 68, Article 3, Section 35, and that following review and approval by the County Attorney’s Office, the Chair be authorized to sign the agreement on behalf of the County; and
BE IT FURTHER RESOLVED, that the Controller be hereby authorized to transfer and disburse funds as necessary to carry out the intent of this Resolution.
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Background:
History: Resolution 17-0207, adopted by the Board on June 13, 2017, commits Hennepin County to fund a portion of the net operating costs for four transit lines located wholly or partially within Hennepin County. The resolution committed the County to pay 50% of the net operating costs of the Blue Line light rail (Project Number 1006448), 30% of the net operating costs of the Green Line light rail (Project Number 1006449), 9.3% of the net operating costs of the Northstar commuter rail (Project Number 1006450), and 43% of the net operating costs of the METRO Orange Line. The County made these commitments in reliance on commitments by other counties to likewise pay appropriate shares of these net operating costs, including a commitment by Dakota County to pay 7% of the net operating costs of the Orange Line.
Resolution 18-0109, adopted by the Board on March 27, 2018, authorized the execution of a Master Operations Funding Agreement (“MOFA”) (A188684) with the Metropolitan Council, Anoka County, Hennepin County and Ramsey County. This four-party agreement identifies the terms and conditions for county contributions to operations of the Blue Line, Green Line, and Northstar. It provided for payment of funding for transitway operations through annual grant agreements, following submission of grant applications by the Metropolitan Council. Each year since adoption of the MOFA, the Metropolitan Council has submitted such applications and the parties have accordingly executed the planned annual agreements. The most recent annual agreements between the Metropolitan Council and Hennepin County were approved by Resolution 22-0493 on November 29, 2022.
The METRO Orange Line began operations in December of 2021. Since that time, County staff have been in negotiations with the Metropolitan Council and Dakota County to establish an operations funding agreement for the Orange Line. However, no funding agreement has been executed.
In its 2023 Session, the Minnesota Legislature enacted an Omnibus Transportation Act modifying the ways in which net operating costs of transitways must be funded. This law requires that, beginning on October 1, 2023, the Metropolitan Council pay all future net operating costs for all of its transitways. It requires that the County pay its promised share of all net operating costs through September 30, 2023, for the lines covered by the MOFA. It also requires that “a political subdivision must pay to the Metropolitan Council… 50 percent of the net operating costs” for the Orange Line through September 30, 2023.
This Resolution would authorize negotiation of two agreements to resolve all outstanding obligations between the Metropolitan Council and Hennepin County regarding the operating costs of these four lines. Agreement PR00005641 relates to the Orange Line. This agreement would provide for Hennepin County to pay 43% of net operating costs incurred by the Metropolitan Council for the line since it began operations in December of 2021. Under the proposed agreement, Hennepin County would make a payment before September 30, 2023, of $2,917,947, the estimated amount of Hennepin County’s contribution for the time period December 2021 through September 2023. The agreement would also include a reconciliation process to resolve any discrepancy between this estimated amount and Hennepin County’s share of actual net operating costs through September 30, 2023. The parties would agree that payment of this Hennepin County share pursuant to this agreement would satisfy all obligations of the County to the Council for operating costs of the Orange Line, whether arising from state law or any other source.
The second agreement, A2311956, is a memorandum of understanding between the County and the Metropolitan Council to resolve all outstanding obligations related to the MOFA and the transit lines covered by the MOFA. It would provide for payment to the Metropolitan Council of all funds owed by Hennepin County for net operating costs on those lines through September 30, 2023. The agreement would also include a reconciliation process to resolve any discrepancy between the planned quarterly payments and Hennepin County’s share of actual costs through September 30, 2023. It would then acknowledge the termination of the MOFA and the annual agreements for the Blue Line, Green Line, and Northstar, pursuant to Laws of Minnesota 2023, Chapter 68, Article 3, Section 35.
Under the current annual agreement for the Blue Line (PR00004837), the County would contribute $ 15,012,903 for operations on that line in 2023. Termination of that agreement on October 1 is expected to reduce the County contribution to $11,259,678.
Under the current annual agreement for the Green Line (PR00004836), the County would contribute $9,052,214 for operations on that line in 2023. Termination of that agreement on October 1 is expected to reduce the County contribution to $6,789,161.
Under the current annual agreement for Northstar (PR00004835), the County would contribute $1,105,810 for operations on that line in 2023. Termination of that agreement on October 1 is expected to reduce the County contribution to $829,358.
Current Request: This resolution would authorize negotiation of Agreement PR00005641, with an estimated contract amount of $2,917,947 for net operating costs of the METRO Orange Line Bus Rapid Transit line from December 2021 through September 2023; and negotiation of Agreement A2311956, a Memorandum of Understanding with the Metropolitan Council pertaining to termination of Agreements A188684 [MOFA], PR00004836 [Green], PR00004837 [Blue], and PR00004835 [North Star] on October 1, 2023.
Impact/Outcomes: Resolution of all outstanding obligations for operating costs of the METRO Blue, Green, and Orange lines and the Northstar commuter rail. These lines provide essential transit services to Hennepin County residents. This financial commitment aligns with county goals of reducing transportation disparities for residents and advancing climate action efforts.
recommendation
Recommendation from County Administrator: Recommend Approval