Item Description:
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Neg Amd 11 to Agmt PR00000689 with Met Council and Hennepin County for METRO Green Line Ext LRT Project (CP 1000899), extend end date to 01/31/25; incr NTE by $100,000,000, with no new funding provided by HCRRA
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Resolution:
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BE IT RESOLVED, that the Executive Director be authorized to negotiate Amendment 11 to Agreement PR00000689, Capital Grant Agreement for the METRO Green Line Extension Light Rail Transit Project (CP 1000899) with the Metropolitan Council and Hennepin County, extending the grant activity period from January 31, 2024, to January 31, 2025; and increasing the maximum grant amount by $100,000,000, for a new maximum grant amount of $1,078,080,704; that following review and approval by the County Attorney’s Office, the Chair be authorized to sign the amendment on behalf of the Authority; and that the Controller be authorized to disburse funds as directed; and
BE IT FURTHER RESOLVED, that the Board approvals herein do not waive any obligations of the Metropolitan Council under any relevant agreement.
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Background:
On May 31, 2018, the Hennepin County Regional Railroad Authority (“HCRRA”) adopted Resolution 18-HCRRA-0027, committing up to $199,548,000 of HCRRA funding to the Southwest Corridor Light Rail Transit (METRO Green Line Extension) Project (CP 1000899) (“Project”). On November 15, 2018, HCRRA adopted Resolution 18-HCRRA-0056, which among other actions authorized negotiation of a new grant agreement with the Metropolitan Council (“Council”) and Hennepin County, Agreement PR00000689 (the “Agreement”), to replace prior funding agreements and be the sole funding source for all Project activities through the end of August 2019.
The Agreement was then negotiated and executed, with a not to exceed amount of $434,901,943 in total funds from Hennepin County (up to $347,921,554) and HCRRA (up to $86,980,389). The funded activities included civil construction work authorized by the Federal Transit Administration (“FTA”), any pre-award authority activities requiring and receiving prior approval by the Hennepin County and HCRRA Boards, and ongoing overhead expenses and other professional services related to the Project.
The Agreement has since been amended ten times. Each time, Hennepin County likewise approved negotiation of the same amendment on the same day as the HCRRA Board’s approval. The amendments were as follows:
• Amendment 1 extended the term through September 30, 2019. (Resolution 19-HCRRA-0037)
• Amendment 2 extended the term through March 31, 2020, increased the maximum grant amount to $553,456,897, and made other contract changes. (19-HCRRA-0038)
• Amendment 3 extended the term through June 30, 2020 and increased the maximum grant amount to $602,795,681 (20-HCRRA-0012).
• Amendment 4 extended the term through August 31, 2020 and increased the maximum grant amount to $677,765,449 (20-HCRRA-0031).
• Amendment 5 extended the term through November 30, 2020. (20-HCRRA-0039)
• Amendment 6 extended the term through January 31, 2022 (20-HCRRA-0052).
• Amendment 7 extended the term through June 30, 2022 and increased the maximum grant amount to $878,080,704 (21-HCRRA-0039).
• Amendment 8 extended the term through December 31, 2022 (22-HCRRA-0019).
• Amendment 9 extended the term through June 30, 2023 and increased the maximum grant amount to $978,080,704 (22-HCRRA-0045).
• Amendment 10 extended the term through January 31, 2024 (23-HCRRA-0018).
Since the approval of Amendment 10, County staff have worked closely with the Metropolitan Council and other stakeholders to identify the additional funds needed to complete the project. The project office is currently working with the Federal Transit Administration to create a revised project budget, with an estimate of those additional needed funds. At present, those costs are estimated to be $340 million more than the project budget currently incorporated into the grant agreement.
After becoming aware of these cost overruns, staff from the Met Council and the County in 2023 negotiated a proposed framework for addressing these additional costs contingent upon board approval. Under this framework, the Met Council agreed that it would contribute $150 million toward the project budget and pay project startup costs, estimated to be approximately $40 million. The County would contribute $190 million in additional funding toward the project budget. This framework was approved by the Metropolitan Council in September. This Resolution would be the County’s first step toward implementing this proposed framework.
This request would authorize negotiation of Amendment 11 to the Agreement, to extend the term of the grant to January 31, 2025, and to increase the maximum grant amount by $100,000,000, for a new maximum grant amount of $1,078,080,704. This new funding would be contributed by Hennepin County, with no new funding provided by the Authority.
Through December 31, 2023, Hennepin County has paid approximately $784 million towards its funding commitment, including $40.2 million contributed under other agreements between the County and the Council. HCRRA has paid its full commitment of approximately $199.5 million, including $72.9 million contributed under other agreements between HCRRA and the Council. In addition to the funds contributed by Hennepin County and HCRRA, the Project budget also includes approximately $1.13 billion in federal funding; $218.9 million from CTIB, which has been fully paid to the Project; and certain other smaller funding sources.
Impact/Outcomes:
Approval of this request will allow for continued construction activities for the METRO Green Line Extension.
This request aligns with disparity reduction efforts by investing in infrastructure that gives people transportation choices and access to housing, jobs, schools, medical facilities, and recreational areas.
recommendation
Recommendation from County Administrator: Recommend Approval