Despite filling the remaining $144.5 million funding gap for Southwest light rail transit, regional planners still hope state leaders will allocate money to the $1.858 billion project in the coming legislative session.
Metropolitan Council board members unanimously voted Wednesday evening to fill the final piece of the project through financing $91.75 million in certificates of participation.
The Counties Transit Improvement Board and the Hennepin County Regional Railroad Authority will fill the remainder of the gap through a combination of additional funding and certificates of participation.
“With this action today, we will have a project,” Met Council Chair Adam Duininck told the board Wednesday night.
Even so, using the certificates wasn’t anyone’s first choice, Duininck acknowledged. The certificates function like bonds, but generally come with more risk and therefore a higher interest rate.
The Met Council wouldn’t issue those bonds until next summer, after the legislative session.
“We still have until the issuance date next summer to potentially revisit the Legislature next year to secure funds in the manner we would prefer,” Duininck said.
Met Council board members offered little pushback Wednesday night.
Council Member Steven Chavez voted to approve the use of the certificates, but said he was concerned it could affect the regional planning board next legislative session, when the Met Council seeks to fund other projects or operating budgets.
“We’re going to be in a position with the Legislature, I think, to look at this action as a precedent, and it may be more difficult down the road to go back to the Legislature for a handshake,” he said, noting that he worried the action could increase reliance on certificates to fund projects.
Wendy Wulff, a Met Council member who wasn’t at the meeting, sent a note read by Chavez that said she would have voted against the measure if she’d been able to attend.
“This will only serve to alienate those we need to work with, not only on this project, but on our entire budget and any other work the [Met] Council does that requires legislative approval,” her letter read.
But most on the board hailed the project as a vital economic and equity driver in the region.
Duininck said in an interview after the vote that he doesn’t plan to make certificates of participation a regular funding mechanism.
The move to use certificates on Southwest should only demonstrate to legislators how urgently a funding commitment was needed, he said.
“This was not a decision made on a whim,” Duininck said. “This was a really difficult decision made by an elected official, being the governor, and a number of people who influence the process.”
Council member Gail Dorfman said that, though she didn’t prefer using certificates, “the only bad option would be to walk away from this project.”
“If we walk away from this project we are breaking a promise and the partnerships that we’ve built,” she said. “We risk walking away from all these other great projects [along the line] that are in various stages of planning.”
Representatives from chambers of commerce along the 14.-5-mile route echoed Dorfman Thursday.
Brad Meier, president of the TwinWest Chamber of Commerce, said the chamber has supported this project for the better part of a decade.
“We see the economic opportunity for the region and realize that growth and workforce … and the ability to attract new workers all factor into this particular project,” he said.
The Minneapolis Regional Chamber of Commerce has also stood by the line for years, said John Stanoch, interim president and CEO of the organization.
“From an economic development, talent attraction and retention perspective, this was absolutely essential,” he said.
In Eden Prairie, Pat MulQueeny, president of the Eden Prairie Chamber of Commerce, said he was relieved at the news.
“It’s been a long road to get to this point,” he said.
Hennepin County on Tuesday agreed to fund an additional $20.5 million of the project, bringing its total contribution to $185 million.
The Counties Transit Improvement Board, the project’s largest local funder, on Wednesday morning agreed to fund another $20.5 million of the line and finance $11.75 million in certificates of participation.
In all, CTIB is paying for $516.5 million of the project, not including the certificates of participation financing.
Planners will submit an application for $928.5 million in funding from the Federal Transit Administration near the end of the year.