Latest Audit of the Southwest Light Rail Project

>> ERIC: IN A FEW MINUTES WE'LL TALK ABOUT THE RANSOMWARE ATTACK ON MINNEAPOLIS PUBLIC SCHOOLS, AND HEAR MORE FROM HOLOCAUST SURVIVOR DORA ZAIDENWEBER.

BUT FIRST, ONGOING ISSUES WITH THE SOUTHWEST LIGHT RAIL PROJECT.

>> CATHY: ON THURSDAY, THE LEGISLATIVE AUDITOR'S OFFICE RELEASED THE SECOND OF FOUR AUDITS OF THE 14-MILE EXTENSION OF THE GREEN LINE TO THE SOUTHWEST SUBURBS.

THE AUDIT RAISED MORE QUESTIONS ABOUT COST OVERRUNS, AND MET COUNCIL OVERSIGHT.

BACK WITH US TO TALK ABOUT THE TROUBLED PROJECT, LEGISLATIVE AUDITOR JUDY RANDALL.

GOOD TO SEE YOU AGAIN.

>> NATION TO BE HERE.

>> Cathy: YOU ALWAYS HAVE BAD NEWS WHEN YOU COME HERE.

>> SORRY.

>> Cathy: THAT'S OKAY, NOT YOUR FAULT.

MET COUNCIL SPENT MONEY IT DIDN'T HAVE.

>> CORRECT.

>> Cathy: DIDN'T HOLD CONTRACTORS ACCOUNTABLE WHEN THERE WERE COST OVERRUNS AND EVIDENTLY WASN'T TRANSPARENT ABOUT THE COST AND DELAYS.

WHAT LED TO THIS MESS?

>> WELL, THERE IS A LOT OF TOOKTORS THAT LED TO IT.

I WOULD SAY ONE OF THE MAIN THINGS WE THINK IS THAT MET COUNCIL IS THE RESPONSIBLE AUTHORITY, SO THEY'RE RESPONSIBLE FOR BUILDING THIS RAIL LINE, THIS LIGHT RAIL LINE, BUT THEY ARE NOT THE ONES FUNDING IT.

SO THERE'S KIND OF THIS MISMATCH IS WHAT WE SAY IN THE REPORT BETWEEN WHO'S RESPONSIBLE AND WHO'S FUNDING IT.

THE MONEY IS REALLY COME FROM THE FEDS AND HENNEPIN COUNTY, A LITTLE BIT FROM THE CITIES BUT THE METROPOLITAN COUNCIL IS THE ONE MAKING ALL THE DECISIONS SO, YOU KNOW, THEY'RE MAKING DESIGNIFICANCES WITH OTHER PEOPLE'S MONEY.

IT MAKES IT HARD TO HOLD SOMEBODY ACCOUNTABILITY.

>> Cathy: SHOULD THEY HAVE SKIN IN THE GAME GOING FORWARD?

>> THAT IS OUR RECOMMENDATION TO THE LEGISLATURE, TO CREATE A FRAMEWORK WHERE THE PERSON OR THE ENTITY RESPONSIBLE FOR BUILDING ALSO HAS SKIN IN THE GAME.

>> Eric: WHAT ABOUT THE FACT THAT A LOT OF THIS MONEY COMES FROM THE FEDS?

WAS THIS JUST A INDICATION OF NOT WANTING TO TURN DOWN A BIG FEDERAL GRANT FOR THIS?

>> I THINK THERE WERE A LOT OF THINGS THAT LED TO THE COST OVERRUINS.

ONE OF THE ONES WE CITE IS THAT THERE WERE SEVERAL BIG ITEMS NOT INCLUDES IN THE ORIGINAL CONTRACT WHEN THEY LET IT OUT TO BID SO THIS CORRIDOR PROTECTION WALL, WHICH IS A CON TREAT BARRIER BETWEEN WHERE THE LIGHT RAIL LINE RUNS AND THE FREIGHT RAIL LINE RUNS, THAT WAS A VERY EXPENSIVE ITEM.

NECESSITY KNEW THAT WAS GOING TO BE COMING BUT THEY DID NOT INCLUDE IT IN THE ORIGINAL CONTRACT SPECIFICATIONS, SO THERE WERE KEY EXPENSIVE THINGS THAT WEREN'T INCLUDED SO IT WAS KIND OF INEVITABLE, FRANKLY, THAT THE PRICE WOULD INCREASE.

>> Eric: AND NOW YOU'RE IN A POSITION, IF YOU'RE THE LEGISLATURE WHERE IT'S TOO BIG TO FAIL, RIGHT?

>> WELL, ATTENTION WE SAY IS IN THE REPORT, THEY DON'T HAVE ENOUGH MONEY TO COMPLETE THE LINE AND THEY DON'T HAVE ENOUGH MONEY TO STOP THE LINE.

BECAUSE STOPPING THE CONSTRUCTION COSTS MONEY, ALSO.

YOU KNOW, YOU HAVE TO SECURE THE THINGS THAT HAVE ALREADY BEEN BUILT, YOU HAVE TO -- IF YOU'RE GOING TO COMPLETELY NOT DO THIS LINE, YOU HAVE TO REBUILD SOME THINGS THAT WERE UNDONE DURING THE CONSTRUCTION.

SO THEY ARE -- THEY ARE A LITTLE BIT IN A PICKLE RIGHT NOW.

>> Eric: IS THIS SETTING A RECORD FOR THE NUMBER OF TIMES THE LEGISLATIVE AUDITOR HAS REVIEWED A PROJECT?

I GUESS YOU GOT SOME MORE IN THE PIPELINE, HUH?

>> THAT'S RIGHT.

WE'LL BE DOING A TOTAL OF FOUR DIFFERENT REVIEWS, SPECIAL REVIEW, TWO PROGRAM EVALUATIONS AND A FINANCIAL AUDIT OF THIS PROJECT, ALL WITHIN THE SPAN OF ABOUT A YEAR.

>> Cathy: WOW.

SO DO YOU THINK THINGS WILL JUST GETS WORSE, THE MORE YOU DIG?

>> I HOPE NOT.

BUT EACH REPORT THAT WE ARE DOING KIND OF GOES A LITTLE BIT DEEPER, SO WE STARTED KIND OF BROAD, LIKE OVERALL PROJECT TIMELINE, BUDGET, AND THEN EACH TIME WE'RE GOING DEEPER INTO THE DETAILS, SO THE NEXT PROJECT IS GOING TO BE LOOKING AT CHANGES -- CHANGE ORDERS THAT HAPPENED DURING THE CONSTRUCTION PROCESS AND HOW MUCH METROPOLITAN COUNCIL KIND OF OVERSAW THOSE CHANGES AND NEGOTIATED THEM WITH THE CONTRACTOR.

AND THE LAST ONE, A FINANCIAL AUDIT WILL LOOK AT SPECIFIC TRANSACTION THAT IS WE HAVE QUESTIONS ABOUT.

>> Cathy: WHAT WAS THE ROLE, BY THE WAY, OF THE TUNNEL, THE UCH-MALIGNED AND CONTROVERSIAL TUNNEL IN ALL OF THIS?

>> SO IT IS TUNNEL IS IN THE KENILWORTH CORRIDOR AND IT IS A BIG CAUSE OF THE DELAYS AND BUDGET INCREASES.

THERE WERE SOME UNKNOWN FACTORS IN THERE.

THE METROPOLITAN COUNCIL DID HAVE PRE-CONSTRUCTION ENGINEERING ANALYSIS DONE IN THAT AREA.

IT DID NOT IDENTIFY MANY OF THE PROBLEMS THAT THEY HAVE RUN INTO.

>> Eric: WHAT DOES THIS SPEAK TO THE LEGISLATURE ABOUT SOME KIND OF DIFFERENT MANAGEMENT FOR THESE BIG TRANSIT PROJECTS OR SOME REORGANIZATION OR -- >> YEAH, SO WE RECOMMEND THAT THEY CREATE A FRAMEWORK SO THAT YOU'VE GOT THE FOLKS RESPONSIBLE FOR BUILDING, THE ONE PAYING FOR IT, AT EAST PAYING FOR SOME OF IT AND THERE'S KIND OF THREE ENTITIES THAT MAKE SENSE.

MnDOT, THE COUNTIES OR METROPOLITAN COUNCIL.

EACH ONE OF THOSE HAS PROS AND CONS SO IT'S GOING TO BE A TRICKY FIX BUT WE DO THINK THERE NEEDS TO BE SOME THOUGHT ABOUT THAT.

IF THEY DECIDE TO KEEP IT WITH THE METROPOLITAN COUNCIL, THOUGH, WE DO THINK THERE NEEDS TO BE ORE ACCOUNTABLE WITHIN THE METROPOLITAN COUNCIL.

>> Cathy: SO THIS -- I'M SORRY.

SO THIS PROJECT COULD BE MOVED OUT OF THE REALM OF HE MET COUNCIL.

>> I'M SORRY, NOT THIS PROJECT, I THINK THIS PROJECT IS TOO FAR GONE BUT FUTURE LIGHT RAIL TRANSIT PROJECTS.

>> Cathy: UNDERSTOOD.

>> Eric: HAS THE CREDIBILITY, I GUESS 'M ASKING FOR SPECULATION ON YOUR PART, BUT AS AUDITORS OF THIS, IS THE MET COUNCIL JUST A FLAWED BASIC LEVEL FRAUD -- JUST NOT UP TO IT?

>> I THINK THIS PROJECT HAS BEEN TROUBLED, WHETHER THAT'S AN INDICTMENT OF THE WHOLE METROPOLITAN COUNCIL, I CAN'T GO THERE.

>> Eric: OKAY.

>> Cathy: ALL RIGHT.

THANK YOU FOR COMING ON TONIGHT AND WE'LL HAVE YOU BACK WITH, WHAT, THE THIRD OF THE SUPPORT REPORTS.

>> SOUNDS GOOD.

THANKS FOR