History: Resolution 17-0207, adopted on June 13, 2017, approved the assumption of certain unpaid funding commitments for the METRO Green Line Extension Project (County CP 1005876) (Project), the assumption of the 2017 Capital Grant Agreement (Counties Transit Improvement Board #01-2017-01/Met Council #17I007) (CTIB Grant Agreement) with the Metropolitan Council (Council) for the Project, and the imposition of the 0.5% sales and use tax and $20 motor vehicle excise tax that are the primary sources of funds for Hennepin County contributions to the Project. Through these and other actions, Hennepin County agreed to take responsibility for the remainder of the 30% share of project funding formerly committed by the Counties Transit Improvement Board (CTIB) and the remainder of the 10% share formerly anticipated from the State of Minnesota. The Hennepin County Regional Railroad Authority (HCRRA) provided funding for the Project, as well, under separate grant agreements.

On May 31, 2018, the county adopted Resolution 18-0222, committing county funding to the Project in an amount up to $592,953,000, in addition to the CTIB contribution. Resolution 18-HCRRA-0027, adopted on May 31, 2018, committed HCRRA funding in an amount up to $199,548,000. All CTIB funds have now been paid to the project. The total CTIB contribution is $218.9 million.

On November 14, 2018, the Federal Transit Administration (FTA) granted the Council a Letter of No Prejudice (LONP1), allowing the Council to begin construction activities prior to the execution of a Full Funding Grant Agreement (FFGA). LONP1 authorized the Council to expend up to $187,336,000 for civil construction activities, with the potential for those construction expenditures to be treated as part of the local match required for future federal funding.

On November 15, 2018, the county adopted Resolution 18-0499, approving the work and expenditure of the amounts authorized under LONP1. It also authorized negotiation of a new grant agreement with the Council and HCRRA, Agreement PR00000689 (the LNTP Grant Agreement), to replace the amended CTIB Grant Agreement and to be the sole funding source for all Project activities through the end of August 2019. On the same day, HCRRA adopted Resolution 18-HCRRA-0056, likewise approving the work under LONP1, and likewise authorizing the negotiation of the LNTP Grant Agreement to replace the existing HCRRA grant agreement.

The LNTP Grant Agreement was then negotiated and executed, with a not to exceed amount of $434,901,943 in total funds from the county (up to $347,921,554) and HCRRA (up to $86,980,389). The funded activities included the civil construction work authorized under LONP1, any pre-award authority activities requiring and receiving prior approval by the county and HCRRA Boards, and ongoing overhead expenses and other professional services related to the Project.

The LNTP grant agreement also established a number of conditions on the funding it provides. One such condition is that Hennepin County and HCRRA provide prior approval for the expenditure of funds pursuant to a Letter of No Prejudice and so called “Pre-Award Authority.” Activities designated as Pre-Award Authority are those activities for which expenditures may be made prior to execution of a FFGA from the FTA with the expectation that, upon award of such an FFGA, such expenditures will be eligible for federal match.

On June 4, 2019, the county adopted Resolution 19-0221R1, which provided the county's prior approval for the Council's submission to the FTA for a second Letter of No Prejudice (LONP2). The HCRRA adopted Resolution 19-HCRRA-0025 on the same day, likewise, providing the HCRRA's prior approval. The LONP2 request sought FTA authorization for $81.01 million for the civil construction and $16.10 million for the systems contract. The Council submitted its request to the FTA for LONP2 on June 11, 2019.

On August 27, 2019, the county adopted Resolution 19-0363, which approved Amendment 1 to Agreement PR00000689, to extend the grant activity period from August 31, 2019, to September 30, 2019 with no increase to the grant amount. Three days later, on August 30, the Council received the requested LONP2 from the FTA.

On September 17, 2019, the county adopted Resolution 19-0368, approving the work and expenditure of the amounts authorized under LONP2. It also authorized negotiation of Amendment 2 to Agreement PR00000689, extending the grant activity period from September 30, 2019, to March 31, 2020, increasing the maximum grant amount by $118,554,954 (from $434,901,943 to $553,456,897), allowing use of project funds for certain freight rail expenses, incorporating an itemized project budget, and requiring mutual agreement on changes to the itemized project budget. For the additional funds provided under Amendment 2, Hennepin County will contribute up to $94,843,963 and HCRRA will contribute up to $23,710,991. On the same day, the HCRRA adopted Resolution 19-HCRRA-0038, likewise approving the work and expenditure of the amounts authorized under LONP2 and approved the negotiation of Amendment 2 to Agreement PR00000689.

On February 4, 2020, the county adopted Resolution 20-0043, providing the county’s prior approval, as required by the LNTP Grant Agreement, for the Council to expend up to $400,000 of grant funds pursuant to federal pre-award authority for long-lead item materials consisting of four special track turnouts and related materials to support two new lines of track being built at the Franklin Operations and Maintenance Facility in Minneapolis. On the same day, HCRRA adopted Resolution 20-HCRRA-0008, likewise approving the use of grant funds for long-lead item materials pursuant to federal pre-award authority.

At this time, the Council has submitted an FFGA application to the FTA for its consideration. The Council anticipates that the FTA will approve and execute the FFGA this spring. To continue project activities through June 30, 2020, Amendment 3 to Agreement PR00000689 will increase the maximum grant amount by $34,338,784 for a new total not to exceed amount of $587,795,681. It is anticipated that the county will fund 80 percent of the increase ($27,471,026) and HCRRA will fund 20 percent ($6,867,757). The total split under Agreement PR00000689, including this Amendment 3 will be County $470,236,543 and HCRRA $117,559,137.

These additional funds will support $13.4 million of new construction activities for the systems, Franklin Operations and Maintenance Facility modifications, and long-lead materials procurement contracts; $5 million of ongoing professional services and project office staff costs; and $16 million of civil construction activities. This resolution also provides the county’s consent for expenditures pursuant to federal Pre-Award Authority under the systems contract and the Franklin Operations and Maintenance Facility modifications as required by the LNTP Grant Agreement.

A companion resolution for the HCRRA share will be considered by the HCRRA on March 10, 2020.

Current Request: Authorization to negotiate Amendment 3 to Agreement PR00000689 with the Metropolitan Council for the METRO Green Line Extension Project, extending the grant activity period from March 31, 2020 to June 30, 2020, increasing the maximum grant amount by $34,338,784 for a new maximum grant amount of $587,795,681.

Impact/Outcomes: This action will permit continued construction and funding of the METRO Green Line Extension Project.