Stop That Train!
[Editor's note: A correction ran concerning this story; see end of article.]
State representative Phil Krinkie takes a midmorning swig of coffee from a Styrofoam cup and glances out the second-story window of his St. Paul office, at yesterday's dirty snow and today's stream of traffic along Interstate 94. He points to a cluster of orange barrels blocking a freeway on-ramp: The Minnesota Department of Transportation (MNDoT) opened that concrete chute last year as a bypass for high-occupancy vehicles, he explains, but the design proved problematic. Cars in the sane lane couldn't always see traffic on the regular ramp. Hence the barricades, slated to remain until the ramp can be improved in the spring.
Problem is, notes Krinkie, the barrels are routinely knocked down. A couple of times a week, MNDoT workers trot out to prop them back up. "Every time I see these guys," he chuckles, "I think, 'These are the same guys that are going to build a billion-dollar trolley system?'"
"Billion-dollar trolley system" is Krinkie's derisive term for the planned 11.5-mile light-rail-transit (LRT) line connecting the Minneapolis-St. Paul International Airport, the Mall of America, and downtown Minneapolis via the Hiawatha corridor along Highway 55. After years on the drawing board, the project now seems set to go with a capital budget of $548.6 million.
At least that's the official cost. But Krinkie and other skeptics say light rail's sponsors in state government and elsewhere have long known that the real price tag could creep much higher--and that they've either kept that fact under wraps or not included key numbers in the project's budget.
"The total cost to the public is certainly going to approach a billion dollars," charges Krinkie. It's a mantra he's repeated countless times in recent months, alienating light-rail supporters at the capitol and throughout the halls of metro-area governments. To streetcar fans like Gov. Jesse Ventura and MNDoT commissioner Elwyn Tinklenberg, Krinkie has come to resemble a political pit bull with his teeth in his prey's pants leg--an indefatigable yapper who is still fighting a battle many believe he lost long ago.
With his brown tasseled loafers, cropped sandy brown hair, tie, and gray sportcoat, Krinkie doesn't look the part of the rebel. He looks like what he is--a small-business operator who also happens to be a suburban Republican lawmaker. His father founded the Snelling Company, a heating and cooling firm in St. Paul's Midway district, in 1931; Krinkie took over almost two decades ago. The flyers on a table out front exhort customers to "Save Now With Our Winter Specials."
Playing fiscal watchdog has become a hobby of Krinkie's. A few years back he raised the ire of then-governor Arne Carlson with his vociferous criticism of a publicly funded baseball stadium. "Some people have referred to me as cheap," he admits. "I like to think of myself as a quality buyer."
Over the past year MNDoT has installed signs proclaiming, "LRT Is On Track!" throughout the Hiawatha corridor. Booklets issued by the department feature computer-generated images of sleek, futuristic trains zooming along tree-lined tracks; the first trains are slated to run in 2004. But Krinkie and others say there are still several ways for the wheels to come off the deal.
The project currently faces two lawsuits, one of which last week prompted a judge to issue an order sharply criticizing MNDoT's bidding process. At the capitol, House Republican leaders say they will soon announce a plan to try to yank $100 million appropriated for light rail in 1998 and '99. There's also talk of the GOP-controlled House firing off a resolution to Congress, imploring the feds not to fund the project.
And then there's Krinkie himself. The Shoreview lawmaker has filed a lawsuit charging that MNDoT failed to perform a cost-effectiveness study as mandated by statute; uncovered a passage in state law that he says taints the bidding process; and, finally, dredged up documents from MNDoT's own consultants that he says show state officials knew the project would cost $100 million more than they were telling legislators last spring. "I've spent six months digging," he says. "I feel like I'm on an archaeological dig."
Krinkie, now in his tenth year as a lawmaker, knows his way around the capitol well enough to understand how money for light rail came to be appropriated last year. It was the usual late-session deal-brokering, he says: The Senate got money for education. The House got tax breaks. And the governor got $60 million for trains (on top of an additional $40 million appropriated in 1998). Krinkie voted against the final package, but he wasn't surprised at its passage: "What is done, as everyone knows, is horse-trading," he says.
It wasn't until after the Legislature had packed up and gone home for the year that Krinkie began to dig deeper into the numbers. A 1997 study had estimated the cost of the project at $371.6 million. By 1998 that had been revised to $400 million, and later $446 million. That last one was the figure used in Governor Ventura's budget request last year, and the one MNDoT representatives quoted over and over at the Legislature, according to Krinkie and his confederates.
In July, a short two months after lawmakers had adjourned, MNDoT publicly unveiled a new project budget: Suddenly, the rail line's cost had ballooned by more than $100 million, to nearly $550 million. At the same time, the scope of the project had shrunk from what had been talked up during the session. The line would end at Nicollet Mall rather than in the Warehouse District. There would be 15 stops instead of 18, and each train would have two cars instead of three. Krinkie concluded that he and his colleagues had been duped ("at the very least, the Department of Transportation misrepresented information," he says now)--and he was determined to prove it. He'd already sent a letter to Commissioner Tinklenberg on June 21, requesting "all memos, documents, files, and e-mails" related to light rail, with particular attention to "all documents related to cost and ridership projections."
The request yielded some paperwork but, Krinkie says, nothing that seemed to answer his questions. On August 19 he wrote Tinklenberg again, demanding more detail. He says he got no response. On September 16 he fired off another letter, noting that it had been more than 85 days since his original request and closing with a not-so-veiled threat: "I am now requesting immediate and total access to all MNDoT files on LRT. If this access is not granted, I will file a legal complaint to gain access to this information under the state's Data Practices law." At that point MNDoT suggested that Krinkie talk to the consultants working on the project.
Krinkie then met with staffers in the Minneapolis office of Parsons Brinckerhoff Quade & Douglas Inc., a branch of New York-based Parsons Brinckerhoff Inc. that was serving as an engineering consultant and has since been awarded the contract to manage the project. He was given a memo the firm had prepared for MNDoT in March 1999--before the Legislature even began seriously considering the light-rail appropriation--that estimated the project cost at $512 million, a good $66 million higher than what lawmakers were told a few weeks later.
This, Krinkie figured, was the smoking gun. In late September he along with Rep. Tom Workman (R-Chanhassen) and Rep. Carol Molnau (R-Chaska), held a press conference denouncing what he called a cover-up. Though opponents, namely gubernatorial spokesman John Wodele, have referred to the trio as "a small group of disgruntled legislators," the three are not exactly back-benchers: Krinkie chairs the House's State Government Finance committee, Workman the Transportation committee, and Molnau the Transportation Finance committee; in other words, together they control the three panels most likely to consider light-rail funding.
Since then Krinkie has taken to framing the issue in the language of Watergate: "I'm saying [to MNDoT], 'What did you know and when did you know it?'"
Through a spokeswoman, Tinklenberg declined to comment for this story. But Wodele says the commissioner "has been up-front and forthcoming with any information that the Legislature has needed." And Bob Winter, assistant metro division engineer at MNDoT, says that when he testified at the Legislature last year, he made it clear that the department's figures were based on earlier estimates.
Yet House Speaker Steve Sviggum says many GOP lawmakers, himself included, "absolutely" share Krinkie's suspicions. He refuses to point fingers, saying only that "obviously there was some information that was not shared...The numbers have changed dramatically from an agreement that we had last spring."
In fact, Krinkie says, the $512 million memo was not the only surprise he found in MNDoT's vaults. Last fall he unearthed another series of memos, including one that put the estimated cost for light rail at more than $707 million. This one was dated early June 1999--just a few weeks after legislators had gone home with the $446 million figure firmly planted in their minds. Following that memo, MNDoT directed its consultants to create a new budget, totaling no more than $550 million.
Bill Stead, project director of the Hiawatha project for Parsons Brinckerhoff, says $707 million was just a preliminary estimate--the amount the consultants came up with when they included the wish lists of all the government agencies involved. "If you took what everybody wanted, it could have been over $700 million," he says. "But to say that we had a budget of over $700 million misrepresents the process. The first and only budget that I've ever had or worked to was $548.6 million."
Undaunted, Krinkie to this day maintains that $700 million probably is closer to the project's true cost than $550 million. In fact, he and other critics contend that by the time a host of other factors--including unforeseen expenses, operating costs, associated development spending, even future extensions of the line--is considered, the total could climb to almost $1 billion. Seeking to bolster that contention, he has soldiered on, pummeling MNDoT with increasingly sharply worded data requests.
On October 1 Krinkie wrote to Tinklenberg yet again, reasserting his request for documents and e-mails; this time he asked for access to "computer backup tapes" as well. The next week, on October 7, he got a letter from Margo LaBau, Tinklenberg's chief of staff, addressing the "complexity" of his request. Attachments to LaBau's letter outlined MNDoT's estimated cost for processing Krinkie's request: "Five or more" staffers would have to work on the project full-time for up to ten weeks, to the tune of $99,950.
Krinkie fired back: "As with other projects, we believe your cost estimate is incorrect." LaBau's return volley reiterated the department's estimate and said that upon receipt of a $51,000 down payment her staff would be happy to get cracking.
Stepping up the pressure, Krinkie filed a request for a second opinion from the state Department of Administration, which oversees public-data issues. First, the department asked for more time; then they wanted to seek legal advice.
Finally, on January 25, David Fisher, commissioner of administration, sent Krinkie a note explaining that because the representative had since filed a lawsuit over another light-rail question and named Fisher as a defendant, no advisory opinion would be forthcoming. Without discussing the particulars of Krinkie's inquiry, information policy analysis director Don Gemberling tells City Pages that in general, government documents addressing state business, including e-mails, are considered public.
At MNDoT, the mere mention of Krinkie's name is enough to invoke exasperated sighs. "He's received a lot of information," contends engineer Winter, who says staffers have provided plenty of paperwork and spent hours talking to Krinkie. "He's looking for this piece of information that clearly indicates that the department misled the Legislature," Winter maintains, "and it doesn't exist."
Winter adds that Krinkie's crusade has been frustrating for MNDoT staff. "We want to move ahead and it seems like we spend a lot of time rehashing these issues that have been settled, at least in our mind." Krinkie, meanwhile, suggests that he's not about to relent: "The next lawsuit," he announces, "may be with regard to the fact that the department has willfully withheld public data."
Looking at least one battle ahead has become something of a habit with Krinkie. Last year, even as he watched the majority of his colleagues vote to fund light rail, he authored a provision laying the groundwork for another fight. His little-noticed measure required that any state contract for goods or services above $5 million come with a cost-benefit analysis showing that taxpayers will get their money's worth--or, as the law puts it, that the project shows "a positive benefit to the public."
Though Krinkie says he wrote the provision with light rail in mind, he says he wants all major projects--be they baseball stadiums or riverfront theaters--to pass the same test. The operative question, he insists, is: "Is the cost of that subsidy worth the contribution of our citizens?"
Last fall MNDoT released the light-rail study Krinkie had required, and the figures didn't look pretty. The train line, the department estimated, would save Minnesotans some $318 million by reducing travel times, accidents, emissions, and assorted other car-related costs. (Critics said that the study failed to take into account the potential value of development spinoffs.) To reap that benefit, taxpayers would spend more than $765 million, a figure that included operating costs through 2028. The bottom line? The state would receive 42 cents of benefit for every dollar expended; the document added that all the numbers had been drawn from "forecasts that are subject to uncertainty."
Under Krinkie's law, a project that doesn't show a positive benefit to the public can still proceed if a subsequent cost-effectiveness study demonstrates that it is "the most effective way to provide a necessary public good." MNDoT says it proved that last fall by producing another study that culminated in this endorsement: "The Hiawatha Light Rail Transit Project is the most cost-effective alternative to providing a diversified, multi-modal, integrated and balanced transportation system on the Hiawatha corridor and will serve as the first phase of a diversified multi-modal, integrated and balanced transportation system for the region."
That wasn't good enough for Krinkie. The intent of his law, he says, was a study that examined several alternatives, weighing the costs of each; MNDoT, he charges, merely touted light rail. "If we're moving people from point A to point B," he asks, "don't we want to know the cheapest way to do that?"
MNDoT's Winter counters that the law contains no explicit instructions or definitions; so, he says, the department used existing federal guidelines. "[Krinkie] is trying to use any technique that he can to stop the project," Winter contends. "The department's position is that we've done what was required under the law. It was more than adequate. The governor reviewed it, the governor signed it."
"The governor has said for no apparent reason, I like trains better than buses," counters Krinkie. "We're going to put in a trolley car because I think that's neat. My belief is that if you do [a cost-effectiveness study] and you do it correctly, that will show that their $700 million light-rail line is not the most cost-effective way to achieve public good. That would mean that it can't be built."
At the end of December, Krinkie filed suit in Ramsey County District Court asking that "the Hiawatha Corridor LRT project construction be halted until a satisfactory [cost-effectiveness study] is completed." Nine other legislators subsequently signed on to the lawsuit.
MNDoT's Winter argues that Krinkie simply drafted a bad law. "A lot of probably very good public-works projects might not pass scrutiny under this law," he alleges. "Things like parks and libraries, you'd have to ask whether they'd be able to pass the test." The state has filed a motion to have Krinkie's lawsuit dismissed; a hearing isn't scheduled until March 8.
Pesky Phil Krinkie isn't MNDoT's only legal problem at the moment. In early January a contracting team headed by Raytheon Engineers & Contractors Inc., a division of the Lexington, Massachusetts-based defense contractor Raytheon Co., sued the state after being dropped from the bidding to build and design the light-rail line. The suit charges that MNDoT "arbitrarily and capriciously failed" to follow its own bidding guidelines, and sought to halt the bidding process until a hearing could be held. Joining them in the suit were Ames Construction Inc. of Burnsville and the Wisconsin-based Edward Kraemer & Sons Inc.
Raytheon and the San Francisco-based Bechtel Corp. (through its subsidiary Bechtel Infrastructure Corp.) were arguably the biggest players in the field of five. Despite the state's questions about Raytheon's finances, the company posted sales of nearly $20 billion in 1999. It is currently wrapping up work on a light-rail line in New Jersey and has been involved in similar projects in Boston, Dallas, St. Louis, and Pittsburgh. Bechtel posted $13 billion in sales last year; its past rail projects include the Bay Area Rapid Transit (BART) system in San Francisco and a line extension in Portland.
On January 28 Ramsey County judge A. James Dickinson ordered MNDoT to halt the bidding process until Raytheon was reinstated as a participant. And that wasn't all: In his 25-page opinion, the judge raised several questions about how the first phase of the bidding process had been managed.
"Simply on the basis of the ability, credibility, and achievement of [Raytheon]," Dickinson wrote, "it is difficult to conceive why [it] would be disqualified in Phase One of this project."
The court also raised questions about the relationship between project managers Parsons Brinckerhoff and bidder Bechtel. It noted that the 11-member MNDoT review panel that rejected Raytheon included two employees of Parsons Brinckerhoff, including Bill Stead--who, the court concluded, was a onetime Bechtel employee. Though the record didn't show how Stead had voted, Dickinson wrote, evidence suggested he had supported his former employer. In addition, Dickinson noted that Bechtel and Parsons Brinckerhoff are currently working together on a $10 billion highway project in Boston. "It is a concern of the Court that [Parsons Brinckerhoff] apparently plays a key role as consultant to MNDoT, and at the same time has a very strong relationship with Bechtel on another project," he wrote. In Phase Two of the bidding process, Dickinson ruled, Parsons Brinckerhoff staffers should be barred from voting.
A Bechtel spokesman declined to comment in the wake of the ruling, and Stead could not be reached by press time. Tinklenberg issued a press release saying that MNDoT would "take the steps necessary" to bring Raytheon and its partners back into the process, but he had not decided whether to appeal the judge's ruling. The commissioner also said the decision would not delay the project.
Mary McFarland, MNDoT communications coordinator for light rail, says Stead's former employment is not a concern for MNDoT.
Raytheon spokesman Ed Powers says the company is "pleased" with the decision. The judge's ruling seemed to bear out concerns that had been raised by MNDoT's least-favorite legislator: Phil Krinkie. In fact, he says, his crusade began shortly after session's end last year, when a staffer called his attention to some language buried deep inside a MNDoT housekeeping bill. "Notwithstanding any law to the contrary, the commissioner [of transportation] may award a contract [for light rail] on the basis of requests for proposals or requests for qualifications without bids."
Without bids? Krinkie, who charges that the law amounts to "a radical change in state policy," was stunned: He couldn't figure out how this had sailed past him and his colleagues. "The commissioner of transportation can do any damn thing he wants with the largest construction project in state history," he howls now, "and there's not a damn thing anyone can say about it!" More softly, he adds: "That's the string that I pulled on that unraveled the rest of this."
At the other end of this particular string Krinkie found Bill Schreiber, a former state lawmaker who helped shepherd the bidding provision through the Legislature in his capacity as MNDoT's then-director of intergovernmental policy. Schreiber says the intent of the measure was twofold: to prevent disgruntled bidders from suing the state, and to give MNDoT "flexibility" in awarding a contract based on factors beyond cost, a concept also known as "best value."
Explains Schreiber: "You could end up with what I call a butt-ugly design on the stations, just kind of bare concrete designs, and that could be the lowest bid. On the other hand, I don't think the public expects Taj Mahals, they don't expect fancy granite, and so on. I think that's why the commissioner needs some flexibility in awarding the contract."
A few months after last year's session, Schreiber left government service; by November he had accepted a position on the lobbying staff of the Minneapolis firm Messerli & Kramer. His client roster includes Bechtel.
Pointing to Schreiber's involvement and the language in the law, Krinkie says he has a feeling that Bechtel will wind up with the contract. Schreiber chortles dismissively at the suggestion: "He knows a lot more than I do, then." He maintains that his former job doesn't give his client any edge in the process, and adds that until guidelines regarding the next phase of the bidding process are released, he can't even talk to MNDoT about it. Bechtel government affairs representative Jaime Vice declines to comment. Current state law does not prohibit former state officials from lobbying after they leave the public sector; efforts to pass so-called revolving-door legislation, most recently in 1999, have failed.
Once again, those involved in the project say Krinkie's all wet. "[Light rail] does go through a bidding process," says MNDoT's Winter. "That's the process we're going through right now, working with those contractors so they can develop the most competitive bids."
If nothing else, Krinkie has helped to ensure that in the legislative session that began this week, lawmakers will debate the light-rail issue anew. House Speaker Sviggum says Republicans plan to soon introduce their package of measures calling for a repeal of state light-rail funding, and proposing a high-speed busway instead. Supporters claim they have the votes to pass such a bill in the Republican-controlled House; most observers say a similar effort doesn't have a prayer in the DFL-dominated Senate.
Sviggum acknowledges, with signature understatement, that his caucus faces an "uphill battle." But light-rail critics hope that a fracas in the House could have political resonance--if, for example, federal funders (currently slated to provide more than $270 million for the Hiawatha line) conclude that state politicians are divided on the issue.
Krinkie, true to form, isn't pinning his hopes on this battle alone. He plans to mount a separate fight over the massive transit initiative Ventura recently unveiled--a plan he views as a Trojan horse filled with money to bankroll light rail.
Ventura's proposal, announced January 10, would dedicate a chunk of state motor-vehicle excise taxes to create a new transit fund, a honeypot expected to generate $2.4 billion to $3 billion over the next decade. Twenty-five percent of that money would go to the Metropolitan Council, which could use the funds for bus expenditures as well as ongoing light-rail operations.
The trains will need the subsidy: Under current projections, fare-box revenues will cover only 40 percent of annual operating costs, meaning the line could lose as much as $7.8 million a year. The governor's plan offers a way to plug that budget hole--and, Krinkie charges, quietly subverts a promise Ventura made to the Legislature last year. "The bold, frank, honest governor is lying to the people of Minnesota when he says that not one more dime will be spent on light-rail transit," he fumes.
Wodele, sighing wearily, says Krinkie is confused: Ventura never said the state wouldn't subsidize light rail's operations. All he promised was that the capital contributions would stop at $100 million. "Would the representative deny operation and maintenance funds to bridges and roads we've built?" Wodele wonders. "It's tiresome in some ways to continually correct the representative."
But if Wodele and others are growing sick of responding to Krinkie's salvos, the representative himself shows no sign of exhaustion. Even if his every dodge and parry fails, he seems to crave the battle itself. "People consistently have asked me over the last six months, 'Isn't this a done deal, and isn't it too late'?" he avers, then quickly offers an answer: "Whatever the Legislature giveth, the Legislature can take away."
Interns Claire Adamsick, Chris Jones, and Julie Mañes contributed research to this story.
Think $550 million is a lot for light rail? Try $700 million. Or how about a round billion?
THE MINNESOTA DEPARTMENT of Transportation is adamant that the budget to build light rail is $548.6 million--no ifs, ands, or buts--and that they know exactly where each of those dollars will come from. Here's how the pie breaks down: In addition to $100 million in state-approved bonding, the current calculation calls for $274.3 million in "New Starts" funding from the Federal Transit Administration. Thanks in part to the efforts of U.S. representative Martin Sabo, the ranking Democrat on the House Transportation Appropriations Committee, $70 million of that has been appropriated over the last three years; MNDoT hopes to have an agreement for the rest in place this fall.
An additional $70 million is expected from the Metropolitan Airports Commission (MAC), to pay for stations at Minneapolis-St. Paul International Airport and tunnels under the runways. Hennepin County is to kick in another $70 million, and state and county together are offering $34.3 million in "in-kind" contributions, largely land and rights of way. All together, that works out to a capital budget of $548.6 million.
Critics, however, note that the tally doesn't include a few key items that together could bring the total price tag far higher. Among them is the almost $43 million being spent to accommodate light rail in the Highway 55 reroute project. Then there's close to $7 million for supplementary park-and-ride spots at Fort Snelling. Neither of those figures is included in the budget: MNDoT's Winter says that's because they are not directly part of the project the way, say, trains or tracks are.
An even bigger uncertainty has to do with the electrical wires, telecommunication cables, and sewer and water lines sitting under Fifth Street along the proposed light-rail route in downtown Minneapolis. MNDoT's cost-benefit analysis of the project, dated November 4, gave a "rough, preliminary estimate" of $100 million for moving those utilities and noted that "significant downward and upward variance from that estimate exists." All told, some 22 different entities have either cables or rights of way under the street. But the two companies with the largest chunks slated for relocation don't sound too enthusiastic.
"We don't think that our customers should be forced to pay for light-rail transit on their electric bill," says Jim Kucera, NSP's project director for light rail. Kucera says moving his company's wires alone will cost between $25 million and $37 million. NSP had been pushing for alternate routes, he adds, but the utility abandoned that effort in August when it became clear light rail's backers weren't interested. Similarly, US West public affairs manager George Blackwell estimates his firm's costs at $28 million to $35 million, and adds: "But with the costs of the unknowns, it could be even higher than that."
Kucera also points to a provision in NSP's franchise agreement with the city that says the company must be reimbursed for relocation expenses associated with construction projects sponsored by someone other than the city. Those costs, Kucera says, would have to be borne by whoever forces the utilities to relocate, arguably any of the entities funding light rail. The power company, Kucera adds, has sought an outside legal opinion on the matter and believes its position is strong. Winter says the department disagrees. "I guess the attorneys will have to advise us on that," he offers.
Winter adds that MNDoT has asked its consultants to work up recommendations for how to handle the utility relocation issue. "We're confident that it's going to be substantially less than $100 million," he concludes. Meanwhile out at the airport, questions linger regarding the $70 million of MAC funding for light rail: In other cities, airlines have balked at seeing airport dollars spent on non-flight-related projects, but the FAA has green-lighted similar projects. The MAC, says spokeswoman Wendy Burt, asked the FAA for permission back in June, but so far has not received a definitive response. FAA spokesman Tony Molinaro will only say that "We hope to reply soon."
As for the billion-dollar price tag cited by opponents, Winter says the figure has no foundation. "I guess if you want to be critical, you can make those statements. But we think we're delivering the project that was promised at a reasonable cost."
That may be what the department intends to do, counters Krinkie--but just watch what happens once the construction crews get going: "I don't know too many projects of this size or nature that come in under cost estimates."
Correction published 2/9/2000:
This story contained two typographical errors: The Bechtel Corp.'s 1999 sales figure should have been $13 billion, not $13 million; conversely, the amount of federal funding slated for the Hiawatha light-rail line should have been $270 million, not $270 billion. The above version of the story reflects the corrected text. City Pages regrets the errors.
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