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        DEPARTMENT OF TRANSPORTATION:                           RESPONSIBILITIES: CONSTRUCTION:
        Responsibilities of Commissioner of Transportation and Metropolitan Council in connection·
        with construction of light rail transit project discussed: Minn. Stat. §§ 471.59, 473.399
        473.3997.
                                                                                                        229A
                                                                                  (Cr. ref. 1005, 1007, 1016)
                                                     June 30, 2000


        Representative Jim Rhodes, Chairman
        Governmental Operations and Veterans
        Affairs Policy Committee
        Minnesota House of Representatives
        409 State Office Building, 100 Constitution Avenue
        St. Paul, MN 55155-1206

    Dear Chairman Rhodes:

            Thank you for your letter in which you requested a formal opinion, pursuant to Minn.
    Stat. § 8.05, regarding the Hiawatha Light Rail P-roject Management Plan. Your letter was
    accompanied by a resolution, passed May 1, 2000, of the House Governmental Operations and
    Veterans Affairs Policy Committee.

            Your letter and the resolution requested that--t;p.is Office opine as to whether the Hiawatha
    Light Rail Project Management Plan, as submitted by the Metropolitan Council and approved by
    the Federal Transit Administration, conforms with Minnesota Statutes and the Legislature's
    intent for control of the project.
                                                     FACTS-

    I.        OVERVIEW OF PROJECT MANAGEMENT PLAN.

           A project management plan is a detru.Ted document required by the Federal Transit
    Administration ("FTA") to be submitted by parties seeking grants from the FTA. The Hiawatha
    Light Rail Project Management Plan ("PMP") was submitted to the FTA by the Metropolitan
    Council, as the proposed grantee of the FTA funds.

            The Attorney General's Office has obtained a copy of the PMP 1 dated April 14, 2000, a
    copy of which is attached as Exhibit 1. Chapter 2 of the PMP is entitled "Management
    Organization, Approach and Responsibilities." The Metropolitan Council has advised this
    Office that the PMP dated April 14, 2000 was submitted to the FTA and subsequently approved
    by it.
    1
      The Attorney General's Office has received and reviewed only Chapter 2 of the PMP. Unless
    the context indicates otherwise, references herein to the PMP refer to Chapter 2 of the PMP.
 Representative Jim Rhodes
 June 30, 2000
 Page 2

         The PMP sets forth a detailed description of "the scope of the [light rail transit] project
 implementation during preliminary engineering, final design, construction startup, and revenue
 services." PMP <][2.01. The PMP states that its focus is on "a description of adequate staff
 organization, complete with well-defined reporting relationships, statements and functional
 responsibilities, job descriptions and job qualifications and... [a] description of organizational
 structures, management skills, and staffing levels required throughout the construction phase" of
 the light rail transit project. PMP '][2.01.
        In outlining responsibilities for the project, the PMP states as follows:
        The project blends the strengths of the Metropolitan Council, the Minnesota
        Department of Transportation, the Metropolitan Airports Commission, and other
        project partners. The Metropolitan Council is the Federal grantee, and is in
        charge of the project. Mn/DOT is responsible for designing af!d constructing the
        project, and the Metropolitan Airports Commission is responsible for construction
        of the tunnel and airport station.

PMP '1[2.04. l.
      The following describes the respective responsibilities and a:ttthority of the Metropolitan
Council and the Department of Transportation as described in the PMP.

II.     RESPONSIBILITIES OF DEPARTMENT OF TRANSPORTATION

        The PMP states that "as delineated in the state's enabling legislation (Mitrn. Stat.
§§ 473.399-473.3998), the Minnesota Department of Transportation, acting through its
Commissioner, has primary responsibility for the design and construction of the project."
PMP '1[2.04.4.2. However, the PMP also states that the Department of Transportation's role in
the project is to serve as an "agent" of the Met Council. PMP <J[2.01.
     Responsibilities of the Department of Transportation are specifically set forth in the
PMP. Those include the following:
       •   Preliminary Design Plan
       •   Design Management
       •   Bases of Design
       •   Procurement
       •   Preliminary Engineering
       •   Soils Borings
       •   Aesthetic Design Guidelines
       •   Environmental Services
       •   Design/Build Contract Faultation
       •   Station Design
       •   Utility Relocation
       •   Design/Build Civil Contract
Representative Jim Rhodes
June 30, 2000.
Page 3

              -   RFP, Phase I
              -   Roster of Design/Build Firms
              -   Design/Build Team Contracts for Proposals
              -   RFP, Phase II
              -   Selection of Design Build Contractor
              -   Design/Build Contract
              -   Oversight of Design/Build Contractor

        ■   Manage Design/Build Contract
             - Quality Assurance
             - Quality Control
             - Document Control
             - Materials Testing
             - Change Management
             - Cost Control
             - Schedule Control
             - Construction Oversight
               Risk Management
PMP 'f2.04.4.2. The above provisions of the PMP appear to indicate that the responsibility for
designing and building the project rests with the Department of Transportation.
III.   RESPONSIBILITIES OF THE METROPOLITAN COUNCIL

       The PMP recognizes that the Metropolitan Council is designated by state law as the
operator of the completed light rail system. PMP 12.04.4.1. The PMP also identifies the
Metropolitan Council as the Federal Transit Administration grantee for the project.
PMP !f2.04.4. l.
         With respect to specific responsibilities, the PMP states that the Metropolitan Council is
the final decision maker in all aspects of the project. PMP 12.04.4.1. Indeed, one of the
responsibilities of the Metropolitan Council is to "approve design and construction activities" for
the project. PMP 12.04.4.1. The PMP also identifies the Metropolitan Council as the "lead
agency" for both design and build and program management contracts. In addition, the PMP
states that the Council approves construction contracts. PMP 'f2.05.l and ')[2.05.2.2.
        The coordination of the project is the responsibility of the Project Management
Consultant. PMP 12.05.1. The Project Management Consultant's mission is to "achieve the
performance, schedule and budget objectives of designing and constructing the Hiawatha Light
Rail Transit Project." The Project Management Consultant reports to the Metropolitan Council.
PMP <][2.05.1.
      To assist the Project Management Consultant, the chair of the Metropolitan Council and
the Commissioner of the Department of Transportation created the Hiawatha Project Office
("HPO"). PMP <][2.05.2. The function of the HPO, as set forth in the PMP, is as follows:
 Representative Jim Rhodes
 June 30, 2000
 Page 4

           The HPO provides advice from the participating entities relative to the
           Commissioner's responsibility under a 1992 Minnesota State Statute, as amended
           in 1998 and 1999 (Minnesota Statute 473.99-473.3998), to design and construct
           the Hiawatha Light Rail Transit System.

 PMP 1)[2.05.2. It is not clear from the PMP to whom the HPO provides advice. However, it
 appears that such advice is provided to the Program Management Consultant (PMP «)(2.05.2)
 who, as noted above, reports to the Met Council.
       The HPO is divided into units. PMP 12.05.2. Two of those units, the Office of Project
Director and Design/Build Program Management, are relevant to this discussion and are
described below.
        The Project Director Office consists of a Project Director, Senior Department of
Transportation and Metropolitan Council representatives and program managers and staff. PMP
'f2.05.2.2. The Project Director manages all departments within HPO including Design Build
Program Management, Finance and Administration, Public Relations, Operations and
Maintenance and Planning and Environment. PMP 'l[2.05.2. The Project Director reports to the
Met Council and is specifically accountable to the Metropolitan Council for the Design and
Construction of the Project. PMP 12.05.2.2. Among the Project Directq.f's principal
responsibilities are the following:
       •       Prepare Hiawatha Light Rail Design and Construction Project Plan for approval-­
               Project definition, implementation approaches, schedule, budget.
       •       Prepare direct contract formation and administration process for construction
               contracts, service contracts and master agreements (e.g. with utilities,
               municipalities, etc.) for Metropolitan Council approval.
       •       Interface with contractors and other third parties as required for progress of the
               project.
       •       Manage principles of design, construction, commissioning and· payments for work
               and services.
PMP '{2.05.2.2
       The Design/Build Program Management Unit of HPO "provides the expertise,
procedures and staff resources to manage the Hiawatha Light Rail Transit Design Build contract
procurement and administration for the Metropolitan Council." PMP <][2.05.2.4. The Design
Build Program Management Unit reports to the Project Director and receives policy,
administrative and technical direction from and through the Project Director and guidance on
    Representative Jim Rhodes
    June 30, 2000
    Page 5

     issues from the Design and Construction Committee.2 PMP <][2.05.2.4. The Design/Build
     Program Management Unit manages the Design Build Contractor selection process and
     administers the selected design build contractor from inception through contract close out. PMP
    'l[2.05.2.4. The responsibilities of the Design/Build Program Management Unit include the
    following:
            ■   Develop and maintain Design/Build Program Master Budget and Cost Estimate
            ■   Develop and maintain Design/Build Program Master Schedule
            ■   Procure and administer design build contractor
            ■   Establish Procurement Standards
            ■   Establish Design Standards
           ■    Establish Construction Specifications
           ■    Execute Invoice Verifications and Payments
    PMP '][2.05.2.4.
        The PMP states that the Design/Build Program Manager ''was created in July 1998 to
fulfill MnDOT's role of responsibility for the design and construction of the Light Rail Transit
system as described in legislation." PMP '][2.07.3.
        It is not clear from the PMP to whom the Design/Build Program Manager reports. The
description of the position is included in a section entitled ":Minnesota Department of
Transportation -- Metro Rail Office." PMP <j[2.07.3. However, the Design/Build Program
Manager also appears to be a part of the Design Build Program Management Unit, which reports
to the Project Director, who reports to the Metropolitan Council.
        The Attorney General's Office was provided an organizational chart that schematically
describes the project management relationships between the Metropolitan Council and other
entities involved in the project. A copy of the organizational chart is attached as Exhibit 2.
According to the chart, the Commissioner of the Department of Transportation reports directly to
the Metropolitan Council. Design/Build Program Management staff report to the Metropolitan
Council through the Project Director of HPO.
      There is a dashed line running upwards from Design Build Program Management to the
Department of Transportation. The significance and meaning of the dashed line are unknown.




2
 The Design and Construction Committee is responsible for the technical issues regarding the
design and construction of the project. The Committee reports to the Design/Build Program
Manager of HPO. PMP <][2.06.2.
 Representative Jim Rhodes
 June 30, 2000
 Page6

                                      LAW AND ANALYSIS

 I.      APPLICABLE STATE LAW

         The statutes addressing the planning, design and construction of the Hiawatha Light Rail
 Project are set forth in Minn. Stat. §§ 473.399-473.3997 (the "Enabling Legislation").
 Throughout these sections, the Metropolitan Council and the Department of Transportation have
 statutorily prescribed responsibilities in connection with the project.
        With respect to the Metropolitan Council, Minn. Stat. § 473.399 requires the Council to
 adopt a plan to ensure that light rail transit facilities in the metropolitan area will be acquired,
 developed, owned and capable of operation in an efficient manner and in coordination with buses
 and other transportation modes. Regarding this plan, Minn. Stat. § 473.399, subd. l(b) states as
 follows:
        The light rail transit plan or first phase of the plan required by this section must be
        adopted by the council before the commissioner of transportation may begin
        construction of light rail transit facilities. Following adoption of the plan, the
        commissioner of transportation shall act in conformity with the plan. The
        commissioner shall prepare or amend the final design plans as necessary to make
        the plans consistent with the light rail transit plan.

        In connection with the preparation of design plans, Minn. Stat. § 473.3994, subd. 7 states
as follows:

        Before proceeding with construction of a light rail transit facility, the
        commissioner [of transportation] must submit preliminary and final design plans
        to the metropolitan council. The council must review the- plans for consistency
        with the council's development guide and app!ove the plans.
        Minn. Stat. § 473.3993, subd. 3 goes on to state:
       The commissioner of transportation may use a design-build method of project
       development in construction for light rail transit. Notwithstanding any law to the
       contrary, the commissioner may award a design-build contract as a basis for
       request for proposals or requests for qualifications with bids.

In addition, in 1999, the Legislature appropriated to the Commissioner of Transportation $60
million "to match federal money to construct light rail transit in the Hiawatha Avenue
corridor ... " 1999 Session Laws, ch. 240, art. 1.
       Upon completion of construction of light rail transit facilities and the commencement of
revenue service using the facilities, the Metropolitan Council is directed to operate the facilities.
Minn. Stat.§ 473.4051.
    Represen�ative Jim Rhodes
    June 30, 2000
    Page7

    II.    ANALYSIS

            Minnesota law reflects the desired goal of an integrated transportation system and, to that
    end, requires the Commissioner of Transportation and the Metropolitan Council to ensure that
    the light rail transit and commuter rail facilities are planned, designed and implemented to move
    commuters and transit users about the metropolitan area, and to ensure that rail transit lines will
    interface with each other and other transportation facilities and services.
       The statutory roles of the Metropolitan Council and the Commissioner of Transportation
with regard to the light rail transit project directly relate to one another. The Council has the
authority for regional transit planning, preliminary and final light rairtransit design approval and
the operation of the light transit system. The Commissioner has the authority to plan, design and
construct light rail transit facilities and use design-build in construction.
         As noted above, various sections in the PMP indicate, consistent with the Enabling
Legislation, that it is the responsibility of the Commissioner of Transportation to design and
 build the light rail transit system. These include statements acknowledging that the Department
of Transportation has responsibility for the design· and construction of the project
(PMP <][2.04.4.2) and the inclusion in the detailed listing of Department res_ponsibilities the duties
"design management," the "design/build civil contract" and the management of the design/build
contract (PMP ':lf2.04.4.2). However, other sections of the PMP appear jnconsistent with those
sections to the extent they indicate that the Metropolitan Council is directly or indirectly
responsible for the design and construction of the project. These include. the statement that the
Department of Transportation's role in the project is to serve as an "agent" of the Metropolitan
Council (PMP <jf2.01); the statement that the Metropolitan Council is the "lead agency.._ for
design and build contracts (PMP 2.04.4.1); the.fact that the Project Manager, whose duties
include achieving the performance, schedule and budget 9bjectives of deigning and constructing
the project, reports directly to the Metropolitan Council (PMP '12.05.1);.and the accountability of
the Design/Build Program Management Unit to the Metropolitan Council. (PMP CJ[2.05.2.4).3
        On April 13, 2000, the law firm of Dorsey & Whitney provi9-ed to the Metropolitan
Council a legal opinion that the allocation of responsibilities and control between the Met
Council and the Commissioner as set forth in the PMP is authorized by applicable state law
(the ''DW Opinion"). A copy of the DW Opinion is attached as Exhibit 3.




3
  The PMP dated April 14, 2000 which was reviewed by the Attorney General's Office is a
redlined, updated version of a PMP dated March, 2000. Interestingly, the March, 2000 and prior
versions of the PMP indicated that the Design/Build Program Management Unit managed the
design/build contract for the Department of Transportation. The words ''Department of
Transportation" are stricken in the April 14, 2000 version and the words "Metropolitan Council"
are inserted. (PMP <][2.05.2.4) Similar redlined changes are contained elsewhere in the PMP.
 Representative Jim Rhodes
 June 30, 2000
 Page 8

         The DW Opinion states that while the PMP "might appear to give the Council a greater
 role in the management and control of the design and construction process than may have been
 anticipated in the [Enabling Legislation] ... , that role is a reasonable and legitimate means of
 implementing the final decision-making authority" which Minnesota law grants to the Council.
         Certain provisions in the PMP do appear to give the Metropolitan Council a greater role
in the design and construction process than is set forth in Minnesota law. It is not clear,
however, to what "final decision-making authority" of the Council the DW Opinion refers when
it states that such authority has been granted to the Council and justifies the level of involvement
of the Council which appears in the PMP. The DW Opinion provides no analysis or citation as
to any specific statutory authority for the role of the Metropolitan Council as described in the
PMP which, Dorsey & Whitney acknowledges, may be greater than that set forth in Minnesota
law.
         The DW Opinion also states that Minn. Stat. § 471.59 provides a basis for two or more
governmental units, by agreement, to jointly and cooperatively exercise any power common to
the units or any similar powers. The DW Opinion intimates that the joint powers statute applies
to the light rail project. Indeed, the DW Opinion states:
       The agreement which will implement this structure also constitutes an agreement
       whereby the Council and MnDOT are jointly agreeing to exercise the powers
       granted to them by the Minnesota Legislature to accomplish the pmposes set forth
       in the [Enabling Legislation] by the method set forth in the Project Management
       Plan.

        The Attorney General's Office is not aware of any joint powers agreement that has been
entered into between the Metropolitan Council and the Department of Transportation. As stated
in the DW Opinion, Minn. Stat. § 471.59 provides the authority for two or more governmental
units, by agreement, to jointly and cooperatively exercise any power common to both units or
similar powers. Minn. Stat. § 471.59 was passed in 1943 and is based on a California statute.
Kaufman v. Swift Co., 20 NW2d 34, 37 (Minn. 1947). The purpose of the California law has
been described as follows:
       The Act "mean[s] that cities may contract in effect to delegate to one of their
       number [or a separate agency created by the agreement] the exercise of a power or
       the performance of an act in behalf of all of them, and which each independently
       could have exercised or performed ... It grants no new powers but merely .sets up a
       new procedure for the exercise of existing powers."

Los Angeles v. South Gate, 51 Cal. Rptr.2d 878, 883 (1997), citing The City of Oakland
v. Williams 15 Cal.2d 542, 549, 103 P.2d 168 (1940).
      Here, not all of the statutorily prescribed powers and duties of the Metropolitan Council
and the Department of Transportation are common. As a result, the Department of
Transportation and the Metropolitan Council may enter into a cooperative agreement, but that
 Representative Jim Rhodes
 June 30, 2000
 Page 9

 agreement must reserve to the Commissioner of Transportation the authority delegated to him by
 statute, such as the authority to award the design-build contract.
        Statements in the PMP can be interpreted in more than one way with regard to the
respective responsibilities of the Metropolitan Council and the Commissioner of Transportation
pertaining to the design and construction of the light raii transit system. Accordingly, the
determination as to whether the PMP complies with state law is dependent upon the PMP's
interpretation and implementation by the Metropolitan Council and the Commissioner.4 To the
extent that the terms of the PMP are implemented in a manner consistent with the Enabling
Legislation, it is the opinion of this Office that the PMP conforms with Minnesota law.
                                         CONCLUSION

       The relevant legal standards and analysis regarding this matter may be summarized as
follows:
        1.       The Metropolitan Council has the authority to adopt a plan to ensure that light rail
transit facilities are developed and owned in coordination with other means of transportation.
Minn. Stat. § 473.399, subd. 1..
        2.     The Commissioner of Transportation must submit preliminary and final design
plans to the Metropolitan Council for approval. Minn. Stat.§ 473.3994, subd. 7.
       3.     The Commissioner of Transportation has the .authority to award the design-build
contract. Minn. Stat.§ 473.3993, subd. 3.
       4.      A governmental unit generally cannot delegate its discretionary authority to
another unit unless that unit has common authority. Minn. Stat.� 471.59.
     5.     The Commissioner of Transportation and the Metropolitan Council do not have
common authority to design and construct the light rail transit system. The Commissioner of


4
  An initial PMP was apparently drafted and submitted to the FfA in September, 1999. However,
the Attorney General's Office was not consulted or requested to review any part of the PMP until
April 10, 2000 -- only 21 days before the May 1, 2000 deadline for FfA approval established by
1999 Minn. Laws, ch. 240, art. 1. On April 10th, the Attorney General's Office received a copy
of Chapter 2 of the PMP which had been filed with the FfA on or about April 6, 2000. After it
received and reviewed the PMP, this Office contacted representatives of the Metropolitan
Council, the Department of Transportation, the Governor's Office and the FfA to express
concerns about ambiguities in the PMP. On April 11, 2000, this Office requested Pat Riley, the
Deputy Administrator of the FfA, to set up a meeting among State representatives and FrA
attorneys to clarify and resolve ambiguities between the PMP and Minnesota law. The meeting
was scheduled for April 13, 2000 in Chicago. After scheduling the meeting, the Metropolitan
Council obtained the DW Opinion and cancelled the Chicago meeting. The Attorney General's.
Office has had no further involvement with the PMP or the FfA since that time.
    Representative Jim Rhodes
    June 30, 2000
    Page 10

    Transportation has final authority to award the design-build contract. The Commissioner may
    consult with the Metropolitan Council, or any other party he deems appropriate, concerning the
    award of the contract.
            6.    The Commissioner of Transportation is responsible for the construction of the
    project and must oversee the construction to ensure compliance with bid specifications.
           7.      The Metropolitan Council may monitor the actions of the Commissioner of
    Transportation to ensure that the construction of the light rail facilities complies with the plans
    submitted by the Commissioner pursuant to Minn. Stat.§ 473.3994, subd. 7.
        The PMP is ambiguous and could have been clarified to clearly meet the parameters
established by Minnesota law. Rather than clarifying these ambiguities with the FfA in
April, 2000, the Metropolitan Council chose to obtain the OW Opinion and cancelled the
meeting. 5 Because of the ambiguities, we believe that compliance with Minnesota law depends
upon the manner in which the PMP is implemented. We believe that, as long as the
Commissioner issues the RFP, selects the contractor, awards the contl]lct and thereafter carries
out the responsibilities of the governmental unit that has.. awarded the contract, the PMP is
consistent with Minnesota law,

                                                 Very truly yours,


                                                 MIKE HATCH
                                                 Attorney General
                                                 State of Minnesota




Enclosures
AG: 387987,v. 01




5
    See footnote 4, supra.'
