Dakota County, tentative agreement get CTIB dissolution back on track

Member counties, Met Council meet over the weekend to reach tentative agreement

As part of the tentative Counties Transit Improvement Board dissolution agreement, the Metropolitan Council would pick up Cedar Avenue Red Line operating costs. File photo

The five members of the Counties Transit Improvement Board have developed a tentative agreement to dissolve the regional planning group after negotiations over the May 6 and 7 weekend.

The Dakota County Physical Development Committee, which includes all of the Dakota County commissioners, passed a resolution May 9 to approve the agreement, which would pay the county $21.3 million as part of the dissolution. The payment was a sticking point of the dispute to disband.

“Our board’s action to endorse this new agreement is a strong message of our support for voluntary dissolution now that acceptable terms have been reached,” the County Board said in a statement. “The board recognizes the efforts of multiple parties in working toward a fair solution. We particularly appreciate the continued understanding of and support for our county’s position by the Dakota County public, business community, and legislative delegation, which has helped immensely in bringing us to this point.”

A bill was proposed in the Legislature that would have forced CTIB to disband, but that appears to be unnecessary.

Dakota County held up an earlier proposed CTIB break up in March as the county sought to receive a dissolution payment of $29.1 million instead of the $16 million as proposed by the four other member counties — Hennepin, Ramsey, Washington and Anoka, along with representation from the Metropolitan Council.

The county dug in on its stance as it attempted to garner some of the money it says it has disproportionately contributed over the years.

Dakota County officials said in June 2016 that they wanted to leave CTIB by 2018 because the county was putting more money into CTIB projects than the dollar value of the projects being built in the county.

Dakota County said the original CTIB dissolution proposal did the same thing as it would have returned 55 percent of the county’s investment while the average return for other member counties would have been 91 percent.

Dakota County’s dollar-for-dollar return on investment stance didn’t sit well with other CTIB members since they said it didn’t take into account that many Dakota County commuters use CTIB transportation projects like the Hiawatha Light Rail.

Hennepin County Commissioner Peter McLaughlin said previously that at the outset of CTIB’s formation there was an explicit conversation about whether counties should get back what they put in dollar for dollar.

“We rejected that,” McLaughlin said in March. “The whole mindset of Dakota County that everyone gets back what they put back in, that was not the mindset when CTIB was formed.”

By disbanding, the counties will be on their own from a tax-generation standpoint as they will be able to access the up-to-half cent local county transportation sales tax that other Minnesota counties can.

It is expected that Hennepin and Ramsey counties would go to that maximum to complete such projects as the Southwest Light Rail from Minneapolis to the western suburbs and Bottineau Light Rail that would extend east of St. Paul.

Dakota County officials say the disbanding of CTIB rather than the county exiting it alone will benefit Dakota County since it won’t have to pay a $12.9 million debt repayment to CTIB in December 2018.

The disbanding also will result in the county being able to enact the local transportation tax five quarters earlier, which will generate approximately $20 million.

Dakota County said if a dissolution agreement is approved by June 30, 2017, the current 0.25 percent CTIB tax would terminate on Sept. 30, 2017 and a new 0.25 percent county transportation tax would be collected beginning Oct. 1, 2017.

In addition to the dissolution payment of $21.3 million, the agreement says Dakota County would be paid back any future CTIB refunds of repayments on the same basis as other member counties.

The county also will not be required to pick up CTIB’s current 50 percent share of Red Line bus rapid transit operating cost subsidies. The Star Tribune reported that the Met Council would pick up the estimated $1.4 million annual expenses to run the line that currently goes from Apple Valley to the Mall of America in Bloomington.

The next CTIB meeting is June 21.

Contact Tad Johnson at [email protected] or at twitter.com/editorTJ.