(UPDATE) Major Bid For DMC Transit Project Nearly Double Estimate

Rochester, MN (KROC-AM News) -  The City of Rochester has issued a statement in response to comments made by Rochester City Councilmember Shaun Palmer about the cost of the planned Link Bus Rapid Transit system for the Destination Medical Center initiative.

Palmer indicated a major bid for work on the project came in significantly higher than expected and the cost of the transit project has grown by $40 million to $175 million. The City Council is expected to act on the bid at its meeting in early March.

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A spokesperson for the city explained that the initial budget of about $144 million was increased to about $160 million after the Federal Transit Administration required the city to add up to $17 million for contingency expenses. The federal agency earlier approved nearly $85 million in federal funding for the project.

Read More: Feds Give Final Approval For Rochester’s Link Bus Rapid Transit

The statement from the city says the low bid for one of the project's bid packages recently came in at nearly twice as high as expected. The estimate was about $30 million and the low bid was for about $57 million, which has pushed the estimated price tag to approximately $160 million without the required contingency fund. The spokesperson says the city and DMC are now working to identify an additional $15 million in contingency funding which would boost the overall cost to $175 million. The city spokesperson noted it's possible that the contingency will not be needed.

The city spokesperson says approximately $20 million has already been spent on planning and design work, $20 million on the purchase of the buses for the transit system, and $12 million for property acquisition. Two more bid packages, representing about 5% of the total cost of the project, still need to be awarded.

The Link BRT system is designed to utilize custom electric buses to provide fare-free transportation to Mayo Clinic employees, patients, other visitors, and Rochester residents along a 2.6-mile route. A ridership forecast developed in 2019 estimated that there would be nearly 6000 daily linked trips along the route from the planned West Transit Village next to Cascade Lake and along 2nd Street Southwest to the proposed Downtown Waterfront Southeast site in the vicinity of the former Kmart Store.

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Rochester, MN (KROC-AM News) - The bids for the public transit system planned to support the Destination Medical Center initiative in Rochester have come in massively over budget.

Following a briefing on the bids, Rochester City Councilmember Shaun Palmer disclosed to KROC News that three bids for the huge construction project were submitted. The recommended bid to build the Link Bus Rapid Transit System raises the total cost to about $175 million. According to Palmer, that would push the project's costs nearly $40 million over budget.

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The Link BRT system is designed to utilize custom electric buses to provide fare-free transportation to Mayo Clinic employees, patients, other visitors, and Rochester residents along a 2.6-mile route. A ridership forecast developed in 2019 estimated that there would be nearly 6000 daily linked trips along the route from the planned West Transit Village next to Cascade Lake and along 2nd Street Southwest to the proposed Downtown Waterfront Southeast site in the vicinity of the former Kmart Store.

Palmer says the larger than expected bid for the work will be presented to the Rochester City Council during its first meeting in March. He says the City Council can either accept the bid or reject it, which would likely scuttle the project.

According to Palmer, about $58 million has already been spent planning and preparing for the Bus Rapid Transit system, which is considered crucial to the Destination Medical Center Initiative. That figure includes land acquisition and purchasing the buses. If approved, the project is scheduled to get underway this year and the new transit system is slated to become operational by the end of next year.

Read More: Feds Give Final Approval For Rochester’s Link Bus Rapid Transit

The federal government last year awarded nearly $85 million in funding for the Rochester transit project. The remainder of the funding would come from state transit aid that was included in the original Destination Medical Center legislation and from the Olmsted County transit aid using local dollars generated through a countywide .25% sales tax that was also part of the DMC legislation.

Palmer says the additional funding needed to cover much higher-than-expected construction costs would come from state and county sources and would not come from local property taxes. He did note that the bid, which filled approximately 4000 pages, includes more than $17 million for potential contingency expenses.