The Rochester City Council will be asked Monday to approve a construction contract for the city's planned rapid-transit system while rejecting another amid anticipated cost increases.

The Link Bus Rapid Transit project's estimated budget has increased from $145 million to $175 million, partly due to a federal requirement to add up to $17 million in contingency funds to the project.

The project was awarded nearly $85 million in federal funding last year, with state and county Destination Medical Center funds related to transit approved to cover most of the remaining anticipated costs.

The state DMC Corp. board had planned to hold a special meeting on Feb. 28 to consider approval of added funds, but DMC Economic Development Agency Communication Manager Geno Palazzari reported the meeting was canceled after city officials reported board action isn't needed ahead of Monday's City Council meeting.

On Monday, the council will be asked to approve a nearly $7.7 million contract with a contract to Elcor Construction, Inc., for work creating public spaces at Link's western hub.

Elcor's proposed cost, which was the lowest of five bids, is
roughly $1.4 million less than the city's original cost estimate for work that includes creating a transit center plaza near Cascade Lake.

At the same time, the council will be asked to reject bids for infrastructure and other work along the 2.8-mile Link route, which is estimated to cost $58.5 million.

City staff is recommending rejection of the bids received due to "irregularities and good faith errors" in the process. If they are rejected, the council will be asked to seek new bids for the planned work.

The requests are on the council's consent agenda for Monday's 6 p.m. meeting in council chambers of the city-county Government Center, meaning they could be approved without comment, unless a council member seeks to separate them for individual consideration.

While the Elcor contract was less expensive than the city's estimates, Deputy City Administrator Cindy Steinhauser said the bids being rejected were more expensive than expected. She also noted that property purchases related to the Link project were at a higher cost than initially estimated, which contributed to the anticipated budget increases.

Two additional construction project will also be considered as the project moves forward. City staff have estimated a required addition to the city's bus maintenance bay will cost roughly $5.5 million and public restrooms at the western end of the Link route are estimated to cost $2.5 million.

Potential contracts for the bus bay work and restrooms haven't been submitted council review.

Depending on final costs, the DMCC board could be asked to add to the $75.2 million it's already approved for the Link project's construction, which is set to start this year with plans to have the system operational by the end of 2026.

According to the 2025 DMC report to the Minnesota Legislature, the DMC effort has secured $15 million in state transit aid and $22 million in county transit aid through 2024. It’s a portion of the $69.6 million in state transit funding and $46.4 million in county funding expected by the end of the DMC initiative' 20 years.

The unexpected cost for the planned Link system isn't the first time the budget for the DMC-funded transit project has changed.

In 2021, a proposed the U.S. Department of Transportation budget included $56.1 million, for the transit project, which had an anticipated $114 million price tag at the time.

Less than a year later, project estimates rose to $146.8 million with an expanded route to create a western hub near the intersection of Third Avenue Southeast and Sixth Street.

The potential budget could have been higher, with earlier proposals extending the north-south section of the route to the former Seneca Foods canning facility site near the intersection of Third Avenue Southeast and 12th Street.

Other past plans considered before the current bus-based system was developed, included proposals for a ground level and elevated light-rail systems through downtown, with the bus option selected as a system that could provide flexibility if the route needs to change in the future.

Link’s current planned 2.8-mile route through downtown will include designated transit lanes along Second Street, between Avalon Cove Court Southwest and Third Avenue Southeast, as well as approximately four blocks south on Third Avenue.

Seven transit stations are being developed. Planned locations are:

• The planned West Transit Village development on what in currently Mayo Clinic’s west shuttle lot on Second Street Southwest near Cascade Lake

• Near the 19th Avenue Southwest intersection of Second Street

• Near Saint Marys Hospital

• Near the Sixth Avenue Southwest intersection with Second Street 

• Near the Second Avenue Southwest intersection with Second Street 

• Near the Mayo Civic Center 

• Near the intersection of Third Avenue Southeast and Sixth Street. 

The West Transit Village and Sixth Street Southeast sites will serve as endpoints to the dedicated route, with other stations offering boardings in each direction every 5 minutes during peak periods and every 10 minutes during other times, including weekends.

Peak periods are expected to be from 6 a.m. to 9 a .m. and 3 p.m. to 6 p.m. on weekdays, with service operations anticipated from 5 a.m. to midnight on weekdays and 8 a.m. to midnight on weekends.

Service will be provided with specially designed 60-foot electric buses offering at-grade entrance, with rider amenities expected to include charging ports for cellphones and other devices.

The system is being designed to operate without fares. The majority of operating expenses will be covered by state and federal transit funds, with Mayo Clinic agreeing to fill the funding gap for 20 years.

Note: This report was updated with the cancellation of the Feb. 28 DMCC board meeting.

Upcoming meetings

Meetings scheduled to be held during the week of March 3 include:

Rochester

• City Council, 6 p.m. Monday in council chambers of the city-county Government Center, 151 Fourth St. SE. The meeting will livestream at www.rochestermn.gov/meetings/council-meetings and be available on Spectrum cable channel 180 or 188.

• Airport Commission, 2 p.m. Tuesday in the administration conference room of City Hall, 201 Fourth St. SE.

• Park Board, 4:30 p.m. Tuesday in room 104 in City Hall.

Olmsted County

• Physical Development Committee, 8 a.m. Tuesday in conference room 1 of the Government Center.

• Health, Housing and Human Services Committee, 9:30 a.m. Tuesday in conference room 2 for the Government Center.

• Board of County Commissioners, 11 a.m. Tuesday in the board chambers of the Government Center.

• Administrative Committee, 1 p.m. Tuesday in conference room 1 of the Government Center.

• Planning Advisory Commission, 7 p.m. Tuesday, in board chambers of the city-county Government Center.

Rochester Public Schools

• School Board, 5:30 p.m. Tuesday in the boardroom of the Edison Building, 615 Seventh St. SW.