total amount of 29 settled claims by highway contractors who lost work from the state government shutdown$5 million
claimed savings in government spending due to the shutdown65
additional projects for which contractors already have filed claims or may file claims
Jan. 26: Cost of Minnesota government shutdown still climbing
- Article by: PAT DOYLE
- Star Tribune
- January 26, 2012 - 7:49 PM
Last fall, state officials painted a bright picture of the government shutdown's impact.
Legislators on the Senate Transportation Committee got a darker view Thursday, because of the escalating cost of claims by highway contractors for lost work.
While 29 claims have been settled for $2 million, the potential cost to taxpayers is much greater. Contractors for 65 projects have filed or may file additional claims, "and some of those are larger projects," said Jon Chiglo, engineering services division director for the Minnesota Department of Transportation.
"We all said it was going to be costly, but we didn't know how costly," said Sen. John Howe, R-Red Wing.
The latest assessment challenges the significance of a report last fall by Minnesota Management and Budget, which concluded that the shutdown saved $5 million in government spending, without accounting for contractor claims.
Tim Worke, director of the highway division of the Associated General Contractors of Minnesota, said total claims are likely to be "in the tens of millions."
He told legislators Thursday that the Management and Budget report showing the shutdown saved $65 million and cost $60 million was misleading.
MnDOT has not released a figure for current claims.
Besides costing the state money, interruption of road work during the three-week shutdown had a magnifying effect on the progress of projects. Restarting the projects took time because contractors and subcontractors fell out of order in obtaining steel, and some workers found jobs in North Dakota.
Thirty-six projects had 2011 work pushed back to this year or later, MnDOT told the Transportation Committee on Thursday. Twelve projects did not start as expected in 2011 and will begin this year.
It could have been worse.
"The mild fall that we had and the lack of rain accommodated us in many ways to complete work," Chiglo said.
The projects that continued into this year "were for the most part large scale ... or at a point where they couldn't get any more work done last fall."
In response to a question from Howe, Chiglo said MnDOT had predicted that a shutdown could cost from $500,000 to $1 million a day, depending on the length of a shutdown.
"Do you think it's going to come out to about what you estimated?" Howe asked.
"At this point it's too early to say what the total estimated cost is," Chiglo replied, noting that claims are still coming in.
Worke criticized the MnDOT system for processing claims, saying, "It's been somewhat frustrating it's taken this long."
Contractor Lori O'Malley, owner of O'Malley Construction, told the committee the interruption of work was so severe that it threatens the survival of her business.
"This impact is very far-reaching and very devastating," she said.
Pat Doyle • 612-673-4504
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