A local board that contributed more than $1 billion to metro-area transit projects has agreed to dissolve itself — following months of squabbling over the terms of the breakup.

The move by the Counties Transit Improvement Board (CTIB) comes after its members reached an agreement over how much Dakota County should be paid in the dissolution. Following negotiations over the weekend, the compromise breakup fee is $21.3 million, according to CTIB Chairman Peter McLaughlin, who is also a Hennepin County commissioner.

While the full CTIB board must approve the tentative agreement, the news appears to fend off a forced dissolution that is part of the omnibus transportation bill pending at the Capitol.

"This removes any uncertainty about CTIB," McLaughlin said.

CTIB raises money mostly through a quarter-cent sales tax for transit that is levied in Hennepin, Ramsey, Dakota, Anoka and Washington counties. The board consists of representatives from the counties, as well as the chair of the Metropolitan Council.

By dissolving the board, the CTIB counties could legally raise the tax to a half-cent, raising more money for transit projects, including the Southwest and Bottineau light rail lines. Only Hennepin and Ramsey are expected to raise the tax, however.

Dakota County voted last year to leave the board by 2019, claiming it contributed more to CTIB's coffers than it received.

CTIB moved earlier this year to dissolve itself, but Dakota County said the amount of money it was getting in the breakup wasn't enough. The suburban county initially said it was owed $29.1 million, while the CTIB board said the figure was more like $16.5 million.

Until a few days ago, a compromise seemed unlikely. McLaughlin said Dakota County called to renew discussions.

Part of the tentative agreement involves the Met Council paying $1.4 million in annual operating costs for the Red Line even after the board dissolves. The bus-rapid transit line connects the Mall of America to an Apple Valley transit station.

"I think this is a very positive outcome," said Mike Slavik, chairman of the Dakota County board. "We're moving in the right direction."

The Dakota County board will consider the deal at its May 23 meeting, he said. Other member counties are expected to vote on the pact as well.

In related news, the deadline for companies to submit bids for the $1.9 billion Southwest light-rail civil construction contract was delayed for a third time. The new deadline is June 6.

Laura Baenen, spokeswoman for the Southwest project, said the deadline was extended "due to continued intense interest from potential bidders who need more time to complete their bids."

She said bids would be awarded in August, with construction on the 14.5-mile line starting in late summer.

The contract covers the construction of 29 new bridges for light rail, roadway and freight rail; six pedestrian tunnels and tunnels under Hwy. 62 and in the Kenilworth corridor; 117 retaining walls; a parking ramp, seven surface lots, 15 stations, sidewalks and trails; the modification of seven existing bridges; reconstruction of freight rail tracks; road improvements, and landscaping.

It is unclear how much the work will cost. Mark Fuhrmann, Metro Transit's New Starts program director, told CTIB members last week the contract will be "nine places left of the decimal point."

The Southwest line could still be derailed by a pending federal lawsuit filed by a Minneapolis nonprofit group that seeks to block the project. It must also win $929 million in grant funding from the Federal Transit Administration.

Janet Moore • 612-673-7752