Accountability for bonded projects

Hundreds of millions of dollars are annually expended on bonds for public capital investment projects, and some representatives think more needs to be done to quantify actual return on the state’s investment.

The House Capital Investment Committee laid over two bills April 12 that would move the project selection process toward one that could include a return on investment analysis and a report on the number of jobs created.

Rep. Sarah Anderson (R-Plymouth) sponsors HF194 that would require Minnesota Management & Budget to report by Sept. 1 of each odd-numbered year on the jobs created or retained as a result of capital project funding during the previous biennium.

She said that during bonding hearings supporters talk about the number of jobs to be created or retained, but those numbers are never quantified. Her bill would help lawmakers get “a better picture of the jobs generated, so that the left hand knows what the right hand is doing as far as the outcome, especially on the projects we authorize.”

Sponsored by Rep. King Banaian (R-St. Cloud), HF369 would encourage completion of a return on investment form as part of the project application.

Information sought would include a comprehensive description of the project’s statewide value and a 10-year look at cost of ownership, revenue projections and the net jobs impact to the state. Banaian said the information would help the committee determine which projects to fund.

However, Rep. Morrie Lanning (R-Moorhead) raised a concern over a one-size-fits-all approach to measuring the value of projects.

Rep. Tom Rukavina (DFL-Virginia) questioned how emergency projects would be dealt with, such as flooding or, in a situation like the city of Aurora, where a sewage plant blew up.

Banaian said that if the bill was to move forward, he would need to “clearly address emergency situations,” adding that his intent is to have the form only as a tool and not as a requirement to have a project bonded.

The companion to Anderson’s bill, SF535, is sponsored by Sen. Chris Gerlach (R-Apple Valley), and the companion to Banaian’s bill is SF500, sponsored by Sen. John Pederson (R-St. Cloud). Both await action by the Senate Capital Investment Committee.