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City Council Scrutinizes Streetcar Budget Fixes

By German Lopez · May 15th, 2013 · City Desk

At a Budget and Finance Committee meeting on May 13, City Council members grilled City Manager Milton Dohoney Jr. on how the city will fix the streetcar project’s $17.4 million budget gap and whether paying for the cost overrun to save the project is worth it.

Supporters of the streetcar pushed questions and comments that suggested the streetcar will provide the city with a large return on investment, which was supported by Dohoney’s testimony and previous studies from HDR, a consulting firm, and the University of Cincinnati. Opponents suggested the overruns have made the project, which now stands at an estimated $133 million, too expensive.

In a memo issued April 30, Dohoney recommended various capital funding sources to fix the streetcar budget gap, including a temporary reallocation of Music Hall renovation funds and money that would have otherwise gone to infrastructure projects around the Horseshoe Casino.

The proposals would not raise taxes.

Still, there are a few remaining uncertainties. Dohoney said he doesn’t know for certain whether Messer, which responded to the city’s bid process with the lowest construction bid, is still willing to contract with the city under the terms it previously offered. He said Messer officials have indicated they are still interested, but it remains uncertain until a contract is signed.

Another uncertainty is exactly how much laying down the tracks will cost. Dohoney said it won’t be possible to gauge the exact cost until Messer or any other company contracts with the city and begins actual work on the project.

For those situations, Dohoney said the project has a $10 million contingency fund available, as required by the federal government.

The city is also working with the federal government to obtain another $5 million that could be used for contingency or to undo some of the overrun fixes being looked at, but federal officials are waiting to see how the city government reacts to the current cost overrun problems before a decision is made, according to Dohoney. 



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