Although it has already been explicitly stated in two letters from the federal government, Federal Transit Administration (FTA) Chief Counsel Dorval Carter on Monday reiterated that if Cincinnati were to unravel the $132.8 million streetcar project, the city would lose $40.9 million in federal grants and another $4 million in federal funds would be transferred to the state government, which could appropriate the money to any project in Ohio.
The clarification is necessary because Mayor-elect John Cranley and a majority of the incoming City Council are looking into pausing and potentially canceling the streetcar project once they take office in December. Cranley says he will lobby the federal government to reallocate the federal funds, even though the federal government has repeatedly insisted it’s not going to happen.
Carter joined City Council’s Budget and Finance Committee on the phone on Monday to walk council members through the legal technicalities involved in cancellation and how the federal government would react to such circumstances.
According to Carter, merely delaying the project at this point would break the city’s agreement with the federal government and lead the federal government to restrict the federal funds, ask the city to repay the money it already spent or terminate the deal altogether.
Still, Carter said cancellation might not hurt the city’s chances, at least from a legal perspective, of obtaining federal funds for other projects.
“It will not preclude you from pursuing other projects,” he said.
But Carter agreed with Vice Mayor Roxanne Qualls that the city’s credibility could be weakened if the streetcar project were canceled.
President Barack Obama’s administration has prioritized light rail projects like the streetcar, according to Carter, so the reclaimed federal money would likely go to other cities pursuing similarly ambitious transit projects.
At a press conference following the council meeting, Cranley appeared unfazed by the news.
“If we have to, we’ll give the money back,” he said.
Although much noise was made about the council meeting, there wasn’t much news in the way of substance. The federal government already outlined the cancellation costs in separate letters sent to Mayor Mark Mallory in June and earlier in November.