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December 17th, 2013 By German Lopez | News | Posted In: News, City Council, Mayor, Streetcar

SORTA Agrees to Take on Streetcar Operating Costs

Mayor, council members argue offer falls short of demands

city hallCity Hall - Photo: Jesse Fox
The Southwest Ohio Regional Transit Authority (SORTA) on Tuesday indicated its willingness to pursue a public-private partnership to cover the streetcar’s operating costs, estimated at $3.4-$4.5 million a year.

The announcement could provide an avenue for business and philanthropic leaders to help fund streetcar operations through SORTA in an attempt to meet demands from the mayor and some council members.

“SORTA’s willingness is based upon assurances from the Cincinnati business and philanthropic communities that they will work with SORTA in public-private partnership to secure the funds required to cover the short and long-term operating costs of the streetcar to the extent other sources of streetcar revenue, such as fares, advertising, sponsorships, etc., are inadequate,” the agency said in a press release.

But in a press conference following the announcement, Mayor John Cranley called SORTA’s offer “woefully insufficient.” He argued SORTA’s assurances aren’t enough to pull streetcar operating costs completely off the city’s books.

Councilman Kevin Flynn, one of two potential swing votes on City Council, agreed with Cranley’s assessment.

But he cautioned the commitment could become a viable path forward for the streetcar project if SORTA provides more assurances in the next couple days, before a council vote on the streetcar.

SORTA’s commitment comes less than one week after Mayor John Cranley said he’d allow the $132.8 million streetcar project to move forward if private contributors agree to cover the streetcar’s operating costs for 30 years. Flynn and Vice Mayor David Mann, the two swing votes on City Council, approved of Cranleys proposed compromise.

In support of the announcement, the Haile Foundation also announced a $1 million commitment in seed money to spur further contributions to an operating reserve fund for the streetcar.

“We are committed to seeing the streetcar through to completion and beyond. SORTA has stepped up and is more than qualified to serve in this role. This is another great example of community collaboration helping move to region forward,” said Eric Avner, vice president of the Haile Foundation, in a statement.

Avner told CityBeat on Dec. 12 that private-sector leaders are working to meet the mayor’s demand with some financial assurances for the streetcar’s operating costs. SORTA’s announcement could act as that assurance.

If the streetcar project is completed, SORTA already agreed to help operate the 3.6-mile loop in Over-the-Rhine and downtown. But the public-private partnership would increase the agency’s commitment to the streetcar.

SORTA cautioned that bus service will not be affected in any way by the commitment.

It’s unclear whether SORTA’s assurances will be enough to sway Cranley, Mann and Flynn. If Cranley threatens to veto a continuation of the streetcar project, both Mann and Flynn would likely need to vote in favor of the streetcar to overcome a veto and restart the project.

The streetcar project is currently on “pause” while KPMG, an auditing firm, reviews completion, cancellation and operating costs. City officials expect to receive the audit late Tuesday or early Wednesday, with a council vote scheduled for Thursday.

Updated at 3:23 p.m. with details from Mayor John Cranley’s press conference.

 
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