Perhaps hoping to mimic the suspenseful aspects of an Alfred Hitchcock film or a Thomas Harris novel, an ultra-conservative group has been issuing press releases announcing its endorsements for Cincinnati City Council one at a time.
Oh, the anticipation!
The streetcar project’s chances of survival grew on Thursday after Mayor John Cranley announced he’s willing to allow the $132.8 million project move forward if the annual operating costs for the streetcar are underwritten by private contributors.
But streetcar supporters might have as little as one week to provide assurances to Cranley that the operating costs can be underwritten by the private sector, given the federal government’s Dec. 20 deadline for up to $44.9 million in grants financing roughly one-third of the project.
Still, a representative of the Haile Foundation, a major private contributor to city projects, said private-sector leaders are already working on meeting Cranley’s offer and solving the issue.
The concern for Cranley — and even some streetcar supporters — is that annual operating expenses for the streetcar would hit the city’s already-strained operating budget, especially if the annual operating expenses are higher than the previous estimate of $3.4-$4.5 million.
Although the city wouldn’t need to pay for the full operating costs until the streetcar opens for service in 2016, Cranley and some council members are concerned finishing the project now would force the city to make payments it won't be able to afford in the future.
“We know the streetcar is a very expensive project,” Cranley said. “This community cannot afford a new, ongoing liability that goes on forever.”
Streetcar supporters argue Cranley’s view misses the streetcar’s potential for economic development, which could bring in more city revenues as more people move and work in the city.
The streetcar project would produce a 2.7-to-1 return on investment, according to a 2007 study from consulting firm HDR that was later verified by the University of Cincinnati.
Councilman Kevin Flynn, one of the two potential swing votes on council, said Cranley’s offer could provide “a way forward.” He previously told CityBeat that the operating costs remain a prominent concern for him because they could translate to cuts in the city’s budget, particularly to police and firefighters.
Eric Avner, vice president and senior program manager of community development at the Haile Foundation, called the deal “an olive branch” to streetcar supporters. He said he’s “very, very confident” the private sector will be able to find a solution.
“I don’t think we can solve it in a week. What I heard is he needs assurances,” Avner said.
Cranley said he doesn’t expect someone to come to city leaders next Wednesday with a check paying for 30 years of operating costs, but he said the commitment has to be serious and long lasting for the city to move forward with the streetcar.
Avner discussed bringing together a commission of private-sector leaders with some long-term assurances.
In what he described as an “organic” movement, Avner said he’s heard from various private-sector leaders that they want to keep the project going, but he claimed most of them don’t want to engage in a public “food fight” that could hurt their relations with the mayor and other city officials.
For Avner, it’s a matter of sticking to a project that’s already well into development and construction.
“We don’t have the luxury to waste that kind of money in this town,” he said.
Streetcar Project Executive John Deatrick on Nov. 21 told council members that canceling the streetcar project could save only $7.5-$24.5 million in capital costs after accounting for $32.8 million in estimated sunk costs through November, $30.6-$47.6 million in close-out costs and up to $44.9 million in federal grants that would be lost if the project were stopped.
After Cranley’s announcement, Councilwoman Yvette Simpson questioned Cranley’s motives and said the solicitation might be very difficult to meet in just one week.
Cranley said he’ll reach out to the Federal Transit Administration to try to get an extension, perhaps until the end of the year, on the deadline for federal grants.
“It’s obviously a huge, huge hurdle to try to pull this together in seven days,” Cranley said.
Cranley cautioned he wouldn’t be upset if his offer fell through. Flanked by union representatives for police, firefighters and other city workers, Cranley reiterated that his priorities still lie in basic city services.
Councilman P.G. Sittenfeld previously proposed setting up a special improvement district to pay for the operating costs. But Cranley called the approach unworkable because it would require property owners to opt in — an effort that would presumably take much longer than one week.
Cranley’s announcement came as streetcar supporters move to place a city charter amendment in support of the streetcar project on the ballot. The campaign vowed to gather 12,000 signatures by the end of the week.
Dozens of residents and business owners gathered in Over-the-Rhine on Tuesday to launch a campaign that seeks to persuade Mayor-elect John Cranley and the newly elected City Council to support the $133 million streetcar project.
Attendees included Ryan Messer, who used his life savings to renovate his home in Over-the-Rhine; Derek Bauman, co-chair of Cincinnatians for Progress; Jean-Francois Flechet, owner of the Taste of Belgium; and Derek dos Anjos, owner of The Anchor.
“We’re here today to keep the conversation going outside of political rhetoric and partisan politics,” Messer said. “Simply put, the streetcar is a component of Cincinnati economic development, and it’s a project that grows the whole city — not just an urban core, which, by the way, is an important part of developing this region.”
The group intends to lobby Cranley and the newly elected council, which appear poised to cancel the project when they take office in December.
At least three of nine elected council members — P.G. Sittenfeld, David Mann and Kevin Flynn — have told media outlets that they want a full accounting of the project before making a final decision. Another three — Chris Seelbach, Yvette Simpson and Wendell Young — are on the record as supporting the project. The final three — Christopher Smitherman, Charlie Winburn and Amy Murray — adamantly opposed the project in the past.
Members of the pro-streetcar group invited Cranley and all elected council members to join them at a town hall-style meeting on Nov. 14 at the Mercantile Library, where supporters will discuss their path forward. So far, supporters have publicly discussed a concerted lobbying effort, a referendum if council passes an ordinance undoing the streetcar project and possible legal action.
As CityBeat first uncovered, the costs of canceling the project are currently unknown, and some of the costs could actually fall on the operating budget that pays for police, firefighters and human services instead of the capital budget that is currently financing the streetcar project.
Much of the uncertainty falls on ongoing construction for the streetcar, which has continued despite the newly elected city government’s intent to stop the project. As of September, the city spent $23 million on the project and contractually obligated $94 million, some of which city officials say will need to be paid back even if the project were canceled.
The U.S. Department of Transportation also told city officials in a June 19 letter that nearly $41 million of nearly $45 million in federal grants would need to be returned if the project were terminated.
Supporters also claim Cincinnati would be giving up a 2.7-to-1 return on investment over 35 years if the city abandoned the streetcar now. That estimate is derived from a 2007 study conducted by consulting firm HDR, which was evaluated and supported by the University of Cincinnati.
Project executive John Deatrick says the HDR study is now outdated and the city is working on updating the numbers. Still, Deatrick says the project is intended to spur economic development, not just provide another form of public transportation.
The Nov. 13 issue of CityBeat will give a more in-depth look at the campaign to save the streetcar and some of the people involved in the movement.
As CityBeat did in the 2007 and 2009 election cycles, we’ve once again sent a questionnaire to the non-incumbent Cincinnati City Council candidates to get their reactions on a broad range of issues.
Nine of the 14 non-incumbents chose to answer our questions. Others either didn’t respond or couldn’t meet the deadline.
During the next few weeks, we will print the responses from the non-incumbents to a different topic each time.
Today’s question is, “With the city facing a potential $33 million deficit next year, what specific cuts and/or revenue enhancements would you propose or support to eliminate the shortfall?”
Bill Moller is a city retiree who will be eligible to “double dip” into his pension and a city salary ($147,000 a year) when the city rehires him in February to fill an opening for assistant city manager, city spokesperson Meg Olberding confirmed in an email to CityBeat. Whether he does is entirely up to the interim city manager, Olberding wrote.
The possibility could draw criticism from city officials looking to balance Cincinnati’s structurally imbalanced operating budget. Last year, City Council drew opposition for its decision to hire Streetcar Project Executive John Deatrick and allow him to double dip on his pension and a city salary.
Update: Councilman P.G. Sittenfeld said on Twitter that City Council will discuss the personnel changes at Wednesday’s full council meeting, instead of a special session on Thursday as originally planned.
Moller will eventually replace Assistant City Manager David Holmes, who helped oversee efforts for The Banks and 2012 World Choir Games and filed to retire on April 1, Interim City Manager Scott Stiles wrote in a memo to City Council and the mayor.
“At this point in time, Cincinnati needs not only someone who is proficient in all aspects of municipal finance, but in the aspects of the city of Cincinnati’s finances in particular. Mr. Moller has that experience,” Stiles wrote, noting Moller’s budget and finance experience in Cincinnati, Hamilton and Covington.
City Solicitor John Curp will also leave his current position to instead act as chief counsel for the city’s two utilities, the Metropolitan Sewer District and Water Works.
“The utility has been undergoing a merger of back office functions to save ratepayers money, and also has been expanding services and service areas to decrease costs,” Stiles wrote. “John (Curp) has the private sector experience to assist the utilities with a market-oriented approach, and is uniquely positioned to understand both the particulars of MSD and GCWW as well as the areas in which they can expand.”
The move should save ratepayers money by allowing both utilities to rely on Curp instead of outside legal counsel when legal issues arise, according to Stiles.
Although widely praised by city officials, Curp’s move is unsurprising given the politics surrounding Mayor John Cranley’s election. Curp offered legal guidance for the parking privatization plan and streetcar project, both of which Cranley opposes.
Terrence Nestor, currently the city’s chief litigator, will replace Curp as city solicitor until a permanent appointment is made.
Stiles announced other changes as well:
• Markiea Carter, currently a development officer, will move to the city manager’s office to act as assistant to the city manager.
• Karen Alder, currently risk manager for the city, will begin assisting Finance Director Reginald Zeno as the city’s deputy finance director.
Stiles is currently filling as interim city manager while the city conducts a nationwide search for a permanent replacement to former City Manager Milton Dohoney. Stiles could apply for the permanent role, but his application would need City Council support to win out over other potential candidates.
The city expects the city manager search to last through June, at which point further administrative changes could be expected if the city hires a new permanent city manager.