City Council yesterday voted to allocate $1.25 million to pause the $132.8 million streetcar project and study how much it will cost to continue or cancel the project. The final 5-4 votes to pause came despite offers from private contributors to pay for the $250,000 study and construction for the one or two weeks necessary to carry out the cost analysis. The city administration warned council earlier in the day that pausing the project for one month could cost $2.56-$3.56 million, while previous estimates put continuing construction for the month at $3 million. After the cost study is finished, council members expect to make a final decision on whether to continue or cancel the project.
Meanwhile, Councilwoman Yvette Simpson filed a motion to draw up a city charter amendment that would task the city with completing the current streetcar project. If the charter amendment gets council approval, Cincinnatians would vote on the issue approximately 60 to 120 days afterward. But it’s unclear whether the $44.9 million in federal grants for the streetcar project would survive through the months; the federal government previously warned a delay could be grounds for pulling the money.
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City Council on Wednesday allocated $1.25 million to indefinitely pause the $132.8 million streetcar project and study how much it would cost to continue or permanently halt the project.
If the study's continuation and
cancellation estimates aren't persuasive enough to continue the project,
the vote could effectively act as council's final action on the
The motion came as a result of the Haile U.S. Bank Foundation's offer to pay for the $250,000 study. An undisclosed private contributor also offered to pay $35,000 a day for slowed-down construction, which supporters say will keep the project within Federal Transit Administration (FTA) compliance.
During a brief recess, Councilwoman Yvette Simpson pulled Vice Mayor David Mann out of the council chambers to lobby him to support the motion and hold off on pausing the project.
Mann articulated misgivings with the absence of any written commitment for the private contributions. Given the lack of assurances, Mann voted to pause the project.
claimed a proper study will require at least two weeks, not the one
week the motion allocates. But the undisclosed private contributor is
apparently willing to pay for construction for 10 business days if it's
deemed necessary, according to Mann.
The motion could still be taken up by a committee, but the streetcar project is on hold for now.
Council's final decision to pause the project came despite a memo
released earlier in the day by the city administration warning that
pausing the project for one month could cost $2.56-$3.56 million. The memo states the numbers are only estimates and the
true costs won't be fully known until a pause is actually carried out,
which means the final costs could shrink or grow.
Streetcar Project Executive John Deatrick previously put the cost of continuing construction for one month at $3 million, which means the pause costs could actually come in higher than simply continuing with the project.
Deatrick on Nov. 21 warned the costs of completely canceling the streetcar project could nearly reach the costs of completion after accounting for $32.8 million in estimated sunk costs through November, a potential range of $30.6-$47.6 million in close-out costs and up to $44.9 million in federal grant money that would be lost if the project were terminated.
But the five council members opposed to the project — Mann, Kevin Flynn, Christopher Smitherman, Amy Murray and Charlie Winburn — voiced distrust toward the estimates and called for further analysis.
Streetcar supporters argue pausing the project could be tantamount to cancellation because it could convince the FTA to permanently pull $44.9 million in federal grants that are funding one-third of the project. The FTA already froze the grants pending a council decision to continue with construction.
Opponents of the project insist the FTA will return the money if the project continues.
hope that the spirit of cooperation that many members of this council
think will come from the federal government is there," said Councilman
P.G. Sittenfeld, a streetcar supporter.
But given the estimates for completion and cancellation, Sittenfeld cautioned whether history will look poorly on council's decision on Wednesday. He asked, "Did we choose waste or did we choose opportunity?"
The council meeting also continued the increasingly adversarial atmosphere in council since Mayor John Cranley and the new City Council took office on Sunday.
Councilman Chris Seelbach, a streetcar supporter, said it has been "the most destructive, divisive three days" since he began working at City Hall.
one point, Cranley attempted to compare problems facing the streetcar
project to the business failures of Blockbuster and other video stores.
Councilman Wendell Young, who supports the project, responded, "This idea that a bookstore or a video store can be compared to what's going to happen to the streetcar is about the most ridiculous comparison I can think of."
Supporters of the streetcar project argue it's necessary to spur development along the 3.6-mile loop in Over-the-Rhine and downtown. The project would generate 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.
Opponents of the project argue
it's far too expensive and the wrong priority for Cincinnati. They're
particularly concerned about the $3.4-$4.5 million it will cost to
operate the streetcar each year, which could hit an already-strained
After the study reviewing the project's costs is completed, council expects to make a final decision on whether to continue or cancel the project.
City Council plans to vote today on 11 ordinances that would indefinitely pause the $132.8 million streetcar project while council members review and weigh the costs of cancellation versus the costs of completion. The measures are expected to pass. Because they each allocate at least $100,000 in funding, the ordinances are not susceptible to referendum. Although Mayor John Cranley repeatedly defended the “people’s sacred right of referendum” in opposition to the parking privatization plan while on the campaign trail, he now says he doesn’t want the city to be forced to continue spending on the streetcar project he adamantly opposes until November 2014, as would be required under a traditional referendum.
If a 1930 Ohio Supreme Court ruling applies, Cincinnati could be responsible for paying to move utility lines to accommodate for streetcar tracks, but the city might be able to charge some of those costs back to utility companies, according to a newly disclosed 2011 memo from a city attorney to former City Manager Milton Dohoney. The memo is the latest twist in the ongoing legal battle between Duke Energy and the city over who has to pay $15 million to move utility lines for the streetcar project. If the city loses the case, the cost of the project could climb from $132.8 million to $147.8 million. But it’s still unclear how much the 1930 case applies, given that the 1930 streetcar system was owned by a private company and the 2016 version would be owned by the city.
Editorial from The Cincinnati Enquirer: “Pausing streetcar same as killing it.”
Mayor Cranley and City Council agreed to delay a vote on Willie Carden’s nomination for city manager to give council members enough time to meet with the candidate one-on-one and “digest” ordinances for his nomination. The nomination of Carden, who currently heads the Parks Department, has been plagued by some controversy because of Carden’s decision to live outside Cincinnati, which violates the rules set by the city charter for the city manager, and recently uncovered ethics issues in which Carden wrongfully took pay from both the private Parks Foundation and city.
City Council also delayed voting on new rules for a week to give council members more time to analyze and discuss the rules. Until then, City Council will operate under the standard Robert's Rules of Order. One possible change to the rules would increase the time given to public speakers during committee meetings from two to three minutes.
Watch Councilman P.G. Sittenfeld outmaneuver Mayor Cranley here.
The Ohio Supreme Court yesterday unanimously dismissed a request to compel JobsOhio to disclose various documents. The court argued that state law passed by Republican legislators largely exempted JobsOhio from public record requests, which means the privatized development agency can keep most of its inner workings secret. Republicans argue the agency’s secretive, privatized nature is necessary to quickly establish business deals around the state, while Democrats claim the anti-transparency measures make it too difficult to hold JobsOhio accountable as it uses taxpayer dollars.
The addition of measures that would create state and county councils to help get people off Medicaid ruined some of the bipartisan efforts behind Medicaid overhaul legislation, but Republican legislators still intend to bring the legislation to an Ohio House vote today. Republicans argue the controversial amendments merely update the “framework” under which counties can streamline efforts to get people off public assistance programs. But Democrats say the last-minute measures might have unintended consequences, including one portion that might give the state council the ability to change — and potentially weaken — Medicaid eligibility requirements.
An Ohio Senate bill would revamp and reduce teacher evaluation requirements to make them less costly and burdensome for school districts. The current standards require an annual evaluation of any Ohio teacher rated below “accomplished” and, according to some school districts, create high costs and administrative burdens that outweigh the benefits.
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The Ohio Supreme Court on Tuesday unanimously dismissed a request to compel JobsOhio to disclose various documents.
The court argued the Republican-controlled General Assembly largely
exempted JobsOhio from public records law and therefore allowed the agency to keep most of its inner workings secret.
The decision was a major loss for advocacy group ProgressOhio, which claims the documents should be on the public record.
The Republican-controlled legislature, with the support of
Republican Gov. John Kasich, in 2011 established JobsOhio, a privatized
development agency, to replace the Ohio Department of
Development. The JobsOhio Board of Directors is chaired by wealthy Ohio businessmen.
Republicans argue JobsOhio’s secretive, privatized nature is necessary to quickly foster economic development deals across the state. Democrats say the anti-transparency measures make it far too difficult to hold JobsOhio accountable as it recommends how to spend taxpayer dollars.
An Oct. 23 report criticized JobsOhio and other privatized development agencies around the country for consistently displaying conflicts of interest and other scandalous behavior. The report came from Good Jobs First, a research center founded in 1998 that scrutinizes deals between businesses and governments.
Kasich previously touted JobsOhio as one of the reasons Ohio’s economy quickly recovered following the Great Recession, but recent indicators show the state’s economy is now slowing down. Ohio is one of five states whose economy worsened in the past three months, according to an index from the Federal Reserve of Philadelphia that combines four economic indicators to gauge states’ economic health.
Others have more directly questioned the Kasich administration’s claims to success. An Oct. 29 investigation from The Toledo Blade found jobs numbers from the Ohio Development Services Agency are vastly inflated, indicating that the state government isn’t producing nearly as many jobs as it claims.
After the meeting, Cranley dismissed an offer by major philanthropy organization The Carol
Ann and Ralph V. Haile, Jr./U.S. Bank Foundation to pay for a study of
streetcar shut-down costs that opponents want to see
come in lower than the
city’s estimates before they vote to completely stop the project. Cranley dismissed
the offer because it also came with a note saying that if the streetcar is canceled the foundation will
reconsider its contributions to Music
Hall, the Smale Riverfront Park and other city projects. Cranley would rather make the city pay for the study than negotiate with terrorists respond to threats.
About seven and a half hours into this debacle of American democracy — which included numerous procedural abnormalities including the mayor asking Council to discuss and vote on ordinances no one had read yet, an hours-long delay and a funding appropriation that leaves the cancellation vote safe from the pro-streetcar-threatened voter referendum (something Cranley railed against when the city administration kept the parking plan safe from referendum) — Councilman P.G. Sittenfeld livened things up with something everyone tired of the streetcar debate can agree is funny: undermining the mayor’s authority by asking fellow council members to overrule him.
The following video published by UrbanCincy shows Cranley denying Sittenfeld an opportunity to speak. Sittenfeld then asks for a vote to overrule Cranley, which the mayor had to approve, and everyone but Kevin Flynn votes to overrule. (Flynn unfortunately had to vote first, leaving him unable to determine which way the vote was likely to go — a tough position for a rookie politician.) Once David Mann and Amy Murray voted to allow Sittenfeld to speak, the rest of the anti-streetcar faction followed suit, knowing Sittenfeld had the necessary votes to overrule Cranley. Then Sittenfeld spent a few minutes going mayoral on Cincinnati's new mayor.
Mayor John Cranley and a majority of City Council appear ready to pause the $132.8 million streetcar project on Wednesday after moving forward yesterday with 11 ordinances that aren’t susceptible to referendum. The bills allocate $1.25 million to stop contracts tied to the project and hire expert consultants to study what it would cost to continue or suspend the project — information a majority of council plans to use to gauge whether the project should continue after the pause. Streetcar supporters planned to hold some sort of referendum on the pause ordinances, but Cranley, who previously spoke in favor of the “people’s sacred right of referendum,” now says that the city shouldn’t be required to continue spending on the project until voters make a final decision in November 2014, as would be required under a traditional referendum.
Meanwhile, the Federal Transit Administration yesterday announced it froze $44.9 million in federal grants for the streetcar until Cincinnati agrees to move ahead with the project. The decision shows Cranley and other opponents of the project were in the wrong when they claimed they could lobby the federal government to reallocate the grant money to other projects. But the decision should also come as little surprise to the new mayor and council, considering federal officials warned of the consequences of canceling the streetcar project on three separate occasions in the past six months.
The Haile U.S. Bank Foundation also joined the fray yesterday with an email to city officials plainly stating that the streetcar project’s cancellation “will definitely cause us to pause and reconsider whether the City can be a trusted partner” and endanger contributions to the carousel in Smale Riverfront Park, the shared-use kitchen at Findlay Market and the renovations of the Globe Building and Music Hall. The email also offered to pay for a study that would evaluate the costs of the streetcar project going forward. But Cranley brushed off the letter as a threat and argued the Haile U.S. Bank Foundation “can’t be a passive-aggressive dictator of legislative process.”
Although his nomination to the city manager spot was initially met with praise, some are beginning to raise questions about Willie Carden’s refusal to live in Cincinnati and his history, including an ethics probe that found he was wrongfully taking pay from both the city and private Parks Foundation. Councilman Chris Seelbach said he’s also worried about the process for Cranley’s pick, which didn’t involve a national search and never put any other candidates in front of council.
Democrats on the Hamilton County Board of Elections have asked state officials to investigate Republican Hamilton County Prosecutor Joe Deters for improperly voting.
Republican State Sen. Bill Seitz of Cincinnati plans to introduce on Wednesday a new version of his overhaul of the state’s renewable energy and efficiency requirements. The new version will dampen a plan that would have allowed Canadian hydroelectric power facilities to satisfy Ohio’s renewable energy requirements, but it will also allow decades-old hydro plants along the Ohio River to fulfill the requirement. Seitz and other supporters of the overhaul argue it’s necessary to make the requirements friendlier to businesses and consumers. But opponents of the bill, including businesses and environmentalists, argue it would effectively ruin Ohio’s energy requirements and, according to a study from the Ohio State University and the Ohio Advanced Energy Economy coalition, cost Ohioans $3.65 billion more on electricity bills over the next 12 years. CityBeat covered the proposal in greater detail here.
Ohio schools can now tap into a $12 million program to make their facilities safer through various new measures, including a radio system directly connected to emergency responders, cameras and intercoms. “Naturally, after Sandy Hook, I think we were all just extremely upset about that, and you want to be able to do something,” Republican State Sen. Gayle Manning told StateImpact Ohio.
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Mayor John Cranley and a majority of City Council appear ready to halt Cincinnati’s $132.8 million streetcar project on Wednesday — and voters might not get a final say on whether they approve of the pause.
In front of council are 11 ordinances totaling $1.25 million that would stop contracts tied to the streetcar project while the city hires expert consultants to review the costs of continuing or suspending the project.“I think cancellation is what we should do,” Cranley said at Monday’s council meeting. “But a majority of council wants to pause and ask questions.”
One immediate concern for supporters of the project: Because the ordinances appropriate funds, they are not susceptible to referendum.
Cranley repeatedly touted the “people’s sacred right of referendum” in opposition to the parking privatization plan while on the campaign trail, but he now argues the city shouldn’t be forced to continue spending on the streetcar project until voters make a final decision in November 2014, as would be required under a traditional referendum.
Cranley encouraged streetcar supporters to instead push a ballot initiative that doesn’t require the city to continue funding the project.
Councilman P.G. Sittenfeld, who supported a referendum on the parking plan, argued Cranley’s position was hypocritical.
“I don’t want to have the voters’ voice suppressed,” he said.
Sittenfeld on Nov. 26 announced that he’s voting to continue the streetcar project. He asked, “Are we going to have tens of millions of dollars of wasted money or something to show for it?”
In response to the concerns, Councilwoman Yvette Simpson, a streetcar supporter, said she will have her staff draw up a motion to place the streetcar project on the ballot.
But Councilman Chris Seelbach, who also supports the streetcar, countered that the ballot initiative would not matter if the project is paused and the federal government decides to effectively kill the streetcar by taking back $44.9 million in federal grants that are funding one-third of the project’s costs.
The Federal Transit Administration on Monday stated the grant money is already frozen pending a council decision to advance the project.
Simpson questioned whether the ordinances allocated enough money to pause the project. Messer Construction, Prus Construction and Delta Railroad (MPD) estimate they’ll need $590,000 to suspend work for a month. The ordinance halting MPD’s contract allocates only $100,000.
On top of the $1.25 million — or $1.74 million, if MPD’s estimate is counted — allocated to pause the project, the suspension would also force the city to pay for unemployment insurance as construction companies lay off 200 workers involved in the project. Streetcar Project Executive John Deatrick estimates that will cost $419,000 if workers are kept unemployed for a month.
So the city could pay nearly $2.16 million to pause the project for a month. In comparison, Deatrick says one month of construction would cost the city $3 million.
The pause costs would also come from the contingency fund for the streetcar project, according to Deatrick. The $7.4 million contingency fund is already counted as part of the $132.8 million project, but it could go unspent if the project continues without complications.
Deatrick on Nov. 21 warned the costs of canceling the streetcar project could nearly reach the costs of completion after accounting for $32.8 million in estimated sunk costs through November, a potential range of $30.6-$47.6 million in close-out costs and up to $44.9 million in federal grant money that would be lost if the project were terminated.
(The issue of cancellation costs was first reported by CityBeat in October as a follow-up with city officials to a July story that outlined the top 10 misrepresentations surrounding the streetcar project.)Supporters of the streetcar project argue it’s necessary to spur economic development along the planned 3.6-mile loop in Over-the-Rhine and downtown. A 2007 study from consulting firm HDR, which was later validated by the University of Cincinnati, found the project would generate a 2.7-to-1 return on investment over 35 years.
Opponents argue the project is far too expensive and the wrong priority for Cincinnati.“I believe the progress of Cincinnati is going to continue,” Cranley said. “Our future is bullish and bright in downtown and Over-the-Rhine with or without the streetcar.”
A majority of City Council expects to vote in favor of the ordinances at its full meeting on Wednesday at 2 p.m. Council members who oppose the project plan to use the time-out to weigh the costs of cancellation versus the costs of completion.
Federal grants for the $132.8 million streetcar project are on hold
until City Council votes to continue the project, according to a Dec. 2 email from the Federal Transit Administration (FTA) to Cincinnati officials.
The decision means Cincinnati can no longer tap into $44.9 million in federal grants until Mayor John Cranley and a majority of the newly sworn-in City Council, both of which have shown opposition to the streetcar project, agree to continue with ongoing construction.
“As per our telephone conversation, early last week, the Administrator decided to restrict further access to the Federal project funds until the FTA received an affirmative signal from the city’s newly elected officials that the city intends to proceed with the project on the agreed-upon schedule,” wrote Marisol Simon, FTA regional administrator in Chicago. “This measure was taken to protect the taxpayer funds not yet drawn down by the city from being subject to a potential debt collection action.”
The FTA’s decision shows Cranley and other streetcar opponents were in the wrong when they insisted they could lobby the federal government to reallocate the money to other projects, such as the interchange at Interstate 71 and Martin Luther King Drive.
But the consequence should come as little surprise to elected officials. In two letters to former Mayor Mark Mallory and a phone conference with City Council, federal officials warned the city they would pull the funding if the streetcar project were canceled.
The news comes on the same day City Council plans to vote to pause the streetcar project as the costs of cancellation are weighed against the costs of continuing.
It also comes two days after streetcar builder CAF USA warned the city of substantial costs that would be incurred if the streetcar project were canceled.
Even if council only pauses the project, Streetcar Project Executive John Deatrick says the path forward is unknown because it’s unclear how the city will fund costs associated with a pause.
The costs would presumably come out of the project’s contingency
fund, according to Deatrick, but pulling money out of the contingency
fund for a delay or pause changes the scope of the project and could face federal resistance.
On Nov. 21, Deatrick said the costs of canceling the $132.8 million streetcar project could nearly reach the costs of completion after accounting for $32.8 million in estimated sunk costs through November, a potential range of $30.6-$47.6 million in close-out costs and up to $44.9 million in federal grant money that would be lost if the project were terminated.
Mayor John Cranley and the new City Council were sworn in yesterday. Two days prior to the ceremony, Cranley announced his appointments for council committees that play a crucial role in passing legislation through City Hall, but the choices were not without controversy as Cranley, a Democrat, snubbed members of his own party for the two most powerful committees. Councilman Charlie Winburn, a Republican, will head the Budget and Finance Committee, and Councilman Christopher Smitherman, an Independent, will take control of the Law and Public Safety Committee. Democratic council members Chris Seelbach and Wendell Young also didn’t receive any appointments; both supported former Vice Mayor Roxanne Qualls in her bid against Cranley for the mayor’s office. CityBeat covered the new City Council’s priorities in further detail here.
Among the new city government’s first priorities is canceling the $132.8 million streetcar project, but not if supporters of the project have anything to say about it. Hundreds of streetcar supporters yesterday gathered in Washington Park and walked the planned streetcar route to show their solidarity. They’re threatening a referendum on any action council takes to pause or cancel the project, but some are concerned council will attach a funding measure to legislation that would allow a cancellation or pause ordinance to go into effect immediately, even if the project makes it onto the November 2014 ballot.
Meanwhile, the company in charge of building the actual streetcars wrote a letter to former Mayor Mark Mallory on Nov. 30 threatening substantial costs if the project were canceled. The letter explains that, on top of the sunk expenses on design work, cancellation would require CAF USA to pull back on various established deals with subcontractors, which would spur further costs. For streetcar supporters, the letter renews fears that canceling the streetcar could lead to litigation from contractors and subcontractors as they seek their full payday. The legal costs for such lawsuits would fall on an already-strained operating budget that pays for day-to-day services such as cops and firefighters instead of a capital budget that finances capital projects like the streetcar, according to city spokesperson Meg Olberding.
Councilman Smitherman told The Business Courier that he wasn’t aware his brother’s construction company, Jostin Construction, was involved with the streetcar project, but a 2009 press release from the local branch of the NAACP shows Smitherman acknowledging his brother’s ties to the project. Still, a Nov. 21 letter confirms that Jostin pulled out of the project. The connection is important because it presents a potential conflict of interest for Smitherman, a streetcar opponent who will likely act as one of the five necessary votes to pause and potentially cancel the project. It also raises questions about the validity of Smitherman’s anti-streetcar votes in the past few years.
Ohio is one of five states whose economy worsened in the past three months, according to an index from the Federal Reserve of Philadelphia that combines four economic indicators to gauge states’ economic health.
A Republican and Democrat in the Ohio House proposed using the $400 million in savings from the federally funded Medicaid expansion to boost the local government fund, but it seems most of the Republican leadership in the Ohio Senate intends to use the savings on a tax cut. The savings are a result of the Controlling Board’s controversial decision to expand Ohio’s Medicaid program with federal funds, which should shift some Medicaid expenses from the state to the federal level.
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The company in charge of building Cincinnati's streetcars says the city would incur substantial costs if it cancels the streetcar project after it's already gone through some construction and design work.
The Nov. 30 letter from CAF USA Vice President Virginia Verdeja to former Mayor Mark Mallory arrived just one day before Mayor John Cranley, who opposes the streetcar project, and an anti-streetcar majority were sworn in.
"CAF will have to recover all the incurred expenses as well as all the additional cost of cancelling the contract, which would be substantial too," Verdeja writes in the letter.
The letter explains that, on top of the sunk expenses on design work, cancellation would require CAF to pull back on various established deals with subcontractors, which would spur further costs.
For streetcar supporters, the letter renews fears of litigation that could crop up if the project were canceled and contractors decided to pursue their full payday. Those legal costs would fall on the already-strained operating budget that pays for day-to-day services like police and firefighters instead of the capital budget that finances big capital projects like the streetcar, according to city spokesperson Meg Olberding.
On Nov. 21, Streetcar Project Executive John Deatrick warned the costs of canceling the $132.8 million streetcar project could nearly reach the costs of completion after accounting for $32.8 million in estimated sunk costs through November, a potential range of $30.6-$47.6 million in close-out costs and up to $44.9 million in federal grant money that would be lost if the project were terminated.
Earlier on Sunday, hundreds of streetcar supporters rallied in Washington Park and walked the planned streetcar route in support of the project. They're threatening a referendum if the new City Council moves to pause or cancel the project.
City Council plans to vote on pausing the project on Monday. Because of threats from the federal government that a mere delay could lead to the loss of federal grants, streetcar supporters claim a pause would equate to cancellation.
Read the full letter below:
Updated at 6:13 p.m. with the PDF of the letter.