The tea party-backed amendment that would semi-privatize Cincinnati’s ailing pension system gathered enough signatures earn a place on the November ballot.
Of 14,215 signatures scrutinized so far, 8,653 were valid, according to Sally Krisel, deputy director of the Hamilton County Board of Elections. That clears the requirement of 7,443 signatures, but the numbers will grow as the board continues counting petitions.
The success follows a well-funded effort from Cincinnati for Pension Reform, which paid California-based Arno Petition Consultants nearly $70,000 to collect enough signatures, according to petition documents obtained through the city.
The amendment would privatize pension plans so city employees hired after January 2014 contribute to and manage their own retirement accounts — a shift from the current set-up in which the city pools pension funds and manages the investments through an independent board.
But unlike private-sector employees, city workers might not qualify for Social Security benefits, which means they would lack the safety net and benefits that shield them from bad investments.
Alternatively, the city could be required to pay into Social Security. An Aug. 5 report from the city administration claims that would make the tea party-backed system more expensive than the current pension system, which would defeat the reform’s main intention.
Supporters of the tea party amendment say it’s necessary because Cincinnati is dragging its feet in addressing an $862 million pension liability, which earned the city a downgraded bond rating from Moody’s in a July 15 report. Although the city passed reforms in 2011 addressing future pension costs, the unfunded liability actually grew by $134 million between 2012 and 2013.
The Cincinnati Retirement System board is working on changes that would address the unfunded liability, but so far no agreement has been reached as board members argue over whether taxpayers or retirees should be hit hardest by more cost-cutting measures.
City officials acknowledge the issues with the current pension system, but they claim the tea party-backed amendment would exacerbate cost problems and reduce payments to future city retirees.
“Under the guise of ‘reform,’ a well-financed out-of-state group is pushing an amendment that spells economic disaster for the future city retirees and the city’s budget,” Vice Mayor Roxanne Qualls said in a statement. “Current and future retirees need an income they can live on. This amendment is a budget-buster for retirees and the city.”
City Council condemned the amendment in a resolution unanimously passed on Aug. 7.
CityBeat’s Aug. 14 news story will give an in-depth look at the amendment and the campaign behind it.
This story was updated at 5:07 p.m. with the most up-to-date numbers.
Six of nine JobsOhio board members have direct financial ties to companies that have received tax credits and other help from the agency and state government, an investigation from Dayton Daily News discovered. The members are connected in various ways: Some are employed by the companies, others sit on their boards and a few just own stocks. The conflicts of interest that could undermine JobsOhio’s goals. The privatized development agency was established by Gov. John Kasich and Republican legislators to replace the Ohio Department of Development. Republicans claim JobsOhio’s privatized nature allows it to move at “the speed of business” when luring companies to the state. But Democrats argue that the agency is unaccountable and draining state funds without any clear indication of where the money is going.
Meanwhile, JobsOhio gave financial aid to a company that simply shifted jobs from one city to another. The agency gave Timbertech a 50-percent credit to create 85 jobs in Wilmington, Ohio. The company is abiding, but it’s simultaneously closing down a Columbus factory at the loss of 58 jobs.
Cincinnati will end up not laying off any city employees after City Council undoes $4 million in budget cuts with leftover revenue from the previous budget year. The restorations will reverse some or all of this year’s cuts to human services, parks, the Health Department and other city programs. Council members called the higher-than-projected revenue evidence that Cincinnati’s economic strategy is working. But the reversals also raise questions about the city administration’s original claims: When the 2014 budget was first being considered, Mayor Mark Mallory and his administration said the city would have to lay off 344 workers, including many cops and firefighters, to balance the budget without the parking lease. But without any of the parking money allocated, the city managed to avert all layoffs and undo a bulk of cuts, largely by using better-than-expected revenues from the past budget year.
Fixing up the Great American Ball Park for the All-Star Game could cost county taxpayers $5 million. The All-Star costs are just one part of the $27 million taxpayers will pay to improve stadiums in Hamilton County over the next five years. Stadiums are often touted by local officials as a way to boost the economy, but economists and urban planners have found that publicly funded sports arenas don’t lead to sizable economic growth.
Ohio’s job growth is so slow that it will take nearly five years to recover all the jobs lost during the Great Recession.
Councilman P.G. Sittenfeld is leading fundraising for this year’s Council campaigns.
The Cincinnati USA Chamber of Commerce is hosting two mayoral debates. This year’s candidates are Vice Mayor Roxanne Qualls, ex-Councilman John Cranley, Jim Berns and Sandra “Queen” Noble. Qualls and Cranley are considered the two frontrunners.
The Cincinnati Art Museum is calling on community contributions to finish the second half of its renovations. The museum has raised $2.7 million out of the $6 million it needs.
Red Squirrel, a local restaurant chain, is closing down three of five eateries.
Internet-based psychotherapy apparently works.
A motion proposed by a majority of City Council today would use leftover
revenue from the previous budget year to undo cuts to various programs,
including human services, parks and the Health Department.
The restorations mean no city workers will be laid off as a result of the operating budget passed in May. Previously, 60 positions had been cut, but many employees remained in different offices while the budget situation was worked out.
The cuts were previously approved with the 2014 budget before council members knew final revenue numbers for fiscal year 2013, which ended June 30. Council had to pass the budget 30 days early because the city’s use of emergency clauses, which eliminate a waiting period on passed laws, was being held up in court.
The city ended up with roughly $10 million more revenue than projected in the past budget year. The Council motion uses nearly $4 million to undo some of the $20 million in cuts carried out in the latest budget. The rest of the extra revenue will be held until the city manager makes further suggestions, but some of that money will likely be saved for next year’s budget gap, Vice Mayor Roxanne Qualls said at a press conference.
Human services funding is getting more than $510,000 restored, putting the program at 0.4 percent of the operating budget. Cincinnati has historically set a goal of directing 1.5 percent of the operating budget to human services, which flows through various agencies that aid low-income and homeless Cincinnatians.
The Health Department is getting the largest restoration at $900,000, allowing the city to bring back positions affecting junked vehicles, rodent control, litter and weed response, infant mortality and more.
Parks will also get back $400,000 out of $1 million that was cut in the previous budget. Another $312,000 is being used to restore recreation funding, particularly to keep the Busch Center open.
Other programs getting money back: the Center for Closing the Health Gap, Cincinnati USA Regional Chamber, Film Commission, African American Chamber of Commerce, Urban Agriculture Program, Office of Environmental Quality, Neighborhood Support Fund, Neighborhood Business District Support Fund, Law Department and funding to 3CDC for Fountain Square maintenance.
Qualls claimed the higher-than-projected revenues are evidence the city’s economic strategy is so far successful.
“Cincinnati’s strategy of investing in jobs, neighborhoods, people is working,” she said. “We are seeing an increase in revenue as a result of investments we are making.”
Qualls also acknowledged that the budget debate has felt like a “roller coaster” for many citizens. Originally, Mayor Mark Mallory’s administration claimed it would have to lay off police and firefighters if the city didn’t lease its parking meters, lots and garages to the Greater Cincinnati Port Authority. But when the parking lease was held up in a court challenge, Council managed to pass a budget without the public safety layoffs. Now, Council is undoing further cuts and moving forward with the parking lease.
After the press conference, Qualls told CityBeat that some of the unused revenue may also be used to finance a disparity study that would gauge whether the city should change its contracting policies to favorably target minority- and women-owned businesses.
Meet Roger Jeremy Ramundo, the man police shot and killed on July 24 after what’s now being called a “life or death struggle.” Police say they first tried to subdue Ramundo, who had a history of mental health problems. But when Ramundo fired his gun once, an officer retaliated by firing two fatal shots into Ramundo’s left back. For family members and colleagues, Ramundo’s death came as a shock; none of them seemed to expect that he could turn violent. Ramundo was diagnosed with bipolar disorder and generalized anxiety disorder, according to the health care worker who notified police that Ramundo left home with his licensed gun, but he had been refusing to take his medication for either illness at the time of his death.
Budget cuts to human services, parks and other areas could be retroactively reduced or eliminated with higher-than-projected revenues from the previous budget cycle, Vice Mayor Roxanne Qualls announced yesterday. When City Council passed the city’s operating budget in May, it had not yet received the full revenue numbers for the fiscal year that ended on June 30. With the full numbers expected to come in higher than originally projected, Council will be able to evaluate options for what and how much can be restored. Human services funding was cut by roughly one-third in the city budget, putting it at 0.3 percent of overall spending — far below the city’s historic goal of 1.5 percent.
Ohio Attorney General Mike DeWine won’t appeal the temporary restraining order that forces the state to recognize a Cincinnati same-sex couple on their death certificate, but DeWine says he’ll continue defending the state’s ban on gay marriage. Lisa Hackley, DeWine’s spokesperson, noted that such restraining orders are normally not susceptible to appeal. Hackley’s explanation contradicts an earlier report from The Cincinnati Enquirer that the order was going to be appealed. Meanwhile, FreedomOhio says it will try to put an amendment legalizing marriage equality on the November 2014 ballot, which CityBeat covered here when the group was still aiming for the 2013 ballot.
The I-71/MLK Interchange yesterday moved closer to its $107.7 million funding goal when Ohio’s Transportation Review Advisory Council gave preliminary approval to Gov. John Kasich’s transportation plan, which will use $3 billion raised through Ohio Turnpike revenues to fund infrastructure projects around the state.
The Ohio Supreme Court will review whether anti-gambling opponents of racinos have standing to sue. Among other issues, critics argue that Kasich’s legalization of video lottery terminals didn’t represent an actual extension of the Ohio Lottery, which is why the state claims it was allowed to legalize the gambling machines without voter approval. The state’s Supreme Court says it will decide the issue after it rules on a similar case involving privatized development agency JobsOhio.
Democrats are voicing uncertainty about whether Republicans will actually take up a Medicaid expansion bill in September. Republican legislators rejected the expansion in the state budget, but they’ve said they will take up the issue in the fall. The Health Policy Institute of Ohio found the expansion, which is funded mostly through federal funds from Obamacare, would insure half a million Ohioans and save the state money over the next decade.
Charter schools’ big challenge: finding space to house their facilities.
An Ohio gun group raised $12,000 to buy George Zimmerman a gun or security system.
Drivers, beware: Hackers could soon be crashing your cars.
Drinking coffee has been linked to a 50 percent lower risk of suicide.
Being one of the first to discover a critical memo put Cincinnati Councilman P.G. Sittenfeld at the center of an ongoing drama regarding the city’s plans to lease its parking meters, lots and garages to the Greater Cincinnati Port Authority. The memo criticized the financial details of the lease, but it was kept from the Port, City Council and the public for nearly a month. Ever since the controversial parking plan passed City Council and was upheld in court, concerned citizens, business leaders and critics like Sittenfeld have been calling on the city and Port to rework or halt the deal. So far, the city and Port have stuck to their support. The city will get a $92 million lump sum and at least $3 million a year from the lease, which it currently plans to use to help balance city budgets and fund development projects, such as the I-71/MLK Interchange.
The latest state budget secured more cuts to city and county governments, putting local governments at a $1.5 billion shortfall in the next two years compared to 2010 and 2011, according to a new report from progressive think tank Policy Matters Ohio. Republican Gov. John Kasich and Republican legislators slashed local government funding in 2011 to help fix an $8 billion budget hole. But the latest state budget, which Kasich signed into law in June, was awash in extra revenues because of Ohio’s economic recovery — so much so that legislators passed $2.7 billion in tax cuts. For Cincinnati, the original cuts cost the city more than $22 million in revenue.
The Brent Spence Bridge was bumped up in a federal funding priority list through a successful amendment from Sen. Rob Portman, an Ohio Republican. The amendment prioritized $500 million for obsolete and structurally unsound bridges, but it’s so far unclear how much of the money will go to the Brent Spence Bridge project, which state officials estimate will cost $2.7 billion. Currently, Ohio and Kentucky officials plan to pay for the bridge project by enacting tolls.
Vice Mayor Roxanne Qualls, who’s running for mayor this year, is calling on the city manager to produce a plan that would structurally balance Cincinnati’s operating budget by 2016. “To build on the momentum Cincinnati is now experiencing, we must set a course now for a fiscally sustainable future,” Qualls said in a statement. “That’s why I’m urging that we have a plan to reach structural balance by 2016, restore reserves and increase the city’s pension contribution, minimize using the parking lease payment to restore budget cuts and continue to invest in neighborhoods and jobs to grow revenue.” The announcement comes more than one week after Moody’s, the credit rating agency, downgraded Cincinnati’s bond rating and criticized the city for its exposure to unsustainable pension liabilities and reliance on one-time sources to fix budget gaps.
Ex-Councilman John Cranley, who’s also running for mayor, is rolling out his jobs plan today. The initiative will provide a job training program for individuals facing long-term unemployment or underemployment, which the Cranley campaign estimates will result in 379 individuals per year obtaining full-time, permanent jobs. The program will be mainly paid for by pulling funds from the city’s Office of Environmental Quality, Department of Finance, travel and the state lobbyist. “My deepest conviction is that there is dignity in work. I believe all able-bodied adults should work and be self-sufficient. And I believe society has an obligation to ensure the opportunity to work exists,” Cranley said in a statement.
On Second Thought: “Facts vs. Perceptions in Trayvon Martin Coverage.”
Police yesterday shot and killed Roger Ramundo, an allegedly armed Clifton resident. Officers had been called to the area of Clifton and Ludlow avenues by a mental health provider, who said there was a person with mental health issues armed with a gun, according to interim Cincinnati Police Chief Paul Humphries. Police said they tried to first subdue Ramundo with Tasers during an ensuing struggle, but they were unsuccessful and the man pulled out his gun and fired a shot. That’s when one officer fired two shots that hit Ramundo, who was then taken to University Hospital, where he was pronounced dead.
Gov. Kasich isn’t providing clemency to a Cleveland killer who stabbed his victim 17 times, overruling a rare plea for mercy from prosecutors but siding with a majority of the state parole board. Billy Slagle will be executed on Aug. 7.
Ohio will take a hands-off approach
to promoting Obamacare, even though outreach will be crucial for the controversial
health care law. President Barack Obama’s administration estimates it
will have to enroll millions of young adults into health care plans to turn the law into a success.
Meanwhile, Hamilton County is investigating if Obamacare could result in lower property taxes by allowing the county to shift costs to the federal government.
A Cincinnati money manager is being accused of running an “elaborate Ponzi scheme” that cost investors “tens if not hundreds of millions of dollars,” according to a July 20 complaint filed in the Hamilton County Common Pleas Court.
The average price of a flight from Cincinnati/Northern Kentucky International Airport dropped, but the airport is still the second-most expensive in the nation.
CityBeat gave Internet cat-celebrity Lil Bub an in-depth look in this week’s issue. Find it online here.
Want to maximize your tan? Here is how close you could get to the sun and survive.
The recently passed state budget means cities and counties will get even less money from the state, according to a new report from progressive think tank Policy Matters Ohio.
The report looks at “three blows” of cuts to local governments: less direct aid, no money from a now-repealed estate tax and the beginning of the end of a state subsidy that supported local property taxes. The cuts add up to at least $720 million less over the next two years than cities and counties got in the past two years, the report finds.
It’s even less money when looking further back in Ohio’s history — specifically before Republican Gov. John Kasich took office.
“Local governments will see $1.5 billion less in tax revenues and state aid compared with” fiscal years 2010 and 2011, said Wendy Patton, the report’s author, in a statement. “Fiscal crisis will continue in many communities.”
Kasich and Republican legislators slashed local government funding in 2011 to help fix an $8 billion budget hole. But the latest state budget, which Kasich signed into law in June, was awash in extra revenues because of Ohio’s economic recovery — so much so that legislators passed $2.7 billion in tax cuts.
The Republican-controlled state government repealed the estate tax in the last budget, but some Democrats and local governments were hopeful at least some of the lost money could be restored this year.
Casino revenue was supposed to curtail some of the cuts, but Policy Matters concludes it’s not enough. Casino revenue has also consistently come under expectations: The state government in 2009 estimated Ohio’s casinos would take in $1.9 billion a year, but that projection was changed in February to roughly $1 billion a year.
For Cincinnati, the previous round of budget cuts cost the
city more than $22 million in revenues — nearly two-thirds of the
budget gap the city faced for fiscal year 2014. Although the city managed to avoid laying off cops and firefighters as a result, it still had to slash other city services and raise property taxes.
Some city and county officials are trying to persuade the state government to undo the cuts. In March, Cincinnati Councilman P.G. Sittenfeld gathered officials around the state to launch ProtectMyOhio.com, which lets citizens write directly to the state government about the cuts.
A federal judge ruled that a state death certificate must recognize the marriage of a newlywed same-sex couple, but the order only applies to James Obergefell and John Arthur. It’s the first time a same-sex marriage is recognized in Ohio. The two men had the case expedited because Arthur is suffering from amyotrophic lateral sclerosis, a deadly neurological disease with no known cure. Al Gerhardstein, the attorney for the two husbands, says the ruling could be the beginning of legal challenges from gay couples inspired by the Supreme Court’s ruling against the federal Defense of Marriage Act (DOMA), which could put further pressure on Ohio to legalize same-sex marriage. CityBeat covered ongoing efforts to legalize gay marriage in the state here, although the group in charge of the movement is now aiming to put the issue on the ballot in 2014, not 2013 as originally planned.
Vice Mayor Roxanne Qualls in a statement called the tea party-backed charter amendment that would revamp the city’s pension system “a wolf in sheep's clothing.” She is also requesting the city administration study the amendment’s consequences and report back to City Council’s Budget and Finance Committee on Aug. 5. The amendment would funnel new hires into a private retirement plan similar to what’s typically found in the private sector — except, unlike private-sector workers, city employees don’t pay into Social Security and don’t collect Social Security benefits from their years with the city. The amendment was announced less than a week after Moody’s, a credit ratings agency, downgraded Cincinnati’s bond rating in part because of the city’s increasing pension liability.
A poll analysis from the Health Foundation of Greater Cincinnati suggests more than 1.25 million Ohioans are uninsured, with about 17 percent of the working-age population lacking insurance. It also found that Ohioans are increasingly reliant on public programs to obtain health benefits. The analysis looked at the Health Foundation’s 2013 Ohio Health Issues Poll. The results could spur further efforts to expand Medicaid eligibility in the state, which the Health Policy Institute of Ohio previously found would save the state money and insure nearly half a million Ohioans over the next decade. Republican legislators rejected the Medicaid expansion in the state budget, citing concerns that the federal government wouldn’t be able to uphold its 90-percent funding commitment.
Gov. John Kasich wants to fast track the I-71/MLK Interchange in part by using revenue from the Ohio Turnpike’s tolls. Kasich’s recommendations, which must be approved by the state’s Transportation Review Advisory Council, add up to $107.7 million in state funds.
State Rep. Peter Beck, a Mason Republican who’s facing 16 felony charges of fraud, won’t resign his seat.
Twenty-eight people have applied to become Cincinnati’s next police chief. With a recent uptick in violence, many have called on the city to expedite the process of replacing James Craig, the former police chief who left for Detroit earlier in the year.
Despite rising interest rates, Cincinnati-area home sales in June continued their strong trend up.
For-profit entities are opening more online schools in Ohio, with the process set by state legislators to shut out public educators. A previous investigation by CityBeat found online schools tend to do worse and cost more than their peers.
The city administration and social media network Nextdoor are partnering up to better link Cincinnati’s neighborhoods with the local government. The network will provide a free website for each of the city’s neighborhoods, which the city says will allow residents to “to get to know their neighbors, ask questions and exchange local advice and recommendations.” City officials plan to use the websites to regularly reach out to local citizens.
Computer software from the Massachusetts Institute of Technology could make the Internet three times faster.
It may become more expensive for the city to issue debt after Moody’s downgraded the city’s bond rating. The credit rating agency pinned the blame on the city’s exposure to local and state retirement systems, as well as the city’s reliance since 2001 on one-time sources to balance the operating budget. Still, Moody’s does give the city some credit for its economically diverse population and recently stabilized earnings tax, despite docking the city for bad socioeconomic indicators, particularly resident income levels and historical unemployment rates.
The Greater Cincinnati Port Authority’s CEO Laura Brunner is apologizing to the public and council members
following the exposure of an email that implied she was trying to keep a
critical parking memo away from public sight. Brunner says she was just trying
to buy time so she could directly show the memo to the Port Authority’s
board before it was reported by news outlets, but she acknowledges that
her email was ill-conceived and came off as an attempt to stifle
transparency. The memo suggests Cincinnati is getting a bad deal from its parking lease agreement with the Port Authority and several private operators, but the Port Authority and city officials argue the memo is outdated and full of technical errors.
The Cincinnati Enquirer has a report detailing political contributions from oil and gas companies that may have helped bring down a state “fracking tax,” which was supposed to raise state revenue from Ohio’s ongoing oil and gas boom. Apparently, many of the Republican legislators who staunchly opposed the oil and gas severance tax also took in a lot of money from the same companies who would have to pay up. The tax proposal was effectively dead on arrival, even with the hyperbolic support of Republican Gov. John Kasich. Fracking is an extraction technique that pumps millions of gallons of water underground to free up oil and gas. CityBeat covered its effects on Ohio in further detail here.
Water utility leaders are meeting in Cincinnati this week to discuss sustainable business models. In Cincinnati, water usage has dropped while expenses to treat water and waste water have escalated, causing the Metropolitan Sewer District to take in less money. The conference will discuss models that can adjust around this trend while keeping rates low for customers.
The owners of The Hanke Exchange, a collection of buildings in Over-the-Rhine, say occupancy is going up as a result of the promise of the Cincinnati streetcar. The property is now at 84 percent occupancy rate, up from 28 percent three years ago.
Dayton and Cincinnati will hold rallies Saturday showing support for Trayvon Martin, the unarmed black 17-year-old who was killed by George Zimmerman last year. Zimmerman was acquitted of murder by a jury last Saturday.
Richard Cordray, the former Ohio attorney general, was confirmed to direct the federal Consumer Financial Protection Bureau, the top agency that will regulate the financial institutions that played a role in causing the Great Recession.
The Hamilton County Young Democrats are hosting a free event today to meet Democratic State Sen. Nina Turner, who’s also running for secretary of state next year against Republican incumbent Jon Husted.
If the sun suddenly went out, humanity could take a few weeks to die out and perhaps live in Iceland.
It might cost Cincinnati more to issue debt following a credit rating downgrade by Moody’s. In a report released on July 15, the credit ratings agency downgraded the city’s general bonds from Aa1 to Aa2 and revised the bonds’ outlook to “negative.”
“The negative outlook reflects the expectation that the city will continue to face challenges in attaining structurally balanced operations, stemming from its unfunded pension liabilities and reliance on a number of one-time budgetary solutions in recent years,” the report reads.
In a memo to the mayor and City Council, City Manager Milton Dohoney put the blame on Moody’s methodological changes that now account for state pension funds that Cincinnati has no direct control over. Specifically, Moody’s now looks at the state-managed Ohio Public Employees Retirement System (OPERS) and Ohio Police and Fire Retirement System (OP&F) when scoring Cincinnati, instead of just the Cincinnati Retirement System (CRS), which the city directly operates.
“It is important to note the Ohio Revised Code provides the percentage each employer pays into OPERS and OP&F as its contribution. The City has paid 100 (percent) of this contribution each year as required. The City has no ability to impact the unfunded liability of OPERS or OP&F,” Dohoney wrote in the memo.
Still, some of the blame lies on the city’s pension fund, which is lacking a long-term strategy for sustainability, according to Moody’s.
The CRS board is currently looking at scenarios to address the city’s long-term liabilities. Its next meeting is on Aug. 1, and it could produce changes that would be presented to City Council, according to the city manager’s memo.
The report also takes issue with the city’s repeated use of one-time sources to fix budget gaps. Since 2001, the city’s annual operating budgets have used one-time sources instead of achieving structural balance with long-term cuts and sources of revenue.
Critics argue the one-time sources only delay fiscal woes instead of permanently fixing the budget shortfalls. Supporters claim the one-time methods allow the city to balance its budget without taking austere measures that would lead to city layoffs and hurt growth while the economy is in recovery.
The report from Moody’s does give Cincinnati some good credit, citing a “pressured but still satisfactory financial position,” the recent stabilization of earnings taxes, financial flexibility provided by an available but untapped levy authority, the city’s economically diverse population and an above-average debt position.
Bonds are typically issued when the city needs a temporary infusion of funds for capital projects, such as the Cincinnati streetcar.
Updated with more context.
In its own memo released today, the city claims that the June 20 memo, which was first reported by WCPO yesterday, is outdated and makes a few technical errors.
The June 20 memo from Walker Parking Cosultants, a parking consultant hired by the city, found it will be 257 percent more expensive for the new private parking operator to run the city’s on-street parking services in comparison to what the city currently spends. It also concludes the city isn’t getting as much revenue as other cities got under their own parking leases.
“The on-street operating expenses shown in the model are projected to grow at a faster rate than operating revenues,” the June 20 memo claims. “The city should expect a private operator to run the parking system more cost effectively than the current operation, not less effectively. Therefore, revenues should be expected to increase at a rate faster than expenses, not slower.”
The memo’s numbers come through estimates provided by ParkCincy, the operating team set to take over the city’s parking meters, lots and garages following a decades-long lease agreement between the city and the Port Authority.
In particular, the memo highlights what it claims are extraordinary payments requested by Xerox under the deal: The private parking operator is asking for a $627,063 fee in 2013, putting about 14.6 percent of projected net operating income to management fees. That’s far higher than the typical 2.1 percent to 2.3 percent found in similar parking deals in other cities, according to the memo.
The city disputed the findings in its own memo this morning.
“The information that Walker used was from an early point in time; the deal was subsequently negotiated from that point to improve the deal,” wrote City Manager Milton Dohoney in his own memo. “For example, the profit margin used was based on different parking deals in other cities that are not the same as ours. As we know, the Cincinnati model is unique in many ways.”
One such trait: Cincinnati’s parking deal includes modernizing the city’s parking meters to accept credit cards and mobile payment.
The city cited a letter from the Port Authority sent to
City Solicitor John Curp during an email exchange on July 12, the same day the Port Authority was given the June 20 memo. The letter contradicted what Port Authority CEO Laura Brunner claims are inaccuracies.
“In its memo, Walker Consulting bases its comparisons on price, yet doesn’t qualify the information with what level of service capabilities are included in the price,” the Port Authority’s letter reads. “The Port Authority is basing its purchasing decisions on price, but also level of enhancement to the on-street system that mirrors the City’s desire to modernize these vital assets and position them to enhance economic development opportunities downtown and in City neighborhoods.”
Besides this “‘apples to oranges’ comparison,” the Port
Authority’s letter disputes many of the technical details behind
the June 20 memo, particularly questioning some of the measurements
used and comparisons that don’t account for differences between Cincinnati’s parking lease and other cities’ agreements. It also emphasizes that contracts with Xerox and other companies
are not finalized yet.
Much of the focus is now on why the June 20 memo was kept from City Council, the Port Authority and the public for nearly a month, given the memo’s controversial findings about a controversial deal.
“The city administration misled the public for months on the need for the deal, saying it was needed to avoid laying off cops and firefighters and then they don’t do it. Now it’s keeping vital information from the public and council. It’s a violation of the public trust of the highest order,” Democratic mayoral candidate John Cranley said in a statement. “I am urging the Port to reject this deal that is bad for the City.”
Cranley and other city officials, including several City Council candidates and council members P.G. Sittenfeld, Christopher Smitherman and Charlie Winburn, signed a letter to the Port Authority asking the city-funded agency to reject its agreement with Xerox.
The city manager’s office couldn’t be immediately reached for comment. This story will be updated if further comments become available.
The parking lease was finally signed by the city and Port Authority in June after months of political and court battles. The deal was signed even though a majority of City Council now opposes the lease after the city managed to balance its budget without the parking deal and without laying off cops and firefighters.
City Council approved the parking lease on March 6, more than three months before the June 20 memo was given to the city administration.
In return for the lease, Cincinnati is getting a $92 million lump sum and at least $3 million in annual payments, according to city estimates. The city plans to use that money to pay down future budget gaps and fund development projects, including the I-71/MLK Interchange.
Update: Clarified Port Authority didn’t receive the memo until July 12.