A local conservative group is making a lot of use of member and lawyer Chris Finney. The Coalition Opposed to Additional Spending and Taxes (COAST) was involved in two lawsuits filed this week: one regarding the Blue Ash Airport deal and another regarding Cincinnati Public Schools (CPS).
Criticism of the Blue Ash Airport deal is not new for COAST. The group has repeatedly criticized the deal, largely because as much as $26 million from the deal will be used to fund Cincinnati’s $110 million streetcar. In the past, COAST has repeatedly characterized the streetcar as a “boondoggle.”
The deal between Blue Ash and Cincinnati is not new, but it did get reworked earlier this year. In 2006, the $37.5 million deal had Cincinnati selling Blue Ash some land on the Blue Ash Airport property, which Blue Ash would then use to build a park. Blue Ash voters approved the deal, which contained a 0.25 percent earnings tax hike, in a two-to-one margin.
When Cincinnati couldn’t get a $10 million grant from the Federal Aviation Administration (FAA), the city stopped working on the airport as it became too costly. The city then tried to shift the proceeds from the deal to the Cincinnati streetcar, but the FAA said funding must be used for airports since the property is classified as an airport.
Eventually, Cincinnati asked Blue Ash to rework the deal. The plan was Blue Ash would rescind the deal, and then Cincinnati would officially close down the airport and resell the land to Blue Ash while it’s no longer classified as an airport.
At first, city officials said $11 million of the opened-up money would go to the streetcar and $26 million would go to municipal projects. Since then, the city has shifted $15 million of that municipal project funding — supposedly temporarily — to help Duke Energy move underground utility lines from the path of the proposed streetcar route, at least until the city and energy company can work out an ongoing feud.
The reworked deal, which was approved by Blue Ash City Council in a 6-1 vote on Aug. 9, seemed like a win-win for both sides. Cincinnati would get more funding for ongoing projects, and Blue Ash netted $2.25 million from the deal — $250,000 to cover fees for Blue Ash’s new park and $2 million was subtracted from the deal since Blue Ash would no longer have to match the FAA grant.
But COAST does not approve. The organization doesn’t want any funding redirected to the streetcar, and it claims the reworked deal is not allowed. The lawsuit filed by Blue Ash resident Jeffrey Capell and Finney cites a section of the Blue Ash City Charter that disallows some contracts: “No contract shall be made for a term longer than five years, except that franchises for public utility services and contracts with other governmental units for service to be received or given may be made for any period no longer than twenty years.”
Mark Vander Laan, Blue Ash’s city solicitor, says the city charter section the lawsuit is referencing is irrelevant. He argues the deal is not a contract as the city charter defines it; instead, it’s a mortgage and debt instrument. In the Blue Ash City Charter, there’s another section that deals with debt instruments, and that’s what the rescinded deal falls under, according to Vander Laan. He says the city would not function as it does today if the lawsuit’s claim was correct: “If that were the case, all the bonds we’ve ever issued would have been incorrect.”
Vander Laan says the real issue here is disapproval of the streetcar, not any legal technicalities: “They may have a complaint about the streetcar, but that’s not the city of Blue Ash’s issue at all. We don’t think it’s even an appropriate basis to challenge this.”
He added, “Frankly, if somebody had an issue with (the deal), they should have taken that issue back in 2006 and 2007.” That’s when Blue Ash voters first approved the airport deal, but back then, the money wasn’t going to the streetcar, which didn’t even exist at the time.
In another legal battle, COAST filed a lawsuit against CPS over staff allegedly campaigning for Issue 42, a ballot initiative that will renew a CPS levy voters approved in 2008. The case goes back to 2002, when Tom Brinkman, chairman of COAST, sued CPS for “illegal and unconstitutional use of school property for campaign purposes,” according to the lawsuit. That case ended in a settlement, which forced CPS to enter into a “COAST Agreement” that says, “CPS will strictly enforce a policy of preventing … Other Political Advertisements on CPS Property.”
But COAST now says that agreement has been broken, and the
lawsuit cites emails as evidence. The emails show staff promoting voter
registration drives, which aren’t directly linked to Issue 42, and
staff offering to contribute and volunteer to the campaign. In the
emails, there are a few instances of Jens Sutmoller, Issue 42’s campaign
coordinator, asking CPS staff to give him personal emails, which shows
he was trying to avoid breaking any rules.
In CityBeat’s experience, CPS officials have been pretty strict with following the settlement with COAST. In a Sept. 20 email, Janet Walsh, spokesperson for CPS, told CityBeat she could not provide some levy-related information during work hours: “Yes, but due to constraints about doing levy-related work on work time (we can't), it may have to wait until I can get on my home computer.”
COAST has endorsed a “No” vote on Issue 42. In CityBeat’s
in-depth look into CPS and Issue 42 (“Battered But Not Broken,” issue
of Oct. 3), Brinkman defended COAST’s position by saying they’re not
necessarily against the school getting funding. COAST is more
interested in holding the school accountable: “It’s a five-year levy.
The reason we have five-year levies is so the public can gauge after
four or four and a half years how the entity where the taxes are going
to is doing with the money.” In that sense, for COAST, it’s important to
bring the levy renewal to voters as late in the game as possible —
November 2013 in this case. CityBeat this week endorsed a "Yes" vote on Issue 42 here.
Criticism of CPS levies is also not new for COAST. The group campaigned against last year’s new, permanent $49.5 million levy, which CPS said it needed to meet new technology needs and keep some buildings open.
An anti-tax group has made opposing Cincinnati’s planned streetcar project its primary cause in recent years, so it might be surprising to now find one of its leaders teaming up with a major streetcar advocate.
But that’s exactly what is happening later this month as Chris Finney, of the Coalition Opposed to Additional Spending and Taxes (COAST), co-hosts a political fundraiser with Chris Bortz, an ex-Cincinnati city councilman.
The Coalition Opposed to Additional Spending and Taxes (COAST) has threatened to block a move that would allow Cincinnati to use $37.5 million from the 2007 sale of the Blue Ash Airport for projects other than aviation, $11 million of which would go to the Cincinnati streetcar.
The Blue Ash City Council voted Thursday to re-do the sale of 130 acres at the Blue Ash Airport to the City of Cincinnati. COAST says it wants to put the matter before voters in a 2013 referendum, which would halt the sale and re-instate the original agreement made in 2007 when Cincinnati made the sale.
The two cities decided to re-work the $37.5 million sale because a federal rule requires proceeds from the sale of an operating airport to be used for other aviation projects. The money would be returned, airport shut down and then the property re-sold to Blue Ash for the original amount.
“When they originally sold it they were stupid, which is typical of the City of Cincinnati, and did not realize that the proceeds on the sale of the airport have to go to other aviation-type things,” says COAST Chairman Tom Brinkman. “Now that they want to get the streetcar, they want to crack that money.”
Brinkman openly admits he doesn’t want the money to go to the streetcar (“We’re doing everything we can to make sure that boondoggle doesn’t occur”) but says COAST is working with a group of local pilots who want money from the sale to go to Cincinnati’s Lunken Airport.
Blue Ash is confident that the ordinance they passed approving the re-sale isn’t subject to referendum.
“Blue Ash believes everything enacted was lawful and would survive any challenge,” says City Solicitor Brian Pachenco. He declined to discuss specifics
The city wants the airport land to build a park.
Pachenco said the ordinance wasn’t written specifically to exempt it from referendum attempts, but nevertheless it falls under a section of the city’s charter that makes voters unable to recall it.
COAST isn’t so sure.
Chris Finney, legal counsel for COAST, said the buying and selling of land under the Blue Ash charter is subject to referendum. He said the ordinance was written to avoid using that language, but what was happening was in reality a sale.
For its part, Cincinnati doesn’t seem too concerned with the threatened referendum.
“We’re not going to talk 'what ifs' at this point,” city spokeswoman Meg Olberding said. “The streetcar has had two previous referendums that have been shot down.”
She pointed out that only $11 million of the sale was going toward the streetcar, and the remaining money would be available for other projects.
Cincinnati City Councilman Chris Seelbach was also unconcerned.
“COAST and groups like COAST have tried to put up every obstacle possible to prevent the streetcar from happening and we have overcome all of them,” Seelbach said. “I am 100 percent positive if this comes to a vote we will overcome it again and the streetcar will be built.”
Cincinnati's streetcar project is getting another $5 million in federal funding. But before the money is handed over, the city must first eliminate cost overruns that have recently put the project in danger.
U.S. Secretary of Transportation Ray LaHood unveiled the news in a letter to Mayor Mark Mallory dated June 19. The letter acknowledges the project's recent cost overruns, but goes on to claim the federal government still backs the project.
"The DOT (Department of Transportation) continues to support your bold vision for economic development and enhanced transportation choices for the city of Cincinnati, and we believe that this project is a significant component of that vision. With that in mind, I want to provide up to $5 million in additional assistance from DOT," LaHood wrote.
But the money comes with two conditions: The city must first fix the streetcar project's cost overruns and restore certain aspects of the project, including a passenger information system and a screen or wall that would block power substations from public view.
The $5 million will be on top of the nearly $40 million the federal government has already contributed to the project through various grants and programs.
The funding bump comes just in time for City Council's Monday vote on the streetcar project's cost overruns.
In February, the city received construction bids that were $26 million to $43 million over budget, effectively leading to a $17.4 million budget gap and a $133 million overall cost for the project.
Since then, City Manager Milton Dohoney proposed a few fixes to City Council, including pulling funding from various capital projects and issuing more debt.
At the same time, Dohoney told City Council the city administration was working with federal officials to find opportunities for more federal funding. The new commitment is presumably the result of those discussions.
City Council is expected to vote on the budget fixes Monday. So far, council members Roxanne Qualls, Yvette Simpson, Wendell Young and Laure Quinlivan have vowed support, but Council will need a fifth vote — perhaps from Chris Seelbach or Pam Thomas — to pass the changes.
Read the full letter below:
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.
The Cincinnati streetcar took another step forward on Monday when car builder CAF USA unveiled renderings for the $133 million project.
The city has hired CAF to supply five cars. The latest details show the cars will have four doors on each side and be capable of moving in both directions on a track. The cars are also completely low-floor, which should make boarding, disembarking and moving around the streetcar easier.
CAF, which is based in Spain, has supplied cars for a few other U.S. cities, including Pittsburgh, Houston and Sacramento, Calif.
John Deatrick, the streetcar project’s executive director, told CityBeat on Thursday that he’s been in regular contact with CAF USA since he joined the project in August.
Unlike most other streetcars around the world, the Cincinnati cars are particularly tuned to handle sharp turns, according to Deatrick. That’s because the city didn’t want to expand roads and knock down buildings just to accommodate the transit network.
Deatrick says the true test for the cars will come once they’re shipped and tested on a completed Over-the-Rhine loop in June 2015. The streetcar is set to open for use on Sept. 15, 2016.
Check out the renderings here.
Mayor Mark Mallory will join fellow streetcar supporters Thursday to discuss how the project is coming along and where it’s headed.
The event is the monthly streetcar social, hosted by Cincinnatians for Progress. Organizers expect to pull in nearly 100 people from around the city to discuss topics and issues surrounding the project. It will take place on Thursday, July 18, between 5:30 p.m. to 8 p.m. at Rhinegeist Brewery, 1910 Elm St., Cincinnati, Ohio, 45202. For more information, check out the event’s Facebook page.
Mallory, who’s term-limited from running for reelection this year, has spearheaded efforts to build a streetcar in Cincinnati. He’s been joined by a steady Democratic majority in City Council, which most recently approved $17.4 million more in funding for the project alongside several accountability measures that will require the city manager to regularly update council and the public on the project’s progress.
CityBeat’s cover story for the week of July 10 debunked the top 10 misrepresentations surrounding the Cincinnati streetcar project.
Streetcar supporters argue the project will foster economic growth and development in Cincinnati, particularly downtown — a claim backed by studies from advising company HDR and the University of Cincinnati.
Opponents claim the project, which now stands at $133 million after recent cost overruns were fixed, is too expensive. They doubt it will succeed in spurring growth and development.
Convening in packed City Council chambers today, Cincinnati officials discussed the costs and benefits of the streetcar project in light of a $17.4 million budget gap revealed by the city administration on April 16. City Manager Milton Dohoney Jr. said the project could and should be saved, but a minority of public speakers and some City Council members did not seem convinced.
To balance the budget
gap, Dohoney said the city would have to pull funds
from multiple sources. He said he will offer specifics in writing
tomorrow, which invoked verbal disappointment from officials who were expecting details at the meeting.
“I'm disappointed in this presentation,” said Councilman Chris Smitherman. “We're here today to hear how we're going to pay for it.”
The meeting, which was
called by Democratic Vice Mayor Roxanne Qualls shortly
after the budget shortfall was announced, covered a presentation from Dohoney, comments from public speakers and City Council
questions to Dohoney. Despite expectations prior to the meeting, no specifics were given for closing the budget gap even after extensive questioning.
Dohoney did reveal the price tag for halting the streetcar project: $72 million. According to Dohoney, the project has already cost the city $19.7 million, and the city would have to spend another $14.2 million in close-out costs. Another $38.1 million in federal grants would have to be returned to the federal government.
Dohoney added that terminating the project would also reduce faith in Cincinnati’s competitiveness and ability to take on big development projects.
The budget gap was originally $22.7 million, but the city administration identified $5.3 million in potential cuts. Dohoney said further cuts would “alter the scope” of the project and push it into a “danger zone.”
The budget gap is a result of construction bids coming in $26 million to $43 million over budget. The lowest bid from Messer Construction, which came in $26 million over budget, has already expired, but Dohoney said the company is still willing to work on the streetcar project.
The city could rework the request for proposal for construction bids, but Dohoney said city officials and third-party experts agreed it’s unlikely that would effectively lower costs.
Throughout the meeting, streetcar opponents argued that the cost of the project is too high and the budget shortfall is proof the program is unsustainable.
Most of Dohoney’s presentation focused on the streetcar’s purpose. He said the streetcar would help drive
economic and population growth, which would then bring in more tax revenue to
help balance the city’s operating budget. That would represent a turnaround for Cincinnati, which has been steadily losing population since the 1950s during a period that has
coincided with disinvestment, urban flight and the dissolution of
the city’s old streetcar system.
Throughout his presentation, Dohoney cited multiple examples and studies that found streetcars can help grow local economies. He said the city has not pursued the streetcar because “it’s a cool thing to do,” but because it follows the expert advice given to city officials about what’s necessary to compete with other cities.
Dohoney’s argument was previously supported by HDR, which the city hired to do an economic impact study in 2007. HDR found major benefits to connecting Over-the-Rhine and the Central Business District, including travel cost savings, increased mobility for low-income individuals and economic development that would spur rising property values. The HDR study was entirely supported and echoed by a follow-up assessment from the University of Cincinnati.
Some critics have argued that the study is outdated because it was conducted before Over-the-Rhine’s recent revitalization, but Dohoney said there are still several hundred vacant buildings in the area, particularly north of Liberty Street.
The project has faced continued opposition from Democratic mayoral candidate John Cranley, Republicans and the conservative Coalition Opposed to Additional Spending and Taxes (COAST). They say the project is too expensive and they’re skeptical of the economic growth being promised by city officials.
Opponents of the
streetcar have so far put the project on the ballot twice, but Cincinnati voters rejected the referendum efforts. Still, the streetcar may be on the ballot
again this year through the 2013 mayoral race between Democrats Cranley and Qualls (“Back
on the Ballot,”
issue of Jan. 23). Cranley opposes the streetcar, while Qualls supports it.
The streetcar project was originally supposed to receive $52 million in federal funds through the state government, but Republican Gov. John Kasich pulled the funds after he unseated Democratic Gov. Ted Strickland.
Beyond the financial cost, Dohoney pointed out Kasich’s decision raised concerns about the project’s feasibility among previous supporters, leading to more hurdles and delays. He said Duke Energy in particular began stalling efforts to move utility lines to accommodate for streetcar tracks because the company grew weary of the project’s prospects.
Duke’s reluctance led to a conflict with the city over who has to pay to move utility lines — a conflict Duke and the city agreed to resolve in court. While the court battles play out, the city set aside $15 million from the Blue Ash Airport deal to move utility lines, but city officials say they will get that money back if the courts side with the city.
The city originally expected $31 million in private funding for the streetcar project, but those expectations were dampened as a result of the Great Recession, which forced local companies to scale back private donations.
John Deatrick, the current project manager for The Banks, previously told CityBeat that it’s normal for large projects to deal with multiple hurdles. Deatrick, who the city wants to hire to manage the streetcar project, said, “Any time you try to build something — even out in the middle of a corn field — you’re going to have unexpected, unanticipated issues. ... These things happen, and that’s what project management is all about.”
Dohoney said the current phase of the streetcar project is only a starter line between Over-the-Rhine and Cincinnati’s business district, but city officials are already planning for a second line that would run up to the University of Cincinnati and hospitals in uptown. If Dohoney’s vision for the project were completed, streetcars would run on multiple lines all around the city, ranging from the Cincinnati Zoo to The Banks.
The streetcar budget debate comes amid another debate regarding a $35 million deficit in the city’s operating budget. Some streetcar opponents have tried to link the two issues, but the streetcar is funded through the capital budget, which cannot be used to balance the operating budget because of legal and traditional constraints.
Cincinnati could lose up to $45 million in federal funds if it cancels the $133 million streetcar project, according to a new letter from the Federal Transit Administration released on Thursday by Mayor Mark Mallory.
The letter confirms much of what was stated in a previous June 19 letter to Mallory, and it presumably acts as a warning to Mayor-elect John Cranley, who intends to permanently cancel ongoing construction on the streetcar project once he takes office in December.
Cranley previously said he could lobby the federal government to re-appropriate the money to other projects, but the FTA letter unequivocally states the money is only for the streetcar project.
“FTA’s oversight contractor for the Project informs me that the City’s expenditures plus committed costs on the Project as of this date exceed $116 million, which is approximately 88 percent of the total project cost,” wrote FTA administrator Peter Rogoff. “These commitments include many construction activities that cannot be easily reversed — the City has relocated utilities, embedded rail in City streets, and purchased streetcars. Should the City choose to prematurely terminate the Project, all cost associated with closing down the project, including any claims from the contractors, will not be eligible for any federal reimbursement.”
The letter confirms that, as CityBeat originally reported, canceling the streetcar project carries its own costs.
Should the city cancel the project, it would first need to return nearly $41 million in federal grant money. The remaining $4 million in federal funds would fall under the discretion of Gov. John Kasich, who could shift the money to other parts of Ohio.
City spokesperson Meg Olberding previously told CityBeat
the city already spent $2 million of the federal funds. Olberding said the $2 million in repayments would need to come out of the operating budget
that pays for cops, firefighters and human services instead of the
capital budget that’s currently financing the streetcar project.
Since the operating budget has been structurally imbalanced since 2001, adding millions in costs could force the city to cut additional services or raise taxes.
Upon cancellation, the city would also need to pay back some of the $94 million in standing contractual obligations for the streetcar project. In many cases, the obligations reflect supply orders and other expenses contractors and subcontractors already took on but haven’t officially billed to the city. If the project were canceled, city officials say the already-spent money would need to be paid back, along with extra costs to close the project — to repave torn-up streets, for example.
Project executive John Deatrick previously told CityBeat that paying back the contractual obligations could involve litigation, which would also be paid for through the operating budget, as the city tries to minimize cancellation costs and private contractors try to recoup as much as they can from the project.
All of that is on top of the $23 million that’s already been billed to the project as of September, which should grow by $1.5 million each month as contractual obligations are turned into official bills, according to Deatrick.
The final decision on the streetcar project rests on City Council. Cranley told The Cincinnati Enquirer on Thursday that he’ll pursue a 30-to-90-day time-out on the project as the city conducts a full accounting of cancellation costs, completion costs and the potential return on investment of the project, following requests from Councilman P.G. Sittenfeld and incoming council members David Mann and Kevin Flynn — three crucial swing votes in the newly elected council of nine — for more information before placing a final vote on the project.
The talk of cancellation already spurred some Over-the-Rhine residents and businesses to launch a campaign to save the streetcar. Cranley insists it’s too expensive and the wrong priority for the city, but supporters tout independent studies and their own experiences to argue it would spur economic development. The pro-streetcar group will meet on Thursday at 7 p.m. at the Mercantile Library, 414 Walnut St. #1100, downtown Cincinnati.
The full letter: