City Manager Milton Dohoney Jr. defended the streetcar project at a special four-hour session of City Council yesterday, but the city manager did not reveal any specifics over how the project’s $17.4 million budget gap could be closed. Dohoney revealed the price of halting the project would be $72 million: the project has already cost the city $19.7 million, the city would have to spend another $14.2 million in close-out costs and another $38.1 million in federal grants would have to be returned to the federal government. Most of Dohoney’s presentation focused on the streetcar’s economic benefits, but opponents say the budget gap proves the streetcar project is unsustainable and its costs are too high.
The Cincinnati Enquirer identified the 17-year-old honors student at LaSalle High School who tried to commit suicide
in front of a classroom of 22 other students yesterday, even though parents asked press to provide privacy. The student remains
alive and in critical condition this morning. No other students were physically hurt, and classes are
resuming as normal. (Update: The student’s name was removed from this post upon the family’s request.)
The city is moving to sell Tower Place Mall for $1 to Brook Lane Holdings, an affiliate of JDL Warm Construction, so the construction company can pour $5 million into the defunct mall and convert it into a garage with street-level retail space. Financing the project at Pogue’s Garage, which is across the street from Tower Place Mall, is still being worked out now that the parking plan has been delayed by court battles and a referendum effort.
Cincinnati’s police and firefighter unions are filing a lawsuit over the city’s health care dependent audit. The city is asking employees to verify whether spouses and children are legitimately eligible for health care benefits by turning over documents such as marriage licenses, birth certificates and tax returns. The unions’ attorney told WVXU the unions are willing to provide the necessary documents, but he said they’re concerned the process is too intrusive and difficult.
Two firms are getting tax credits for creating jobs in the Greater Cincinnati area: 5Me, which creates manufacturing software, and Festo Americas, which specializes in factory and process automation. Altogether, the credits could create 312 jobs in the region.
A Democratic state senator hinted yesterday at letting voters decide whether Internet sweepstakes cafes should be allowed in Ohio. State officials, particularly Attorney General Mike DeWine, claim Internet cafes are hubs for criminal activity. The Ohio House already passed a measure that would effectively ban the cafes, but some are cautious of the ban as the Ohio Senate prepares to vote.
An intelligent headlight makes raindrops disappear.
Some people may prefer death to being saved by this terrifying robot snake.
Although it has already been explicitly stated in two letters from the federal government, Federal Transit Administration (FTA) Chief Counsel Dorval Carter on Monday reiterated that if Cincinnati were to unravel the $132.8 million streetcar project, the city would lose $40.9 million in federal grants and another $4 million in federal funds would be transferred to the state government, which could appropriate the money to any project in Ohio.
The clarification is necessary because Mayor-elect John Cranley and a majority of the incoming City Council are looking into pausing and potentially canceling the streetcar project once they take office in December. Cranley says he will lobby the federal government to reallocate the federal funds, even though the federal government has repeatedly insisted it’s not going to happen.
Carter joined City Council’s Budget and Finance Committee on the phone on Monday to walk council members through the legal technicalities involved in cancellation and how the federal government would react to such circumstances.
According to Carter, merely delaying the project at this point would break the city’s agreement with the federal government and lead the federal government to restrict the federal funds, ask the city to repay the money it already spent or terminate the deal altogether.
Still, Carter said cancellation might not hurt the city’s chances, at least from a legal perspective, of obtaining federal funds for other projects.
“It will not preclude you from pursuing other projects,” he said. “You would just have to pursue those on their own merits.”
But Carter agreed with Vice Mayor Roxanne Qualls that the city’s credibility could be weakened if the streetcar project were canceled.
President Barack Obama’s administration has prioritized light rail projects like the streetcar, according to Carter, so the reclaimed federal money would likely go to other cities pursuing similarly ambitious transit projects.
At a press conference following the council meeting, Cranley appeared unfazed by the news.
“If we have to, we’ll give the money back,” he said.
Although much noise was made about the council meeting, there wasn’t much news in the way of substance. The federal government already outlined the cancellation costs in separate letters sent to Mayor Mark Mallory in June and earlier in November.
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.”
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.
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 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.
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.
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: