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.
Following Democratic mayoral candidate John Cranley’s announcement Friday to increase city contracts with minority- and women-owned businesses once elected, fellow Democratic mayoral candidate and Vice Mayor Roxanne Qualls echoed support for the proposals, although she disputed Cranley’s record on the issue. One issue in particular is the Croson study that would allow the city to prepare for a broader inclusion plan for minorities and women. Qualls has repeatedly proposed a Croson study during her time in City Council and previous time in the mayor’s office, but she says Cranley failed to publicly raise the issue at all during his time on council between 2000 and 2009.
Cincinnati’s streetcar project cleared another hurdle Friday when Messer Construction announced it needed $500,000 to carry out construction work, which is easily covered by the project’s $10 million contingency fund. With a construction contract, new funding and accountability measures now moving forward, the only potential issue is who has to pay to move utility lines to accommodate for streetcar tracks. The city claims Duke Energy does, while the energy company puts the onus on the city. That issue is currently being worked out in court, although the city has already set aside $15 million to carry out the work for now and just in case Duke isn’t forced to carry the costs. Throughout the streetcar’s history, the project has been mired in misrepresentations and exaggerations, which CityBeat covered in further detail here.
The recently approved two-year state budget provides about $517 million less local government funding than the budget did in 2011, even though it pays for $2.7 billion in new tax cuts. Democrats have been highly critical of the cuts, but the governor’s office says local governments are effectively getting more funding through other sources not particularly geared for city and county governments. CityBeat covered local government funding in greater detail here and the state budget here.
Some state officials are pushing to establish an online, searchable database that would allow Ohio taxpayers to track state spending penny-by-penny. The state treasurer’s office already maintains a database for teacher and state employee salaries.
The Health Careers Collaborative, an organization working to increase health care employment in Greater Cincinnati, has a new leader.
Amish communities in Ohio are questioning whether they should take royalties for land that would be used for fracking, an oil and gas extraction process that environmentalists claim is dangerous for surrounding air and water. For the Amish, the issue is spiritual, rooted in their religious restrictions against technology and many facets of the modern world. CityBeat covered fracking and its ongoing effect on some Ohio communities in greater detail here.
Ohio gas prices are starting up this week.
Twinkies are returning to store shelves today.
HD 189773b, a blue exoplanet, may look hospitable, but the planet has a bad habit of raining glass sideways.
In June, City Council approved an extra $17.4 million and
accountability measures for the streetcar project, which require the city manager to publicly update council with a timeline of key milestones, performance measures, an
operating plan, staffing assessments and monthly progress reports.
During discussions for
the funding and accountability proposals, some council members, particularly Councilman P.G.
Sittenfeld, raised concerns that Messer would require more money than
the city could afford. Sittenfeld said he was especially concerned Messer would have all the leverage going forward, considering the city supposedly needed the lower construction bid to keep the project within its new budget.
Messer was the lowest bidder for the project’s construction work, but even that bid came $26 million higher than the city’s original estimates, forcing the city to close a budget gap if the project was to continue.
With the construction bids taken care of, the only known funding concern for the streetcar is who has to pay $15 million for moving utility lines to accommodate for streetcar tracks. Duke Energy argues the cost burden is on the city, while the city says the energy company has to pay up. The issue is currently being decided in court.
Ever since Cincinnati began pursuing the streetcar project, it’s been mired in misrepresentations and political controversy, which CityBeat covered in further detail in this week’s cover story.
Democratic gubernatorial candidate Ed FitzGerald is urging a coalition effort to begin a long, complicated petitioning process that could repeal some of the anti-abortion measures in the recently approved two-year state budget.
If the petitioning process is successful, it would force the Ohio General Assembly to consider repealing aspects of the budget that don’t involve appropriations of money. If the General Assembly changes, rejects or ignores the repeal proposal, it could be put on the ballot in November 2014.
FitzGerald is jump-starting the repeal effort through a new website, Ohioans Fight Back.
Speaking at a press conference Thursday, FitzGerald also questioned the constitutionality of some of the anti-abortion measures, particularly those that require doctors give certain medical information regarding abortions and restrict publicly funded rape crisis centers from discussing abortion as a viable option. He said such rules might violate free speech rights.
The state budget effectively defunds contraceptive care and other non-abortion services at various family planning clinics, including Planned Parenthood. It also makes it more difficult for abortion clinics to establish mandatory patient transfer agreements with hospitals.
The budget provides separate federal funding to crisis pregnancy centers, which act as the pro-abstinence, anti-abortion alternatives to comprehensive clinics like Planned Parenthood.
The budget also gives money to rape crisis centers, but centers that take public funding are barred from discussing abortion as a viable option with rape victims.
Days before the budget’s passage, Republican legislators also added an amendment that forces women to get an ultrasound prior to getting an abortion. As part of the amendment, doctors are required to inform the patient if a heartbeat is detected during the ultrasound and provide an estimate of the fetus’s chances of making it to birth.
FitzGerald, who’s currently Cuyahoga County executive,
plans to run against Republican Gov. John Kasich in 2014.
Kasich signed the controversial state budget with the anti-abortion measures on June 30, despite calls for the governor to use his line-item veto powers — a move that would have kept the rest of the budget in place but repealed the anti-abortion provisions.
CityBeat analyzed the state budget in further detail here.
Ever since the Cincinnati streetcar has been envisioned, the mass transit project has been mired in misrepresentations driven largely by opponents and politicians. CityBeat has a breakdown of the misrepresentations here, showing some of the silliest and biggest falsehoods claimed by opponents and supporters.
The national battle over gun control came to Cincinnati on July 4 when former Rep. Gabby Giffords stopped at the Northside parade to call for new restrictions on firearms. Giffords is part of a slew of national leaders calling for stronger regulations and enforcement for background checks — a policy more than nine in 10 Americans support. Still, the call seems to be politically unheard so far: Federal legislation is stalled in Congress, and Ohio legislators are working to loosen gun restrictions.
Facing city budget cuts, public access media organization Media Bridges is shutting down by the end of the year. The city picked up Media Bridges’ funding after the organization lost state funding that had been provided through an agreement with Time Warner Cable. But city officials claim the local funding was supposed to act as a one-year reprieve and nothing more — a claim Media Bridges was apparently never made aware of until it was too late. To justify the cut, the city cites public surveys that ranked budget programs in terms of importance, but a look at the citizen surveys shows the demographics were skewed against low-income people who make the most use out of programs like Media Bridges.
Check out CityBeat’s editorial content for this week’s issue:
• German Lopez: “Meet Daniela,” the hypothetical victim of Republican policies at the state and national level.
• Ben Kaufman: “‘Enquirer’ Takes Questionable Approach to Covering Meyers Ordination,” which analyzes the questionable apathy to a supposedly “illegal” ordination of a woman Catholic priest.
• Kathy Wilson: “Until It’s Time for You to Go,” a look at the life story of South African leader Nelson Mandela and the hurdles he faced as he helped end discriminatory apartheid policies.
If you’re headed to Fountain Square today, expect to see some images of bloodied fetuses and fetal limbs. An anti-abortion group is showing a video with the gruesome visuals as part of a protest against what it sees as “the greatest human rights injustice of our time.” The group defends its tactics by citing its First Amendment rights. The U.S. Supreme Court has so far refused to rule one way or the other on the issue, but, barring some restrictions for airwave broadcasts, the court typically protects all kinds of political speech as long as it’s not pornographic.
The Cincinnati Police Department is changing how it responds to calls to focus on what it sees as the most important issues, such as impacting violent crime, youth intervention efforts, long-term problem solving projects, traffic safety and neighborhood quality-of-life issues. The biggest change will come with how the department reacts to minor traffic accidents: It will still respond, but it may not file a report.
The so-far-unnamed Greater Cincinnati coalition working to reduce the local infant mortality rate set a goal yesterday: zero. It’s a dramatic vision for a region that, at 13.6, has an infant mortality rate more than twice the national average of six, as CityBeat covered here.
Councilman P.G. Sittenfeld announced in a statement yesterday that he will be gathering local leaders and health officials to encourage the state to expand Medicaid. The expansion, which CityBeat covered in further detail here, would save Ohio money and insure half a million Ohioans in the next decade, according to an analysis by the Health Policy Institute of Ohio.
Fish oils may increase the risk of prostate cancer, according to a new study.
A measure that would disallow employers from discriminating against gay and lesbian individuals made it through a U.S. Senate committee yesterday.
Cadillac’s Super Cruise could have the features to making self-driving cars viable.
A device trains blind people to see by listening.
Local public access media organization Media Bridges is shutting its doors for good by the end of the year, ending nearly 25 years of public service.
The organization’s demise is a result of the city eliminating funding for Media Bridges in its latest budget, which was passed by City Council in May.
“It is with great sadness that I must announce that Media Bridges will close its doors by the end of 2013. The city has made it extremely clear that we will not be receiving any more funding from them. While we have tried many other avenues for revenue it has become clear that we will be unable to sustain operations beyond 2013,” Media
Bridges Executive Director Tom Bishop announced Tuesday in the organization’s newsletter.
The shutdown will be a steady process, with Media Bridges completely closing once its channels are transferred or Dec. 13 — whichever comes first.
The city’s budget cuts were originally considered in December, but City Council managed to restore some funding to keep the organization afloat. Prior to the partial restoration, Bishop had called the cuts a “meteor” to his organization’s budget.
City officials previously defended the cuts to Media Bridges, citing city surveys that ranked the program poorly in terms of budgetary importance. For the surveys, the city used meetings and mailed questionnaires to gauge public opinion.
But Bishop claims the surveys’ demographics were lopsided against low-income Cincinnatians, the income group that benefits the most from public access programs like Media Bridges.
For both the meeting-based and mail-in surveys, Bishop’s claim checks out. His concern is even directly acknowledged and backed in the documented survey results for the meetings: “Twenty-two percent of meeting participants earned less than $23,050 per year, compared to 40.8 percent of the population at large who earn less than $24,999 per year. While this is not representative of the population at large, the data does indicate strong participation from low income residents.”
Meanwhile, wealthier Cincinnatians were much better represented, with 11 percent of meeting participants making $150,000 or more per year despite only 6 percent of the city at large belonging to that income group, according to the survey results.
The same issue can be found in the mail-in survey: Only 22 percent of respondents made less than $25,000, while 10 percent made $150,000 or more.
“It’s ridiculous that they would call that representative of the city of Cincinnati,” Bishop says.
Instead of using its skewed survey results, Bishop argues the city should have looked at the 2010 Spring Greater Cincinnati Survey from the University of Cincinnati’s Institute for Policy Research. In that survey, Cincinnati respondents were asked how important it was to provide recording equipment to citizens and neighborhoods so they can “produce educational and public access programs for cable television.” About 54.3 percent called it “very important,” 33.9 percent labeled it “somewhat important” and 11.7 percent said it was “not too important.”
City officials also defended the cuts by claiming that funding was only provided as a “one-year reprieve” after Media Bridges lost state funding that came through Time Warner Cable, which successfully lobbied to end its required contributions in 2011.
Bishop disputes the city’s claim, saying Media Bridges and its staff weren’t informed that the city funding was meant to be temporary — at least until it was too late.
Media Bridges is a public access media organization founded in 1988 that
allows anyone in Cincinnati to record video and sound for publicly
broadcasted television and radio. It also provides educational programs for people new to the process.
Although Media Bridges is closing down, the city is still funding CitiCable, which, among other programming, broadcasts City Council and county commissioner meetings, through franchise fees from Cincinnati Bell and Time Warner.
Ohio and Kentucky officials will roll out a plan in September to pay for the Brent Spence Bridge project with tolling
— a decision that could lead to opposition from Northern Kentucky
officials who have long advised against using tolls to finance the $2.5
billion project. The funding choice comes as little surprise,
given the lack of major federal support for the interstate bridge project. But tolling could put the plan in
danger if the Kentucky legislature follows the lead of its Northern
Kentucky delegation. The announcement follows a December agreement between Ohio and Kentucky’s governors to get the project done.
Gov. John Kasich will be using a month-long tour to show off the new two-year state budget. The schedule for the tour is still being worked out, but at least one stop in southwest Ohio is expected. The $62 billion budget has many moving parts, but a CityBeat analysis found the plan disproportionately favors the wealthy and limits access to legal abortions and contraceptive care in Ohio.
Cincinnati’s Horseshoe Casino posted its worst monthly revenue gains since its grand opening in March. It was an equally poor month for the rest of the state, which saw the worst casino revenue gains since Cincinnati’s casino opened. If the trend holds up, that could be a troubling sign for proponents of using casino revenue to balance local and state budgets.
A prominent Ohio Republican and former Kasich cabinet member says he supports overturning the state’s ban on same-sex marriage, giving a bipartisan jolt to FreedomOhio’s efforts to get the issue on the ballot in 2014. Jim Petro, former attorney general and previous head of the state’s higher education board, has a daughter who’s gay, which may have influenced his decision. He was joined by Ian James, co-founder of FreedomOhio, when announcing his support. CityBeat covered FreedomOhio’s same-sex marriage amendment when it was originally slated for the 2013 ballot here.
Cincinnati Gardens is for sale. Kenko Corporation, which has owned the garden for 35 years, announced its plans yesterday. “Our hope would be to sell, and see the historic venue move forward in its current state: a sports and entertainment venue,” explained Pete Robinson, president of the Cincinnati Gardens, in a statement. “However, we are prepared to explore other opportunities.”
At least two county commissioners are expected to approve the Cincinnati Zoo’s levy request, which could put the flat renewal of the five-year levy on the ballot this November.
In other zoo news, here is Gladys the gorilla with her family.
As City Council winds down its sessions, Councilman Chris Seelbach will keep busy and help other city employees pick up garbage and clean sewers. Seelbach will be tweeting about his experiences in a different kind of public service here.
Kroger led Cincinnati stocks to a big start in July — a good sign for an ailing national economy that has struggled to get back on its feet. The Cincinnati-based grocer also announced on Tuesday that it will buy rival Harris Teeter Supermarkets Inc. in a $2.4 billion deal.
Here are some pictures of carnivorous plants in action.
Plunderbund Ohio reports that Gov. John Kasich has picked up his first endorsement for a presidential bid from Citizens for Community values president and executive director and self-professed former porn addict Phil Burress, following Kasich's signing of some of the country's most archaic and restrictive anti-abortion provisions in the nation. This week’s news story by CityBeat’s most glamorous misanthrope, German Lopez, explains how the recently passed state budget caters to Republicans by lowering taxes for the rich, tries to block health care for the poor and effectively defunds Planned Parenthood and its valuable health services.
Eleven school buses were hijacked from the Petermann Bus Company bus lot in Golf Manor. All but one of the buses has been recovered. Ralph Brown, who supervises the company, speculated some kids just wanted to take a "joy ride."
Columbia Parkway is open again after massive flash flooding and landslides inundated the road, but this weekend's wet forecast could cause it to flood again.
SPCA Cincinnati is adopting out cats and kittens for just $5 through this weekend in honor of Independence Day. Visit the Northside or the Sharonville location.
"God buried fossil fuels 'because he loves to see us find them.'" No. 5 on Rolling Stone's top 10 list of the dumbest things ever said about global warming comes from Bryan Fischer, director at the American Family Association.
Men can eat a lot more weiners than women. Sonya "The Black Widow" Thomas ate 36.75 hot dogs yesterday in Brooklyn, N.Y., at Coney Island's 98th annual Nathan's Famous Hot Dog Eating Contest, earning first place in the women's division, while male title winner Joey Chestnut ate 69 dogs IN 10 MINUTES.
Here's why hot temperatures sometimes can make you cranky.
Women in Egypt are at a staggeringly high risk to become victims of sexual assault. More than 80 women were raped, sexually harassed or sexually assaulted during Wednesday night’s mob celebration of the forced departure of president Mohamed Morsi on Tahrir Square in downtown Cairo.
Buttercup, a duck born with his left foot twisted backward, is now on top of the world
after his owner used 3D printing to create a brand new foot for Buttercup. Here is a video for good measure.
Councilman Chris Seelbach and other local leaders are calling on Congress to rework the Voting Rights Act following a U.S. Supreme Court decision that struck down key provisions. Supporters of the Voting Rights Act argue it’s necessary to prevent discrimination and protect people’s right to vote, while critics call it an outdated measure from the Jim Crow era that unfairly targeted some states with forgone histories of racism. “Within 24 hours of the Supreme Court’s decision to gut the Voting Rights Act, five states are already moving ahead with voter ID laws, some of which had previously been rejected by the Department of Justice as discriminatory,” Seelbach said in a statement. “The right to vote is one of the most sacred values in our nation and Congress should act immediately to protect it”.
Nonprofit developer 3CDC says it’s restructuring staff and guidelines to take better care of its vacant buildings following criticisms from residents and the local Board of Housing Appeals. The board has fined the 3CDC three times this year for failing to maintain Cincinnati’s minimum standards for vacant buildings, which require owners keep the buildings watertight and safe for emergency personnel to enter.
Gov. John Kasich said the funding allocation belonged in
the capital budget — not the operating budget he signed into law — when
he vetoed money going to State Treasurer Josh Mandel’s office, but The Columbus Dispatch reports it might have been revenge
for Mandel’s opposition to the Medicaid expansion and an oil-and-gas
severance tax. Kasich spokesperson Rob Nichols says the allegation is
“silly” and “absurd,” adding that Kasich said he would work with Mandel
on allocating the money during the capital budget process. The state
treasurer’s office says it needs the $10 million to upgrade computers
against cyberattacks. Mandel was one of the first state Republicans to
come out against the Medicaid expansion, which CityBeat covered here and here.
A series of mandatory across-the-board federal spending cuts was supposed to take $66 million from Ohio schools, but state officials say they’ll be able to soften the blow with $19 million in unspent federal aid. The federal cuts — also known as “sequestration” — were part of a debt deal package approved by Congress and President Barack Obama that kicked in March 1. Prior to its implementation, Obama asked Congress to rework sequestration to lessen its negative fiscal impact, but Republican legislators refused. CityBeat covered some of sequestration’s other statewide effects here.
The mayoral race officially dropped down to four candidates yesterday, with self-identified Republican Stacy Smith failing to gather enough signatures to get on the ballot.
Check out the Cincinnati Zoo’s latest expansion here.
Headline from The Cincinnati Enquirer: “Where does John Cranley live?”
It’s now legal to go 70 miles per hour in some state highways.
Cincinnati-based Kroger and Macy’s came in at No. 2 and No. 14 respectively in an annual list of the nation’s top 20 retailers from STORIES magazine.
The Tribune Co. is buying Local TV LLC in Newport for $2.7 billion to become the largest TV station operator in the nation.
Human head transplants may be closer than we think (and perhaps hope).