Work began yesterday on an audit of Cincinnati’s $132.8
million streetcar project, but streetcar supporters are upset the audit
will only look at the costs and not the potential return on investment.
The city hired KPMG, an auditing firm, to review the
streetcar’s completion, cancellation and operating costs by Dec. 19, the day the federal government says it will pull up
to $44.9 million in grants funding roughly one-third of the project.
Losing the federal funding would most likely act as a death blow for the
project, since most local officials — even some streetcar supporters —
say they’re unwilling to allocate a similar amount of funding through local sources. Mayor John Cranley and City Council asked for the audit before they decide whether to continue or permanently cancel the project.
Meanwhile, streetcar supporters yesterday kicked off a petition-gathering campaign to get a city charter amendment on the ballot that would task the city with continuing the streetcar project. But given the federal government’s Dec. 19 deadline, it’s unclear whether the ballot measure, which could go to voters as late as May, stands much of a chance. Streetcar supporters say they’ll lobby the federal government to keep the funding on hold until voters make the final decision on the project.
A City Council committee yesterday voted to rescind council’s support for a supportive housing complex in Avondale that would aid chronically homeless, disabled and low-income Cincinnatians. But because National Church Residence already obtained state tax credits for the project in June, it might be able to continue even without council support. The committee’s decision comes in the middle of of a months-long controversy that has placed neighborhood activists and homeless advocates at odds. The full body of City Council could make the final decision on its support for the project as early as today’s 2 p.m. meeting.
City Council could also move today to repeal a “responsible bidder” ordinance that has locked the city and county in conflict over the jointly owned and operated Metropolitan Sewer District (MSD). The conflict comes at a bad time for MSD, which is under a federal mandate to revamp the city’s sewer system. Councilman Chris Seelbach argues the ordinance, which he spearheaded, improves local job training opportunities, but opponents claim it places too much of a burden on businesses and could open the city to lawsuits. CityBeat covered the issue in greater detail here.
Some City Council members are concerned Interim City Manager Scott Stiles’ compensation package could act as a “golden parachute.”
State Sen. Eric Kearney of Cincinnati yesterday resigned as running mate for Democratic gubernatorial candidate Ed FitzGerald. Kearney’s decision came after media outlets reported that he, his wife and his business had up to $826,000 in unpaid taxes. The controversy grew so thick that Democrats decided Kearney was too much of a distraction in the campaign against Republican Gov. John Kasich.An Ohio House Republican pitched a proposal that would slightly increase the state’s oil and gas severance tax, but the industry isn’t united in support of the measure. When it was first discussed, the House plan was supposed to act as a downscaled but more palatable version of Gov. Kasich’s proposal, which received wide opposition from the oil and gas industry.
Speaking against a bill that would tighten sentences for nonviolent felony offenders, Ohio’s prison chief said the state is on its way to break an inmate record of 51,273 in July. The state in the past few years attempted to pass sentencing reform to reduce the inmate population and bring down prison costs, but the measures only registered short-term gains. The rising prison population is one reason some advocates call for the legalization and decriminalization of drugs, as CityBeat covered in further detail here.
More than one-third of Ohio third-graders could be held back after they failed the state reading test this fall. But the third-graders will get two more chances in the spring and summer to retake the test. Under a new state law dubbed the “Third Grade Reading Guarantee,” Ohio third-graders who fail the reading test must be held back starting this school year.
Only 5,672 Ohioans signed up for new health plans through
the Obamacare marketplace in November. Still, total enrollment in
federal marketplaces was four times higher than it was in October as the
troubled Obamacare website (HealthCare.gov) improved. Reports indicate
the website also vastly improved right before the White House’s
self-imposed December deadline to get the website working better.
William Mallory Sr., prominent local politician and ex-Mayor Mark Mallory’s father, died yesterday morning.
A home kit allows anyone to find antibiotics in leaves, twigs, insects and fungi.
The Federal Transit Administration on Friday gave Cincinnati until Dec. 19 to make a final decision on the $132.8 million streetcar project before it pulls up to $44.9 million in federal grants. The decision gives the city less than two weeks to finish its audit of the project’s completion and cancellation costs, which should be conducted by global auditing firm KPMG. The streetcar project would presumably die without the federal grants, which are covering roughly one-third of the project’s overall costs, even if a majority of council or voters decide to continue with the project.
Mayor John Cranley might veto legislation continuing the streetcar project, even if a majority of council agrees to restart the project after its costs are reviewed through an independent audit, said Jay Kincaid, Cranley’s chief of staff, on Friday. If Cranley vetoes, council would need a supermajority — six of nine votes on council — to continue the project, which could be difficult since there are only two perceived swing votes on council. The veto threat presents a bait-and-switch for many streetcar supporters: Only five council members voted to pause the project on Dec. 4 while the city reviews completion and cancellation costs, but six members might be needed to continue the project if Cranley reviews the audit and decides it is still too expensive.
Cincinnati Parks Department Director Willie Carden, Mayor John Cranley's choice for city manager, withdrew from consideration on Friday. In making the announcement, the mayor’s office said it will keep Acting City Manager Scott Stiles in his current role while the city conducts a national search for a permanent replacement. Carden’s nomination was initially well received by council members, but it grew somewhat controversial after Carden insisted he will continue to live outside Cincinnati — a violation of the city charter — and The Cincinnati Enquirer uncovered an ethics probe that found Carden wrongfully took pay from the city and private Parks Foundation.
The Cincinnati/Northern Kentucky International Airport (CVG) fell short on recommendations from a previously undisclosed 2012 survey of the region’s business needs. In particular, CVG most likely won’t be able to meet the key recommendation to land Southwest Airlines, a discount carrier that could help bring down fares and increase travel destinations.
Cincinnati turns 225 on Dec. 28.
Ohio gas prices spiked to $3.24 for a gallon after briefly dropping to around $3.
Major companies are feeling increasing pressure to move or at least establish alternative facilities in the urban core as young workers flock to cities, according to The Wall Street Journal.
About 99 percent of U.S. exterminators encountered bed bugs over the past year, up from 11 percent a decade ago.
The Federal Transit Administration (FTA) will allow Cincinnati to keep $44.9 million in federal grants for the $132.8 million streetcar project until midnight on Dec. 19 while the city reviews the costs of canceling or completing the project, Mayor John Cranley announced on Facebook on Friday.
The FTA's decision gives the city two weeks to assemble a team and conduct its audit, which a slim majority of City Council agreed to do on Wednesday when it put the streetcar project on pause.
Without the federal grants, the streetcar project would have lost one-third of its funding and presumably died, even if a majority of City Council decided it wants to continue with the project.
The city is currently working to hire KPMG, an audit, tax and advisory firm, for the audit, according to Jay Kincaid, Cranley's chief of staff.
Council members David Mann and Kevin Flynn in particular asked for the review before they make a final decision on the streetcar.
Streetcar Project Executive John Deatrick previously warned the costs of completely canceling the streetcar project could nearly reach the costs of completion after accounting for $32.8 million in estimated sunk costs through November, $30.6-$47.6 million in close-out costs and up to $44.9 million in federal grants.
Mann and Flynn were among a majority of council members who voiced distrust toward Deatrick's estimates, hence the need for an independent review.
But the review might not matter if Cranley decides to veto any ordinance continuing the streetcar project, which Kincaid said Cranley would do if he deems the project too costly following the audit.
A mayoral veto would require both Flynn and Mann to help provide a supermajority — six of nine council votes — to save the streetcar. That could prove a considerably higher hurdle than a simple majority of five council members.
Update: Added who the city plans to hire for the audit.
Cincinnati Parks Department Director Willie Carden, Mayor John Cranley's choice for city manager, has withdrawn from the nomination process, the mayor's office announced on Friday.
The mayor's office said it will keep Acting City Manager Scott Stiles in his current role while it launches a nationwide search for a permanent replacement.
"After consulting with my family, we have come to the personal, private decision that it is best for me to remain as the director of the Parks Department," Carden said in a statement. "John Cranley is going to be a great mayor and this is a difficult decision for me. But it’s simply about what is best for me and my family. As a personal matter, I would ask that you respect our family's privacy."
Carden's nomination initially drew wide praise from City Council, but it was snared in controversy after Carden said he will continue to live outside Cincinnati — a violation of the city charter. The Cincinnati Enquirer also uncovered an ethics probe that found Carden wrongfully took pay from both the city and the private Parks Foundation.
Councilman Chris Seelbach responded ambivalently to the news, praising both Carden and the decision to go through a national search.
"Although I would have supported Willie Carden as the permanent city manager, I'm glad to see we are now going to undertake the process we should have taken all along," Seelbach posted on Facebook.
When Cranley announced the nomination on Nov. 27, the Charter Committee, Cincinnati's unofficial third political party, criticized Cranley for not undertaking a transparent national search prior to his decision.
City Council's Rules and Audit Committee almost considered Carden's nomination on Tuesday, but the decision was delayed for a week to give council members time to interview Carden one-on-one and evaluate ordinances for the nomination.
Mayor John Cranley might veto an ordinance continuing the $132.8 million streetcar project, even if a majority of City Council wants the project to continue after its costs are reviewed through an independent audit, said Jay Kincaid, Cranley’s chief of staff, on Friday.
The decision means six of nine council members — a supermajority — might be required to overturn a mayoral veto and continue the streetcar project. With only two perceived swing votes on council, that could prove a considerably higher hurdle than a simple majority of five council members.
“Of course he reserves the right to veto the legislation,” Kincaid said.
If Cranley reviews the numbers and decides that the project is too costly, he will use the veto powers provided to him through the city charter, Kincaid explained.
Kincaid’s response came after CityBeat confirmed with City Solicitor John Curp that continuing the streetcar project would require a new ordinance that, in theory, could be vetoed by the mayor. City Council can overcome a mayoral veto with a supermajority, or six of nine total council votes.
When CityBeat talked to Kincaid the day before he confirmed Cranley’s willingness to veto, Kincaid speculated that Cranley would not veto legislation continuing the streetcar project.
“I have not talked to (Cranley) about it. I assume that he would let it go forward since he gave (Councilman) David Mann his word that he would give this time to review it, and he gave the same assurance to (Councilman) Kevin Flynn,” Kincaid previously said.
Five of nine council members on Wednesday agreed to allocate $1.25
million to indefinitely pause the streetcar project and pay
for an independent study that will gauge how much it will cost to
continue or permanently cancel the project.
Streetcar Project Executive John Deatrick previously warned the costs of completely canceling the streetcar project could nearly reach the costs of completion after accounting for $32.8 million in estimated sunk costs through November, $30.6-$47.6 million in close-out costs and up to $44.9 million in federal grants that would be lost if the project were terminated.
Almost immediately, a majority of council voiced distrust toward Deatrick’s numbers. In a press conference following Deatrick’s presentation, Cranley called city officials in charge of the streetcar project “incompetent.”
Council members Flynn and Mann vocally opposed the streetcar project on the campaign trail. But both said they’ll make a final decision on the project once the cancellation and completion numbers are evaluated through an independent review.
Mann previously told CityBeat, “If they do hold up, that’s fairly persuasive.”
Flynn wouldn’t speculate on what stance he will take if the numbers stand to scrutiny. He said a pressing concern for him is how the city will pay for $3.4-$4.5 million in annual operating costs for the streetcar, which could hit an already-strained operating budget.
If Cranley vetoes an ordinance continuing the streetcar project, both Flynn and Mann would likely need to agree to continue — or at least overturn a mayoral veto — to keep the streetcar alive.
City officials estimate the review will take at least two weeks. Once the audit is finished, council members are expected to announce their final positions on continuing or canceling the project.
Update: Mayor John Cranley on Friday announced the federal government is giving Cincinnati until Dec. 19 to make a decision on the streetcar project. Read more here.
This story was updated to better explain that Jay Kincaid’s second direct quote came from a separate conversation on Thursday, the day before he announced Mayor John Cranley’s willingness to veto.
City Council on Wednesday allocated $1.25 million to indefinitely pause the $132.8 million streetcar project and study how much it would cost to continue or permanently halt the project.
If the study's continuation and
cancellation estimates aren't persuasive enough to continue the project,
the vote could effectively act as council's final action on the
The motion came as a result of the Haile U.S. Bank Foundation's offer to pay for the $250,000 study. An undisclosed private contributor also offered to pay $35,000 a day for slowed-down construction, which supporters say will keep the project within Federal Transit Administration (FTA) compliance.
During a brief recess, Councilwoman Yvette Simpson pulled Vice Mayor David Mann out of the council chambers to lobby him to support the motion and hold off on pausing the project.
Mann articulated misgivings with the absence of any written commitment for the private contributions. Given the lack of assurances, Mann voted to pause the project.
claimed a proper study will require at least two weeks, not the one
week the motion allocates. But the undisclosed private contributor is
apparently willing to pay for construction for 10 business days if it's
deemed necessary, according to Mann.
The motion could still be taken up by a committee, but the streetcar project is on hold for now.
Council's final decision to pause the project came despite a memo
released earlier in the day by the city administration warning that
pausing the project for one month could cost $2.56-$3.56 million. The memo states the numbers are only estimates and the
true costs won't be fully known until a pause is actually carried out,
which means the final costs could shrink or grow.
Streetcar Project Executive John Deatrick previously put the cost of continuing construction for one month at $3 million, which means the pause costs could actually come in higher than simply continuing with the project.
Deatrick on Nov. 21 warned the costs of completely canceling the streetcar project could nearly reach the costs of completion after accounting for $32.8 million in estimated sunk costs through November, a potential range of $30.6-$47.6 million in close-out costs and up to $44.9 million in federal grant money that would be lost if the project were terminated.
But the five council members opposed to the project — Mann, Kevin Flynn, Christopher Smitherman, Amy Murray and Charlie Winburn — voiced distrust toward the estimates and called for further analysis.
Streetcar supporters argue pausing the project could be tantamount to cancellation because it could convince the FTA to permanently pull $44.9 million in federal grants that are funding one-third of the project. The FTA already froze the grants pending a council decision to continue with construction.
Opponents of the project insist the FTA will return the money if the project continues.
hope that the spirit of cooperation that many members of this council
think will come from the federal government is there," said Councilman
P.G. Sittenfeld, a streetcar supporter.
But given the estimates for completion and cancellation, Sittenfeld cautioned whether history will look poorly on council's decision on Wednesday. He asked, "Did we choose waste or did we choose opportunity?"
The council meeting also continued the increasingly adversarial atmosphere in council since Mayor John Cranley and the new City Council took office on Sunday.
Councilman Chris Seelbach, a streetcar supporter, said it has been "the most destructive, divisive three days" since he began working at City Hall.
one point, Cranley attempted to compare problems facing the streetcar
project to the business failures of Blockbuster and other video stores.
Councilman Wendell Young, who supports the project, responded, "This idea that a bookstore or a video store can be compared to what's going to happen to the streetcar is about the most ridiculous comparison I can think of."
Supporters of the streetcar project argue it's necessary to spur development along the 3.6-mile loop in Over-the-Rhine and downtown. The project would generate a 2.7-to-1 return on investment, according to a 2007 study from consulting firm HDR that was later verified by the University of Cincinnati.
Opponents of the project argue
it's far too expensive and the wrong priority for Cincinnati. They're
particularly concerned about the $3.4-$4.5 million it will cost to
operate the streetcar each year, which could hit an already-strained
After the study reviewing the project's costs is completed, council expects to make a final decision on whether to continue or cancel the project.
City Council plans to vote today on 11 ordinances that would indefinitely pause the $132.8 million streetcar project while council members review and weigh the costs of cancellation versus the costs of completion. The measures are expected to pass. Because they each allocate at least $100,000 in funding, the ordinances are not susceptible to referendum. Although Mayor John Cranley repeatedly defended the “people’s sacred right of referendum” in opposition to the parking privatization plan while on the campaign trail, he now says he doesn’t want the city to be forced to continue spending on the streetcar project he adamantly opposes until November 2014, as would be required under a traditional referendum.
If a 1930 Ohio Supreme Court ruling applies, Cincinnati could be responsible for paying to move utility lines to accommodate for streetcar tracks, but the city might be able to charge some of those costs back to utility companies, according to a newly disclosed 2011 memo from a city attorney to former City Manager Milton Dohoney. The memo is the latest twist in the ongoing legal battle between Duke Energy and the city over who has to pay $15 million to move utility lines for the streetcar project. If the city loses the case, the cost of the project could climb from $132.8 million to $147.8 million. But it’s still unclear how much the 1930 case applies, given that the 1930 streetcar system was owned by a private company and the 2016 version would be owned by the city.
Editorial from The Cincinnati Enquirer: “Pausing streetcar same as killing it.”
Mayor Cranley and City Council agreed to delay a vote on Willie Carden’s nomination for city manager to give council members enough time to meet with the candidate one-on-one and “digest” ordinances for his nomination. The nomination of Carden, who currently heads the Parks Department, has been plagued by some controversy because of Carden’s decision to live outside Cincinnati, which violates the rules set by the city charter for the city manager, and recently uncovered ethics issues in which Carden wrongfully took pay from both the private Parks Foundation and city.
City Council also delayed voting on new rules for a week to give council members more time to analyze and discuss the rules. Until then, City Council will operate under the standard Robert's Rules of Order. One possible change to the rules would increase the time given to public speakers during committee meetings from two to three minutes.
Watch Councilman P.G. Sittenfeld outmaneuver Mayor Cranley here.
The Ohio Supreme Court yesterday unanimously dismissed a request to compel JobsOhio to disclose various documents. The court argued that state law passed by Republican legislators largely exempted JobsOhio from public record requests, which means the privatized development agency can keep most of its inner workings secret. Republicans argue the agency’s secretive, privatized nature is necessary to quickly establish business deals around the state, while Democrats claim the anti-transparency measures make it too difficult to hold JobsOhio accountable as it uses taxpayer dollars.
The addition of measures that would create state and county councils to help get people off Medicaid ruined some of the bipartisan efforts behind Medicaid overhaul legislation, but Republican legislators still intend to bring the legislation to an Ohio House vote today. Republicans argue the controversial amendments merely update the “framework” under which counties can streamline efforts to get people off public assistance programs. But Democrats say the last-minute measures might have unintended consequences, including one portion that might give the state council the ability to change — and potentially weaken — Medicaid eligibility requirements.
An Ohio Senate bill would revamp and reduce teacher evaluation requirements to make them less costly and burdensome for school districts. The current standards require an annual evaluation of any Ohio teacher rated below “accomplished” and, according to some school districts, create high costs and administrative burdens that outweigh the benefits.
For the second time in two weeks, Hamilton County Juvenile Court Judge Tracie Hunter left court in an ambulance after supposedly passing out in court. Hunter faces increasing pressure from higher courts to rule on long-stalled cases.
A 9-year-old boy who was abandoned by his adoptive parents in Butler County allegedly threatened to kill his adoptive family.
Here is how bars are using cutting-edge technology to make better drinks.
After the meeting, Cranley dismissed an offer by major philanthropy organization The Carol
Ann and Ralph V. Haile, Jr./U.S. Bank Foundation to pay for a study of
streetcar shut-down costs that opponents want to see
come in lower than the
city’s estimates before they vote to completely stop the project. Cranley dismissed
the offer because it also came with a note saying that if the streetcar is canceled the foundation will
reconsider its contributions to Music
Hall, the Smale Riverfront Park and other city projects. Cranley would rather make the city pay for the study than negotiate with terrorists respond to threats.
About seven and a half hours into this debacle of American democracy — which included numerous procedural abnormalities including the mayor asking Council to discuss and vote on ordinances no one had read yet, an hours-long delay and a funding appropriation that leaves the cancellation vote safe from the pro-streetcar-threatened voter referendum (something Cranley railed against when the city administration kept the parking plan safe from referendum) — Councilman P.G. Sittenfeld livened things up with something everyone tired of the streetcar debate can agree is funny: undermining the mayor’s authority by asking fellow council members to overrule him.
The following video published by UrbanCincy shows Cranley denying Sittenfeld an opportunity to speak. Sittenfeld then asks for a vote to overrule Cranley, which the mayor had to approve, and everyone but Kevin Flynn votes to overrule. (Flynn unfortunately had to vote first, leaving him unable to determine which way the vote was likely to go — a tough position for a rookie politician.) Once David Mann and Amy Murray voted to allow Sittenfeld to speak, the rest of the anti-streetcar faction followed suit, knowing Sittenfeld had the necessary votes to overrule Cranley. Then Sittenfeld spent a few minutes going mayoral on Cincinnati's new mayor.
Mayor John Cranley and a majority of City Council appear ready to pause the $132.8 million streetcar project on Wednesday after moving forward yesterday with 11 ordinances that aren’t susceptible to referendum. The bills allocate $1.25 million to stop contracts tied to the project and hire expert consultants to study what it would cost to continue or suspend the project — information a majority of council plans to use to gauge whether the project should continue after the pause. Streetcar supporters planned to hold some sort of referendum on the pause ordinances, but Cranley, who previously spoke in favor of the “people’s sacred right of referendum,” now says that the city shouldn’t be required to continue spending on the project until voters make a final decision in November 2014, as would be required under a traditional referendum.
Meanwhile, the Federal Transit Administration yesterday announced it froze $44.9 million in federal grants for the streetcar until Cincinnati agrees to move ahead with the project. The decision shows Cranley and other opponents of the project were in the wrong when they claimed they could lobby the federal government to reallocate the grant money to other projects. But the decision should also come as little surprise to the new mayor and council, considering federal officials warned of the consequences of canceling the streetcar project on three separate occasions in the past six months.
The Haile U.S. Bank Foundation also joined the fray yesterday with an email to city officials plainly stating that the streetcar project’s cancellation “will definitely cause us to pause and reconsider whether the City can be a trusted partner” and endanger contributions to the carousel in Smale Riverfront Park, the shared-use kitchen at Findlay Market and the renovations of the Globe Building and Music Hall. The email also offered to pay for a study that would evaluate the costs of the streetcar project going forward. But Cranley brushed off the letter as a threat and argued the Haile U.S. Bank Foundation “can’t be a passive-aggressive dictator of legislative process.”
Although his nomination to the city manager spot was initially met with praise, some are beginning to raise questions about Willie Carden’s refusal to live in Cincinnati and his history, including an ethics probe that found he was wrongfully taking pay from both the city and private Parks Foundation. Councilman Chris Seelbach said he’s also worried about the process for Cranley’s pick, which didn’t involve a national search and never put any other candidates in front of council.
Democrats on the Hamilton County Board of Elections have asked state officials to investigate Republican Hamilton County Prosecutor Joe Deters for improperly voting.
Republican State Sen. Bill Seitz of Cincinnati plans to introduce on Wednesday a new version of his overhaul of the state’s renewable energy and efficiency requirements. The new version will dampen a plan that would have allowed Canadian hydroelectric power facilities to satisfy Ohio’s renewable energy requirements, but it will also allow decades-old hydro plants along the Ohio River to fulfill the requirement. Seitz and other supporters of the overhaul argue it’s necessary to make the requirements friendlier to businesses and consumers. But opponents of the bill, including businesses and environmentalists, argue it would effectively ruin Ohio’s energy requirements and, according to a study from the Ohio State University and the Ohio Advanced Energy Economy coalition, cost Ohioans $3.65 billion more on electricity bills over the next 12 years. CityBeat covered the proposal in greater detail here.
Ohio schools can now tap into a $12 million program to make their facilities safer through various new measures, including a radio system directly connected to emergency responders, cameras and intercoms. “Naturally, after Sandy Hook, I think we were all just extremely upset about that, and you want to be able to do something,” Republican State Sen. Gayle Manning told StateImpact Ohio.
A report found staff weren’t at fault for the high-profile prison suicides of Billy Slagle, whose case CityBeat covered in further detail here, and Ariel Castro, who held three women captive in his home for nearly a decade.
Popular Science argues Amazon’s plan for delivery drones isn’t realistic.
Mayor John Cranley and a majority of City Council appear ready to halt Cincinnati’s $132.8 million streetcar project on Wednesday — and voters might not get a final say on whether they approve of the pause.
In front of council are 11 ordinances totaling $1.25 million that would stop contracts tied to the streetcar project while the city hires expert consultants to review the costs of continuing or suspending the project.“I think cancellation is what we should do,” Cranley said at Monday’s council meeting. “But a majority of council wants to pause and ask questions.”
One immediate concern for supporters of the project: Because the ordinances appropriate funds, they are not susceptible to referendum.
Cranley repeatedly touted the “people’s sacred right of referendum” in opposition to the parking privatization plan while on the campaign trail, but he now argues the city shouldn’t be forced to continue spending on the streetcar project until voters make a final decision in November 2014, as would be required under a traditional referendum.
Cranley encouraged streetcar supporters to instead push a ballot initiative that doesn’t require the city to continue funding the project.
Councilman P.G. Sittenfeld, who supported a referendum on the parking plan, argued Cranley’s position was hypocritical.
“I don’t want to have the voters’ voice suppressed,” he said.
Sittenfeld on Nov. 26 announced that he’s voting to continue the streetcar project. He asked, “Are we going to have tens of millions of dollars of wasted money or something to show for it?”
In response to the concerns, Councilwoman Yvette Simpson, a streetcar supporter, said she will have her staff draw up a motion to place the streetcar project on the ballot.
But Councilman Chris Seelbach, who also supports the streetcar, countered that the ballot initiative would not matter if the project is paused and the federal government decides to effectively kill the streetcar by taking back $44.9 million in federal grants that are funding one-third of the project’s costs.
The Federal Transit Administration on Monday stated the grant money is already frozen pending a council decision to advance the project.
Simpson questioned whether the ordinances allocated enough money to pause the project. Messer Construction, Prus Construction and Delta Railroad (MPD) estimate they’ll need $590,000 to suspend work for a month. The ordinance halting MPD’s contract allocates only $100,000.
On top of the $1.25 million — or $1.74 million, if MPD’s estimate is counted — allocated to pause the project, the suspension would also force the city to pay for unemployment insurance as construction companies lay off 200 workers involved in the project. Streetcar Project Executive John Deatrick estimates that will cost $419,000 if workers are kept unemployed for a month.
So the city could pay nearly $2.16 million to pause the project for a month. In comparison, Deatrick says one month of construction would cost the city $3 million.
The pause costs would also come from the contingency fund for the streetcar project, according to Deatrick. The $7.4 million contingency fund is already counted as part of the $132.8 million project, but it could go unspent if the project continues without complications.
Deatrick on Nov. 21 warned the costs of canceling the streetcar project could nearly reach the costs of completion after accounting for $32.8 million in estimated sunk costs through November, a potential range of $30.6-$47.6 million in close-out costs and up to $44.9 million in federal grant money that would be lost if the project were terminated.
(The issue of cancellation costs was first reported by CityBeat in October as a follow-up with city officials to a July story that outlined the top 10 misrepresentations surrounding the streetcar project.)Supporters of the streetcar project argue it’s necessary to spur economic development along the planned 3.6-mile loop in Over-the-Rhine and downtown. A 2007 study from consulting firm HDR, which was later validated by the University of Cincinnati, found the project would generate a 2.7-to-1 return on investment over 35 years.
Opponents argue the project is far too expensive and the wrong priority for Cincinnati.“I believe the progress of Cincinnati is going to continue,” Cranley said. “Our future is bullish and bright in downtown and Over-the-Rhine with or without the streetcar.”
A majority of City Council expects to vote in favor of the ordinances at its full meeting on Wednesday at 2 p.m. Council members who oppose the project plan to use the time-out to weigh the costs of cancellation versus the costs of completion.