Cincinnati City Council on Friday approved a budget that relies on parking privatization as a means to plug a $34 million budget deficit while also raising property taxes in 2014.
Mayor Mark Mallory opened up the council meeting with a moment of silent prayer for the 27 students and adults killed at an elementary school in Connecticut.
“I want us all to take a moment and put into perspective what we’re doing today,” he said.
Council voted to increase the property tax by about 24 percent, from 4.6 mills (a mill is equal to one-tenth of a cent) to 5.71 mills. That means Cincinnatians would pay an additional $34 for every $100,000 of their home’s value.
The vote reverses a move made last year by conservatives on council, who reduced property taxes.
Council also passed a budget that relies on $21 million from a proposed lease of the city’s parking facilities — a deal that is expected to be voted on in March. Of the proposals submitted to the city so far, Cincinnati stands to gain $100 million to $150 million in an upfront payment and a share of the profits over the 30-year lease.
“My concern about balancing this budget with a onetime revenue source by selling our parking system seems to be ill advised,” said Independent Councilman Chris Smitherman. “We don’t know how council will vote in March … but we have tied not only the budget to this one time revenue source, but we have also tied reciprocity.”
Council nixed a plan to eliminate tax reciprocity for people who lived in Cincinnati but worked elsewhere and paid income tax in both cities.
Though the budget doesn’t mention parking privatization, council hasn’t mentioned other options to close the budget deficit.
If opponents of parking privatization want to keep facilities under city control, they would have to come up with $21 million in revenue elsewhere or make $21 million in cuts.
Councilman P.G. Sittenfeld suggested using casino revenue, cutting travel expenses, downsizing the ratio of managers to workers, sharing services with nearby jurisdictions and downsizing the city’s fleet as ways to cut down the budget.
Councilwoman Laure Quinlivan, long an advocate of downsizing the police and fire departments, voted against the property tax increase in protest of what she said was bloated spending on departments that were outpacing population growth.
The budget also requires Cincinnati to accept police and fire recruit classes in 2014, regardless of whether the city gets a federal grant to fund the classes.
The budget also restores the Cincinnati Police Department’s mounted patrol, which patrols downtown on horseback. The city will use $105,000 from off-duty detail fees from businesses that hire off-duty officers. Council also voted to start charging those businesses an extra $1.64 on top of the off-duty pay.
Council also voted to shift $50,000 for repairs and upgrades to the Contemporary Arts Center to pay for maintenance and beautification at Washington Park, which is operated by 3CDC.
Councilman P.G. Sittenfeld on Monday announced he will vote to continue the $132.8 million streetcar project.
Sittenfeld’s support for the project means the incoming City Council might not have the six votes required for an emergency clause that would immediately halt the project and make a cancellation vote insusceptible to referendum.
If streetcar supporters successfully put a cancellation vote to referendum, the project would be forced to continue until the streetcar once again appears on the ballot in November 2014. The continuation would sink more costs into the project as construction is forced to progress for nearly a year.
Sittenfeld’s announcement preceded a vote from the outgoing City Council to officially write the streetcar project into law, which means Mayor-elect John Cranley, a streetcar opponent, won’t be able to take administrative action to halt the project and instead must bring the project to a City Council vote after he and other newly elected officials take office on Sunday.
The two remaining swing votes in the incoming council — David Mann, who Cranley on Monday named as his choice for vice mayor, and Kevin Flynn — previously discussed delaying the project as council analyzes whether it should permanently cancel or continue with currently ongoing construction.
But Sittenfeld equated a delay to total cancellation after warnings from the federal government made it clear that the city could lose federal funds for the project even if it only delayed progress.
If either Flynn or Mann move to support the streetcar project, streetcar proponents would gain a five-vote majority on the nine-member council to continue the project and preclude a referendum.
Sittenfeld characterized his decision as the better of “two bad choices.”
“We can pursue a project that has never earned broad public consensus and that has yet to offer a viable and sustainable budget,” he said at a press conference, “or we can scrub the project and throw away tens of millions of dollars in taxpayer money, forgo a massive federal investment and have nothing to show for the enormous effort and expense.”
To explain his decision, Sittenfeld cited concerns about how much money has been dedicated to the project at this point, including $32.8 million in sunk costs through November and a potential range of $30.6-$47.6 million in close-out costs, according to estimates from the city. Sittenfeld noted that, at the very least, half of the city’s $87.9 million share of the project will be spent even if the city pulls the plug now.
Sittenfeld also voiced concerns that pulling back from the project and effectively forfeiting $44.9 million in allocated federal funds would damage Cincinnati’s reputation with the federal government. That could hamper projects he sees as much more important, such as the $2.5 billion Brent Spence Bridge project.
“I did my part to avoid getting us into this reality, but it cannot be wished away,” Sittenfeld said.
There was one major caveat to Sittenfeld’s decision: the operating costs for the streetcar, which the city estimates at $3.4-$4.5 million a year.
Sittenfeld said the cost must not hit Cincinnati’s already-strained operating budget and instead must be paid through fares, sponsorships, private contributions and a special improvement district that would raise property taxes near the streetcar line.
A special improvement district would require a petitioning process in which property owners holding at least 60 percent of property frontage near the streetcar line would have to sign in favor of taking on higher property taxes to pay for the streetcar.
“Ultimately, that’s a decision for the citizens,” Sittenfeld said.
If the special improvement district doesn’t come to fruition, Sittenfeld cautioned that the streetcar project would be more difficult to support going forward.
Asked whether Sittenfeld thinks some of the people who voted for him will see his decision as a betrayal, he responded that his conclusion shows the “thoughtfulness and carefulness” people expect of him when it comes to taxpayer dollars, given the costs of cancellation.
Vice Mayor Roxanne Qualls on Thursday unveiled “The Qualls Plan to Grow Cincinnati,” an outline of her platforms and what she would do during her first 100 days as mayor if she’s selected by voters on Nov. 5.
The plan proposes three major changes that Qualls would pursue within 100 days of taking office: She would reinstitute the Shared Services Commission to see which city services can be managed in conjunction with Hamilton County or other political jurisdictions; she would propose a job tax credit for businesses that create jobs that pay a living wage and provide benefits; and she would “renew business districts” by making unused city property available at a “nominal fee” to local startups and small businesses.
Qualls also outlines seven other proposals for the first 100 days, including a review of city services to find efficiencies and cost savings and a “Mayor’s Night In” event that would be held monthly to directly hear residents’ concerns.
The rest of the plan promises more city-provided opportunities for businesses, expanded transportation options, investments in public safety and neighborhoods, employment and apprenticeship programs for struggling youth, new education programs and government reforms. It also includes plans to combat human trafficking, increase the city’s use of renewable energy sources and make Cincinnati more inclusive for women, minorities, the LGBT community and immigrants.
Many of the changes would be made through partnerships and regulatory changes, which means they could come at no cost.
But some of the proposals would involve tax breaks, new city agencies and more spending directed at certain projects. The extra costs could be tricky for a city that has been mired in budget problems for years, especially since Qualls has proposed structurally balancing Cincinnati’s operating budget for the first time since 2000.
Still, Qualls’ proposals are made with the understanding
that economic growth can expand the city’s tax base and increase
revenues. Cincinnati’s shrinking population since the 1960s is often cited by city officials as a cause for the city’s budget problems.
Qualls is running for mayor against ex-Councilman John Cranley. The biggest issues dividing the two Democratic candidates are the streetcar project and parking plan, both of which Qualls supports and Cranley opposes. The two issues took up most of the discussion during the first post-primary mayoral debate.
Read Qualls’ full plan here:
Cincinnati would save just $7.8-$52.6 million in capital costs if it incurs tens of millions in additional expenditures to cancel the $132.8 million streetcar project, according to an audit from consulting firm KPMG released Wednesday.
By showing the potentially high costs of cancellation, the numbers could throw a lifeline to the streetcar project just one day before City Council decides whether to restart construction or permanently halt the project.
But Mayor John Cranley appears undeterred in his commitment to cancel the streetcar project. By accounting for the annual costs to operate the streetcar, Cranley estimates the city will actually save $102 million if it cancels the project.
The city already spent roughly $34 million on the project, according to the audit. Cancellation would add $16.3-$46.1 million in close-out costs, bringing the total costs of cancellation and money spent so far to $50.3-$80.1 million.
Completing the project would add $68.9 million in costs, after deducting $40.9 million in remaining federal grants, the audit found.
But the completion estimate assumes the city will need to pay $15 million in utility work — a cost that is currently being debated in court. If the city wins its case against Duke Energy, the utility company would be required to pay the $15 million and bring down the total completion costs to $53.9 million.
The audit also put the costs of operating the streetcar at $3.13-$3.54 million a year, lower than the previous $3.4-$4.5 million estimate. After revenues from fares, sponsorships and other sources, the city would need to pay $1.88-$2.44 million to operate the streetcar, according to the audit.
The reduced estimate for operating costs could become particularly important in deciding the project's fate as private contributors attempt to get the cost off the city's operating budget.
Delaying the streetcar project while KPMG conducted its audit also added $1.7-$2.8 million in costs, according to the audit. The city allocated another $250,000 to pay KPMG for its work.
The audit did not account for the potential costs of litigation if contractors and investors along the planned streetcar line sue the city to recoup costs.
City Council paused the streetcar project on Dec. 4 to obtain the cost estimates of completion, cancellation and annual operations. The full body of council will decide whether to restart the project on Thursday, before a Friday deadline set by the Federal Transit Administration for federal grants.
Read the full audit:
This post was updated at 12:59 p.m. with more information and details.
City Council took a contentious vote on Thursday to give the city manager a pay raise and a bonus.
Those in favor of the 10 percent raise and $35,000 bonus for Milton Dohoney say he is underpaid, has done a great job for the city and has gone five years without a merit raise. Those opposed say it’s bad timing and sends the wrong message when many city workers have also gone years without a pay increase.
Dohoney was hired in August 2006. He hasn’t received a merit raise since 2007, but has collected bonuses and cost of living adjustments over the years. He currently makes about $232,000 and the raise would bump that up to $255,000. Dohoney made $185,000 when he started the job.
Council approved the raise on a 6-2 vote, with councilmen Christopher Smitherman and Chris Seelbach voting against it.
Before the vote, Mayor Mark Mallory lauded the manager, saying he set high expectations and didn’t expect Dohoney to meet them, but the manager exceeded all of them.
“To do anything other than that (approve the raise) is a backhanded slap in the face and actually a statement that we want the manager gone,” Mallory said. “We are going to give him a raise. And from where I sit we’re not giving him a big enough raise.”
The raise came from a performance review conducted by Democratic council members Yvette Simpson, Cecil Thomas and sole council Republican Charlie Winburn.
Winburn said the city manager’s financial management system is impeccable, Dohoney has pushed economic development, he has expanded the tax base and made sacrifices by not receiving a raise for the previous five years.
Other members of council pointed out that Dohoney isn’t the only city employee who has gone a while without a raise.
“For me, look, 4 years ago I turned down a job at Google where I’d be making a hell of a lot more money,” Councilman P.G. Sittenfeld told 700WLW radio host Scott Sloan. “This is public service. This is already the city’s highest-paid employee.”
Sittenfeld missed the council meeting Thursday afternoon because he was out of town on a personal matter, according to an aide.
Sittenfeld and others have raised questions over whether it is wise to give Dohoney a raise and bonus when the city faces an estimated $34 million budget deficit. Councilman Wendell Young said the raise would not hurt the budget.
Opponents also argued that it would look bad to give the manager a raise when other city employees are dealing with wage freezes. Police, for instance, agreed during contact negotiations this year to a two-year wage freeze. Though they received a raise in 2009.
Smitherman said city employee unions may keep that in mind during upcoming negotiations.
"Unions are going to remember this council extended a $35,000 bonus to the city manager.”
The latest batch of bad streetcar news provoked a harsh memo to the city manager’s office from Vice Mayor Roxanne Qualls, a Democrat who has long supported the $125 million transit project. In the memo, Qualls wrote about “serious concerns” regarding the project’s costs and timetable.
“Whether people support or oppose the streetcar project, everyone has a vested interest in getting the most for our public dollars and in having the highest confidence in the management of the project,” Qualls wrote. “While a council majority has continued to support the project, council has not given the administration a ‘blank check.’”
The memo suggested putting the streetcar project through “intensive value engineering” to bring the project’s budget and timetable back in line — preferably in time for the 2015 Major League Baseball All-Star Game.
The memo is in response to streetcar construction bids coming in $26 million to $43 million over
budget. Meg Olberding, city spokesperson, says the bids leave the city with
two options: The city could take up the current bids, which could have their costs brought down upon further review, or the city could reject the
bids and rebid the project, which would cause delays. But Olberding also cautions that the administration is still working on fully reviewing the bids — a process that could take weeks or longer.
Qualls is running for mayor against John Cranley, a former Democratic council member. Cranley has been a vocal opponent of the streetcar project — creating a strong contrast between the two candidates that has placed the streetcar in the center of the 2013 mayoral race.
Earlier today, Cranley held a press conference asking the city to halt the streetcar project. In a statement, he argued it is “irresponsible” to continue work on the streetcar in light of the higher costs.
CityBeat previously covered the streetcar and how it relates to the race between Qualls and Cranley (“Back on the Ballot,” issue of Jan. 23).
Cincinnati Mayor Mark Mallory will deliver his annual State of the City address next week.
The address, which will be Mallory’s seventh since taking office, will be given 6:30 p.m. Tuesday. It will be held in the Jarson-Kaplan Theater at the Aronoff Center for the Arts, located at 650 Walnut St., downtown.
When CityBeat asked what the theme would be for this year’s address, a spokeswoman for Mallory declined comment.
“Our office won’t be previewing or giving information out about the speech this year,” said Julianna Rice, a policy aide to the mayor.
Generally, because seating is limited, anyone wishing to attend must receive a ticket through the mayor’s office. For more information, call 513-352-3250.
Mallory, a Democrat, was sworn in as the 68th mayor of Cincinnati on Dec. 1, 2005 and was reelected in 2009. He cannot run again in 2013 due to term limits.
Mallory’s election marked a new era for City Hall as the first two-term mayor under the city's new “stronger-mayor” system, as well as Cincinnati’s first directly-elected black mayor, and the first mayor in more than 70 years who didn’t first serve on City Council.
Mallory celebrated his 50th birthday on Monday.
A group of Greenpeace protesters face burglary and vandalism charges after a stunt yesterday on the Procter & Gamble buildings. Protesters apparently teamed up with a helicopter to climb outside the P&G buildings to hang up a large sign criticizing the company for allegedly enabling the destruction of rainforests in Indonesia by working with an irresponsible palm oil supplier. P&G officials say they are looking into the protesters’ claims, but they already committed to changing how they obtain palm oil by 2015.
Cincinnati Center City Development Corp. (3CDC) will step in to resolve the status of a downtown grocery and apartment tower project. The previous city administration pushed the project as a means to bring more residential space downtown, but Mayor John Cranley refuses to pay to move a tenant in the parking garage that needs to be torn down as part of the project. Following Cranley and Councilman Chris Seelbach’s request for 3CDC’s help, the development agency will recommend a path forward and outline costs to the city should it not complete the project.
Meanwhile, the tenants in the dispute announced today that they will sue the city to force action and stop the uncertainty surrounding their salon business.
Cranley insists politics were not involved in an appointment to the Cincinnati Board of Health, contrary to complaints from the board official the mayor opted to replace. Cranley will replace Joyce Kinley, whose term expired at the end of the month, with Herschel Chalk. “Herschel Chalk, who(m) I’m appointing, has been a long-time advocate against prostate cancer, who's somebody I’ve gotten to know,” Cranley told WVXU. “I was impressed by him because of his advocacy on behalf of fighting cancer. I committed to appoint him a long time ago.”
The costs for pausing the streetcar project back in December remain unknown, but city officials are already looking into what the next phase of the project would cost.
Troubled restaurant Mahogany’s must fully pay for rent and fees by March 10 or face eviction.
Through his new project, one scientist intends to “make 100 years old the next 60.”email@example.com.
Mayor John Cranley on Feb. 12 officially unveiled his plan for Cincinnati’s parking meters, lots and garages, providing the first clear option for the city’s parking system since the Greater Cincinnati Port Authority agreed to halt the previous plan.
The proposal seeks to effectively replace the previous administration’s parking privatization plan, which outsourced the city’s parking assets to the Port Authority and several private companies, and maintain local control of the city’s parking assets.
Here’s a breakdown of the plan and all its finer details.
What is Cranley’s parking plan?
It’s a plan for Cincinnati’s parking meters, lots and garages. More specifically, Cranley calls his proposal a “framework” that focuses on upgrading the city’s parking meters and keeps City Council’s control of parking rates and hours.
Cranley’s plan, based on a Feb. 7 memo from Walker Parking Consultants, achieves his goals in a few ways:
• The city would issue bonds, backed by future parking revenues, to upgrade all parking meters to accept credit card payments.
• The amount of enforcement officers under the city’s payroll would increase to 15, up from five, to provide greater coverage of the city’s parking meters. (Currently, a few areas, including major hubs like the University of Cincinnati and Over-the-Rhine, are effectively unenforced for two to five hours a day, according to Walker.)
• Neighborhood meter rates would go up by 25 cents to 75 cents an hour. Downtown rates would remain at $2 an hour.
• Sundays and holidays remain free.
Cranley says the underlying idea is to maintain a few key principles, particularly local control over rates and hours. He cautions Walker’s proposal, including expanded enforcement hours, could change with public input and as City Council puts together the final plan.
Does the plan let people use smartphones to pay for parking meters?
No. Cranley says the upgraded meters will support the technology, but it will be up to council to decide whether it’s enabled in the future.
Smartphone capability is a double-edged sword: It introduces its own set of costs, including shorter battery life for meters. It also allows customers to avoid under- and overpaying at parking meters, which decreases citation and meter revenues. But smartphone access also increases ease of use, which could lead to higher revenues by making it easier to pay.
The parking privatization plan promised to provide smartphone access at all parking meters. The previous administration and Port Authority championed the feature as key to increasing convenience and revenue.
OK, that explains the parking meters. What about the parking garages?
Cranley’s plan makes two changes to garages:
• The Port Authority would take over Fountain Square South Garage. The Port would be required to cover expenses for the garage, but any net revenue could be used on projects within the city.
• The city would issue bonds, backed by future parking revenues, to build a garage at 7th and Broadway streets.
Otherwise, things remain the same as today.
In other words, the city would be on the hook for parking garage repairs and upgrades, which Walker estimates would cost roughly $8 million in capital expenses over the next five years.
But the city would also continue directly receiving around $2 million per year in net revenue from parking garages, according to Walker.
Still, the city isn’t allowed under state law to use the revenue from parking garages for anything outside the parking system.
The parking privatization plan tried to do away with the restriction by putting the Port Authority in charge of garages. State law allows agencies like the Port to tap into garage revenues for other uses, such as development projects.
But without the previous administration’s plan, Cranley claims the Port Authority declined to take over more facilities beyond Fountain Square South
Garage. Given the rejection, Cranley says it’s up to council to figure out another way to leverage garage
revenues beyond putting them back in the parking system.
What does Cranley’s plan do about the thousands of parking tickets already owed to the city?
Nothing. By Cranley’s own admission, the city needs to do a better job collecting what it’s owed. But he says that’s something City Council will have to deal with in the future.
So why did Cranley oppose the parking privatization plan?
Cranley vehemently opposed giving up local control of the city’s parking assets. He warned that outsourcing meters to the Port Authority and private companies would create a for-profit incentive to ratchet up parking rates and enforcement.
The previous administration disputed Cranley’s warnings. They pointed out an advisory board, chaired by four Port Authority appointees and one city appointee, would need to unanimously agree on rate and hour changes, and the changes could be vetoed by the city manager.
Without any changes from the advisory board, the 30-year privatization plan hiked downtown parking meter rates by 25 cents every three years and neighborhood rates by 25 cents every six years. The plan also expanded enforcement hours to 8 a.m.-9 p.m. in Over-the-Rhine and parts of downtown.
Still, City Council would lose its control of rates and hours under the privatization plan. Cranley and other opponents argued the outsourcing scheme could insulate the parking system from public — and voter — input.
Cranley also opposed the privatization plan’s financial
Under the old deal, the city would receive a lump sum of $85 million and annual installments of $3 million, as long as required expenses, such as costly garage upgrades or repairs, were met.
In comparison, the city currently gets roughly $3 million in net revenue from parking meters and another $2 million in net revenue from parking garages. (As noted earlier, the parking garage revenue can only be used for parking expenses.)
Cranley characterizes the lump sum as “borrowing from the future” because it uses upfront money that could instead be taken in by the city as annual revenue.
Why does Cranley think his proposal is necessary?
It solidifies the death of the parking privatization plan. That’s important to begin the process of legally dismantling the previous plan.
The plan also increases net parking meter revenues from roughly $3 million to $6 million in the next budget year and more than $7 million per year within five years, according to Walker’s original estimates. (The estimates are likely too high because they assumed evening hours would expand around the University of Cincinnati, Short Vine in Corryville, Over-the-Rhine and downtown. But Cranley shelved the expansion of hours, with no estimates for how the changes will affect revenues.)
Since parking meter revenue, unlike garage revenue, can be used for non-parking expenses, the extra revenue could help plug the $20 million gap in the $370 million operating budget.
Why do some people oppose Cranley’s plan?
Some people supported the parking privatization plan. They saw the lump sum as a great opportunity to invest in development projects around the city. Without the lump sum, critics claim Cranley’s plan accepts all the pain of the previous plan — increased enforcement, rates and hours — for very little gain, even though the city would get more annual revenue and upgraded parking meters and garages.
Politics are also involved. After the contentious streetcar debate, there’s not much Cranley can do without some critics speaking out.
When will Cranley’s plan go into effect?
City Council first has to approve Cranley’s plan for it to
become law. Council will likely take up and debate the plan at the
Neighborhood Committee on Feb. 24 and set a more concrete timeline
This blog post will be regularly updated as more information becomes available. Latest update: Feb. 19.