The streetcar project remains on track following today's votes by City Council's Budget and Finance Committee, which approved increased capital funding and accountability measures that aim to keep the public informed on the project's progress.
The increased funding was previously proposed by City Manager Milton Dohoney to fix a $17.4 million budget gap. The money will come from more issued debt and pulled funding from various capital projects, including infrastructure improvements around the Horseshoe Casino. Under state law, none of the capital funding could be used for operating budget expenses, such as police and fire.
The accountability measures also require the city administration to report to City Council on the streetcar's progress with a timeline of key milestones, performance measures, an operating plan, staffing assessments and monthly progress reports.
"The progress reports should be easy-to-understand and made available online to ensure transparency and accountability to City Council and to citizens," the motion reads.
Council members Roxanne Qualls, Laure Quinlivan, Chris Seelbach, Yvette Simpson and Wendell Young voted for the measures. Council members P.G. Sittenfeld, Chris Smitherman and Charlie Winburn voted against both. Councilwoman Pam Thomas voted against the funding ordinance, but she abstained from voting on the motion imposing accountability measures.
Qualls, who revealed the accountability measures in a press conference prior to today's committee meeting, said the measures will move the streetcar forward and help keep the public informed.
"I will vote today to continue the streetcar project because we need to continue moving Cincinnati forward," she said. "At the same time, while I remain a supporter, it is with the recognition that it is time for a reboot on the project to instill public confidence in its management."
Smitherman did not seem convinced.
"I believe the administration will be back asking for more money on the streetcar," he claimed, pointing to pending litigation with Duke Energy over who is legally obligated to pay for moving utility lines to accommodate the project.
Smitherman and Sittenfeld also criticized their colleagues for not bringing the accountability measures to a vote earlier in the process.
"You would think seven years ago there would have been a motion like this in front of us," Smitherman said, referencing when City Council first approved the streetcar project.
Among the accountability motion's items is an operating plan, which streetcar critics have long demanded.
The city administration estimates operating the streetcar will cost about $3.5 million a year, indicating in the past that casino tax revenue would be used to pay for the costs.
Supporters say those costs will be outweighed by the city's estimated three-to-one return on investment for the streetcar project — an estimate backed by studies from advising company HDR and the University of Cincinnati.
Simpson in particular argued the costs will be made up through increased revenue as the streetcar brings in more businesses and residents to Cincinnati.
Still, Simpson says those estimates don't matter to streetcar opponents.
"If it was $5, there would be individuals who don't support this project," she said.
Winburn responded by saying he supports the streetcar as a concept, which roused laughter from streetcar supporters in the audience. Throughout the project's many hearings, opponents of the streetcar have often said they support streetcars as a concept — at least until they have to put their support to a vote or commit funding.
Still, Winburn added, "Even if you all are wrong, I want to commend you for fighting for what you believe in."
The streetcar project's $17.4 million budget gap is a result of construction bids coming in $26 million to $43 million over budget — a result of "errors in bid documents," according to Qualls.
Besides increasing funding, the city is also hiring John Deatrick, project manager of The Banks, to head the streetcar project. Multiple city officials, including Qualls and Quinlivan, have praised Deatrick for his ability to bring down project costs and put large projects on track.
The funding currently set for the streetcar will only go to the first phase of the project. The final plan calls for tracks stretching from The Banks to the Cincinnati Zoo.
"If the intent of the streetcar would only be to go from The Banks to just north of Findlay Market, then I never would have said it's a project worth doing," Dohoney previously told City Council. "The intention has always been to connect the two major employment centers of the city and go beyond that."
But Smitherman says talk of another phase is financially irresponsible: "I want to indicate to the public that they (the city administration) don't have a budget for the second leg."
The funding ordinance and accountability motion must now be approved by a full session of City Council, which has the same voting make-up as the Budget and Finance Committee.
If it's approved, the federal government has committed another $5 million to the streetcar that will help restore certain aspects of the project previously cut because of budget concerns.
Here are two ways to report the latest news regarding potential Duke Energy rate hike connected to streetcar construction:
• From The Enquirer: “Duke customers could face streetcar tab”
• From The Business Courier: “Cincinnati, Duke making progress on moving utility lines”
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City Manager Milton Dohoney Jr. released a memo yesterday detailing how the streetcar project's $17.4 million budget gap could be fixed by pulling funds from various capital projects and issuing more debt, upholding a promise he made at a contentious City Council meeting Monday.
The five-page memo says none of the proposed capital funding sources can be used to balance the city's $35 million operating budget deficit because of limits established in state law, which means the streetcar project is not being saved at the expense of cops, firefighters and other city employees being laid off to balance the operating budget.
"Neither Capital nor TIF funds can be used to help with the operating budget deficit that the City is facing," the memo reads. "They are separate sources of funds and by State Law, cannot be used for operating expenses like police and fire personnel."
At least $5.4 million would be temporarily pulled from the $10.6 million planned for the Music Hall renovation project, but the redirected Music Hall funds would eventually come back in capital budgets for fiscal years 2017, 2018 and 2019. City spokesperson Meg Olberding explained in an email that moving funds around would not hinder the Music Hall project.
"The use of $5.4 million of Funds set aside for Music Hall this year is money currently sitting in a fund for this year that will not be needed this year," she wrote. "Funds for Music Hall will not be needed until 2016, the agreed upon deadline for fundraising for the Music Hall renovation with the Music Hall Revitalization Company. Therefore, the City is still keeping its commitment to Music Hall, while also advancing the streetcar project."
About $6.5 million would be taken from infrastructure projects surrounding the Horseshoe Casino, including funds that would otherwise go to lighting the trees along Reading Road and a study that would look at adding a turn lane from Reading Road. The memo acknowledges the trade-off, but it also justifies the redirected spending: "However, since the Streetcar passes within two blocks of the Casino Site, it is a project within the Casino Area that both benefits the TIF District and the Casino."
The memo also recommends pulling $400,000 that was originally set for traffic signal replacement, which would be used for the traffic replacement component of the streetcar project.
Another $500,000 would come from funding currently set for water main relocation and replacement. The memo says the water main funding is simply Water Works' share: "Of the $21.7 million cost overrun for the Streetcar project, approximately $1 million was for water main relocation (and) replacement work. Water Works' share of this is $0.5 million."
The remaining $4.6 million would come from the city issuing general capital debt, which would be paid back through a small portion of the income tax that is established in the City Charter for permanent improvement purposes. The memo acknowledges this would cost other economic development and housing projects $340,000 a year over the next 20 years, but it claims the funding is justified because the streetcar project is a permanent improvement project.
The memo outlines other vague capital funding options that could be used to balance the budget, but Dohoney does not explicitly recommend them.
The memo also leaves open the possibility of future sources of funding, including $15 million that could be opened up if the city prevails in court against Duke Energy over who has to pay for moving utility lines to accommodate streetcar tracks — but this was money that was originally supposed to go to neighborhood development projects — and the sale of remaining city-owned land at the Blue Ash Airport.
City Council still has to consider and approve the memo's recommendations for them to become law.
A small group of Over-the-Rhine homeowners is preparing for a possible lawsuit and other actions should Mayor-elect John Cranley try to cancel the $133 million streetcar project. Ryan Messer says the fight is about protecting his family’s investment along the streetcar route. Streetcar supporters plan to host a town hall-style meeting in the coming weeks to discuss possible actions to keep the project on track, including a referendum effort on any legislation that halts construction of the ongoing project. While Cranley says canceling the streetcar is at the top of the agenda, questions remain about how much it would cost to cancel the project, as CityBeat covered in further detail here and here.
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