The streetcar project’s chances of survival grew on Thursday after Mayor John Cranley announced he’s willing to allow the $132.8 million project move forward if the annual operating costs for the streetcar are underwritten by private contributors.
But streetcar supporters might have as little as one week to provide assurances to Cranley that the operating costs can be underwritten by the private sector, given the federal government’s Dec. 20 deadline for up to $44.9 million in grants financing roughly one-third of the project.
Still, a representative of the Haile Foundation, a major private contributor to city projects, said private-sector leaders are already working on meeting Cranley’s offer and solving the issue.
The concern for Cranley — and even some streetcar supporters — is that annual operating expenses for the streetcar would hit the city’s already-strained operating budget, especially if the annual operating expenses are higher than the previous estimate of $3.4-$4.5 million.
Although the city wouldn’t need to pay for the full operating costs until the streetcar opens for service in 2016, Cranley and some council members are concerned finishing the project now would force the city to make payments it won't be able to afford in the future.
“We know the streetcar is a very expensive project,” Cranley said. “This community cannot afford a new, ongoing liability that goes on forever.”
Streetcar supporters argue Cranley’s view misses the streetcar’s potential for economic development, which could bring in more city revenues as more people move and work in the city.
The streetcar project would produce 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.
Councilman Kevin Flynn, one of the two potential swing votes on council, said Cranley’s offer could provide “a way forward.” He previously told CityBeat that the operating costs remain a prominent concern for him because they could translate to cuts in the city’s budget, particularly to police and firefighters.
Eric Avner, vice president and senior program manager of community development at the Haile Foundation, called the deal “an olive branch” to streetcar supporters. He said he’s “very, very confident” the private sector will be able to find a solution.
“I don’t think we can solve it in a week. What I heard is he needs assurances,” Avner said.
Cranley said he doesn’t expect someone to come to city leaders next Wednesday with a check paying for 30 years of operating costs, but he said the commitment has to be serious and long lasting for the city to move forward with the streetcar.
Avner discussed bringing together a commission of private-sector leaders with some long-term assurances.
In what he described as an “organic” movement, Avner said he’s heard from various private-sector leaders that they want to keep the project going, but he claimed most of them don’t want to engage in a public “food fight” that could hurt their relations with the mayor and other city officials.
For Avner, it’s a matter of sticking to a project that’s already well into development and construction.
“We don’t have the luxury to waste that kind of money in this town,” he said.
Streetcar Project Executive John Deatrick on Nov. 21 told council members that canceling the streetcar project could save only $7.5-$24.5 million in capital costs 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 stopped.
After Cranley’s announcement, Councilwoman Yvette Simpson questioned Cranley’s motives and said the solicitation might be very difficult to meet in just one week.
Cranley said he’ll reach out to the Federal Transit Administration to try to get an extension, perhaps until the end of the year, on the deadline for federal grants.
“It’s obviously a huge, huge hurdle to try to pull this together in seven days,” Cranley said.
Cranley cautioned he wouldn’t be upset if his offer fell through. Flanked by union representatives for police, firefighters and other city workers, Cranley reiterated that his priorities still lie in basic city services.
Councilman P.G. Sittenfeld previously proposed setting up a special improvement district to pay for the operating costs. But Cranley called the approach unworkable because it would require property owners to opt in — an effort that would presumably take much longer than one week.
Cranley’s announcement came as streetcar supporters move to place a city charter amendment in support of the streetcar project on the ballot. The campaign vowed to gather 12,000 signatures by the end of the week.
Chris Seelbach, a first-time candidate for Cincinnati City Council, has won an endorsement from the Gay & Lesbian Victory Fund, a national group that could provide a boost in campaign fundraising.
Founded in 1991, the Victory Fund provides strategic, technical and financial support to openly gay and lesbian candidates across the United States, helping them win elections at local, state and federal levels. Most recently, the organization helped elect Mayor Anise Parker of Houston, Texas, the fourth-largest city in the nation.
Is it because he's tired of being on the losing side of debates? Is it because he doesn't have a party endorsement and also lost his base of conservative, West Side voters? Is it because the boss at his day job with the Bengals is tired of all the negative publicity?
Whatever the reason, Cincinnati voters won't have City Councilman Jeff Berding to kick around any longer. Like Alaska Gov. Sarah Palin, Berding has chosen to quit the political game before his current term expires.
Cincinnati council members and community leaders today explained and defended plans to use the parking lease to fund a disparity study that would gauge whether the city should change its contracting policies to favorably target minority- and women-owned businesses.
But before City Council unanimously passed the motion at today's meeting, it was amended to allow the city administration to find alternate sources of funding.
Since the city dismantled its last minority- and women-owned business program in 1999, contract participation rates for minority-owned businesses have plummeted, while rates for women-owned businesses have remained relatively flat.
But because of a 1989 U.S. Supreme Court ruling, governments must conduct a study to prove there's a race- or gender-based disparity before policies can be adjusted to favor such groups.
Cincinnati has not taken up a disparity study since 2002. That study found evidence of disparities but ultimately recommended race- and gender-neutral policies to avoid legal uncertainty that surrounded the issue at the time.
"This is an opportunity to respond to a complaint and concern that has been around for as long as I can remember," Councilman Wendell Young said.
City officials claim they couldn't conduct another study until the administration finished implementing recommendations from OPEN Cincinnati, a task force established in 2009 after Mayor Mark Mallory and his administration were criticized for neglecting the city's small business program.
But the holdup has also been brought on by the study's cost, which city officials currently estimate between $500,000 and $1.5 million. Some critics argue the money would be better spent elsewhere.
Vice Mayor Roxanne Qualls, who's running for mayor this year, defended the cost by explaining a disparity study can potentially lead to economic development by lifting minority groups, who currently face unemployment rates higher than white Cincinnati residents. She said it's on the city to ensure everyone, including women and minorities, benefit from Cincinnati's economic growth.
Other critics, particularly mayoral candidate John Cranley, have criticized the motion's suggestion for funding. The motion asks the city administration to fund the study with part of the upfront money that will come from leasing the city's parking meters, lots and garages to the Greater Cincinnati Port Authority, but it does allow the city administration to find other funding options if possible.
Cranley, who supports conducting a disparity study but opposes the parking lease, says the money should come from other, unnamed sources because parking funds are currently being held up while the city hashes out legal uncertainty surrounding the lease and the Port Authority works out contracts with private operators that will manage Cincinnati's parking assets.
In response to those concerns, Qualls said that "money doesn't grow on trees" and Council has to make do with what it has.
Councilman Chris Seelbach voted against the parking lease, but he supports using parking funds for the disparity study. He says that, while he may have voted against the lease, the vote is done and the money is there.
The amended motion was unanimously passed by City Council today. It asks the city administration to present a budget and timetable for the study at the Budget and Finance Committee's first October meeting.
Updated at 3:18 p.m. with results of City Council meeting.
(**UPDATE FOLLOWS BELOW)
A sanitation worker has filed an incident report with Cincinnati Police alleging City Councilman Chris Bortz threatened him and used a racial slur while doing so.
The alleged incident occurred Thursday morning outside of Bortz' townhouse in Mount Adams, when the worker blew the horn on his garbage truck a few times because the vehicle's path was blocked by the councilman's parked car.
The Coalition Opposed to Additional Spending and Taxes (COAST) has threatened to block a move that would allow Cincinnati to use $37.5 million from the 2007 sale of the Blue Ash Airport for projects other than aviation, $11 million of which would go to the Cincinnati streetcar.
The Blue Ash City Council voted Thursday to re-do the sale of 130 acres at the Blue Ash Airport to the City of Cincinnati. COAST says it wants to put the matter before voters in a 2013 referendum, which would halt the sale and re-instate the original agreement made in 2007 when Cincinnati made the sale.
The two cities decided to re-work the $37.5 million sale because a federal rule requires proceeds from the sale of an operating airport to be used for other aviation projects. The money would be returned, airport shut down and then the property re-sold to Blue Ash for the original amount.
“When they originally sold it they were stupid, which is typical of the City of Cincinnati, and did not realize that the proceeds on the sale of the airport have to go to other aviation-type things,” says COAST Chairman Tom Brinkman. “Now that they want to get the streetcar, they want to crack that money.”
Brinkman openly admits he doesn’t want the money to go to the streetcar (“We’re doing everything we can to make sure that boondoggle doesn’t occur”) but says COAST is working with a group of local pilots who want money from the sale to go to Cincinnati’s Lunken Airport.
Blue Ash is confident that the ordinance they passed approving the re-sale isn’t subject to referendum.
“Blue Ash believes everything enacted was lawful and would survive any challenge,” says City Solicitor Brian Pachenco. He declined to discuss specifics
The city wants the airport land to build a park.
Pachenco said the ordinance wasn’t written specifically to exempt it from referendum attempts, but nevertheless it falls under a section of the city’s charter that makes voters unable to recall it.
COAST isn’t so sure.
Chris Finney, legal counsel for COAST, said the buying and selling of land under the Blue Ash charter is subject to referendum. He said the ordinance was written to avoid using that language, but what was happening was in reality a sale.
For its part, Cincinnati doesn’t seem too concerned with the threatened referendum.
“We’re not going to talk 'what ifs' at this point,” city spokeswoman Meg Olberding said. “The streetcar has had two previous referendums that have been shot down.”
She pointed out that only $11 million of the sale was going toward the streetcar, and the remaining money would be available for other projects.
Cincinnati City Councilman Chris Seelbach was also unconcerned.
“COAST and groups like COAST have tried to put up every obstacle possible to prevent the streetcar from happening and we have overcome all of them,” Seelbach said. “I am 100 percent positive if this comes to a vote we will overcome it again and the streetcar will be built.”
With a current budget proposal pending before Cincinnati City Council calling for laying off up to 112 police officers, police supervisors are working on a new plan for responding to calls for service.
The plan, dubbed the Police Differential Response Program, is an attempt to reduce the number of calls for service that the department responds to on a daily basis. Under the plan, police won’t send a patrol car for certain types of calls.