The company in charge of building Cincinnati's streetcars says the city would incur substantial costs if it cancels the streetcar project after it's already gone through some construction and design work.
The Nov. 30 letter from CAF USA Vice President Virginia Verdeja to former Mayor Mark Mallory arrived just one day before Mayor John Cranley, who opposes the streetcar project, and an anti-streetcar majority were sworn in.
"CAF will have to recover all the incurred expenses as well as all the additional cost of cancelling the contract, which would be substantial too," Verdeja writes in the letter.
The letter explains that, on top of the sunk expenses on design work, cancellation would require CAF to pull back on various established deals with subcontractors, which would spur further costs.
For streetcar supporters, the letter renews fears of litigation that could crop up if the project were canceled and contractors decided to pursue their full payday. Those legal costs would fall on the already-strained operating budget that pays for day-to-day services like police and firefighters instead of the capital budget that finances big capital projects like the streetcar, according to city spokesperson Meg Olberding.
On Nov. 21, Streetcar Project Executive John Deatrick warned the costs of canceling the $132.8 million 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.
Earlier on Sunday, hundreds of streetcar supporters rallied in Washington Park and walked the planned streetcar route in support of the project. They're threatening a referendum if the new City Council moves to pause or cancel the project.
City Council plans to vote on pausing the project on Monday. Because of threats from the federal government that a mere delay could lead to the loss of federal grants, streetcar supporters claim a pause would equate to cancellation.
Read the full letter below:
Updated at 6:13 p.m. with the PDF of the letter.
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.
As Cincinnati debates canceling the streetcar project, the Ohio Department of Transportation (ODOT) is evaluating transit systems around the state to encourage more efficiency and cost effectiveness. The agency is particularly focused on how different transit services are dealing with rising demand and shrinking budgets. But if that’s the case, ODOT might carry some of the blame: When Gov. John Kasich took office, ODOT’s Transportation Review Advisory Council pulled $52 million from the Cincinnati streetcar project despite previously scoring the streetcar the highest among Ohio’s transportation projects. The Kasich administration also refused $400 million in federal funding for a statewide passenger light rail system, and the money ended up going to California and other states that took on light rail projects.
Cranley’s other major campaign promise is to stop the city’s plan to lease its parking meters, lots and garages to the Greater Cincinnati Port Authority, but the Port intends to finalize the lease by the end of the month — before Cranley takes office in December — by selling bonds that will finance the deal. The outgoing city administration pushed the parking plan through City Council in a matter of months for an upfront payment of $92 million. But following unsuccessful litigation and a due diligence process, the Port Authority cut the payment to $85 million, and the city is now responsible for paying $14-$15 million to build a new parking garage that the Port was originally supposed to finance under the deal. Cranley and other opponents of the parking plan say it gives up too much control over the city’s parking assets, while supporters argue it’s necessary to modernize the assets and help fund economic development projects.
Several of Cincinnati’s power brokers and building owners are working on a plan that would create a retail corridor in the city’s center and hopefully keep Saks Fifth Avenue in the city. Some of the efforts apparently involve financial incentives from the city, according to details provided to the Business Courier.
In the past decade, Ohio students have shown limited improvement in reading and math scores.
The Cincinnati area could become the largest metropolitan area without an abortion clinic following new regulations imposed by the state budget signed into law in June by Gov. Kasich and the Republican-controlled legislature. CityBeat covered the regulations and the rest of the state budget in further detail here.
The Hamilton County Association of Chiefs of Police released a report outlining stricter guidelines for Taser use. Attorney Al Gerhardstein, who has led lawsuits on behalf of families who lost loved ones after they were Tased, told WVXU he’s encouraged by the report, but he said he would also require annual tests of the devices and a ban on chest shots.
The Cincinnati branch of the Council on American-Islamic Relations is filing a federal complaint against the DHL Global Mail facility in Hebron, Ky., after DHL allegedly fired 24 of its employees on Oct. 9 in a dispute over prayer breaks.
Cincinnati’s Horseshoe Casino reported $18.2 million in gross revenue in October, down from $19.8 million in September. The revenue reduction also cost Cincinnati’s casino the No. 1 spot, which is now held by Cleveland’s Horseshoe Casino. For Cincinnati and Ohio, the drop means lower tax revenue.
The Cincinnati Gay and Lesbian Center plans to close its physical space, but it’s sticking around as a virtual organization and will continue hosting Pride Night at Kings Island. A letter from the center’s board of directors stated that the transition was based on a need to “evolve with the times.”
The U.S. Senate passed a bill that would ban discrimination against gay and transgendered workers, but the bill’s chances are grim in the U.S. House of Representatives. Both Ohio senators — Democrat Sherrod Brown and Republican Rob Portman — voted in favor of the Senate bill. CityBeat previously covered efforts in Ohio to pass workplace protections for LGBT individuals here.
Watch a homeless veteran’s aesthetic transformation, which apparently helped push his life forward:
The popular video of a baby’s reaction to his singing mom might actually show conflicting feelings of fear and sociality, not sentimentality.
Duke Energy told city officials to OK an operating deal for the streetcar before trying to talk costs. The fighting words are in the middle of an ongoing feud between city officials and Duke Energy about who will move utility lines and pipes to accommodate the streetcar. The operating details will help Duke know what “unbreakable rules” about maintenance and emergency repairs exist and where the streetcar will go, according to the company’s spokesperson. CityBeat previously covered the streetcar issue and all the pettiness from Duke here.
A suspended frat is suing Miami University. The frat was suspended after a fireworks battle led to the discovery of illegal substances in the frat. The frat claims the university improperly suspended it, damaged its business and property, and made libelous allegations out of “malice, hatred and ill will.” The frat says it shouldn’t have been suspended without a written complaint, but Miami's spokesperson said the university is allowed to suspend students without a written complaint if there is a pending investigation.Ohio will soon begin tying college funding to graduation rates. If only that was done with e-schools.
Equality Ohio announced Columbus, Ohio made a step forward in LGBT rights yesterday. It is now among the few cities in Ohio to have a domestic partner registry, which allows same-sex couples to legally declare their relationships without marriage or civil unions. Toledo, Cleveland, Athens and Dayton also have registries.
Secretary of State Jon Husted wrote a “guest column” on his own website defending early voting rules in Ohio. Republicans are facing criticism over bringing racial politics and poor arguments into the early voting debate.
The University of Cincinnati’s new interim president just got a nice raise.The state texting-while-driving ban goes into effect tomorrow.
Sen. Rob Portman of Ohio made his speech at the Republican national convention yesterday. In the speech, he criticized President Barack Obama for the current state of the economy. In return, Democrats criticized Portman for his budget work for former President George W. Bush, whose administration is widely blamed for the current economic crisis.It seems like Paul Ryan spent a lot of time lying in
At a Budget and Finance Committee meeting today, City Council members grilled City Manager Milton Dohoney Jr. on how the city will fix the streetcar project’s $17.4 million budget gap and whether paying for the cost overrun to save the project is worth it.
Supporters of the streetcar pushed questions and comments that suggested the streetcar will provide the city with a large return on investment, which was supported by Dohoney’s testimony and previous studies from HDR, a consulting firm, and the University of Cincinnati (“Back on the Ballot,” issue of Jan. 23).
Opponents suggested the cost overruns were too much, and the project, which the city manager said now stands at an estimated $132 million to $133 million, is too expensive.
In a memo issued April 30, Dohoney recommended various capital funding sources to fix the streetcar budget gap, including a temporary reallocation of Music Hall renovation funds and money that would have otherwise gone to infrastructure projects around the Horseshoe Casino.
Dohoney clarified that funding for Music Hall is not being permanently pulled; instead, his recommendations would delay Music Hall funding until 2016, which is when the Music Hall project will need the funds, and use currently allocated funding on the streetcar project.
Dohoney added that Otto Budig, president of the Music Hall Revitalization Company, raised no concerns about the streetcar plan after it was explained to him.
Dohoney also clarified that his recommendations would not raise taxes.
A few council members, particularly Councilman Chris
Seelbach, asked whether the streetcar project could face future cost
overruns. Dohoney said it’s possible, based on the project’s scope.
“For major projects like this … there is usually an anticipation that something other than the exact plan may occur somewhere along the line,” Dohoney said.
For the streetcar project, there are a few remaining uncertainties. Dohoney said he doesn’t know for certain whether Messer
Construction, which responded to the city’s bid process with the lowest construction bid, is still willing
to contract with the city under the terms it previously offered. He said Messer officials have indicated they are still interested, but it remains an uncertainty until a contract is in place.
Another uncertainty is exactly how much laying down the tracks will cost. Dohoney said it won’t be possible to gauge the exact cost until Messer or any other company contracts with the city and begins actual work on the project.
But for those situations, Dohoney said the streetcar project has a $10 million contingency fund available, as required by the federal government.
Councilman Chris Smitherman, who opposes the streetcar project, asked whether there’s a funding ceiling that, if breached, would make Dohoney stop supporting the streetcar project. Dohoney said he could not provide a number without further thought and analysis. When Smitherman later asked if the streetcar should be built at any cost, Dohoney said no.
When asked what would happen if the project’s cost overruns were not covered, Dohoney said the project would effectively end.
Smitherman asked how the city administration can be pushing forward with the project, given the cost overruns: “How is the administration continuing to move forward with a project that without a vote of council is dead?”
Dohoney responded by saying the city administration does not have to stop by law until it is directed to do so by City Council.
Ending the project would come with its own costs of about $72 million, according to Dohoney: $19.7 million that was already spent, $14.2 million in close-out costs and $38.1 million in federal grants that would have to be returned to the federal government.
Dohoney said stopping would also make the federal government reluctant about working with Cincinnati in the future: “They’ve let us know they would not be pleased if we did it.”
The city administration is currently working with the federal government to obtain another $5 million that could be used for contingency or to undo some of the overrun fixes being looked at, but federal officials are waiting to see how the city government reacts to the current cost overrun problems before a decision is made, according to Dohoney.
Much of the City Council discussion focused on the streetcar’s merits,
particularly whether the first phase of the project, which would run
from The Banks to just north of Findlay Market, could be successful on its own. The
city plans to eventually expand the route to the University of
Cincinnati and hospitals uptown — a route originally part of the first phase of the streetcar project that was cut after Gov. John Kasich pulled $52 million in state-distributed federal funding in 2011.
“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 said. “The intention has always been to connect the two major employment centers of the city and go beyond that.”
But Dohoney later clarified that the first phase of the project would help invigorate hundreds of vacant lots and buildings in Over-the-Rhine, which he said would make that phase of the project a success by itself.
Some opponents of the streetcar have incorrectly attempted to tie the streetcar project to the city’s $35 million operating budget deficit, which will likely be closed in part by laying off cops, firefighters and other city employees. But the streetcar project’s funding comes from the capital budget, which can’t be used to balance the operating budget because of limits established in state law.
The city confirmed today that Cincinnati Police Chief James Craig will be leaving Cincinnati to take a job in Detroit. During Craig’s time, the city experienced a significant drop in crime. City officials praised Craig for his attempts to forge better ties between the Cincinnati Police Department and local communities, particularly by establishing the External Advisory Committee, a group of active local community members and business leaders that gives advice on the police department’s policies and procedures. City Manager Milton Dohoney Jr. said the city will begin a nationwide search for Craig’s replacement tomorrow.
Cincinnati Union Bethel (CUB) is selling the Anna Louise Inn to Western & Southern for $4 million, and CUB will be relocating the Inn’s services to Mount Auburn. Many Anna Louise Inn supporters are taking the sale as a sign Western & Southern won, while others are glad the extensive legal battles are finally over. The sale came after years of Western & Southern obstructing the planned renovations for the Anna Louise Inn through court battles and other legal challenges, which CityBeat covered here. In a Q&A with The Cincinnati Enquirer, Western & Southern CEO John Barrett reflected on the events, saying his company took the “high road” throughout the controversy — a claim many Anna Louise Inn supporters dispute.
City Council grilled Dohoney yesterday over fixing the streetcar project’s $17.4 million budget gap and whether paying for the cost overruns to save the project is worth it. Supporters of the streetcar pushed questions and comments that touted the streetcar project’s return on investment, which was further supported by Dohoney’s testimony and previous studies from HDR, a consulting firm, and the University of Cincinnati. Opponents suggested the cost overruns were too much and the project, which now stands at $133 million, is too expensive. A final decision is expected by the end of May. The streetcar project’s funding comes from the capital budget, which can’t be used to fix the city’s $35 million operating budget deficit because of limits established in state law.
The city and county governments are clashing over the city’s hiring policies for companies bidding on the Metropolitan Sewer District’s (MSD) construction projects. The city’s laws require construction firms to have apprenticeship programs, which the city says promotes job training on top of employment. But the Hamilton County Board of Commissioners claims the requirements aren’t feasible and put too much of a strain on companies. Democratic Commissioner Todd Portune questioned why the city’s policy only applies to MSD and not other local government agencies.
The Duke Energy Garden is the latest addition to the Smale Riverfront Park.
A Catholic teacher union will not support Carla Hale, a gay Columbus-area teacher who was fired after she named her girlfriend in an obituary for her mother. Hale says she was fired over her sexuality, but the Catholic Church says she was fired for revealing a “quasi-spousal relationship” outside of marriage. The Catholic Church opposes same-sex marriage, which means all gay couples are in a non-marital relationship under the Church’s desired policies.
The Internal Revenue Service scandal, which involves IRS officials unfairly scrutinizing conservative groups, is now nationwide. Previous reports pinned the practice on a Cincinnati field office, but numerous IRS offices around the country, including one in Washington, D.C., were found to be guilty of the practice in documents acquired by The Washington Post.
Headline from The Columbus Dispatch: “Man who killed wife, then self: ‘I couldn’t take her mouth anymore.’”
The brain catches grammar errors even when a person doesn’t realize it.
The City of Cincinnati and Duke Energy are still fighting over the streetcar. The city and company are both disputing who is required to relocate utility lines and pipes in order to accommodate for the streetcar. Cincinnati officials say Duke Energy is required to do it under state law, but the company disagrees. The city is considering legal action, so the feud might soon be heading to court.A recent campaign event might have been mandatory for workers at a mine in Beallsville, Ohio. The miners were allegedly pulled from work, refused pay and required to attend the event with presidential candidate Mitt Romney and senatorial candidate Josh Mandel. Romney, Mandel and the mine owner have all been criticized for the move.
Cincinnati Bell and StarTek plan on bringing back 200 outsourced jobs to Cincinnati. StarTek will also hire another 136 workers.
President Barack Obama’s administration finalized new regulations yesterday requiring the average gas mileage of new cars to be at 54.5 mpg by 2025. The new standard is double today’s standard. Lisa Jackson, EPA administrator, said on Twitter the new standards will reduce national oil consumption by two million barrels a day. The United States currently uses about 20 million barrels a day. That reduction in consumption could help combat climate change, which is partly blamed for Arctic Sea ice hitting record lows this summer.
A federal judge ruled Ohio boards of elections must count defective provisional ballots if the ballots were counted defective due to errors from poll workers. The ruling protects voters from mistakes by poll workers. Secretary of State Jon Husted is expected to appeal the ruling because he says it disagrees with state law.Husted ended up firing the two Democrats on the Montgomery Board of Elections that voted for extending in-person early voting to include weekends. Democrats say not allowing weekend voting is voter suppression, but Republicans cite racial politics and costs as deterrents.
New rules for juries stop the use of Twitter and Facebook during cases.The Republican national convention is underway in Tampa, Fla. Gov. John Kasich and Sen. Rob Portman of Ohio will be there. For coverage, check out Twitter’s Republican convention page, which tracks all mentions of the convention.
Romney apparently agrees with Mandel that fact checkers don’t matter. This is despite Romney’s claim that President Barack Obama should stop running ads after fact checkers find them to be false or misleading. Mandel previously said he will continue saying wrong statements even after they’re declared false or misleading by fact checkers.
Former Ohio Gov. Ted Strickland criticized Romney on his plans for Medicare. The former governor said the Romney-Ryan budget plan would “destroy Medicare as we know it.”
Republicans like to say that Obamacare will get employers to drop health insurance, but a new survey has found zero out of 512 employers plan on dropping health insurance.The U.S. economy grew at a 1.7 percent annual rate in the second quarter. The growth isn’t great, but it slightly beat expectations.
Apparently computer grading programs are judging student essays better than teachers.
And some scientists want to use HIV to fight cancer.
In a memo to the mayor and City Council members last night, City Manager Milton Dohoney Jr. revealed the streetcar is facing a $22.7 million shortfall because construction bids were way over budget. The memo says $5.3 million of that budget gap could be brought down through cuts, but fixing the rest requires $17.4 million in additional funds. The memo comes at a time the city is attempting to balance its operating budget by laying off cops and firefighters. But as John Deatrick explained when the city moved to hire him for the streetcar project, the streetcar is part of the capital budget, which is separate from the operating budget and can't be used to balance the operating budget because of legal and traditional constraints.
The budget bill heading to the Ohio House floor would ban comprehensive sex education, defund Planned Parenthood and fund crisis pregnancy centers that pro-choice groups consider "anti-choice." Citing "gateway sexual activity," the bill would open teachers to up to $5,000 in fines for explaining the use of condoms and other birth control to students, and it also bans the distribution of any birth control on school grounds. The bill takes its anti-contraceptive measures to promote an abstinence-only education program. Research has found abstinence-only programs to be generally ineffective, while birth control programs ultimately save money by avoiding costly pregnancies and sexually transmitted infection treatment.
Councilman Cecil Thomas is stepping down, and he will be replaced by his wife of 32 years, Pam Thomas. The appointment has raised questions about how council members are replaced upon resignation, but Thomas says he's just following the rules. Under the current system, designees appoint successors to council seats, but the designees give great weight to the incumbent's input.
JobsOhio repaid $8.4 million to Ohio yesterday — fulfilling a promise it made in March that it would fully repay the state for public funding received since it opened on July 5, 2011. The sum is much higher than the $1 million state officials originally said would go to the agency. JobsOhio's finances came under criticism after it was revealed that Gov. John Kasich was redirecting public funds to the agency, prompting a closer look from State Auditor Dave Yost. JobsOhio is a privatized development agency that Kasich and Republicans established to eventually replace the Ohio Department of Development.
In light of the Boston Marathon bombings, Flying Pig Marathon organizers are evaluating security measures, but they're not sure whether additional measures are needed just yet. The Flying Pig Marathon is expected to draw more than 20,000 participants on May 5 — close to the 23,000 who typically attend the Boston Marathon. Still, only about 150,000 spectators are expected at the Flying Pig Marathon, while about 500,000 typically spectate the Boston Marathon.
City Council is expected to vote today in support of expanding mobile food vending in the city and make the program, which is handled by 3CDC, permanent. The new mobile vending spots will be near nightlife areas in Over-the-Rhine and during the day at Washington Park.
TriHealth and Mercy Health are among the top 15 hospital systems in the United States, according to a new ranking from Truven Health Analytics.
When renewing its contract with Sedgwick Claims Management Services Inc., Kroger asked the company to move its center from Des Moines, Iowa, to Cincinnati, bringing an estimated 55 new jobs to the city.
New surgical tape works like a parasitic worm for extra stickiness.
For the first time, scientists are being allowed to study psychedelics for potential medical treatments.
City Council’s budget committee voted 6-3 Monday to use $29 million from other projects in part to move utility lines and pipes to accommodate for streetcar tracks. The plan will use $15 million from the Blue Ash airport deal and $14 million from a new financing plan to ensure the streetcar’s opening is not delayed further from the current 2015 deadline.
The city claims it will eventually get the $15 million back. That money, which was originally promised to neighborhood projects, will be used to move utility lines and pipes. The city is currently trying to resolve a dispute with Duke Energy over who has to pay to move utility lines and pipes. If the city wins out, Duke will reimburse the costs. If Duke wins out, the money will be lost in the streetcar project.
At the public meeting that preceded the vote Monday, neighborhood officials and streetcar supporters clashed. Opponents to the plan claimed the money should stay in neighborhood projects as originally promised, while streetcar supporters pointed to the benefits of the streetcar for neighborhoods and insisted the money will eventually come back.
Chris Smitherman, Independent; Charlie Winburn,
Republican; and P.G. Sittenfeld, Democrat, voted against the plan.
Roxanne Qualls, Laure Quinlivan, Yvette Simpson, Cecil Thomas, Wendell
Young and Chris Seelbach — all Democrats — approved the plan.
Jason Barron, spokesperson for Mayor Mark Mallory, says the mayor is in favor of the plan moving forward.
Although the vote included all City Council members, it was not the formal City Council vote. Instead, it was only the budget committee vote. The City Council vote will take place Wednesday.
CORRECTION: This story originally said the entire $29 million plan will be reimbursed by Duke. Only the $15 million from the Blue Ash airport deal will be reimbursed if the city wins in the dispute.
Council Member P.G. Sittenfeld is circulating a small business petition to stop Cincinnati from privatizing parking services. Sittenfeld threw his support behind the petition in a statement: “Individual citizens have made clear that they are overwhelmingly against outsourcing our parking system. Now we're going to show that small businesses feel the same way. I hope that when council sees that the small businesses that are the engine of our city are strongly against outsourcing our parking, we can then nix the proposal immediately.” The petition asks city officials “to find a smart, resourceful, sustainable alternative to address the budget situation.” City Manager Milton Dohoney says parking privatization is necessary to avoid laying off 344 city workers.
Gov. John Kasich’s expanded sales tax is going to hurt a lot of people. The tax is being expanded to apply to many items included in households’ monthly budgets, such as cable television, laundry services and haircuts. The revenue from the sales tax expansion will be used to cut the state income tax by 20 percent across the board, lower the sales tax from 5.5 percent to 5 percent and slightly boost county coffers.
City Council and local residents are not impressed with the USquare development. At a City Council meeting Tuesday, Vice Mayor Roxanne Qualls described the development: “I have to say that it is underwhelming. And that’s about the kindest thing I can say about it. And also really repeats, on many different levels, virtually all of the mistakes that have ever been made in the city and in neighborhoods when it comes to creating public spaces.” But architect Graham Kalbli said he’s excited about the plan: “Because we’ve taken a vacant strip of land and really made kind of a living room for the Clifton Heights community. We wanted to do that, that was one of our overriding goals.”
The Hamilton County Board of Elections is subpoenaing 19 voters who are suspected of voting twice in the November election. Most of the voters being investigated filed provisional ballots then showed up to vote on Election Day.
David Mann is officially running for City Council. The Democrat has served as a council member, mayor and congressman in the past.
Traffic congestion isn’t just bad for drivers; it’s also bad for the environment and economy. The Annual Urban Mobility Report from the Texas A&M Transportation Institute found traffic congestion cost Cincinnati $947 million in 2011 and produced an an extra 56 billion pounds of carbon dioxide nationwide.
Leslie Ghiz is taking the judge’s seat a little early. The former city council member was elected to the Hamilton County Common Pleas Court in November, but she was appointed to the seat early by Gov. John Kasich to replace Dennis Helmick, who retired at the end of 2012.
The magic of capitalism: Delta is already matching a low-cost carrier’s fares to Denver at the Cincinnati/Northern Kentucky International Airport.
The U.S. Postal Service is ending Saturday mail delivery starting Aug. 1. The Postal Service has been dealing with financial problems ever since a 2006 mandate from U.S. Congress forced the mail delivery agency to pre-fund health care benefits for future retirees. Riddled with gridlock, Congress has done nothing to help since the mandate was put in place. This will be the first time the Postal Service doesn’t deliver mail on Saturdays since 1863.
It’s unlikely zombies could be cured by love, but it’s possible they could be cured by science.
The next Michael Jordan has been discovered: