by German Lopez
Operating costs also lower than previously projected
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.
1 Comment · Wednesday, December 18, 2013
As some council members discuss shutting down a permanent housing project in Avondale, a study finds the facility wouldn't damage the neighborhood.
by German Lopez
Private backers support streetcar offer, city budget gap estimated, governor's race still close
More than a dozen business and philanthropic entities
support the Southwest Ohio Regional Transit Authority’s (SORTA) plan to
develop a private-public partnership to pay for the streetcar’s
operating costs, according to Eric Avner, vice president of the
philanthropic Haile Foundation. If the people cited by Avner put money behind their support, they could get streetcar operating costs off
the city’s books and pave the clearest path forward for the $132.8
million streetcar project since the new mayor and City Council took
office earlier this month. Although Cranley called SORTA’s offer
“woefully insufficient” earlier in the day, Councilman Kevin Flynn, one
of two swing votes on council, said the idea could turn into a viable option if the business and philanthropic community
provided more assurances.
Other streetcar news:• City Council will hold public hearings on the streetcar
today at 1:30 p.m., with a vote to decide the project’s fate expected
tomorrow.• Speaking about the streetcar project, Vice Mayor David Mann told The Business Courier, “I’m awfully close to saying let’s go for it.” • The Federal Transit Administration might prefer to deal with SORTA over Mayor Cranley if the streetcar is completed.
Cincinnati’s projected operating budget gap for fiscal
year 2015 is $16 million, which means City Council will need to find new
revenue or cuts to balance the budget by July. Although a majority of
council members promise to structurally balance the budget in the next
few years, a minority say it will be more difficult than most expect without hiking
taxes or cutting police and firefighters.The 2014 gubernatorial race between Republican Gov. John
Kasich and Democratic challenger Ed FitzGerald is within the margin of
error, according to a poll released Monday by Public Policy Polling (PPP). “Although
there’s been a fair amount of movement toward Republicans nationally
since (November), the state of this particular race has seen very little
movement and Democrats continue to have an excellent chance at a pick
up next year,” wrote Tom Jensen, director of PPP.
Meanwhile, Hamilton County Commissioner Todd Portune could challenge FitzGerald for the Democratic nomination.A task force could undertake a comprehensive review of the city charter to modernize the city’s guiding legal document.Startup incubator SoMoLend is likely to liquidate before
the scheduled Jan. 23 state hearing about alleged securities fraud. The
liquidation would be an effective end to a once-promising company that partnered with the city of Cincinnati to foster startups
and small businesses.
This year could be the least deadly on Ohio’s roadways, according to the Ohio Department of Transportation.A bill in the Ohio House could require hospitals to report
the number of newborns addicted to drugs. The grim number would provide
a much-needed measure for tackling Ohio’s so-called opioid epidemic.
Ohio is doing a poor job fighting infectious diseases,
according to a report from Trust for America’s Health and the Robert
Wood Johnson Foundation.
Cincinnati Children’s Hospital obtained a grant to combat brain cancer.
Two won the $636 million Mega Millions jackpot.
Even the physics behind emperor penguin huddles are pretty complicated.Follow CityBeat on Twitter:• Main: @CityBeatCincy • News: @CityBeat_News • Music: @CityBeatMusic • German Lopez: @germanrlopez
by German Lopez
Foundation lists more than a dozen business, philanthropic leaders in support
More than a dozen business and philanthropic entities
support the Southwest Ohio Regional Transit Authority’s (SORTA) offer to
develop a private-public partnership to fund the streetcar’s operating
costs, Eric Avner, vice president of the Haile Foundation, told CityBeat on Tuesday.If enough private contributors agree to finance the streetcar’s operating costs, they could address a major concern raised by streetcar opponents and provide the clearest path forward for the $132.8 million streetcar project since the new mayor and City Council took office early this month.
The Haile Foundation already contributed $1 million to an
operating reserve fund for the streetcar, but Avner cautions that his
organization’s donation is only the beginning, given all the other
entities interested in moving the streetcar forward.
Avner says 14 other business and philanthropic leaders supported the SORTA concept in person or through writing in time for SORTA’s board of
trustees meeting on Tuesday. Among other community leaders,
Avner cites Otto Budig, Cathy Crain of Cincinnati State, William Portman of the University of Cincinnati, Jeannie
Golliher of the Cincinnati Development Fund, Rick Greiwe of Greiwe
Development and Jack and Peg Wyant of Grandin Properties.
In a letter to SORTA, the Haile Foundation offers to
recruit and financially establish a commission of community leaders that
will work with the agency to create an operating and revenue plan
that will require no funds from the city of Cincinnati. The letter also promises to leverage the initial $1
million investment to secure additional contributors and build a fund
that would pay for a full year of operating costs.
Mayor John Cranley called SORTA’s offer “woefully
insufficient” in a press conference on Tuesday. Cranley said the city will need financial assurances far above the Haile
Foundation’s $1 million to cover $3.4-$4.5 million in annual operating costs for the streetcar over 30 years.
Councilman Kevin Flynn, one of two potential swing votes
on City Council, agreed with Cranley’s assessment, but he said the proposal could become a viable option if the city receives more
assurances from SORTA and private entities that show the groups are serious in their offer.At this point, private contributors might be necessary to
save the streetcar project. Cranley and Flynn said on Dec. 12 that
operating costs must be written off the city’s budget if the project is
to move forward.
SORTA already agreed to help operate the streetcar if the
project is completed, but its decision to take up the operating costs shows
an additional commitment to the project.
The agency claims bus services will not be impacted by its increased commitment to the streetcar.
City Council expects to vote on Thursday on whether to
restart the streetcar project. Council paused the project on
Dec. 4 while the city audits the project’s completion, cancellation and
Read the Haile Foundation’s full letter below:
by German Lopez
Mayor, council members argue offer falls short of demands
The Southwest Ohio Regional Transit Authority (SORTA) on
Tuesday indicated its willingness to pursue a public-private partnership
to cover the streetcar’s operating costs, estimated at $3.4-$4.5
million a year. The announcement could provide an avenue for business and philanthropic leaders to help fund streetcar operations through SORTA in an attempt to meet demands from the mayor and some council members.“SORTA’s willingness is based upon assurances from the
Cincinnati business and philanthropic communities that they will work
with SORTA in public-private partnership to secure the funds required to
cover the short and long-term operating costs of the streetcar to the
extent other sources of streetcar revenue, such as fares, advertising,
sponsorships, etc., are inadequate,” the agency said in a press
But in a press conference following the announcement, Mayor John Cranley called SORTA’s offer “woefully insufficient.” He argued SORTA’s assurances aren’t enough to pull streetcar operating costs completely off the city’s books. Councilman Kevin Flynn, one of two potential swing votes on City Council, agreed with Cranley’s assessment. But he cautioned the commitment could become a viable path forward for the streetcar project if SORTA provides more assurances in the next couple days, before a council vote on the streetcar.
SORTA’s commitment comes less than one week after Mayor John
Cranley said he’d allow the $132.8 million streetcar project to move
forward if private contributors agree to cover the streetcar’s
operating costs for 30 years. Flynn and Vice Mayor David Mann, the two swing votes on City Council, approved of Cranley’s proposed compromise.In support of the announcement, the Haile Foundation
also announced a $1 million commitment in seed money to spur further
contributions to an operating reserve fund for the streetcar.
“We are committed to seeing the streetcar through to
completion and beyond. SORTA has stepped up and is more than qualified
to serve in this role. This is another great example of community
collaboration helping move to region forward,” said Eric Avner, vice
president of the Haile Foundation, in a statement.
Avner told CityBeat on Dec. 12 that private-sector
leaders are working to meet the mayor’s demand with some financial assurances for the streetcar’s operating costs. SORTA’s announcement could act as that assurance.
If the streetcar project is completed, SORTA already agreed
to help operate the 3.6-mile loop in Over-the-Rhine and downtown. But
the public-private partnership would increase the agency’s commitment to the
SORTA cautioned that bus service will not be affected in any way by the commitment.
It’s unclear whether SORTA’s assurances will be enough to
sway Cranley, Mann and Flynn. If Cranley threatens to veto a
continuation of the streetcar project, both Mann and Flynn would likely
need to vote in favor of the streetcar to overcome a veto and restart the project.
The streetcar project is currently on “pause” while KPMG,
an auditing firm, reviews completion, cancellation and operating costs.
City officials expect to receive the audit late Tuesday or early
Wednesday, with a council vote scheduled for Thursday.Updated at 3:23 p.m. with details from Mayor John Cranley’s press conference.
by German Lopez
Big week for streetcar, council OKs interchange funds, emergency jobless aid to expire
Major events for Cincinnati’s streetcar project this week:
Today, supporters will turn in petitions to get the issue on the
ballot; late today or early tomorrow, KPMG will turn in audit of the
project’s completion, cancellation and operating costs; tomorrow,
council will take public comment on the project at 1:30 p.m.; and on
Thursday, council will debate and make the final decision on the streetcar. Other streetcar news:• Mayor John Cranley is asking streetcar opponents to speak up during the public comments section of Wednesday’s council meeting.• Supporters collected more than 9,000 signatures
to get the streetcar project on the ballot. Nearly 6,000 signatures need to be
verified to allow a vote in the coming months.
City Council’s budget committee yesterday advanced funding
for the $106 million uptown interchange project at Martin Luther King
Drive and Interstate 71. The capital funding set by council will be
backed through property taxes, which, according to the city
administration, will prevent the city from reducing property taxes in
the future as originally planned. Still, proponents of the project,
including a unanimous body of council, say the project is worth the investment; the
University of Cincinnati’s Economics Center found in a May 2012 study
that the interchange will generate 5,900 to 7,300 permanent jobs, $133
million in economic development during construction and another $750
million once the interchange opens.
Congress appears ready to pass a bipartisan budget deal
that will not extend emergency benefits for the long-term unemployed
through 2014, which could leave more than 36,000 unemployed Ohioans
behind in December and 128,600 Ohioans without aid through 2014. The
emergency benefits were originally adopted by Congress to provide a
safety net for those worst affected by the Great Recession.
Conservatives, touting the $25.2 billion annual cost, say the economy
has improved enough to let the costly benefits expire, but liberals,
pointing to the high numbers of long-term unemployed, say the benefits
are still needed and would help keep the economy on a stable recovery.The Cincinnati area’s economy could overtake the Cleveland area in 2015.Six men were taken into custody after a SWAT team
responded to a home and engaged in a gun battle that left a
three-year-old critically injured.A Union Township trustee says he can’t believe Chris Finney would
hurt his credibility for a $850-a-year tax break to open a law firm in Clermont County.
As a member of the Coalition Opposed to Additional Spending and Taxes,
Finney repeatedly spoke against tax breaks for businesses in the past.Medicaid expansion supporters announced yesterday that
they’re no longer pursuing a ballot initiative after actions from Gov.
John Kasich and the Ohio Controlling Board effectively enacted the
expansion, which taps into federal funds to expand Medicaid eligibility
to 138 percent of the federal poverty level.The Kasich administration expects to hand out education
grants from the “Straight A” fund on Wednesday in an attempt to reward
innovation at the state’s schools. The grants will go to more than 150
of Ohio’s 614 school districts, according to state officials.Someone hacked The Cincinnati Enquirer’s online streetcar polls.
The Mega Millions jackpot hit $586 million yesterday.A new study finds “blind as a bat” isn’t blind at all.Watch giraffes clash in a surprising, epic one-on-one:Follow CityBeat on Twitter:• Main: @CityBeatCincy • News: @CityBeat_News • Music: @CityBeatMusic • German Lopez: @germanrlopez
by German Lopez
Property taxes to remain at current rate as a result of project
City Council’s Budget and Finance Committee on Monday
unanimously agreed to allocate $20 million in capital funding for the
$106 million interchange project at Martin Luther King Drive and
The funding will be backed through property taxes, which, according to the
city administration, will prevent the city from
lowering property taxes in the future as originally planned.
Councilman P.G. Sittenfeld argued the focus should be on the project’s economic potential, not its possible impact on property taxes.
“If the city stopped spending money and stopped investing
in things, indeed people’s taxes would go down, but I don’t think it’s a
very fair frame to think about making this very important investment,”
But Councilman Chris Seelbach said the public should know the full effects of the project.
“Believe me, I support this, and I support this through
the property tax, but I just don’t want us to be able to pass this
without saying what it is,” he said.
Council members said they support the interchange project because
of the positive economic impact it will have on the uptown area, which
includes the University of Cincinnati and surrounding hospitals.
According to a May 2012 study from the University of
Cincinnati’s Economics Center, the project will produce 5,900 to 7,300
permanent jobs. The same study found the economic impact of the project
will reach $133 million during construction and $750 million once the
interchange opens, which would lead to higher tax revenues.
The city is carrying roughly one-fifth of the cost for the
interchange project. The rest will be financed through the state and
Ohio-Kentucky-Indiana Regional Council of Governments.
by German Lopez
Feds won't extend streetcar deadline, streetcar closer to ballot, study backs housing projects
The Federal Transit Administration told Mayor John Cranley
and streetcar supporters that it won’t extend its Dec. 20 deadline for
federal grants funding roughly one-third of the $132.8 million street
project. Without the federal grants, the project would likely die
because local officials say they are not willing to make up the loss with local
funds. That means the city has until Friday to decide whether to
continue the project — a decision that could come down to City
Council’s swing votes, Kevin Flynn and David Mann, and whether private
contributors agree to pay for the streetcar’s annual operating costs over the next three
decades.Meanwhile, streetcar supporters say they have enough
signatures to get the streetcar on the ballot. But without the federal
funds, a public vote might not be enough to save the project since the charter amendment only calls for using funds allocated as of Nov. 30, 2013.
While some City Council members might vote to rescind
support for state tax credits going to a supportive housing project in
Avondale, a study commissioned by the group in charge of the project
found similar facilities in Columbus don’t harm neighborhoods in which
they’re located. The study, conducted by two independent groups, found
crime continued to increase in most areas surrounding five supportive
housing facilities, but the increases were roughly the same as or less
than demographically similar areas in Columbus. Researchers
were also told in numerous interviews with Columbus residents that the
facilities had a positive effect or no impact on the area. CityBeat covered the controversy surrounding the Avondale facility in greater detail here.Hamilton County’s shrinking government might sell off
several downtown buildings to accommodate the size reduction. The
buildings could be converted to condominiums or hotels to appease high
demand for downtown residential space.
Despite previously criticizing tax breaks for Cincinnati
businesses, Chris Finney of the Coalition Opposed to Additional Spending
and Taxes (COAST) will receive tax credits to open his own law firm in
Clermont County on Jan. 1. Addressing the so-called heroin epidemic is a top priority
for Ky. officials in 2014. Drug overdose deaths in Kentucky have
quadrupled since 1999, putting Kentucky’s numbers above every state
except West Virginia and New Mexico, according to a study released in
November.Some Ohio wildlife officers wrongfully
hunted deer while on the job, according to the state’s inspector
general.Ohio gas prices dropped in the last work week before Christmas.The Mega Millions jackpot could break last year’s record $656 million prize.A video game might help diabetics control their blood sugar by putting them through a genuine workout.Follow CityBeat on Twitter:• Main: @CityBeatCincy • News: @CityBeat_News • Music: @CityBeatMusic • German Lopez: @germanrlopez
by German Lopez
Streetcar gets path forward, redistricting reform under works, federal budget deal approved
In what could be another chance of survival for the $132.8 million streetcar project, Mayor John Cranley on Thursday announced he's willing to continue the project if private contributors cover annual operating expenses that would hit an already-strained operating budget. Although Cranley gave private-sector leaders and streetcar supporters only one week to get a legally binding plan together, Eric Avner of the Haile Foundation said he is quite confident that private contributors could pull together some assurances for the 30 years in operating expenses in the short time span. The potential operating costs have long been a concern for opponents of the streetcar project, even though supporters insist that they would be more than made up by the economic development spurred by the streetcar.Commentary: "Cincinnati's Impoverished Continue to be Underserved and Undercovered."A constitutional review panel seems to agree on a few key points regarding redistricting reform, which could fix a system that's long been abused by politicians on all sides of the aisle to give their political parties an advantage during elections. The panel agreed to create a seven-member board that would redraw Ohio's congressional and legislative districts after the next census is taken in 2020, but it's undecided how much power the minority party should hold on the board. In the last round of redistricting, Republican leaders redrew Ohio's political maps to deemphasize demographics that typically support Democrats and provide stronger spreads for demographics that typically support Republicans. CityBeat covered the issue and its potential impacts in greater detail here.House Speaker John Boehner, a Republican, was the only federal legislator from the Cincinnati area to approve a budget deal that will avoid the threat of future government shutdowns. The deal replaces some of the controversial, blunt budget cuts known as "sequestration" with revenue from hiked fees and savings from cuts elsewhere. Reps. Steve Chabot and Brad Wenstrup, both Republicans from Cincinnati, voted against the deal because it makes cuts over a long period of time. But many economists agree long-term cuts are necessary to avoid the negative effects of budget cuts on today's already-weak economy. The Washington Post ran through the budget deal in further detail here.Weigh in on the Eastern Corridor project here.An Ohio House bill would eliminate the license requirement for carrying a concealed handgun in the state.Health Care Access Now, which helps low-income people in Ohio and Kentucky get health care, obtained a $600,000 grant that could reach 4,500 more patients in the Cincinnati area.Drug abusers might be intentionally injuring their pets to obtain painkillers.Expect more snow tonight, according to The Weather Channel.The University of Cincinnati filed a lawsuit against Crayola
that claims the toy company uses technology invented and patented by UC
without the university's permission.A former Miami University president is now warning of the potential issues caused by recruiting too many wealthy, out-of-state students.A public memorial will be held for William Mallory Sr., a prominent
local politician and ex-Mayor Mark Mallory's father, at the Cincinnati
Museum Center on Sunday. RSVP here.The Cincinnati Parks Foundation received a $1.5 million gift from the Anderson Foundation to underwrite the pavilion in Smale Riverfront Park.A climatologist argues nuclear power is the only way to curb global warming.Scientists created a pen that allows doctors to 3-D print bones right onto patients.Follow CityBeat on Twitter:• Main: @CityBeatCincy • News: @CityBeat_News • Music: @CityBeatMusic • German Lopez: @germanrlopez
by German Lopez
Streetcar announcement today, streetcar decision nears, interim city manager appointed
Mayor John Cranley, Councilman Kevin Flynn and four union representatives from the Fraternal Order of Police, Firefighters Local 48, AFSCME and CODE will make a “major announcement” regarding the streetcar project today at 9 a.m., according to the mayor’s office. Local 12 reported last night that the announcement will be an offer from a private contributor to underwrite the streetcar’s operating costs for 30 years, but Councilman Chris Seelbach tweeted that the rumor is “not true.” If the report checks out, it could significantly increase the streetcar project’s chances of survival by alleviating a major budget concern. (Update: The announcement wasn’t as expansive as stated by Local 12, but Cranley said he’s open to private contributions. Read more here.)Flynn and Vice Mayor David Mann could decide the fate of the streetcar project by Dec. 20, a deadline set by the federal government for up to $44.9 million in grants funding roughly one-third of the project. It’s a precarious position for Flynn, who in 2009 and 2011 campaigned in support of the project but completely changed his position during his 2013 campaign. Both Flynn and Mann say they will only support the project if the costs of cancellation are close to the costs of completion, but Flynn says he’s also concerned about the costs to operate the streetcar. Read more about the two council members and their pivotal roles here. City Council yesterday appointed Scott Stiles as interim city manager, but only after heated debate over Stiles’ compensation package left three council members voting “no.” The package gives Stiles a raise if he isn’t appointed as permanent city manager and returns to his previous position as one of two assistant city managers, which some council members called unfair to other city workers, including the other assistant city manager, who wouldn’t get comparable pay increases. Council members estimated the search for another city manager will take six months. Former City Manager Milton Dohoney is among five final candidates for the city manager job in Dallas.The Charter Committee, Cincinnati’s unofficial third political party, yesterday picked Colin Groth as its new leader.Number crunchers will release a preliminary financing plan for the $2.5 billion Brent Spence Bridge project by the end of the month, according to Ky. Gov. Steve Beshear. The plan will include a mix of federal funding, state funding and tolls, Beshear explained. Ohio, Kentucky and federal officials largely agree the project is necessary to fix the functionally obsolete bridge, but the project stalled over the years as Northern Kentucky officials resisted using tolls for funding.More than 31,000 Ohio students are using private-school vouchers this year, up 4,600 from the year before. Supporters say the vouchers allow more Ohioans to attend otherwise inaccessible schools, but opponents argue the vouchers effectively siphon money away from the public school system.The new federal budget deal received support from Republican Speaker John Boehner, but Republican Reps. Steve Chabot and Brad Wenstrup, both from Cincinnati, say they’re unsure which way they’ll vote. The deal increases spending levels established after across-the-board cuts known as “sequestration”; the increased spending is balanced out by cuts elsewhere and hiked fees. The Washington Post gave a succinct rundown of the deal here.Ohio, Kentucky and Indiana are among the least healthy states in the nation, according to a report from the United Health Foundation. Ohio legislators yesterday approved an expanded “Move Over” law that “requires motorists to slow down and, as conditions permit, shift to an adjacent lane when approaching construction, maintenance and public utilities commission vehicles that are parked on the roadside with flashing, oscillating or rotating lights,” according to the Ohio Department of Transportation. Previous law only requires slowing down and shifting lanes when approaching police and other emergency vehicles, including tow trucks.The Ohio House approved a bill that could give student trustees voting power on public university boards, which could allow some students to help set tuition levels.An anonymous $3 million gift created a scholarship fund for University of Cincinnati engineering students.Here are the nominees for the 2014 Cincinnati Entertainment Awards.OpenTable ranked Cincinnati restaurant Orchids at Palm Court as the seventh best in the nation for 2013. Cincinnati-based Boca also made the top 100 list.Miami University and Cincinnati will host the 2016 NCAA hockey tournament.The coldest place on Earth — in Antarctica, obviously — can reach -135.8 degrees Farenheit.A one-way, manned mission to Mars got closer to reality after Mars One announced a deal with Lockheed Martin and SSTL to develop technology to colonize the planet by 2025.Follow CityBeat on Twitter:• Main: @CityBeatCincy • News: @CityBeat_News • Music: @CityBeatMusic • German Lopez: @germanrlopez