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City manager wants more money for streetcar; Council decision not expected Wednesday

City of Cincinnati

Updated 4/17/13:

Cincinnati Council's Budget and Finance committee will hold a public hearing on the streetcar project April 29 at 6 p.m.

"Cincinnatians for Progress" released this statement on the streetcar.

Original story:

It is unlikely Cincinnati City Council will to vote today on the city manager’s request to increase funding for streetcar construction.

City Manager Milton Dohoney sent a memo to Mayor Mark Mallory and Council Members late Tuesday asking for an additional $17 million for the project.

So far there is no ordinance requesting the additional money identifying where those funds would come from.  Also the Budget and Finance Committee would have to consider the item first before a full Council vote.  The group has no meeting scheduled today.

Cincinnati officials and others have been reviewing streetcar financing since the city opened bids for the civil construction contract for the project on February 8.  That package included the tracks for the streetcar and the necessary shelters along the route from The Banks to Over-the-Rhine.  The memo said those bids came in significantly higher than anticipated, resulting in a project gap exceeding $20 million.

After reviewing that information, the city was able to trim $5.3 million dollars from the project.  But officials also agreed the resulting budget gap cannot be closed using project cuts alone.

“After the re-engineering of the scope and budget saving $5.3 million, it is clear the project will need more funding,” Dohoney’s memo said.  “We continue to work with our federal partners to identify options.  However, it is equally clear that the longer we wait to get the construction under contract, the more it will cost.  This has been seen in the delays from the two referenda, the utility cost issues, and the funding changes and subsequent route changes that have occurred with this project.”

The memo said “time is money.”

Officials said re-bidding the project is not a good option.  They said that could result in even higher bids than those received initially.  One participating firm stated it would not re-bid the project.

“Re-bidding the project would require several months, at a minimum, just to re-conduct the procurement process,” the memo stated.  “During that time, the city would have to wait to order certain critical materials in the project, such as special trackwork, that come with already long lead times.”

The city also missed an April 8 deadline that would have allowed a contractor to proceed with work on the project.  The memo said since that date has passed, the city cannot guarantee that the lowest bidder, or any of the bidders, will wait indefinitely nor be able to honor their submission bid. 

The longer the city waits to issue a construction contract, the higher the risk the city will miss milestones set by federal grants and could find itself in violation of those agreements.

Cincinnati has already ordered five streetcars from a company in Spain at a cost of more than $20 million.  Mayor Mark Mallory recently visited that facility in February about the vehicles for the project. 

Streetcar opponents, including the Cincinnati NAACP, have said for years city officials have been understating the project’s cost. 

The original plan for the streetcar called for the system to be operating this year.  Now that date has been pushed to 2015 at the earliest and more likely to 2016.