The voter-approved sale of the city-owned Cincinnati Southern Railway to Norfolk Southern is now final with Friday's official closing of the deal.
President of the Board of Trustees Paul Muething said in a statement they received the $1.6 billion payment, plus $20 million in deferred transaction fees. The money will immediately be invested through a contract with UBS Financial Services.
The board-approved Investment Policy Statement indicates a goal to receive an average annual return of at least 5.5%, projected to generate about $55 million a year. The city will use the investment returns to pay for existing infrastructure maintenance, like health centers and street conditions.
"We want to thank the citizens of Cincinnati for their vote in support of the sale," Muething said in a statement. "This transaction gives us the ability to deliver transformative and perpetual value to the City and its citizens."
RELATED: Your questions about the railway sale, answered
City Council Member Anna Albi announced Friday the board has agreed, at her request, not to invest in firearm manufacturers as part of the actively managed portion of the portfolio.
"Cincinnati residents have made it clear that tackling the gun violence epidemic is a priority," Albi said in a statement. "I’m grateful to the Cincinnati Southern Railway (CSR) Board for committing that the City will not actively invest the proceeds of the sale in the firearm industry given the heartbreaking toll gun violence has taken on our community."
RELATED: How Cincinnati could spend the money from a potential Cincinnati Southern Railway sale
Several years ago, Cincinnati City Council asked the pension fund's Board of Trustees to divest from private prisons. The Board refused, saying it would be bad for the financial health of the fund.
The first returns from the investment are expected next year, in time for the fiscal year 2026 budget. City officials are currently working on the fiscal year 2025 budget.
You can see documents related to the Cincinnati Southern Railway investment policies at cincinnatisouthernrailway.org/public-information/
