Mayor Cranley Pitches Funding Plan For Operating Streetcar

Jun 16, 2015

Credit Provided/City of Cincinnati

Cincinnati Mayor John Cranley said Tuesday he has a plan to pay for streetcar operations if City Council approves the "management option" presented by the Southwest Ohio Regional Transit Authority (SORTA) on June 5th.

Cranley outlined his plan in a memo to city council members, who are scheduled to decide the issue Wednesday.

Cranley has said he favors the "management option," which SORTA said will cost at least $4.7 million.  That proposal would have a private contractor manage the streetcar system with some current SORTA workers, who are members of the Amalgamated Transit Union (ATU), operating the system.

An alternative "turn-key option" would have the private contractor manage the system and hire the operators and other employees.  SORTA said that plan would cost $4 million.

The city had estimated streetcar operations would be about $4.2 million annually.

Cranley is proposing to take $850,000 from the streetcar construction contingency fund and use it to fund streetcar startup costs.  The contingency fund now has about $1 million left, but there is still about year of construction before the system is complete.  Cranley wrote in the memo that $850,000 from a plan last year to pay for streetcar operations was "reprogrammed for startup costs."  He said if that money can be replaced the system can be operated without a deficit.

Cranley said another alternative is to ask the Haile Foundation "to honor its commitment made in late 2013 and provide $900,000 annually for streetcar operations beginning a year earlier, in Fiscal Year 2016 instead of Fiscal Year 2017."

Cranley also said a combination of contingency money and Haile funds could be used to pay for streetcar start up costs.   

The mayor had said he would veto the "management option" if it cost more than $4.2 million.  His memo seems to present an alternative to a veto.  He also had said he would veto the "turn-key" option, but there appears to be little City Council support for that alternative.

The city's revenue estimates have been changing and decreasing because SORTA reduced anticipated fare revenues and sponsorship estimates.

At least one council member disagrees with the Mayor's plan.

"Taking $850,000 from the construction of the streetcar will not only impact the completion of the system," said Council Member Chris Seelbach in a text message.  "But may well violate our grant agreements with the federal government, which the Mayor is fully aware of."

In the end, SORTA will have to approve one of the options, and it can only proceed with a proposal that it has enough money to pay for.  That funding comes from the city.

The Major Transportation Committee will meet Wednesday morning at nine to discuss the issue.  The full Council is expected to vote later that afternoon.