Cincinnati and the Carol Ann and Ralph V. Haile, Jr./U.S. Bank Foundation have reached agreement on streetcar operations funding. The 8-page deal released Thursday spells out the terms for the foundation providing $900,000 to help with streetcar operating funds for the first two years.
Streetcar operations are expected to cost approximately $4.2 million in years one and two. The first year of service is scheduled to begin in September.
Under the agreement, City Council commits to provide a certain level of money in order to receive the Haile funds.
The city is committed to providing $1.5 million in general fund parking revenue, another $680,527 for year one, and $518,888 for year two. As long as the council honors its part of the deal, then the Haile Foundation will provide its $900,000.
The Haile Foundation pledged $900,000 per year to help with streetcar operations for the first 10 years back in December 2013, when City Council was deciding whether to cancel the project. This current agreement covers the first two years and then officials will have better projections for the remaining eight years.
“The start of streetcar operations is subject to budget uncertainty attributable to the wide range of reasonable projections for streetcar revenue,” City Manager Harry Black wrote in a memo. “The Administration has worked diligently to develop a conservative set of budget projections that, together with added confidence in an undisputed payment by Haile, will allow it to submit to Council a $4.2 million budget for streetcar operations and maintenance costs for the first year of revenue service.”
Besides the city’s money and funds from the Haile Foundation, the budget relies on streetcar fares, advertising and sponsorships and naming rights.
“If actual streetcar revenue is less than budget projections, the City has reserved its right to institute cost-saving measures such as service cuts in order to balance the budget — without impacting Haile’s payment obligation,” Black wrote. “If streetcar revenues exceed budget projections, the ‘surplus’ will be applied on a dollar-for-dollar basis to reduce the amount of additional City funding required to balance the streetcar budget.”
City Council must approve the agreement with the Haile Foundation. It must also approve an ordinance for streetcar funding for the first year. Those votes could take place next week.