Streetcar Supporters Gather Outside City Hall to Announce the Start of a Charter Amendment Petition Drive. Photograph by John Yung for UrbanCincy.
In the latest twist of the ongoing Cincinnati Streetcar saga, the Federal Transit Administration (FTA) Administrator, Peter Rogoff, sent a piercing letter to Mayor John Cranley (D) and all nine members of City Council informing them that the FTA is planning to act quickly on what they perceive as a material breach of contract.
“The Cincinnati City Council passed eleven ordinances on December 4, 2013, that have the effect of suspending progress on the Cincinnati Streetcar Project, an unprecedented action to suspend a federally funded transit project while it is currently under construction and after the City committed approximately $116 million in expenditures and contractual agreements,” Rogoff wrote.
“The Council’s action is a material breach of the FTA Master Agreement and the separate Grant Agreements executed between FTA, the City, and the Southwest Ohio Regional Transit Authority to fund the project. As such, I write to inform you that unless this action is reversed and I receive not later than midnight on December 19, 2013, unequivocal assurances that the City will proceed with the project to completion on the current FTA-approved schedule, FTA will immediately terminate all of its grant obligations for the project and initiate a debt collection action to recover money owed.”
Strong words. It is no wonder Mayor Cranley jumped out in front of the media early on Facebook Friday morning to spin the letter as a positive development for his administration.
But what it also means is that the City of Cincinnati must complete its third financial audit of the project, with KPMG, no later than that date and should make a decision FTA finds satisfactory in order to avoid the loss of $40 million from the Federal government and debt collection on another $5 million of Federal money already spent.
“The City understood FTA’s position before it decided to suspend the project,” Rogoff emphasized with regard to ongoing claims by some streetcar opponents, contrary to what FTA has directly told them, who believe the $45 million in Federal funding could be reprogrammed to other area transportation projects.
Those activities happened on Friday and continued to evolve over the weekend. Meanwhile, the group fighting Mayor Cranley on this matter held a press conference on the steps of City Hall Monday morning announcing the start of a petition drive that would place a Charter amendment forcing the administration to finish the project according to its contractual agreements.
Streetcar supporters will need to gather 5,970 signatures in order to have the Charter amendment placed on the ballot, but say they are striving to collect 12,000 within five days in order to send a message to City Hall. Should they get the necessary signatures, it would be placed on the ballot for voters within 60 to 120 days according to state law.
“We are confident that this [the city’s ongoing financial audit] will show that the cost to stop the streetcar is more than the cost to continue,” Ryan Messer, unofficial spokesman for the ‘We Believe in Cincinnati’ organization, told the crowd. “We hope at that point City Council will remove the pause button and hit the restart button, so we can continue to see the growth and development that has already come as a result of the Cincinnati Streetcar.”
At the same time, Mayor Cranley has gone on the record and stated that he would potentially veto any majority vote by City Council to restart construction and complete the project. Such a move would require the Charter amendment or a 6-3 super majority vote of City Council to override the mayor’s veto.
Following Monday’s press conference, the ‘We Believe in Cincinnati’ organizers say they will host a signature gathering training session tomorrow evening at First Lutheran Church at 1208 Race Street in Over-the-Rhine from 6pm to 8pm. Organizers say all are welcome to attend and that they expect hundreds to show up for what will be the first of a five-day blitz to collect thousands of signatures.
In order to get to the super majority vote, streetcar supporters need both Vice Mayor David Mann (D) and Councilman Kevin Flynn (C) to side with the four existing council members supporting the project. While both Mann and Flynn have stated, and campaigned on the fact, that they would consider the facts and figures before making a decision, both have shown indications that their minds may already be made up even before the latest audit is completed.
“I’m not against the streetcar because I’m against streetcars,” Flynn, who prior to being elected had been a prominent streetcar supporter, told The Enquirer on Monday. “I’m against it because I don’t think it makes economic sense for the city right now. I don’t think the numbers are going to come back supportive.”
Whether Flynn and Mann were sincere in saying that they would reasonably consider the facts and figures associated with taking “unprecedented action” to cancel a project already under construction, or not, is yet to be seen. But in either case it appears that streetcar supporters have a tough road ahead of them.
Today was the day that would show the true colors of those members of council freshly sworn into office. They were faced with a decision of voting to continue and finish construction of the Cincinnati Streetcar project, or voting to pause and essentially cancel the project altogether.
A shifting landscape continued to alter the debate and make the whole vote more intriguing, and thus more revealing. Yesterday a confidential document was leaked, that courts had ordered remain confidential, and showed that city attorneys felt the city might lose its case against Duke Energy for the cost of relocating utilities along the streetcar line. Many suspect the document was leaked by Mayor John Cranley’s (D) administration. Such a legal loss would cost the City the $15 million it currently has set aside in escrow.
On Monday, the Haile/U.S. Bank Foundation had offered up private money to fund the independent financial review of the project, which was then matched by an anonymous contribution on Wednesday that would also cover the costs of construction to continue while that study was conducted. Both offers were turned down by Mayor Cranley and the five members of City Council who ultimately voted to pause the project indefinitely.
Acting City Manager Scott Stiles also informed City Council that such an action to “pause” the project would cost the City between $2.6 million to $3.6 million per month due to contractual obligations – a number that exceeds the total amount it costs to merely continue construction activities.
An official vote to continue or cancel the $133 million project is expected to come following the conclusion of the financial review.
Some city officials believe the move will result in the Federal Transit Administration pulling $40 million in unspent money from the project and beginning debt collection on the $5 million already spent by the city – thus increasing the local cost share for city taxpayers. Others believe that the way in which the 11 approved ordinances have been written give the City a limited amount of time before the federal government acts.
During the hearing there were times that both Vice Mayor David Mann (D) and Councilman Kevin Flynn (C) seemed to be conflicted. They had both campaigned on their skepticism of the project, but vowed to carefully review the facts and figures associated with cancelling the project at such an advanced stage. Those promises, however, appear to have been not much more than lip service in order to appease their progressive base of supporters.
What actually happens next is anyone’s guess. A lawsuit has been threatened by a Cincinnati resident and attorney alleging Councilman Christopher Smitherman (I), who was one of the five voting against the streetcar today, has a conflict of interest and therefore has committed wrongdoing by voting or engaging in official discussion on the matter.
If streetcar supporters are successful at getting the matter put on the ballot, such an issue could be placed before voters as soon as 90 to 120 days following that motion. Although, it is expected that the Federal government could still pull their investment during that time regardless.
As politicians continue to bicker over Cincinnati’s $133M streetcar project after six years, Atlanta blazes ahead with construction of its own $69M streetcar project near Centennial Olympic Park. Image provided to UrbanCincy.
What makes the whole matter more startling is the apparent change of heart from the city’s powerful business community. Earlier today, the Business Courier reported that leadership at companies including Procter & Gamble, Frost Brown Todd, CBRE, Otto M. Buding Family Foundation, Haile/U.S. Bank Foundation, Greiwe Development Group, Grandin Properties, Blue Chip Venture, Jack Rouse Associates and Fifth Third Bank all expressed specific interest in either finishing the streetcar project or moving forward with a comprehensive regional rail transit system.
All this combined with the change of position by P.G. Sittenfeld (D), who is now in favor of finishing the streetcar project, have seemingly empowered the active pro-streetcar groups causing some to urge for a recall of Mayor Cranley. Recall election or not, streetcar supporters are stating the battle is not over after today’s expected vote.
Who knows what will happen next, but what happened this week defies logic. In a matter of just three days, the new mayor and council have undone all the work that has taken place over the past six years to get the streetcar project to this point. Some may call that rushed, chaotic and reckless, and we would be inclined to agree with those people.
We know many of our readers are very passionate about this issue and very much want to see the first phase of the streetcar not only completed, but eventually expanded city-wide in a manner that compliments regional rail and bus transit. We will be getting together at the Moerlein Lager House tomorrow from 5:30pm to 8:30pm for our monthly URBANexchange event, and we would love for you to join us and share your feelings and discuss what you think will or should happen next.
In what Nathaniel Livingston described as the most bizarre day at City Hall since now Mayor John Cranley (D) chaired over the Law & Public Safety Committee meeting shortly before the 2001 Race Riots broke out, City Council approved a confusing collection of 11 ordinances that will go for a final vote on Wednesday.
The confusion was due to a number of reasons. First, Mayor Cranley presided over the committee hearing, which does not normally take place as it is not the mayor’s role. Cranley then encouraged the committee to move forward with its proceedings before adopting any rules to govern the committee. Finally, Cranley then introduced 11 separate ordinances that had not been provided to the public or to the members of the committee, and instructed votes on each of them anyway.
Each of the 11 ordinances is slightly different, but each includes appropriations so that they cannot be challenged by referendum under state law. This goes against a campaign promise of Cranley and all incoming members of city council who stated over and over again that they respect the citizen’s right to referendum.
In the past, John Cranley, Amy Murray, Christopher Smitherman and Charlie Winburn have all talked about a “sacred” right to referendum, but appear to be opposed to one in this instance.
Item #201301490:SUSPENDING all spending and incurring of additional costs by the City of Cincinnati pursuant to construction and implementation of the Cincinnati Streetcar System in order to permit Cincinnati City Council to obtain an independent financial review of the total costs associated with continuation of the Cincinnati Streetcar System; and further REPEALING Ordinance No. 392-2013.
Item #201301491:SUSPENDING all spending and incurring of additional costs by the City of Cincinnati pursuant to its reimbursement agreement with Cincinnati Bell Telephone Company, LLC, related to construction of the Cincinnati Streetcar System in order to permit Cincinnati City Council to obtain a financial review of the total costs associated with continuation or suspension of the Cincinnati Streetcar System.
Item #201301492:SUSPENDING all spending and incurring of additional costs by the City of Cincinnati pursuant to its reimbursement agreement with Time Warner Cable Midwest, LLC, related to construction of the Cincinnati Streetcar System in order to permit Cincinnati City Council to obtain an independent financial review of the total costs associated with continuation or suspension of the Cincinnati Streetcar System.
Item #201301493:SUSPENDING all spending and incurring of additional costs by the City of Cincinnati pursuant to its reimbursement agreement with Level 3 Communications, LLC, related to construction of the Cincinnati Streetcar System in order to permit Cincinnati City Council to obtain an independent financial review of the total costs associated with continuation or suspension of the Cincinnati Streetcar System.
Item #201301494:SUSPENDING all spending and incurring of additional costs by the City of Cincinnati pursuant to its contract with CAF USA, Inc. related to design and fabrication of streetcars for the Cincinnati Streetcar System in order to permit Cincinnati City Council to obtain an independent financial review of the total costs associated with continuation or suspension of the Cincinnati Streetcar System.
Item #201301495:SUSPENDING all spending and incurring of additional costs by the City of Cincinnati pursuant to its contract with LTK Consulting Services, Inc. related to construction of the Cincinnati Streetcar System in order to permit Cincinnati City Council to obtain an independent financial review of the total costs associated with continuation or suspension of the Cincinnati Streetcar System.
Item #201301496:SUSPENDING all spending and incurring of additional costs by the City of Cincinnati pursuant to its contract with Messer/Prus/Delta Railroad JV related to construction of the Cincinnati Streetcar System in order to permit Cincinnati City Council to obtain an independent financial review of the total costs associated with continuation or suspension of the Cincinnati Streetcar System.
Item #201301497:SUSPENDING all spending and incurring of additional costs by the City of Cincinnati pursuant to its contract with Parson Brinkerhoff, Inc. related to construction of the Cincinnati Streetcar System in order to permit Cincinnati City Council to obtain an independent financial review of the total costs associated with continuation or suspension of the Cincinnati Streetcar System.
Item #201301498: AUTHORIZING the City Manager to take all steps necessary and proper to suspend construction and implementation of the Cincinnati Streetcar System in the most cost-effective and efficient manner possible, in the best interests of the public peace, health, safety and general welfare of the City of Cincinnati.
Item #201301499: AUTHORIZING the City Manager to take all steps necessary and proper to negotiate the suspension of the Intergovernmental Agreement Between the Southwest Ohio Regional Transit Authority and the City of Cincinnati related to the Cincinnati Streetcar System in the most cost-effective and efficient manner possible, in the best interests of the public, peace, health, safety and general welfare of the City of Cincinnati.
Item #201301500: AUTHORIZING the City Manager to take all steps necessary and proper to negotiate the suspension of the Cooperation Agreement for Relocation of Utilities between Duke Energy Ohio, Inc. and the City of Cincinnati in the most cost-effective and efficient manner possible, in the best interests of the public peace, health, safety and general welfare of the City of Cincinnati.
For reference, Ordinance No. 392-2013 repealed in the first item listed above is the ordinance that was passed by City Council last week requiring phase one of the project to be finished. The final kicker was a motion filed by Councilmembers Mann, Winburn, Smitherman, Flynn and Murray that stated:
Item #201301501: WE move that the City Manager immediately suspend all work related to the streetcar as permitted under existing contracts, and immediately begin an analysis of the costs of continuation versus cancellation.
This all took place a day after CAF, the firm manufacturing Cincinnati’s streetcar vehicles, stated that they have incurred great expenses for this project and intend to pursue full compensation for their work from the city.
Prus Construction has now also indicated that they will be greatly impacted by a decision to cancel the project and appear poised to file major lawsuits against the city.
Approximately 1,000 Streetcar Supporters ‘Line The Line’ on 12/1/2013
Construction Work at the Maintenance & Operations Facility on 12/1/2013
Construction Work Proceeds on the Streetcar on 12/1/2013
At the same time as all of this unfolded, the Federal Transit Administration (FTA) announced that they were freezing their $45 million investment, which they had signaled they would do and would move promptly to recoup all of their funds should Cincinnati move to pause or cancel the project, and were prepared to begin debt collection immediately on any money already spent. This news came with great concern for Councilmember P.G. Sittenfeld (D) who fears that the action from FTA may have negative impacts for the region’s bus system.
“I’m concerned about a path toward damaging the most basic of transportation needs,” Sittenfeld told the Business Courier on Monday. “I think this could eventually lead to harming bus service.”
What was also announced today during all the commotion was that the Haile Foundation offered to pay 100% of the costs for any study needed to study the finances of the project so that it could move forward. Had the new council accepted that offer, there would have been no need to appropriate funds with each of the 11 ordinances, thus eliminating the possibility of a citizen referendum.
The Haile U.S. Bank Foundation went on to say that canceling the project would cause the philanthropic organization “pause” and would force them to “reconsider whether the city can be a trusted partner.” The letter further stated that such reconsideration would affect their planned investments at Smale Riverfront Park, Music Hall, Findlay Market and other redevelopment projects.
Going against this offer to fund a financial study were Vice Mayor David Mann (D) and Councilmember Kevin Flynn (C) – both of whom campaigned on the promise to carefully consider the facts and figures associated with cancelling the project before making a decision. Insiders believe both will hold their line despite the flood of evidence suggesting a cancellation of the project would be a financial disaster for the City.
If one or the other were to switch their vote in light of this information on Wednesday, then the streetcar project would have a 5-4 majority on City Council and the matter would be settled. If they hold their line, it appears that a slew of lawsuits, potential referendums, injunctions and a potential recall election could all transpire over the course of 2014. Happy New Year!
The day ended after a nearly eight-hour council session that left many more confused than when they arrived. The standing room only crowd – where 68 of the 71 members of the public who spoke were in favor of the project – left dejected and feeling a bit hopeless facing a defiant mayor utilizing every trick to block any chance of a citizen referendum.
The thought is that should the project go to a referendum for a third time that it would win with voters for a third time. The prospects of huge and lengthy lawsuits, the loss of a $45 million federal investment, the destruction of the relationship with the federal government and private investors, and the fact that it is estimated it may only cost $400,000 more to just finish the project would not sit well with voters.
The question now is whether the facts and figures presented to date will be enough to sway either David Mann [david.mann@cincinnati-oh.gov] or Kevin Flynn [kevin.flynn@cincinnati-oh.gov], or will the Cranley Administration have the courage to allow a direct referendum on the matter?
There has never been a single anti-streetcar event that has gathered more than 20 people, but earlier today it was estimated that close to 1,000 Cincinnati Streetcar proponents gathered with green balloons at Washington Park to show their support.
Event organizers from Cincinnatians for Progress and We Believe in Cincinnati lined up the hundreds of supports for blocks – stretching from in front of Music Hall on Elm Street to north of Findlay Market, where streetcar tracks are currently being installed.
The event also came on the same day that the new mayor and city council were sworn into their offices, marking the first time an organized protest of hundreds took place on the first day for newly elected leadership. With a defiant Mayor John Cranley (D) and five of the nine members of City Council poised to pass a bizarre collection of ordinances in order to bypass any further public protest of their actions, it appears that legal fights are about to begin.
Also earlier today, Mayor Cranley and Councilmember Chris Smitherman (I) outlined exactly how they intend to make it all work to their favor. At the same time, reports surfaced of a potential conflict of interest for Smitherman due to his brother’s involvement with the $133 million streetcar project through Jostin Construction.
A majority of city council and the mayor himself have stated that they support the right to referendum, but their proposed legislative action would run counter to that. Whether or not they will allow Cincinnatians to vote on the streetcar directly for a third time, or be forced by the courts to do so, is yet to be seen.
The next big event will take place on Monday, December 2 at 4pm inside City Hall. City Council will hold a special hearing on the streetcar project at that time, and it is expected to be heavily attended by both supporters and opponents. Those who would like to attend are encouraged to arrive early. Those unable to attend that would still like to get involved can do so by donating to the Alliance for Regional Transit and by signing up to volunteer.
“Does it make any sense to lose our reputation with the federal government simply because we want to prove a political point,” Rob Richardson asked the boisterous crowd. “I’ll tell you what does make sense…it makes sense that we have to fight for a comprehensive transportation system so we can compete with cities all across this country and all across the world. That is the goal.”
“We measure greatest not by what we cut, but by what we accomplish.”
