P.G. Sittenfeld – Page 2

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.

Additional legal action may come from citizens trying to block today’s action by council that prohibits citizens from placing the matter on the ballot for a third time. Outside of that, both CAF and Prus appear poised to file lawsuits against the city for breach of contract.

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.

The Cincinnati Enquirer has also changed their position in recent weeks calling on the new mayor and council to finish the project.

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.

Each of the 11 ordinances squeaked by with a 5-4 majority – including Councilman Christopher Smitherman (I), who is currently being accused of having a conflict of interest that should prevent him from either voting or engaging in official discussion on the project. Here is what each of the ordinances would do, if passed on Wednesday:

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.

In Wisconsin, Talgo just recently filed a second lawsuit for $65.9 million against the State of Wisconsin after it canceled its inter-city rail project. In addition to that, Talgo has already been awarded $40 million as a result of the state backing out of its contract. The total contract amount, meanwhile, was only worth $47.5 million.

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.

Already, Sittenfeld and The Enquirer have switched their stance on the matter and have encouraged the mayor and city council to finish the project.

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?