Construction of the Cincinnati streetcar moved one step closer Wednesday with a 6-2 affirmative vote on three ordinances that will cover some of the project's $128 million first phase.

The ordinances, okayed by City Council's Budget and Finance Committee on Monday, approve the issuance of $64 million in bonds to cover planning and construction, which will cover the Downtown/Over-the-Rhine circulator and connection to the Uptown neighborhoods.

$11 million in bonds will be serviced by proceeds from the sale of the Blue Ash Airport, and $25 million would be serviced by tax increment financing (TIF) revenues resulting from increases in neighborhood property values. An additional $28 million in bonds will be serviced through City capital funds.

A reserve fund using additional proceeds from the sale of the airport will be established to cover debt service if either income tax or TIF revenues underperform.

Cincinnati's attempts to garner federal support have not been as successful as it had hoped, largely due to a perceived lack of local support. In February, the City narrowly missed receiving $60 million in federal Transportation Investment Generating Economic Recovery (TIGER) grants.

However, the City has been successful in garnering an additional $15 million in state (TRAC) funding and $4 million in Congestion Mitigation and Air Quality (CMAQ) funding, approved by the Ohio-Kentucky-Indiana Regional Council of Governments on Wednesday.

The City also has approved $2.6 million in local funding through the sale of its street lights to Duke Energy.

With nearly two-thirds of the project tentatively funded, streetcar proponents now are hopeful that they have a better chance of receiving up to $25 million in federal grants next month.


Borrowing against the future?

In discussions during Monday's committee meeting, Councilmember Jeff Berding voiced his concern that the City might be borrowing against a speculative future.

Though the Blue Ash funds were a reliable funding source, capital funds, which rely on income tax revenues, could be unreliable. TIF revenues that underperform could put the City on the hook, he said.

"I would view that as a cost the City cannot afford," Berding said.

Councilmember Chris Monzel agreed, adding that this TIF money could be applied to other projects, such as a much-sought District 3 police facility in East Price Hill, a new fire station for Westwood, the Waldvogel Viaduct, or even infrastructure improvements and housing at .

"There is some pause here about how we're funding this," Monzel said. "That brings me great concern and pause. And we're not even talking about the operating costs. It's going to have to come out of the general fund."

Yearly operations of the streetcar are estimated at about $3 million a year. An operations plan, being funded by nearly $2.6 million that council approved last month, is still in the works.

And although the general fund has not been officially named as a source of operating funds, neither have any other sources.

According to City Budget Director Lea Ericksen, fares, advertising, station sponsorships, and the creation of a special improvement district along the route are all being explored.

Monzel called that "an uncertain public subsidy", and an irresponsible move in a time of economic distress.

Both Monzel and Berding believe that the City should have had an operations plan before committing to bonds.


Legal action threatened

The "elephant in the room", according to committee chair Laketa Cole, was the recent revelation that Councilmember Chris Bortz ignored an advisory opinion by the Ohio Ethics Commission that he should recuse himself from all deliberations and voting on the project.

Bortz has a family interest in Towne Properties, which has been selected as preferred developer of Uptown Commons, a $100 million apartment, commercial, office and hotel project on Calhoun Street in Clifton Heights.

Local lawyer Tim Mara spoke to that concern, backing up a letter he sent last week to members of City Council saying that he was prepared to take the matter to court if Bortz proceeds "in reckless disregard for the law".

"I'm puzzled," Mara said. "I cannot reconcile that opinion with the opinion of the City solicitor on Laketa Cole's votes relating to the St. Aloysius project."

But City Solicitor John Curp said that council bears no responsibility for the matter. It's up to the individual – Bortz – to determine the appropriate conduct.

Curp has sent a four-page letter to the Ohio Ethics Commission asking them to decide the matter once and for all.

Mara said that the integrity of the vote itself is more important than the outcome.

"If his votes turn out to be critical, taxpayers will forever wonder if he voted in the best interests of the City, or his family business."


Not tippy-toeing

The vast majority of Monday's public speakers voiced their support for the project, citing the project's ability to attract and retain young people and its catalytic effect on an already burgeoning Downtown and Over-the-Rhine.

Cole, who voted in favor of the bond package, said that the streetcar issue is one of the few issues she's seen that has involved such a diverse group of people – and young people.

"A lot of times when you hear about our young people, you hear, 'Where are they at?'" she said. "They have been up front, and I hope that continues."

Councilmember Cecil Thomas, who also voted in favor of the bond package, agreed, adding that the project is a "bold move" for growing the City and the region.

"I'm a visionary," he said. "I truly believe...if not now, when? If not us, who?"

If we don't build it, Thomas said, we'll be back in the same situation ten years from now.

"We didn't get to where we are now by tippy-toeing," Thomas said. "Cincinnati is on the verge of accomplishing some very great things."

Also on Monday's calendar was a motion by Monzel to cease and desist all streetcar activity. Cole filed that motion without a vote, saying it already had been acted upon at the April 19 meeting.

Tom Luken, former Cincinnati mayor, councilmember, and congressman, said he plans to circulate petitions to put construction of the streetcar on the November ballot.

Previous reading on BC:
Streetcar tentatively awarded $15M, other projects recommend (3/22/10)
CFP celebrates, plans to continue (12/14/09)
Port study would examine impacts of fourth Mill Creek rail main (9/30/09)
Ballot language requiring rail vote passes out of committee (9/2/09)
Monzel asks Cincinnati to cease and desist all streetcar activity (8/10/09)