December 19, 2013

Cincinnati’s SORTA may take on streetcar operating costs

The Southwest Ohio Regional Transit Authority’s (SORTA) Board of Trustees expressed its willingness to assume responsibility for Cincinnati Streetcar operating costs.

SORTA’s willingness is based upon assurances from the Cincinnati business and philanthropic communities they will work with SORTA in public-private partnership to secure the funds required to cover the short- and long-term operating costs of the streetcar to the extent other sources of streetcar revenue, such as fares, advertising and sponsorships, are inadequate.

SORTA voted on Tuesday, at its regularly scheduled meeting, to “endorse the concept of assuming responsibility for the operating costs associated with the Cincinnati Streetcar.” SORTA emphasized that bus service will not be affected by this decision. In addition, several viable financial models have been identified by SORTA’s consultant to fund projected streetcar operations and were discussed at the board meeting.

According to SORTA officials, the Federal Transit Administration (FTA) has agreed to serve as a resource for assisting in the development of a viable operating funding model and sharing best practices for streetcar operations in other cities. The agency also announced that a $1 million commitment has been received from The Carol Ann and Ralph V. Haile Jr. US Bank Foundation to seed an operating reserve fund.

“For Greater Cincinnati to successfully develop a truly regional approach to public transportation it is imperative that the Cincinnati Streetcar project proceeds,” said Karl Schultz, vice chair of SORTA’s board. “SORTA is willing to explore assuming responsibility for the streetcar’s future operating costs and we ask the city get the project moving again and work with us and the business and philanthropic communities to quickly move to a viable solution.”

“We believe this is a viable solution for our region. The city will not be responsible for the future operating costs of the Cincinnati Streetcar,” Terry Garcia Crews, CEO and GM of Metro, said. “Our business and philanthropic leaders have demonstrated leadership, and we are confident they will deliver. Importantly, because of SORTA’s involvement, discussion of the Cincinnati Streetcar can now be considered in the context of this region’s comprehensive public transit needs.”  

Speaking on behalf of the business and philanthropic communities, Eric Avner, VP of the Haile Foundation, said: “We are committed to seeing the streetcar through to completion and beyond. SORTA has stepped up and is more than qualified to serve in this role. This is another great example of community collaboration helping to move the region forward.”

The concept approved by SORTA at its board meeting requires further refinement and collaboration between the city, its business and philanthropic communities and SORTA. The essential elements include:

1. SORTA will not permit operation of the streetcar to adversely impact the existing Metro bus system.

2. The city will resume construction of the streetcar and will remain responsible for completion of the construction project as required under existing grants, plans and contracts; SORTA’s role in the construction phase will not change from the current status.

3. At a yet-to-be-identified trigger point (likely substantial completion of construction), SORTA will assume all responsibility for providing operating funds necessary to operate the streetcar; the city will not be responsible for any streetcar operating costs.

4. All streetcar assets will be conveyed to SORTA upon completion of construction or some other mutually-agreed upon date.

5. The city will remain a party to all utility relocation agreements and will remain liable for any related litigation.

6. The Cincinnati business and philanthropic  communities will work with SORTA and the city to provide adequate and firm financial assurances and guarantees to fund operation of the streetcar to the extent other sources of streetcar revenue, such as fares, advertising, sponsorships, etc., are inadequate.

7. The Cincinnati business and philanthropic communities will work with SORTA to establish a “Streetcar Advisory Committee” or similar oversight group to assist SORTA in the implementation and operation of the streetcar.

RELATED: "Streetcar Projects Continue Breaking Ground Despite Uncertain Federal Future"

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