CINCINNATI — The city of Cincinnati might have found a solution to cover at least some of the projected shortfalls in streetcar funding, according to a memo issued Thursday.
In the memo, City Manager Harry Black outlines a new agreement between the city and the Carol Ann and Ralph V. Haile/U.S. Bank Foundation, that would guarantee up to $900,000 per year toward streetcar operations.
The funding is intended to be used when necessary, but the agreement also mandates Black recommend the city accommodate for the remaining shortfalls of $680,527 for the streetcar’s first year of operation and another $518,888 for its second year.
Black attributed the agreement, initially discussed in late 2013, to “budget uncertainty attributable to the wide range of reasonable projections for streetcar revenue.”
An independent analysis found earlier this year that the streetcar could see as much as a $1.4 million shortfall in its first year of operation.
City Council approved last year an annual operations contract of $4.2 million with Transdev, Inc., to be brokered and managed by the Southwest Ohio Regional Transit Authority, which also runs the Cincinnati Metro bus system.
In addition to Haile’s commitment, a parking plan approved in 2014 — which consisted of raising meter rates and increasing metered time downtown and in Over-the-Rhine — is also expected to generate $1.5 million in funding for streetcar operations, in addition to revenue generated through an opt-in tax incentive program that allows OTR and Downtown property owners applying for a real property tax abatement to allocate a certain percentage of those funds toward streetcar operations.
Advertising and naming rights for the streetcar — which have yet to be negotiated — are estimated to generate roughly another $450,000 toward the $4.2 million.
Fares for the full first year are estimated to generate approximately $675,000, lower than initially projected . Per the agreement, any revenue generated above this amount will go toward lowering the funding contributions taken from the city's general fund.
Four of the city’s five streetcar vehicles have arrived to the streetcar’s maintenance and operations facility on Henry Street in OTR and are currently undergoing street testing, leading up to the system’s projected launch in September.
City staff is still working to finalize an operations budget for the streetcar’s first year.
Follow Pat LaFleur on Twitter ( @pat_laFleur ) for all things public transit and living car-free in Cincinnati and Northern Kentucky.