Sharon Coolidge

scoolidge@enquirer.com

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Cincinnati City Council Tuesday approved the money to operate Cincinnati's streetcar, but it came with a new argument: Should the local transportation union run it?

The previous plan had been to bid out operations in an effort to find a rail expert and keep costs down. But Council's five Democrats -- David Mann, PG Sittenfeld, Chris Seelbach, Yvette Simpson and Wendell Young -- want to keep operations in house.

"I don't believe we should have two separate classes of employees - one driving streetcars, one driving buses," said Mann, who proposed in-house operations. The idea will be discussed at the committee's next meeting.

Council has three options:

* Operate the streetcar in-house for the first 12 months, which a consultant estimated would cost taxpayers $4.56 million; though the union insists it would cost $3,850,989 -- just $6,057 more than the contracted estimate.

* Operate the streetcar in-house for the first 12 months with a new collective bargaining agreement, which a consultant estimated would cost taxpayers $4.2 million.

* Bid the work out, which the city says would cost $3.8 million for the first 12 months.

The original plan was for a fixed-price contract that requires the contractor to assume the risk of price increases, instead of the city covering the cost of unknowns. If the local union runs the streetcar, the city would assume the risk, according to Councilwoman Amy Murray, who oversees council's Transportation Committee.

Metro's Rail Manager, Paul Grether, cautioned the costs were estimates only.

"We have operating employees who care," said Troy Miller, president of the Amalgamated Transit Union, Local Division 627, which has 750 members. "We don't want to let the money go outside the city."

Paying for operations

In the meantime, Council's Transportation Committee, which has five voting members, passed an operating agreement and approved funds for operations with four votes. Councilman Kevin Flynn, who put the plan together, abstained. He doesn't want to bypass the bidding process.

An agreement with SORTA to run the streetcar was supposed to be signed by the end of last month, but wasn't because the cost needed to be determined first. The month delay won't affect the streetcar schedule, but any longer and Flynn feared project delays. For instance, an operator has to be in place before the actual streetcars can be delivered. A delay there could trigger penalties under the streetcar contract.

The region's transit authority will not be allowed to use Metro bus money to help run Cincinnati's streetcar, according a draft of the streetcar operations agreement between SORTA and the city.

Murray argued against skipping the bidding process. She contends failure to bid out operations would:

* Lead to higher operating costs. Specifically, she contends using the current collective bargaining agreement with the Amalgamated Transit Union would add $709,035 to the yearly cost of operating the streetcar.

* Remove competition. Using the ATU union removes an incentive to offer the best competitive price.

* Lead to reduced operating hours. The more the streetcar costs, the fewer hours the city can operate it.

* Create risk. Lack of expertise in operating a streetcar assumes a greater level of risk.

A SORTA consultant recommended bidding the work out.

"The goal is to avoid risk," Grether said. "Looking at advantages and disadvantages of each scenario, knowing SORTA does not currently operate rail, we're new to this and the city doesn't operate rail, you're new to this, the goal is to avoid risk.

"You don't know what you don't know," he added.

Streetcar Executive John Deatrick reminded the committee the city will have a fixed amount of money to run the streetcar; money council has been scrambling to find all year. "If numbers come in above that we're in trouble. One of key factors is to have competition. It's the American Way."

Flynn: "I couldn't agree more. If we restrict the pool from which we can choose.... we're not going to get the best bids."

Councilwoman Yvette Simpson countered: "Flexibility and control are just as important."

The $133 million, 3.6 mile streetcar route through parts of Downtown and Over-the-Rhine is set to start service in September of 2016.

Where the money will come from

Cincinnati Councilman Kevin Flynn's plan would run the streetcar every day, rely on neighborhood participation and wouldn't hurt city police, fire and garbage collection operations.

Under the new plan, the burden for paying for the streetcar operations would ultimately fall most heavily on people who buy and develop property along the streetcar route.

Flynn has been working on how to pay the $3.8 million to $4.2 million in yearly operation costs.

A look at the three-part plan:

Fees. This includes sponsorships, naming rights and fares. The cost to ride the streetcar has not been set; but SORTA Rail Manager Paul Grether said Wednesday recent discussions centered around $1 for two hours. No sponsorships or naming rights deals have been made, and city and transit authority officials do not expect those to reap big dollars. Total anticipated revenue from fees: $1.4 million.

Developers would contribute part of tax abatements on future Downtown and Over-the-Rhine mixed-use and commercial developments. Total anticipated revenue: $200,000 a year to start, but the amount would increase every year, growing to $2 million a year by 2026. This is voluntary, but not really because council has to sign off on these deals and would likely say "no" to anyone not willing to contribute, Flynn said.

Parking meter hours longer, costs increased. Some money will come from meters in Over-the-Rhine and Downtown; the maximum cost per hour would be $2.25 Downtown and $1.25 an hour in Over-the-Rhine. Meters would be enforced 9 a.m. to 9 p.m. Monday through Saturday and 1-9 p.m. Sundays. The unpopular $300 residential parking permit has been dropped from Flynn's final plan. Total anticipated revenue: $1.5 million (although it will raise more money than that).

Who should run the streetcars?