Building and Running the Streetcar Will Not Take Funds From the Operating Budget

This earlier post broke down the funds needed to build the streetcar and showed how they would come from the Capital Budget (the budget used to fund roads, bridges, and other long term investments for the City) and not the Operational Budget (the budget that funds fire, police, and the City’s pension fund).

In a recent memo, City Manager Milton Dohoney details the funding structure for operating the streetcar.   The first pool of funds used will be fares from riders of the streetcar.  The second will be from advertising and sponsorship revenues related to the streetcar.  In Portland, streetcars can be sponsored for $25,000 per year and streetcar stop for $500 per month.

In the event that the first two funding sources do not cover the estimated $3.5 million per year operating cost, the City Manager proposes the creation of a Special Assessment District where the property owners directly on the streetcar line (who receive the most benefit from the streetcar) would contribute to a fund for the streetcar.  This funding mechanism is similar to how the Downtown Ambassadors are currently funded.

Finally the last revenue source being considered is the Parking Fund.  Using a portion the Parking Fund is appropriate because the streetcar will allow the city to use its existing parking facilities more effectively.  For an event held anywhere along the line, the streetcar can allow those attending to utilize the thousands of parking spaces in Uptown and Downtown.  For an event in Over-the-Rhine, which has very limited parking garages, those driving to the event could park Downtown or in Clifton and ride the streetcar the last few miles.

According to the City Manager “the local resources we have identified can not be used for public safety salaries or general expenses associated with the General Fund.”  The Cincinnati Streetcar will spur economic development along the line and will do so without using resources that could fund police, fire, or the pension system.  The Cincinnati Streetcar is a good investment—too good of an investment for the city to pass up.