Tuesday, December 24, 2013

Conservatives versus Libertarians on Streetcars

KPMG projected net operating costs of the Cincinnati Streetcar, after fares and advertising revenues, to range from $1.88 million to $2.44 million--about $1 million less than a "trolley on rubber tires."  

During the recent saga of the Cincinnati Streetcar, commentators often pointed to Portland as evidence that streetcars encourage economic development.  In response, some anti-rail commentators pointed to a report by the libertarian Cato Institute critical of the Portland Streetcar.

William Lind of The American Conservative co-authored a study refuting much of Cato's report.  You can find a link to Lind's report HERE.  Lind establishes that, on a per passenger basis, streetcars are more economical to operate than buses.  In Cincinnati, Mayor Cranley's proposed "trolley on rubber tires" would have cost at least $4.4 million annually to run, while a City-funded KPMG audit established that the streetcar's annual operating expenses would be at least $1 million less and, after fares and advertising revenue, range as low as $1.88-2.44 million.  Streetcars have an operating cost advantage because they attract and carry more passengers than buses.

Friday, December 13, 2013

Why the Cincinnati Streetcar Matters

KPMG is auditing city staff's close-out estimate for killing the Cincinnati Streetcar.  Streetcar supporters are criticizing KPMG's scope of work for including an estimate of operational expenses over 30 years, without an estimate of the City's return on investment during the same time period.  

Not often have I strayed beyond Central Florida local politics in these blog posts, but the national ramifications of the attack on the Cincinnati Streetcar by a new Mayor and council majority, while it's under construction, do concern me.  Douglas John Bowen wrote in Railwayage.com:
“This is not just a Cincinnati issue.  The anti-rail troubadours are going to use the same tactics in other cities to derail light rail” and, presumably, streetcar launches, when and where they can.  ....
For as we pro-rail folks know now, if we didn't before: Planning isn’t enough.  Voter approval (in multiple referendums, yet) isn’t enough.  Passenger rail projects remain under attack even as construction is ongoing and funds are committed. The public willing to pay for streetcars and light rail is finding its normal public funding just isn't enough....  U.S. passenger rail progress, in short, remains held to high standards other land modes somehow simply skirt. It’s not fair, maybe. But it is the reality of the day."  
 Over 1,000 volunteers are gathering signatures to force a vote on a city charter amendment to save the streetcar.  Meanwhile, Mayor Cranley announced he would support completion of the Streetcar if its supporters can line-up commitments for $80 million in private money to pay for operations over 25 or 30 years--a virtually impossible task to accomplish in less than a week.  UPDATE 12/1713 -- Cranley rejected an offer by the Southwest Ohio Regional Transit Authority ("SORTA") to assume responsibility for operating costs, which would take the streetcar off the City budget.  It is believed that SORTA is attempting to salvage its relationship with the Federal Transit Administration, harmed by Cranley and Council members attempting to kill the streetcar.

Simulated photo from the City of Cincinnati
UPDATE 12/18/13: The cost of completing the streetcar is just $3.5 million more than the mid-point of the range of the cost to cancel, according to the newly released KMPG audit.  The cost to complete the project is $68.9 million.  The cost of cancellation, not including litigation costs, is between $50.3 million and $80.1 million, the midpoint of which is $65.4 million.

UPDATE 12/19/13: Cincinnati City Council voted 6-3 to resume construction of the streetcar, with council members David Mann and Kevin Flynn providing the decisive votes that would override a mayoral veto.