Randy A. Simes is the owner and managing editor UrbanCincy.com. He is a graduate of the University of Cincinnati’s School of Planning, and was recognized by the American Planning Association in 2009 for Outstanding Achievement in the Study of Planning. Since then Randy has worked as a planning consultant throughout the United States and Asia, and is currently on assignment for Parsons Brinckerhoff in Seoul.
Randy has been a Strong Towns supporter since the early days of this blog and comments frequently over at the Strong Towns Network. Urban Cincy's coverage of what turned into a daytime soap opera over the political football of their city's already-under-construction streetcar project, revealed the bizzare way we make financial decisions about infrastructure under the status quo. He recaps the rollercoaster ride for us and also unpacks the nature of what was really at stake in the debate.
This past December, Cincinnati’s newly elected mayor called a press conference for a “major” announcement. He was joined by leadership of labor unions representing city workers, along with a member of city council. The event was billed as being a compromise for those wanting to see the city’s modern streetcar already under construction finished and those who did not.
So what was that compromise offered up by the mayor and his allies who wanted to kill the project dead in its tracks? Simple. Deliver a signed financial guarantee that would cover 30 years of operating costs for the streetcar so that it does not negatively impact the operating budget for other city services like police, fire and trash collection.
It’s a classic offer meant to seem reasonable, when it is anything but.
Let’s first examine that the total figure quoted by the newly elected mayor was $80 million. This not only did not account for any of the system’s estimated fares that would offset the cost to the city, but it also didn’t account for sponsorships and used the highest operating cost projected. But hey, he’s just being fiscally responsible.
The problem with this approach is that it is not applied evenly, but is meant to anger taxpayers who are under the impression that it is a reasonable way to operate a local government.
Aside from the unprecedented request, a first of its kind for any transit program in America, it is troubling for two key reasons. First, it sets a dangerous new precedent for how city government operates, and secondly it is an obscene double standard for transit projects to force such a financial commitment.
With labor union representatives at his side, Mayor John Cranley continually stated how he has an obligation to deliver the basic services we all cherish, and said that Cincinnati has a difficult enough time meeting current financial liabilities, much less new ones. As a result, he demanded that the private sector and streetcar supporters, should they actually support the project, “put their skin in the game” and fund its operations for the next 30 years.
That is all great campaign rhetoric, which Cranley used brilliantly leading up to the November 5 election, but it is completely irrational.
If the City of Cincinnati cannot afford any new financial liabilities, then it begs the question of whether the new administration will be requesting operating plans and financing for anything that comes to his desk? Hiring new police officers or fire fighters adds a financial liability and is not offering up any financial commitment, unless the additions are accompanied by new taxes. That means cuts elsewhere.
What does this mean for other projects, like say a new highway interchange? If “no new liabilities” means “no new liabilities” then we should expect the same level of financial accountability for all projects. Not just ones that happen to operate on steel rails embedded in the ground.
Of course this is not the approach anyone is suggesting. It is ludicrous and a terrible way to operate a city. Yes, fiscal responsibility is critical, but demanding such onerous financial commitments upfront before proceeding with anything is just bad business.
What makes this particular scenario so much sweeter is that the very next week the newly elected city council and mayor approved $20 million in bonds to provide the local funds for the $108 million MLK Interchange project. The City is also responsible for an unspecified amount of interest and borrowing on a $25 million loan, thus raising the City’s total obligations to approximately $45 million.
The operating costs are entirely unknown by either the Ohio Department of Transportation or the City of Cincinnati. And if you were to say that those costs will be covered by the gas tax, aka user fee for roads, you would be wrong. That user fee has not been raised since 1993 and on average only covers about 51% of the annual costs to maintain our roadways.
On the one hand there is a demand that the private sector provide 100% of the known legacy costs for a transit project, while a blank check is written for a highway interchange with unknown legacy costs. Coincidentally, both of these projects had economic studies done for them by the University of Cincinnati, which found a better ROI for the streetcar.
That did not stop any of the opponents to the streetcar from questioning the results of the economic study for it, while touting the results of the economic study for the interchange. The whole situation couldn’t be painted any more clearly. People have a faith in roads that they do not have in transit. This faith is not supported by fact or reason, but rather hyperbole and rhetoric.
I spoke about the streetcar at a commercial real estate breakfast last spring. The crowd, as expected, was not entirely on-board with the streetcar project, and the moderator asked me to describe why I supported the project. I told the moderator and audience that the vast majority of trips made each day – nearly three-fourths– are not related to commuting to or from work.
They are for trips to the grocery, pharmacy, doctor, post office, friend’s house, restaurant, church or whatever else it is you do with your life outside of work. My point was that while many people view streetcars as toys for tourists, they actually are transit systems that work to capture the 75% of trips made that aren’t related to commuting patterns. I then asked if any of these business professionals would prefer to develop a project that had a potential 25% market share instead. The silence in the room was deafening.
The reason I wanted to share this story is because there seems to be a fundamental misunderstanding of how our governments should operate. We create parking regulations designed for peak capacity that is only needed one or two days a year. We design our roadways to accommodate traffic that is only achieved four hours a day, five days a week. We need to be making better investments than this.
If we can design our communities in a way that 90% of those non-commute-related trips can be done without a car, then we can build and maintain smaller roadways. We can improve our health as people walk and bike more, thus reducing our long-term health care costs. We can improve our public safety, thus reducing our ongoing police need.
It is often said that you cannot cut your way to prosperity, but I think you can cut and save while you grow, without negatively impacting quality of life. We just need smarter policies.
For instance, in a case of tearing down a highway and turning it into a boulevard you are reducing capacity and travel speeds. At first blush this would seem like a reduction in legacy costs, but also a reduction in service level. However, when slowing down the speeds and adding sidewalks and allowing bicyclists to use the roadway, you diversify its user-base. And studies have shown that the traffic traveling through the area will either use the new boulevard or find another route. You have not reduced the traffic the highway was solely designed to accommodate, but you have added new users to the road. At the same time you have significantly reduced the facility’s legacy costs and negative externalities.
While I was in college, one of the many left-leaning books I read at that time, Cradle to Cradle: Remaking the Way We Make Things, had what I thought was a surprisingly conservative excerpt that stuck with me. While the book was about environmental sustainability, I think its lessons can also be applied more broadly to the triple bottom line approach many companies are moving toward today.
“We see a world of abundance, not limits. In the midst of a great deal of talk about reducing the human ecological footprint, we offer a different vision. What if humans designed products and systems that celebrate an abundance of human creativity, culture, and productivity? That are so intelligent and safe, our species leaves an ecological footprint to delight in, not lament?”
Of course there is a massive financial advantage given to the culture of the personal automobile over transit and active transportation. And of course politicians take extremely hypocritical approaches to examining them. But the answer is not turning the table and giving road projects the same treatment. The answer is changing the formula by which we make policy decisions.