Another streetcar battle brewing?

Another streetcar fight could be brewing as city and transit authority officials try to determine the system's operator – an outside firm with experience running passenger trains or local union members who could be more expensive.

A decision about who will run Cincinnati's streetcar is due by July. Any length of time beyond that could delay the streetcar's September 2016 launch.

City Council must consider the cost – $4.2 million is the most it's willing to pay a year to run the system. But even that might not be enough to operate the streetcar, embroiled in controversy for years because of its costs.

"We might have hard work in front of us," Councilwoman Amy Murray said during council's transportation committee meeting on Tuesday. "So if this (contract) comes through and it's higher than that, this committee is going to have to make choices."

Local transportation union boss Troy Miller says the Southwest Ohio Regional Transit Authority has been unwilling to engage in contract talks so far – despite City Council calling for SORTA and the union to do so.

SORTA is overseeing the streetcar's operations contract, and agency officials say they are willing to talk with the Amalgamated Transit Union (ATU) Local 627. Officials, however, say the collective bargaining agreement in place for the nearly $100 million bus system is immaterial to the much smaller streetcar.

"If we have to pay a little bit more – not a lot more – to pay SORTA (union) employees a fair wage, that's absolutely worth it," Councilman Chris Seelbach said.

Seelbach is among the majority five Democrats on council who passed a motion last fall expressing their desire for SORTA to award the streetcar operating contract to the local union. The motion also called for SORTA and the union to negotiate in "good faith," and that the transit authority is to first receive council approval if a third-party is chosen.

Murray, head of the transportation committee, called the streetcar's budget situation "stressful," because so many costs remain unknown. Those leading construction work on the $148 million streetcar loop through parts of Downtown and Over-the-Rhine say the project is on schedule and on budget.

But the project's rainy-day fund is down to its last $1.1 million with still 1 1/2 years before the streetcar opens to passengers. That is how much money project leaders expect will be left over after construction is done in a worst-case scenario. Project leaders, however, warned they still could run into unexpected underground infrastructure while installing electric poles along the 3.6-mile route.

The contingency fund "is still razor-thin in many ways, but we're working hard ... to keep those (costs) under control," said John Deatrick, the project executive.

Council also has not yet identified where the $1.1 million needed to cover startup costs is going to come from. The money needs to be in place by July 21, when SORTA is scheduled to hire the streetcar operator. On Tuesday, SORTA extended the deadline until March 30 for companies to submit proposals to try to win the operating contract.

The streetcar is projected to cost between $3.8 million and $4.2 million each year to run, and Murray pointed out no more money is available for the project. The costs of retirement benefits could be the difference between the local union and a third-party contractor.

Local union workers are considered public employees and therefore are eligible for the state retirement program. SORTA is required to pay 14 percent of each employee's salary or wages into the state retirement program. Private employees are not eligible for public pensions, and retirement benefits typically are less expensive for a third-party contractor.

Miller and Seelbach said they are optimistic the ATU can make a competitive bid.

"We haven't seen a lot of proposals, but I'm confident they're going to come in under $4.2 (million)," Seelbach said.

Officials from the local union and SORTA met last Wednesday for the first time this year to discuss streetcar operations. At the start of the meeting, Miller said SORTA officials handed him a document that called for a separate streetcar collective bargaining agreement, with nine different provisions than the bus contract.

"They say, 'This is all about cost savings and this is what we want you to give up,'" Miller said. "They just want us to cut sections out of the contract and call that negotiations. They've made it very clear they're not willing to negotiate."

Miller claimed SORTA's tactic was to try to get the union to make a low bid, and the transit authority then could use that dollar figure in negotiating with other potential operators. During Tuesday's meeting, Seelbach said that is a "disservice" to local employees.

SORTA's Paul Grether told council the union's claims aren't true.

"We have not asked them to submit their lowest price," said Grether, SORTA's rail services director. "We have simply provided them information. Part of the challenge with the streetcar ... it's tiny. Our collective bargaining agreement is set up for a large bus system. In terms of scale of the operations, there is a translation that needs to occur."

The streetcar will have 20 to 30 employees. By comparison, the Metro bus system has 352 buses, 850 employees (710 union) and an annual operating budget of $93 million.

If a private firm wins the streetcar operations contract, many expect the non-management employees to unionize.

The streetcar budget concerns seem compounded at a time when systems across the U.S. continue to face financial issues. The Atlanta streetcar system, which opened in December, will cost 50 percent more to run each year than originally projected, the Atlanta Journal-Constitution recently reported.

The 3-mile downtown Atlanta circulator – similar in route length to Cincinnat's streetcar – will now cost $4.8 million instead of $3.2 million to run each year.

The Atlanta news came on the heels of a Feb. 11 unveiling of a Parsons Brinkerhoff study that questioned the value a streetcar line would bring to downtown St. Paul, Minnesota. The study described streetcars as "pricey economic development tools with debatable results," according to the St. Paul Pioneer Press.

"It hits home, and it really worries me," Murray said of what is happening in other cities.

Enquirer reporter Sharon Coolidge contributed.