CINCINNATI, OH (FOX19) - While the City of Cincinnati and the Port of Greater Cincinnati Development Authority signed the parking deal back in June, the lump sum up front payout to the city is not as black and white.
The Port's 75-day window for due diligence closed this week, and the Port Authority is moving forward to develop updated financial models for the bond sale.
Thus far, $92 million has been the dollar amount thrown around City Hall as the parking plan up front payout, which is also the total laid out in the contract.
However, that price tag was based on an old set of assumptions which included market conditions around the first of the year.
The City Solicitor says conservative estimates were used initially, but fast forward through a court battle over the lease, and months later, interest rates have gone up. Projections have also been updated with more accurate information after the Port's 75-day review period.
The financial model now has to be re-run. The Port points out, however, that interest rates are still at a historically low level.
While it may be weeks or even months before we have the final numbers, some updated projections have been made.
First, a quick analysis by the city's actuaries on the impact of changing interest rates for June versus September showed delay has come at a cost of roughly $7 million.
Second, the Port has announced a decrease in the recommended hours of enforcement after talking with residents and businesses, which also means less revenue. That loss is expected to total around $3.7 million.
According to Article 2 of the contract, if the bond proceeds amount falls below $85 million, the city may immediately terminate the agreement. That decision is solely in the hands of the city manager, according to the City Solicitor John Curp, and does not trigger a review by council.
In our commitment to balanced news, FOX19 reached out to both the city manager's office and the Port Authority on Friday. While the Port provided information and documents, no one was available to speak on camera. The city is waiting for the final numbers from the Port to comment.
The Port Authority is currently waiting on the independent results of a structural engineering study of the condition of the city's parking garages. Those results will be used to update the financial model.
The Port is working with Guggenheim, the plan's underwriter, on model projections using current environmental conditions for issuing debt.
They are also working to complete contracts with Xerox, Denison and AEW, which are the operators and manager of the parking system. An agreement in principal has been reached on the key terms with Xerox but the agreement has not been finalized.
Bond documents and the contracts will be made public in advance of the Port Board's vote.
Once the financial models are updated and bond documents are put together and approved, the Port will take them to the rating agencies. Once rated the bonds will go to market.
Once that happens, they'll present the final bond offering to the city, which will include the total dollar amount that will be paid out to the city up front.
If the city remains on board, the Port hopes to close by the end of October 2013.
Public sessions will then be held during January 2014 to educate citizens.
On February 1, 2014 the downtown zone will be in effect, though there will be a period of warnings before tickets are issued.
The change in rates and hours in Over-the-Rhine and the surrounding neighborhoods will go into effect as the new meters are installed throughout February and March. They will work the same as the ones downtown, with coin and credit card options, as well as pay by phone apps.
The Port's plan also includes the following commitments to residents and businesses:
-The enforcement model is to enforce just enough to get people to pay their meters.
-The Port Authority will work to address the many issues that have been raised during the outreach process including the process to bag meters, the prices charged to valets and the way to report problems.
-The Port will regularly meet with community businesses, residents and patrons to hear concerns and suggestions continuously making improvements in the functionality of the system.