New streetcar costs released - Cincinnati News, FOX19-WXIX TV

New streetcar costs released

Two operating cost scenarios for the streetcar were released Friday. (FOX19 NOW/file) Two operating cost scenarios for the streetcar were released Friday. (FOX19 NOW/file)
CINCINNATI (FOX19) - For the first time, Cincinnati taxpayers got a look at what it will cost them to operate the controversial streetcar annually.

Two operating cost scenarios for the streetcar were released Friday. The private firms who submitted bid proposals to the Southwest Ohio Regional Transit Authority (SORTA) were not revealed.

SORTA officials originally declined to release the records. They said that would compromise the competitive bid process and they were required to keep the details private under federal guidelines.

SORTA receives $50 million annually from the city to help run Metro buses and is selecting the company that will operate the streetcar.

"The Southwest Ohio Regional Transit Authority's objective has been to assure the best value for the City and its residents in terms of quality and price in procuring a contractor to manage the operations of the Cincinnati Streetcar.

The procurement process has been conducted with the highest level of professionalism and integrity. We believe that the pricing being presented to City Council represents the best possible value for each of the two service delivery methods," said SORTA Chair Jason Dunn, in a statement.

According to streetcar documents, all proposers were required to submit two methods: a turn-key contract and a management contract.

A turn-key contract is where a private company would hire its own workers to operate the street car. The contractor assumes financial risks for operating based on contract scope. According to SORTA documents, the projected operating costs for each of the first five years of the streetcar is around $4 million.

The management contract is where the contractor manages operations and maintains the system for a fixed price.  At an additional cost, SORTA would provide certain employees such as streetcar operators, facility maintenance/janitorial.  The total cost of operating the streetcar would change based on several factors including negotiations with a new bargaining unit.  The risk is shared. Projected operating costs for each of the first five years of the streetcar with that option would be $4.7 million.

The city would save at least $3.6 million over that five-year period if the turn-key contract is selected. The City and SORTA has the option to extend up to an additional five years.

The pricing that best represents the best value for each method is being shared with the City Council for their decision on preferred method this month. 

The SORTA Board will decide on a preferred method from Cincinnati City Council by the end of June so a contract can be awarded in July. The streetcar operations contractor must be on-site in August to prepare for vehicle delivery that will begin in September with vehicle testing beginning in the fall. 

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