Streetcar skeptic to believer (Cincinnati, Wilson: store, estate, land)

[jbcmh81]

Originally Posted by Wilson513

Mexico City is a toilet. One of the worst in the Western civilized world. Why anyone would model anything after Mexico City is absurd.

Mexico City Is the Most Uninhabitable City in the World.

You just linked to an article that is literally 42 years old.

And even if it wasn't incredibly out of date, the infrastructure point I was making is still valid. Are you saying Cincinnati can't accomplish engineering equivalent to a "toilet"?

[jmecklenborg]

Originally Posted by WILWRadio

Obviously you don't understand the context of my message.

No, you missed the point. It's virtually impossible for an American city to default on bonds and be forced into bankruptcy.


Bondholders are inherently much more conservative than credit card lenders, car loans, mortgage lending, etc. If a city's income declines and its debt increases its credit rating is damaged and eventually it will not be able to sell any bonds. It simply will not be able to sell new debt while older debt matures and is almost continuously paid off. What's more, Ohio takes over financially distressed cities well before things reach that point.

So quit warning of some sort of looming bankruptcy. Look at the city budgets from 2008-2012 and see how income barely went down even during the worst recession since the 1930s. We had barely any layoffs of police and fire.


Cincinnati enjoys a very deep and diversified tax base. We have special lease income from the Southern Railroad as well as significant property tax and earnings income from the giant Queensgate and N-S railroad yards that we can count on for the next 100 years. Our rates of earnings and property tax are significantly lower than the other big Ohio cities.

[Wilson513]

Cincinnati's $1.5 billion unfunded pension liability dwarfs all other considerations. Council has been kicking the can down the road. It is only growing as a problem. It has every capability of bankrupting the City. Just a minor shift in actuarial assumptions and the budget will go upside down and the only cure is bankruptcy or voluntary give back by the unions (hahaha! - like that is gonna happen).

[jmecklenborg]

Public and private pensions are in trouble all around the country for several reasons:


1. Layoffs and furloughs during the recession caused significant dips in contributions
2. Meager raises and new hiring since the recovery began in 2010 means contributions still track well below mid-2000s projections
3. Unprecedented period of ultra-low interest rates has produced negligible returns from bonds and other conservative investments


So the problems with public pension funds hasn't been "mismanagement" so much as unpredictable circumstances well beyond the control of city governments or pension fund trustees. The main fix for the situation is a return to the staff levels that existed ten years ago and significant annual raises so that contributions can approach the trend lines projected a decade ago.


The streetcar has nothing to do with this whatsoever. Federal grants for streetcars, the sale of excess property (Blue Ash Airport, etc.), and the sale of capital bonds cannot be legally used for police/fire wages or pensions. The very small sum from the operations budget (less than 1%) pales in comparison to the raises Cranley has showered on police and fire over the past few years. And there would be much more money to increase staffing and raises if not for Kasich's attack on the Local Government Fund. So instead of a small state inheritance tax TRICKLING DOWN to public workers statewide, 100% of huge $100+ million inheritances are falling in the laps of layabout heirs.

[Wilson513]

I doubt that the inheritance tax is appropriately "on topic" here.

[WILWRadio]

Originally Posted by jmecklenborg

No, you missed the point. It's virtually impossible for an American city to default on bonds and be forced into bankruptcy.


Bondholders are inherently much more conservative than credit card lenders, car loans, mortgage lending, etc. If a city's income declines and its debt increases its credit rating is damaged and eventually it will not be able to sell any bonds. It simply will not be able to sell new debt while older debt matures and is almost continuously paid off. What's more, Ohio takes over financially distressed cities well before things reach that point.

So quit warning of some sort of looming bankruptcy. Look at the city budgets from 2008-2012 and see how income barely went down even during the worst recession since the 1930s. We had barely any layoffs of police and fire.


Cincinnati enjoys a very deep and diversified tax base. We have special lease income from the Southern Railroad as well as significant property tax and earnings income from the giant Queensgate and N-S railroad yards that we can count on for the next 100 years. Our rates of earnings and property tax are significantly lower than the other big Ohio cities.

Bonds play a small role in the larger scheme of things. Clearly there are other ways for a city to build up debt over time and since I have seen many US cities go bankrupt and with Hartford about to, it is obvious that Bonds have little to do with the accrued debt that these cities have built.

[jmecklenborg]

Originally Posted by WILWRadio

Bonds play a small role in the larger scheme of things. Clearly there are other ways for a city to build up debt over time

Like what? Cities don't do mortgages, they don't do revolving lines of credit -- they sell municipal bonds. Their budgets are hemmed in by all sorts of procedures that make it virtually impossible to end up in dire straits. For example, Cincinnati's "current" budget is actually 1 year out. So they have a full year to adjust when revenues come in lower than anticipated or when an unexpected expense arises.

So there is capital debt which is debt on the capital side of the municipal budget and then there are underfunded pensions which are not directly managed by city councils. They are managed by pension trustees. A city only has indirect control over what happens in the pension funds -- contributions by current city staff. If staff levels dip, so do contributions. If staff are not given raises commensurate with projections, then contributions fall behind.

This stuff isn't that complicated. It's a shame that talk radio and Fox have successfully polluted so many minds.

[Wilson513]

The City's annual contribution to pension funds if the product of actualria calculations. When the calculations change, so does the contribution. With underfunding of $1.5 billion to make up, a very small change means big money. The City's obligation is not voluntary. It is less flexible than a bond payment.

So, the Council has been covering up this smelly pile for too long. When the excuses run out, duck.

[cincydave8]

Welp the article all the haters got excited about? Was false. I guess props to Enquirer for owning up.

The correction:
We did the math on the streetcar budget

Ridership is up for May - again. Operating revenue has an almost $200,000 surplus.

May ridership: "Preliminary numbers show 53,116 streetcar boardings in May compared to 49,966 for April."

And the CEO of Kroger just mentioned Streetcar as a reason for building store and 19 story building.

Link to ridership numbers for May: City Council Ready To Debate Streetcar Budget For Year Two | WOSU Radio

[WILWRadio]

Originally Posted by jmecklenborg

Like what? Cities don't do mortgages, they don't do revolving lines of credit -- they sell municipal bonds. Their budgets are hemmed in by all sorts of procedures that make it virtually impossible to end up in dire straits. For example, Cincinnati's "current" budget is actually 1 year out. So they have a full year to adjust when revenues come in lower than anticipated or when an unexpected expense arises.

So there is capital debt which is debt on the capital side of the municipal budget and then there are underfunded pensions which are not directly managed by city councils. They are managed by pension trustees. A city only has indirect control over what happens in the pension funds -- contributions by current city staff. If staff levels dip, so do contributions. If staff are not given raises commensurate with projections, then contributions fall behind.

This stuff isn't that complicated. It's a shame that talk radio and Fox have successfully polluted so many minds.

While Bonds may have initially covered much of the cost of the debt of the construction costs for the Choo Choo, it doesn't continually fund the operation and maintenance of the trains or tracks and associated infrastructure. And the salaries are also not covered by Bonds.

You need to do some research on cities that have declared Bankruptcy. It happens. Cindy's Bond rating just dropped again because of the debt. That came straight out to the mouth of someone on the City Clowncil that was a guest on a (gasp) WLW Radio this week. Either Amy Murray or Chris Smitherman mentioned it during guest spots on the station. Can't recall which one said it but it was brought up. Probably Smitherman.

When you keep burying your head in the sand and ignore small problems, they eventually become big problems. Too much of that going on in Cincinnati these days.