Issue-22-passed.-Cincinnati-must-do-5-things-for-railroad-sale-to-work

The agenda for the June 3, 2026, city council meeting is very long but it is Item 79 (the last item) that got my attention.  It basically reprograms  more than $5 million in  capital funds from existing capital projects to the general fund and then back out to other supposed capital projects. But during the course of those transfers, more than $1 million will be shifted to cover operating costs, not capital projects.

Eventually, I suspect that this type of transferring money around will involve railway money. We all suspect that the city will try to use railway money for some big. ineligible project like an arena. But while that is very possible, I think it is more likely that the city will seek ways to use the railway funds to free up other capital money to cover operating costs elsewhere in the budget, which is what Item 79 does, but for now, with non-railway funds.

That is why I have recently been advocating that the city be required to maintain a separate ledger for tracking any transfers between projects and accounts when it involves railway money. Otherwise, this “operational loophole,” can circumvent the lone “internal control” contained in the law, the “existing infrastructure” provision. It would be very tedious to audit such transfers  without a separate accounting ledger.  Maybe that was the  intent of those who wrote the legislation. Who knows?

After the railway sale, in an Op-Ed in the Enquirer on November 17, 2023,  I also advocated that the city council establish a “floor” for the Capital Improvement Program based on FY24 funding levels, i.e., CIP funding level would never go below the FY 24 level.  My  point was that new railway proceeds should be added to the existing Capital Improvement Program funding level in order to ensure that there is an increase in spending on deferred maintenance, which during the campaign, was described by the mayor as a “crisis.”

I reasoned that establishing such a floor was the only way to guarantee that the city was going to devote the money necessary to tackle the estimated $400 million backlog in deferred maintenance . That backlog was the entire basis for selling the railway.

I think that as soon as the referendum  passed, that deferred maintenance list went straight into the circular file or someone’s bottom desk drawer,  never to be seen again.  Item 79 does not involve railway money as far as I can tell. But this is how the city will bleed the railway trust money away,

As I noted in my Op-Ed, the city manager already publicly contemplatedmoving existing capital funding to the operating budget. And the Cincinnati Futures Commission is recommending the same thing.

To those of us who opposed the sale of the railway, this will come as no surprise.

Farmer_Music_Center ppt to City Council (undated)

Farmer Music Center Records Request

Apparently, this is the all the information that was presented to the city council concerning the $8 million subsidy request for the Farmer Music Center. The document is undated but presumably it was presented before the city council voted to include the subsidy in the FY27 budget.

I made a public records request for information the city council members relied on in their due diligence about the project. This is all the city disclosed – an 8-page powerpoint.

In a city council meeting, 5 council members voiced their support for the project citing projections about the positive economic benefits to the city and the return on investment the city would realize for our $8 million. So, I requested to see the analysis they were relying on to make those claims.  This powerpoint deck is all I received.

The CSO and MEMI are asking the city to invest $8 million in the Farmer Music Center but they provided the city council with nothing more than a “pitch deck” not an investors’ prospectus, which the city should absolutely require, at a minimum.

Links to the presentation and to my records request are provided above.

By the way, it took the city 5 weeks to provide an 8-page powerpoint presentation. Unacceptable.

As I mentioned the other day, the Budget, Finance and Governance Committee, at its meeting on Monday, April 20th, will do what is necessary to push along the convention center hotel deal for approval at Wednesday’s city council meeting.

Ever since there was agreement by the powers that be, that Cincinnati needed a “headquarters hotel” for conventions and an upgraded convention center, the momentum to make a deal built up and the deal gets to the finish line on Wednesday.  Once it started, it wasn’t going to stop. Whether it is a good deal or not.

So, this is not to criticize the deal. It is to help go into the deal with our eyes wide open.

The financing of the project is complicated. There are at least 9-layers of various sources of financing both public and private. The current estimated cost of the hotel is $564 million, and it is essentially 50/50 public and private. The convention center is all public funding.

Here are my observations about the convention center hotel project:

1. In a June 18, 2025, article, the Cincinnati Business Courier reported that, “The city may need to put in $2 million to $3 million per year in additional resources, but those are preliminary numbers.” In other words, until the convention center and hotel start generating the projected increased tax revenues, the city will have to pay its obligations out of existing resources. It is anybody’s guess how many years that will be. We all know about projects that were supposed to pay for themselves that we will be subsidizing until the city shuts it down.

2. As I mentioned the other day and as reflected in the first observation, the financial success of the project relies entirely on generating increased tourism and the various multiplier effects that result in higher tax revenues. So, the city is putting supply ahead of demand. The city will have to generate the demand.

3. The financing plan, especially for the hotel, has 9 layers, and they all have to generate their projected funding. The Business Courier’s article provides a list, posted with this blog. There is one item not included on the Business Courier’s list. The city will agree to make a 30-year $50 million loan to the project. Any outstanding payoff after 30 years can be forgiven.

4. The city’s financial commitment to the hotel is open ended. The project will be crowding out other uses for those tax revenues until the project starts “paying its way.” I have not seen any discussion of that.

To sum up, soon after the city council’s  approval of the “convention headquarters hotel,” on Wednesday, the city will begin subsidizing the project. An extensive financing stack kicks in and the city must begin paying its obligations related to the project. Since there are no increased tax revenues yet, the city must pay obligations out of existing funds.

As I mentioned the other night, if the murders, shootings, other violent crimes and teen mobs in Cincinnati are not abated to the point where the city’s safety image improves the project may have a problem succeeding. The city and county will have an updated convention center and a new hotel or two, but they may be underused and require continued subsidies to meet financial obligations.

The city council should already know what the bookings look like for the new convention center and hotel. The type of conventions that the city is trying to attract are planned years in advance. It would be good to know that baseline before ctiy council votes.

Chief Theetge investigation report

It is too bad that this “investigation” involving Chief Theetge is such a serious matter and that the city has allowed what looks like a management problem to be handled (or mishandled) in such a public way.

I am not going to criticize the attorneys who carried out the investigation except to say that they do not appear to have spent much time around the police and the “police culture.”  Despite that,  there is no benchmarking in the report to indicate that the culture they found in the CPD is any different than other police departments. Nor is there any other context about city politics provided by the report.

Who knew that cops complain about their bosses? Or that policing is characterized by a command and control culture? Nowadays, the issue is not whether police departments have a culture of command and control but rather, “is the command and control excessive?” The report does not seem to make that case.

The report uses the word “believes” and its various iterations, between at least 40 and 50 times in a 9 page memo.  Throughout the memo, the investigators report that, “the witness believes,” “many witnesses believe”, “some witnesses believe,” a majority of witnesses believe,” etc.

Usually investigative reports use terms such as “we found,” or “our findings show,” etc. The report draws conclusions, but the conclusions are based strictly on perceptions.

As a result, the city has been provided what is referred to as a “perception-based” investigation, not evidence-based.  In other words, the report is a (very expensive) cultural assessment for which the city already knew the results.

Unfortunately, for the mayor and city manager, unpopular ≠ ineffective. There is zero data in the report concerning Chief Theetge’s alleged ineffectiveness. With respect to the brawl on 4^th street, the report comes across as finger pointing.

One reported “belief,” shared by “many” concerned a claim of nepotism because a nephew of Chief Theetge, who was already on the force and had recently obtained his law license, was promoted, or assigned, by  Chief Theetge as the CPD’s legal liaison. But the investigators made no finding as to whether the situation constituted nepotism or not. Nepotism, in many cases, is not clear cut when the evidence is applied against the rule.  The report makes no finding either way.

There must be a full report beyond the 9-page memo, including whatever evidence the law firm gathered. At a minimum there should be transcripts of the interviews conducted by the law firm. But the public will likely not get access to those records until the matter has been finally adjudicated.

For those who are predicting that this matter will result in a law suit against the city, that the city will lose, I think they are right.

Most Frequently Funded External Recipients 3.8.26

For the past 7 -10 years, Cincinnati  has steadily outsourced city functions to nonprofit organizations. Since 2020, the city’s budget has evolved to include tables in the annual budget for “Leveraged Support,” “Funding for Competitive Grant Programs,” and “City Operations Programmatic Support and Recipients.”

These categories represent funding for external organizations to carry out governmental functions.  This is not a slight against nonprofit organizations. But this outsourcing makes it much more difficult for taxpayers to know what is happening with public funds. i.e., transparency and accountability.

We have developed a data base of funding for those three categories of external support based on city budget documents for the period 2020 to 2026.

The first thing you notice is that many of the same organizations receive funding every year. Meaning: the process is not a true competition and more significantly, these organizations are essentially part of the city government without the transparency and accountability.

The link above will take yo to the list of “Most Frequently Funded Recipients.” We will be posting additional analysis that could be of interest.