CINCINNATI — The Cincinnati Southern Railway board of trustees will decide in July whether to place the proposed sale of the city-owned railroad on the November ballot, WVXU Radio reports.
The city has agreed to sell the railroad, the nation’s only municipally owned interstate rail line, to Norfolk Southern for $1.62 billion. But city voters are required to approve the deal, and a recent legislative deal that allows the city to use the money for infrastructure improvements required the vote to occur this year or next [see “Ohio legislature passes bill allowing Cincinnati Southern sale to proceed,” Trains News Wire, March 30, 2023].
The board has tentatively scheduled a special meeting for July 11 to decide whether to send the issues to voters this year or wait until 2024. Board President Paul Muething said if the board chooses to place the matter on the November ballot, it will do so at that meeting. It would then go to the Cincinnati City Council for approval of the ballot language, a formality which must occur at least 90 days before the election.
I could be wrong, many times I am wrong. I thought that with the sale of the railroad to NS the &1.62 billion was to be put into some form of TRUST. From this trust only the interest earned each year was to be allotted to projects and the PRINCIPAL was NOT to be touched. If this is correct Cincinnati would have to worry about running out of revenue. Only worry would be rate of return each year. Their would be some down years and some up years.
Yep. That money will eventually be gone. IMO it is better to keep the railroad.
From a previous Newswire article: “But while the city currently receives about $25 million annually from the lease, the sale is structured so those payments will increase to $60 million a year or more”. Looks to me like their getting a bigger bird.
The old saying states, “A bird in the hand is worth two in the bush.”
The lease payments, the bird in the hand, are an ongoing source of revenue. The lump sum payment is the other. In a typical politician/bureaucratic manner, the board is only looking at the short term cash.
The $1.6 billion one-time payment will be gone like poop through a goose.
NS is playing their cards well.
Or, as in the case of the City of Chicago parking meter sale/Chicago Skyway sale, the proceeds of the sale are blown within a matter of a few years, creating annual budget deficits and leaving the taxpayers in a bottomless hole.
What is the yearly lease payment to Cincinnati? Many of these deals look good in the short term but are bad in the long term as the constant yearly flow of lease payments must be made up from other sources such as taxes.