A Conservative Compromise for the 3C Corridor

Issues with the Current Plan:

The principal issue with Ohio’s current 3C rail plan is that the project exposes Ohio taxpayers to
extensive financial risk while the benefits of rail have yet to be proven in the area the 3C Corridor will
serve.

According to a report created by Amtrak for the Ohio Department of Transportation, operation of three
daily trains along the route would cost $29.2 million annually with only $12.2 million covered by ticket
revenue. This would mean the trains would require a $17.0 million annual subsidy. As of now if Ohio
decided to spend the Federal Department of Transportation’s funds allotted to project, the State of Ohio
would be required to pay this subsidy for 20 years.

ODOT’s Current 20 Year Plan to Pay for This Rail Service

Funding Source Budget

Federal Grants $70.1 million
Fare Box $224.0 million
Other* $166.0 million
ODOT Funding $148.0 million
Total $608.1 million
Ohio’s Commitment $314 million

*ODOT anticipates other revenue sources totaling $8.3 million annually, including ORDC contribution, advertising revenue, food
and beverage services, already legislated local cooperative agreements such as Port Authorities, Tax Increment Financing (TIF)
Districts, Joint Economic Development Districts (JEDD) and Assessment Districts, or by assessing development impact fees, land
value taxes or other forms of assessment. Another potential opportunity is to work with the General Assembly to explore new
and innovative ways to fund transportation, including various tolling methods, public-private partnerships, indexed user fees,
fair share fees and state tax increment financing.

Ohio’s taxpayers should not be on the hook for spending $314,000,000 without first having the
opportunity to try rail service in the state.
Our Proposal:

The basic flaw with the current plan is that it does not recognize that expanded rail service in our region
would be an experiment and provides no room for adjusting levels of service. Ohio needs a trial period
before the state commits to spending $314 million on the project and continuation of the rail service
after the trial period should be determined by results.

The incoming Kasich Administration should continue the 3C Corridor, but continue the project on their
own terms by renegotiate Ohio’s current agreement with the Federal Department of Transportation
regarding the 3C Corridor to include the following:

 A five year trial period paid for by federal CMAQ grants and ticket revenue
 Set a series of benchmarks for the corridor do determine whether service should continue
 If benchmarks are met then service would be continued as planned with ODOT funding; if not
Ohio’s service commitment would be reduced from three trains a day to one train a day and end
in 2020 not the proposed 2032
 If ridership on the line falls below 100,000 annual riders at any point the post trial service
commitment would be terminated
 If any train runs empty between two stations at any time during operation Ohio’s post trial
service commitment would be terminated
 New railcars bought for use on the 3C Corridor would come under the ownership of the line’s
operator not ODOT
 No state capital funding would be used for construction of the passenger facilities

The requirements above would provide Ohio a necessary “escape hatch” if the 3C corridor proves to be
a boondoggle.

Benchmarks set should be based on data provided by ODOT and advocacy groups supporting the rail
line. The following are suggested stringent benchmarks:

1. Average annual Ridership must equal or exceed 450,000 people during the trial period
2. New passenger rail service must be cited as beneficial by ODOT and all host railroads
3. Trains must have an average annual occupancy rate above 50% during the trial period
4. Ticket revenue must not fall below $11,000,000 annually during the trial period
5. Trains must maintain an average speed above 50mph between Cincinnati and Cleveland

The Kasich Administration should commit ODOT to minimizing funds spent on the rail stations built and
on equipment purchased for the service. This will make sure the maximum amount of federal funding is
available to upgrade the freight lines needed for the service.
Reasons to Compromise:

Jobs One of the principle reasons behind the desire to continue the 3C
Corridor is job creation. The line will use new DMU railcars made right
here in Ohio by US Railcar. US Railcar needs the 3C Corridor to justify
the opening of a new plant outside of Columbus this plant will generate
200 jobs alone. The construction of utilitarian stations and a small
Cleveland maintenance facility will put Ohioans back to work. The
project’s included upgrades to Ohio’s freight rail network will also
create hundreds of construction jobs.

Freight Rail Under this compromise freight rail will be the principal benefactor of
investment in the 3C Corridor. This is because whether passenger
service proceeds beyond the trial period or not Norfolk Southern, CSX,
and the Indiana & Ohio Railroad will benefit from the huge capacity
upgrades in the plan. They will also benefit from a new much safer
signaling system called positive train control. This prevents train crashes
using GPS positioning and would be installed with 3C funds saving lives.
If the 3C Corridor is continued freight rail will also see substantial track
upgrades allowing for quieter, faster, and safer, freight train operation.

Economic Advantage If the nearly half a billion dollars given to Ohio by the federal
Department of Transportation to construct the 3C Corridor was rejected
the money would not go towards reducing the federal deficit. It would
go to other states such as Illinois, Michigan, Pennsylvania, Florida,
California, Connecticut, North Carolina, Virginia, Maine, and Missouri
build or upgrade systems exactly like 3C Corridor. This would give those
states an economic advantage over Ohio.

Politics This plan forces rail advocates and the Obama Administration to put
their money where their mouth is. By setting benchmarks based on their
numbers it will either prove that they were right and if they weren’t it
will allow Ohio to quickly wind down its failed passenger rail program
with little resistance while keeping the infrastructure upgrades for the
freight railroads and establishing a railcar manufacturing plant creating
jobs near Columbus.