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Tampa's trolley celebrates anniversary and rues expensive insurance premium

TAMPA — The 10th anniversary of the city's historic yellow streetcars will be marked Saturday with 10-cent rides, music and food trucks along the 2.7-mile track linking downtown and Ybor City.

But board members of the trolley's operator, Tampa Historic Streetcar Inc., would prefer to forget another milestone: The $400,000 insurance premium the nonprofit must pay each year to keep a $100 million insurance policy required by the CSX railroad company.

CSX requires that much liability because the publicly subsidized trolley line crosses its railroad tracks in Ybor City, near where E Fifth Avenue meets N 13th Street.

Each year, Tampa Historic Streetcar has no choice but to pay the premium, or CSX could keep the trolley from crossing its rail line. And each year the nonprofit tries — and fails — to negotiate some relief with CSX.

"We have thrown out a lot of things to them and we have not come up with a solution to this," said Tampa City Council member Mike Suarez, who sits on the streetcar board.

Suarez is also an insurance executive who has lobbied CSX to reduce the requirement. But CSX holds all the cards, he said.

"They have not agreed to anything," he said. "They have all the legal rights. We're not in a position of being equal partners here."

CSX spokesman Gary Sease said in an email to the Tampa Bay Times that the company believes the $100 million insurance policy is necessary. He also noted that it was agreed to 10 years ago.

That $400,000 premium is about a quarter of the trolley's annual budget. It is the No. 1 reason board members say the streetcar struggles financially.

To help pay that premium, the board has had to dip into an endowment of private and public funds that once stood at $4 million. As of Aug. 31, that endowment was just $16,114.

"When people ask what happened to the endowment fund, well $400,000 a year times 10 years is $4 million," said the streetcar's president, David Mechanik. "Essentially we only have so much operating money. We had to tap into that fund to make ends meet."

The trolley is jointly funded by a city taxing district, the Hillsborough Area Regional Transit authority, and other government sources like federal grants and a Tampa Port Authority subsidy.

There's also advertising and ridership revenue. Rides cost $1.25 for seniors and $2.50 for regular admission. An an all-day pass is $5.

But the trolley has suffered in the economic downturn and the decline of one of its stops, Channelside Bay Plaza, the entertainment complex that was foreclosed on in 2009 and now sits nearly empty.

This year, ridership is projected to be 340,000 — a 27 percent drop since the Super Bowl year of 2009. To cut costs, the trolley cut services. Wait time for a ride is now 20 minutes.

The struggling streetcar system's viability became an issue once again last month when the Port Authority's governing board debated whether to continue its $100,000 subsidy.

Tampa Mayor Bob Buckhorn, a member of the port board, saved the subsidy after making an impassioned pledge to appoint new board members to the streetcar and come up with a new business plan. Port board members were still fired up about the issue at their meeting Tuesday.

They recounted how at a Sept. 25 port press conference, several of them personally complained about the $400,000 premium to CSX executive vice president and chief commercial officer Clarence Gooden. They said the executive told them they needed to complain to someone else at the company.

Port Commissioner Peter Altman called the premium "insane." One solution to help turn things around, he said, would be to give the nonprofit another $50,000 to hire professional staff to handle things like marketing to boost ridership.

Mechanik said the agency can spend only a minimal amount on marketing, and the nonprofit relies on help from HART staff.

He said HART and the city have repeatedly tried to get CSX to budge on the insurance premium, and Sease wrote that CSX is still willing to work with the streetcar's board.

"CSX has previously undertaken a good faith effort to analyze the level of liability protection, and has reaffirmed that $100 million is required," Sease wrote in his email. "We have worked with local officials to identify other sources for the required insurance, including insurance coverage held by local governments or state agencies. Those efforts are ongoing."

Jamal Thalji can be reached at or (813) 226-3404.

Tampa's trolley celebrates anniversary and rues expensive insurance premium 10/16/12 [Last modified: Tuesday, October 16, 2012 10:57pm]
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