Cincinnati’s investment fund resulting from the sale of the city-owned railway has grown by $94 million since March, a growth of nearly 6%.
Voters approved the $1.6 billion sale to Norfolk Southern last year, replacing a decades-long lease to the railway company.
“We feel very happy with UBS and the way they’ve managed this portfolio so far,” Board Member and former Mayor Mark Mallory told WVXU. “Keep in mind, we’re only six months in … $94 million [is] pretty impressive.”
The state law that regulates the trust fund and its Board of Trustees requires that the board inform the city of Cincinnati by the end of September how much money it will receive for fiscal year 2026 (from July 1, 2025 until June 30, 2026).
The board voted Tuesday to promise $56 million for fiscal year 2026, more than double the amount the city was receiving in annual lease payments from Norfolk Southern before the sale.
It will be paid in quarterly installments of $14 million on July 1, Oct. 1, Jan. 1, and April 1.
The $56 million is 3.5% of the fund’s growth; additional money will stay in the fund to grow the principal.
The money is required by state law to be spent only on maintaining existing city-owned infrastructure like roads, parks, recreation centers, and police and fire stations. City Manager Sheryl Long has broadly outlined how the administration would like to spend the additional revenue; all budget decisions are ultimately up to City Council.
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The total value of the fund as of Sept. 16 is $1,694,175,137.20.
“We have to make sure that we keep focused on the goals of the Board of Trustees, which is to deliver as much money as we can to the city of Cincinnati for infrastructure projects,” Mallory told WVXU.
Board Member Paul Sylvester outlined three primary objectives to accomplish that:
– Distribute 3.5% or more of annual growth to the city
– Grow the trust fund balance to keep up with inflation
– Create an internal “reserve” to act as a cushion when investment returns are low or negative.
The 5.9% growth so far is slightly above what the Cincinnati Southern Railway Board of Trustees projected ahead of the sale. As with any financial investments, the returns are expected to vary considerably but average out to about 5.5% growth annually.
The board also voted on Tuesday to officially change its name to “Cincinnati Southern Railway Trust” and to put out a request for proposals for a project to redesign and re-brand the board’s website.