Despite recent market volatility, Cincinnati’s infrastructure investment fund has grown about 3.5% so far this year.
The initial $1.6 billion fund was invested over a year ago after voters approved the sale of the city-owned Cincinnati Southern Railway. The Board of Trustees that manages the investment fund heard an update on its performance at a quarterly meeting Tuesday.
Eric Goia from UBS Investment Group says the portfolio is designed for the possibility of stormy weather.
“And we build [portfolios] to achieve what we call that efficient frontier, so that we’ll have some stability through choppy waters. And to that end, we have succeeded, and we’re quite pleased about that,” Goia said. “That said, no matter how you construct a ship, when you have a tsunami of waves, it’s going to go up and down — and that’s exactly what we’ve seen.”
The Board hopes to grow the fund by at least 5.5% annually; the growth over the past year is just over 7.5%.
“I think in the first few weeks after the tariffs were originally announced, there was a dip the other way, but it’s grown back up,” said Board President Paul Muething. “You can’t panic too quickly; it is volatile. And I do think they’ve got it supported in a way that it will come back in most cases.”
Regardless of what happens with the markets over the next few months, the city of Cincinnati will have $56 million to spend for the fiscal year that begins July 1, more than double the amount the city was receiving in annual lease payments from Norfolk Southern before the sale.
The Board promised that money back in September based on income that has already been received. It will be paid in quarterly installments of $14 million on July 1, Oct. 1, Jan. 1, and April 1.
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.
City Manager Long and Mayor Aftab Pureval are expected to release the first draft of the fiscal year 2026 budget May 23. City Council must finalize the budget by the end of June.
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