Call to Order and Roll Call
The fourth meeting of the Budget Review Subcommittee on Transportation of the Interim Joint Committee on Appropriations and Revenue was held on Thursday, October 27, 2011, at 10:00 AM, in Room 131 of the Capitol Annex. Representative Sannie Overly, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Jimmy Higdon, Co-Chair; Representative Sannie Overly, Co-Chair; Senators Ernie Harris, Ray S. Jones II, and R.J. Palmer II; Representatives Danny Ford, Jim Gooch Jr., Jeff Greer, Keith Hall, Richard Henderson, Dennis Keene, Fred Nesler, John Short, and Jim Stewart III.
Guests: Representatives Tom Burch, Ron Crimm, Wade Hurt, Mary Lou Marzian, Reginald Meeks, Mike Nemes, Darryl Owens, Steve Riggs, and Tom Riner. Steve Waddle, State Highway Engineer, and Tammy Branham, Executive Director, Office of Budget and Fiscal Management, Transportation Cabinet. Stan Lampe, President, Kentuckians for Better Transportation (KBT). Charles "Skip" Miller, Louisville Regional Airport Authority, KBT Past Chairman 2009. Anne Lawson, Elizabethtown Regional Airport, KBT Air Transportation Committee Member. Darrell Watson, President, Kentucky Aviation Association.
LRC Staff: Greg Rush, Stephanie Craycraft, Jennifer Anglin, and Spring Emerson.
Chair Overly welcomed members of the Jefferson Delegation. She then requested a motion to approve the minutes of the meetings held on July 28, 2011 and September 22, 2011. A motion was made by Representative Hall, seconded by Representative Henderson, and the minutes were approved without objection.
Update on Sherman Minton Bridge
Steve Waddle, State Highway Engineer, provided an update on the Sherman Minton Bridge. He said the bridge had been deemed unsafe due to the discovery of a crack that was considered critical. He added that although the crack was considered to be severe, it had been there since the bridge was fabricated and nothing has caused it to become worse over time.
In response to a question from Representative Henderson, Mr. Waddle said the weight of the additional steel was taken into account with the sequencing of the repair work.
In response to a question from Representative Owens, Mr. Waddle said the crack had been isolated and further repairs are being made.
In response to a question from Representative Meeks, Mr. Waddle said all awards, incentives, and costs relating to the bridge are being split with the state of Indiana. He added that it is anticipated that the bridge will reopen in March 2012.
In response to a question from Representative Nemes, Mr. Waddle said there would be ramifications if the project is not completed in the amount of time specified. He explained that $100,000 per day had been assigned to the project as the "B value," and the cost of the closure of the bridge was much more expensive than that. He said the maximum number of days the contractors could bid was 210 at $100,000 per day. There is an instance where a portion of the B value could be paid to the contractor or deducted from the bid. He explained that if the contractor's bid stated it could complete the project in 100 days, at $100,000 per day the B value would be $10 million, which is used for analysis only. If the contractor finished the project in 98 days, it would receive a bonus of $200,000. There is a maximum bonus amount of $5 million. If the contractor took two days longer than the bid stated, it would be assessed a penalty of $200,000.
In response to a question from Representative Meeks, Mr. Waddle said all awards or incentives and costs would be split by the state of Indiana by fifty percent.
Mr. Waddle stated that the low bid was submitted and accepted by Hall Contracting of Kentucky, which bid an A value of $13.9 million, based on the items of work. The B value was 135 days, or $13.5 million. The bid used for analysis was $27.4 million. Based on that schedule, it is anticipated that the bridge will open around the first of March 2012. If the contractor actually completes the work in 135 days, it will receive $13.9 million, the A value. If it completes the work 50 days earlier, it could be paid as much as $18.9 million.
Mr. Waddle stated that due to the emergency situation, the Federal Highway Administration would provide either 25 percent of the contract or $5 million, which would be a great benefit to Kentucky. The cabinet was able to tap into some interstate bridge maintenance funds.
In response to a question from Representative Meeks regarding whether there was a stipulation that Kentucky employees be used for the project, Mr. Waddle said he would provide information to staff at a later date. Representative Marzian commented that Hall Contracting is an employee-owned company.
In response to a request from Chair Overly, Mr. Waddle explained that two cracks were found that were of tremendous concern. It was determined that there were a number of critical locations where this type of crack could occur, and the decision was made to plate over the entire bridge to strengthen it, which is the next best thing to total replacement. Chair Overly commended the cabinet for extending the life of that useful facility, restoring confidence in travelers driving over the bridge, and for making public safety first.
In response to a question from Representative Burch regarding the rustiness of the bridge, Mr. Waddle said the plan is to paint portions of it while it is shut down, but the priority is to make it safe to drive on and get it re-opened.
In response to a question from Representative Meeks, Mr. Waddle explained that the work on expanding the ramps would be easier while there is no traffic in that area.
In response to a question from Senator Palmer regarding the use of bridge maintenance funds, Mr. Waddle stated that bridge maintenance projects are prioritized and the projects that would be affected by the use of those funds would not be high priority projects.
In response to a question from Representative Gooch regarding plating the main beams, Mr. Waddle said the plates were being bolted on, and the extra weight should not present any problems because the substructures are very solid.
Chair Overly thanked the members of the Jefferson County delegation for their attendance.
Understanding How Kentucky's Airports Attract and Grow Businesses and Jobs - Kentuckians for Better Transportation
Stan Lampe, President, Kentuckians for Better Transportation (KBT); Charles "Skip" Miller, Louisville Regional Airport Authority, KBT Past Chairman 2009; Anne Lawson, Elizabethtown Regional Airport, KBT Air Transportation Committee Member; and Darrell Watson, President, Kentucky Aviation Association, testified on how Kentucky's airports attract and grow businesses and jobs.
In response to a question from Senator Harris regarding the Aviation Development Fund, Mr. Lampe said the amount in the fund that should be protected in the upcoming budget negotiations would be between $468,000 to $531,000. He said in fiscal year 2010 the amount of net loss was $468,000 and in fiscal year 2011 the actual amount of loss was $531,000.
Representative Keene commented that Kentucky's airports are very critical to economic development. Chair Overly said that highlighting the direct impact is significant, but the indirect impact is also significant, and the airports are the welcome mat to our communities. She looks forward to seeing the economic studies when they are complete. Representative Hall commented that the role airports play is very important to the economic development of Kentucky in order to maintain the competitive edge.
In response to a question from Representative Nemes, Mr. Miller said the airport authority would work with agencies such as the Louisville Convention and Visitors Bureau and the Kentucky Fair and Exhibition Board to make sure requirements are met when major events come in.
Road Fund Update
Tammy Branham, Executive Director, Office of Budget and Fiscal Management, Transportation Cabinet, provided an update of the Road Fund. She stated that the fiscal year 2011 Road Fund revenues came in stronger than expected at $73 million over the Consensus Forecasting Group's estimates. When compared to fiscal year 2010 collections, there was an 11 percent growth. She went on to say they anticipate growth of approximately 5.9 percent in fiscal year 2013 over fiscal year 2012, and growth of approximately 5.7 percent in fiscal year 2014 over fiscal year 2013.
In response to a question from Chair Overly regarding the cost of gasoline remaining steady or increasing, Ms. Branham replied that the average wholesale price is set, not actual.
There being no further business before the subcommittee, the meeting was adjourned at 11:22 AM.