Call to Order and Roll Call
The second meeting of the Budget Review Subcommittee on Transportation of the Interim Joint Committee on Appropriations and Revenue was held on Thursday, July 24, 2014, at<MeetTime> 10:30 AM, in Room 131 of the Capitol Annex. Senator Jimmy Higdon, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Jimmy Higdon, Co-Chair; Representative Leslie Combs, Co-Chair; Senators Ernie Harris, Paul Hornback, and R.J. Palmer II; Representatives Hubert Collins, Tim Couch, Jim Gooch Jr., Keith Hall, Dennis Keene, Tanya Pullin, Sal Santoro, John Short, and Jim Stewart III.
Guests: Juva Barber, Executive Director, Kentuckians for Better Transportation (KBT); Greg Curlin, Port Director, Hickman-Fulton County Riverport Authority and Chair, Kentucky Association of Riverports; Greg Pritchett, Port Director, Henderson County Riverport Authority and Chair, Water Transportation Advisory Board; Mike Hancock, Secretary, Transportation Cabinet; and, Tammy Branham, Executive Director, Office of Budget and Fiscal Management, Transportation Cabinet.
LRC Staff: Chuck Truesdell, Jennifer Anglin, and Spring Emerson.
Chair Higdon requested a motion to approve the minutes of the last meeting. A motion was made by Senator Harris and seconded by Representative Stewart, and the minutes were approved without objection.
Riverports
Ms. Barber, Mr. Curlin, and Mr. Pritchett testified about Kentucky’s riverports and their significance to the Commonwealth.
In response to a question from Senator Harris, Mr. Curlin said there would be a big increase in river traffic as a result of the completion of the Panama Canal in 2015.
In response to questions from Representative Pullin, Mr. Curlin said he travels to Washington, DC at least twice per year to lobby for funding to continue operating locks and dams, and that he speaks with federal representatives when they are in Kentucky. Ms. Barber said KBT continually discusses with federal representatives the importance of the riverports in transporting goods and services.
In response to questions from Representative Collins, Mr. Curlin said the Hickman-Fulton County Riverport brings in about $1 million per year gross, and after expenses, may clear approximately $100,000 per year to put back into maintenance and repairs. He said approximately 300,000 tons of grains go out of that riverport per year which equates to about 10 million bushels at a fee of four to eight cents per bushel, and collects $5 to $6 per ton for the unloading fee. Ms. Barber said the amount in the current state budget appropriated to riverports is $500,000 per fiscal year for maintenance of access and dredging, and requires a 50 percent match in local funds. A comprehensive list of funded projects will be made available to the subcommittee at a later date. Mr. Pritchett said the Boyd-Greenup County Riverport has not submitted a grant application and that could be due to the fifty percent match. All allocated funds are being spent.
In response to a question from Representative Keene, Mr. Curlin said the Hickman Port Authority does not own or maintain the ferry between the Hickman port and Missouri.
In response to questions from Representative Hall, Mr. Pritchett said using the Mobile, Alabama, port instead of New Orleans, Louisiana, for coal traffic would not be feasible due to the intensive system of more than thirty locks on the rivers between Kentucky and Mobile.
In response to questions from Senator Hornback, Mr. Pritchett said local ports could be county entities, city entities, or a combination of the two. For example, the Hickman-Fulton Port Authority is a combined county/city facility, as is the Paducah-McCracken County Port Authority. The Owensboro Riverport is a city entity, and the Henderson County Riverport is a county entity. Typically with setting rates, local governmental unit nominates volunteers to form the board of directors for the port authority, and would hire a port director, who in turn would initiate business activity for the port. The Owensboro Riverport is the only port in Kentucky that makes sufficient revenue to return to the local government, in the amount of approximately $300,000 to $500,000 annually.
In response to questions from Representative Combs, Ms. Barber said if the riverports had received the amount requested in the budget, they would have been able to fund dredging and maintenance of access projects that are currently unfunded. Mr. Curlin said at the Hickman Riverport, the cranes used to unload and conveyors to load need to be replaced, which would cost approximately $2 million to $2.5 million for the conveyor and approximately $1 million to $2 million for a good used crane. Ms. Barber said the U.S. Army Corps of Engineers is responsible for dredging the main channel and the riverport is responsible for dredging from the channel to the dock.
In response to a question from Representative Collins, Mr. Curlin said it takes 20 days to travel from the Owensboro-Henderson Riverport to New Orleans, and only nine days from Hickman-Fulton County Riverport, due to it being the only active Kentucky port on the Mississippi River.
Transportation Cabinet Operating Budget
Ms. Branham provided a brief overview of the Transportation Cabinet operating budget.
In response to questions from Representative Gooch, Ms. Branham said Justice and Public Safety direct appropriations are used for enforcing statutes, highway safety, commercial vehicle enforcement, and weigh stations. Homeland Security direct appropriations are used for security operations related to transportation infrastructure. Secretary Hancock said Kentucky is in compliance with the REAL ID federal mandate and is working toward providing a uniform means of identification across the country.
In response to questions from Representative Collins, Ms. Branham said $940,000 was taken from Aviation funds to help balance the state budget. She said in previous years, the revenue stream for jet fuel tax has been very unpredictable, but during the past fiscal year the cabinet saw steady collections, and it is anticipated to increase slightly during the next fiscal year. She said the debt service bond for the Transportation building would be paid out in fiscal year 2022.
There being no further business before the subcommittee, the meeting was adjourned at 11:40 AM.