Call to Order and Roll Call
The 4th meeting of the Interim Joint Committee on Transportation was held on<Day> Tuesday, October 6, 2015, at 1:00 PM, in Bluegrass Hall at Kentucky Speedway in Sparta, Ky. Senator Ernie Harris, Chair, called the meeting to order, and the secretary called the roll. The minutes from the Committee’s September 1, 2015 meeting were approved.
Present were:
Members: Senator Ernie Harris, Co-Chair; Representative Hubert Collins, Co-Chair; Senators Jared Carpenter, C.B. Embry Jr., Jimmy Higdon, Albert Robinson, Brandon Smith, Johnny Ray Turner, Whitney Westerfield, and Mike Wilson; Representatives Denver Butler, Leslie Combs, Tim Couch, Donna Mayfield, Tom McKee, Russ A. Meyer, Jerry T. Miller, Terry Mills, Steve Riggs, Sal Santoro, John Short, Arnold Simpson, Diane St. Onge, Fitz Steele, Jim Stewart III, and Addia Wuchner.
Legislative Guests: Representative Rick Rand.
Guests: Mark Simendinger, General Manager, Kentucky Speedway; Mike Hancock, Secretary, Kentucky Transportation Cabinet (KYTC); Rob Hans, Chief District Engineer, District 6, KYTC; David Talley, Innovative Finance Manager, KYTC.
LRC Staff: John Snyder, Brandon White, Dana Fugazzi, and Christina Williams.
Welcome
Mark Simendinger, General Manager, Kentucky Speedway, welcomed members and guests to the Kentucky Speedway, highlighted important historical facts and figures, gave a brief overview of the Speedway’s operations.
In response to a question asked by Representative Riggs concerning attendance at Kentucky Speedway, Mr. Simendinger stated approximately 25 percent of the attending fan base has been from the Louisville Metropolitan area and approximately 35 percent of the attending fan base has been from the Cincinnati Metropolitan area.
In response to a question asked by Senator Harris concerning the marketing slogan used for Kentucky Speedway, “The Roughest Track in NASCAR,” Mr. Simendinger stated the slogan began due to the result of weathering which caused rough spots on the track. Instead of fixing the rough spots, it was suggested that they be left to cause a challenge for the drivers and to set apart Kentucky Speedway, which does not have other NASCAR venues’ history, from other racetracks.
Infrastructure improvements for Kentucky Speedway
Mike Hancock, Secretary, KYTC, and Rob Hans, Chief District Engineer, District 6, KYTC, gave a presentation on the infrastructure improvements to correct traffic and parking issues for Kentucky Speedway that became apparent at its inaugural race in July, 2011. Secretary Hancock stated KYTC and Kentucky Speedway worked together to implement the improvements. Mr. Hans stated at the inaugural race I-71 north and southbound were completely gridlocked with traffic, and KY-35 had pedestrian issues. A solution was needed. After that race, meetings between KYTC, Kentucky Speedway staff, and Governor Beshear’s office took place to discuss possible solutions. The result was a widening of KY-35 from three lanes to five with two shoulder lanes, for a total of seven lanes to be used if needed. It was also determined through the evaluation of traffic congestion that the majority of the traffic was coming from north to south and utilizing those interstate exits. Capacity was added to the southbound exit lane of I-71 to KY 35, which resulted in three continuous lanes of traffic exiting the interstate and making a right turn to come into the Speedway. In addition to the widening of KY-35, Kentucky Speedway acquired an additional 150 acres of land on the opposite side of KY-35 to be used for added parking space. A pedestrian tunnel was constructed to ease pedestrian traffic issues on KY-35.
Planning and execution of the solutions were expedited for completion by the NASCAR race that was to occur at Kentucky Speedway the following year. There was a competitive bidding process for the changes, and Sunesis Construction won with a bid of about $3.7 million, approximately $220,000 less than the KYTC engineer’s estimate. The plan was executed in nine months. Mr. Hans discussed a timeline of that process.
Mr. Hans stated that, because there was no need to acquire right-of way width on KY-35, construction was able to occur within the footprint. There was a small easement that was acquired from the Speedway. There were also some overhead electrical power lines that were moved, and utility companies were prompt about their removal. The pedestrian tunnel took the longest to construct, therefore was the most time sensitive portion of the project. The pedestrian tunnel is valuable because it allows pedestrians coming to the Speedway, and who are not parking onsite, the ability to cross KY-35 without stopping traffic.
The option to have a counter-flow lane was also implemented so I-71 southbound traffic at the north-end of the median barrier wall could be redirected if traffic was beginning to back up. One of the southbound lanes could be put on the northbound side of I-71 to allow duel flow traffic, which would allow traffic to continue without congestion.
The Speedway hired Stantec to conduct a parking lot and traffic flow simulation of all the exits and entrances into and out of the speedway. The improvements have worked.
Electronic tolling processes used on the Ohio River Bridges Project
David Talley, Innovative Finance Manager, KYTC, testified about the electronic tolling process that will be used on the Ohio River bridges. The Kennedy Bridge and the two new bridges that are being constructed will be tolled using a single all-electronic tolling system. The Sherman Minton and Second Street Bridges will remain toll free. Indiana and Kentucky procured the services of Kapsch to construct, test, and operate the tolling system. There will not be an ability to pay cash for the tolls at the bridges, which will improve safety and time and reduce costs.
Mr. Talley stated there are different tolling costs associated with crossing the bridges depending on the option for passing. If a customer opens a prepaid account and places a transponder in a vehicle, the transponder is recognized on the bridge and the appropriate toll is deducted from the account. The costs associated with the use of a transponder are $1.00 for a frequent user, $2.00 for a passenger vehicle, $5.00 for a medium truck, and $10.00 for a heavy truck. The number of times a person crosses the bridge to be considered a frequent user has not been decided upon, however the initial suggestion is that a person must cross the bridge 40 times within a month. The second tolling option that a customer can choose when crossing is to open a prepaid account, but choose not to place a transponder in the vehicle. The license plate is recognized when crossing the bridge, and the appropriate toll is deducted from the account. This option is referred to as the registered video option, and the costs are $3.00 for a passenger vehicle, $6.00 for a medium truck, and $11.00 for a heavy truck. There is no frequent user alternative for the registered video option. The third tolling option is the unregistered video option. This option is for a customer who chooses not to establish a prepaid account. The license plate is photographed upon crossing, and an invoice is sent to the registered owner for the appropriate toll owed. The costs associated with the unregistered video option are $4.00 for a passenger vehicle, $7.00 for a medium truck, and $12.00 for a heavy truck. There is no frequent user alternative for the unregistered video option.
Mr. Talley stated transponders will be available online, at a customer service center, and at retail outlets. The local transponders will be free, and the E-ZPass transponders will cost less than $20.00, but the exact price has not been set. A customer preferring to only deal in cash can reload a prepaid account at a customer service center or a retail outlet.
If a person does not pay after the original invoice is mailed to the registered vehicle owner, a series of reminders is mailed. Fees are then charged to cover the cost of collection. Eventually, a customer will receive a violation notice along with additional fees. Enforcement may include a vehicle registration renewal hold, collection activity, and legal action.
The next step to finalizing the electronic tolling process is getting the business rules finalized, which will occur in November, 2015. The public information campaign will begin shortly thereafter and continue through 2016 and beyond. The electronic tolling system will be capable of opening accounts in spring of 2016. The system will then be capable of collecting tolls in the fall of 2016.
In response to a question asked by Representative Simpson concerning the finality of the costs of tolls and the location of the cameras, Mr. Talley stated the toll rates were adopted by a tolling body in 2013 consisting of three Kentucky members and three Indiana members. The rate that was decided upon was based on a traffic and revenue study that was conducted at that time and the rate that was needed to support a bond sale on the Kentucky side to finance a portion of the project cost. The toll rates can be overridden by that tolling body at any time, and there is a mechanism for the rates to increase annually by the rate of inflation or 2.5 percent to ensure the collected tolls are sufficient to pay the ongoing and maintenance costs of the project. The cameras and antennas will be located close to the bridges’ entries, but not on the bridges themselves.
In response to a question asked by Representative Short concerning the possibility of the invoices being returned to sender and the intended party not receiving them, Mr. Talley stated KYTC will send the invoice to the registered owner of the vehicle. If the invoice does not reach the intended recipient, there will be tracing used by third parties to try to reach the intended party. In response to a second question asked by Representative Short, Mr. Talley stated the cabinet will work with automobile dealers to come to an equitable solution to figure out how temporary tags should be tolled.
In response to a question asked by Senator Embry, Mr. Talley stated the total loss due to the inability to collect tolls that are owed is estimated to be approximately a 2.5 percent of all tolls due, according to the traffic and revenue study that was conducted. In response to a second question asked by Senator Embry concerning what might happen if a person with an outstanding balance passes away, Mr. Talley stated he is unsure what would happen and that an attorney would have to be contacted.
In response to a question asked by Representative St. Onge concerning the frequent user rate, Mr. Talley stated that rate is not available for medium and heavy trucks, and only available to passenger vehicles that use a transponder.
In response to a question asked by Representative St. Onge, Mr. Talley stated it is in the best interest of the tolling system and all customers that as many people use the transponders as possible, therefore in an effort to get as many transponders as possible distributed, the cabinet has decided that the local transponders will be free. Local transponders refer to the transponders only working on the three Louisville and southern Indiana bridges. A local transponder will not benefit a customer passing through another tolling system.
In response to a question asked by Senator Wilson, Mr. Talley stated the tolls will be in place until all of the financing of the project is paid, which should be at least until 2053. Fifty percent of the combined toll revenue collected of both the Downtown and East-End bridges will go to Kentucky, and 50 percent of the combined toll revenue of both bridges will go to Indiana. The cost of collection is dependent upon how many people use the transponder method and how many people use the invoicing method. The cost could be from four to five cents, if people heavily use the transponder, to twenty-five or thirty cents per one dollar collected if most people use the invoicing method. It is more advantageous to the cabinet for customers to use the transponders, therefore the tolling rates have been set to try to drive the customers to use the transponder method.
In response to a questions asked by Representative McKee, Mr. Talley stated there are other states that have successfully utilized electronic tolling. There will be signs before the bridges alerting motorists of the electronic tolls.
In response to a question asked by Chairman Harris concerning payment of tolls for motorists using rental cars, Mr. Talley stated there are two primary ways to address that issue. One option is that rental agency in a toll area would place a transponder in the rental car and offer the renter the option to utilize the transponder for the tolls. If the renter agrees to the use of a transponder, tolls will be charged on the renter’s credit card through the rental agency. This option often involves a fee assessed by the rental agency. The other option is to open a prepaid account and elect to add the rental vehicle to the account. The second option does not mandate the motorist pay an additional fee to the rental agency. However, the motorist must be sure to add the rental car to the prepaid account and delete the rental car from the prepaid account after the rental car is returned.
Representative Riggs stated his concern for the complexities and administrative costs involved in not having a cash only option to pay the tolls. In response to Representative Riggs, Mr. Talley stated that employees contracted under Kapsch who are utilized to collect, send invoices, and enforce invoices are under a contract that is structured by service level and the number of transactions needed for a set fee. The amount of personnel that it takes for the company to achieve the task is a cost function that is placed upon Kapsch. Kapsch operation will have employees in Kentucky and Indiana and outside those states. The goal to provide fast, efficient, and appropriate services.
In response to a question asked by Representative Wuchner, Mr. Talley stated the Kapsch contract has a seven year term with a renewal option for one additional year. After that time, there would be a new competitive procurement process. The tolls rates are independent from the contractor that is selected.
In response to a question asked by Senator Westerfield, Mr. Talley stated the cabinet will use aggregated data to find trends and see when motorists are using the system the most. However, KRS 175B, which authorizes the collection of tolls, provides that the information collected must be used for toll collection purposes and for no other reason.
Chairman Harris thanked members and guests for attending the meeting and adjourned the meeting at 2:37 P.M.