Call to Order and Roll Call
The 6th meeting of the Interim Joint Committee on Transportation was held on<Day> Tuesday, November 7, 2017, at 1:00 PM, in Room 149 of the Capitol Annex. Representative Marie Rader, Chair, called the meeting to order, and the secretary called the roll. The minutes from the Committee’s October 3, 2017 meeting were approved.
Present were:
Members: Senator Ernie Harris, Co-Chair; Representative Marie Rader, Co-Chair; Senators Joe Bowen, C.B. Embry Jr., Jimmy Higdon, Paul Hornback, Gerald A. Neal, Dorsey Ridley, Albert Robinson, Brandon Smith, Johnny Ray Turner, and Mike Wilson; Representatives Lynn Bechler, Tim Couch, Ken Fleming, Chris Fugate, Al Gentry, David Hale, Chris Harris, Toby Herald, Dennis Horlander, Kenny Imes, Dan Johnson, James Kay, Donna Mayfield, Suzanne Miles, Robby Mills, Tim Moore, Rick Rand, Steve Riggs, Sal Santoro, John Sims Jr, Jim Stewart III, and Walker Thomas.
Guests: Colonel Antoinette Gant, U.S. Army Corps of Engineers, Louisville District, Sharon Bond, Chief of Planning, Louisville District, Sara Konish, Strategic Initiatives Specialist; John Moore, Executive Director, Division of Planning, KYTC, Lynn Soporowski, Transportation Engineering Branch Manager, Multi-Modal Programs Branch, KYTC, Greg Pritchett, Port Director, Henderson Riverport Authority; Robbie Englert, Senior Vice President of Operations, Crounse Corporation, Justin Dickens, Manager, Risk and Administration, Crounse Corporation.
LRC Staff: John Snyder, Brandon White, Dana Fugazzi, and Christina Williams.
Presentation on Kentucky Locks and Dams
Colonel Antoinette Gant, U.S. Army Corps of Engineers, Louisville District, gave a presentation on Kentucky’s locks and dams. She stated the Louisville District is one of seven districts within the Great Lakes and Ohio River Division commanded by Brigadier R. Mark Toy with headquarters in Cincinnati, Ohio. The Huntington, Nashville and Louisville Districts all provide planning, design, and construction management support to communities and to the Commonwealth for water resources projects under the Civil Works program. The Memphis District which is a part of the Mississippi Valley Division, also works within the Commonwealth of Kentucky in southwestern Kentucky on the Mississippi River. Established in 1886, the Louisville district has a total workforce of approximately 1,250 people in the five-state area of Kentucky, Indiana, Illinois, Ohio and Michigan. In addition to the headquarters in Louisville, the Louisville District also has 60 field offices. The over 95 percent civilian workforce is made up of professional engineers, architects, planners, biologists and other specialist and support staff. The Louisville District is one of the Corps of Engineers most diverse districts that include military construction, environmental, and civil works missions. The Louisville District’s military mission is in support of the 12 Army installations, five Air Force installations, several other Department of Defense facilities, and a program of project, design, and construction management in support of the Army and Air Force Reserve military construction program for the entire United States and it territories. The environmental mission is focused on cleanup of Department of Defense site contamination to protect public health and safety, and the environment. Lastly the Civil Works Mission includes flood risk management, navigation, regulatory activities, water supply, water quality, hydropower, environmental conservation, and restoration, recreation and emergency response. The Louisville Districts civil works boundary includes 20 multipurpose flood reduction and recreation reservoirs and ten locks and dams (two along the Green River and eight along the Ohio River.) From this general navigation profile of the mainstream of the Ohio River from Pennsylvania to Southern Kentucky, nine of the 20 locks and dams (including locks and dams 52 and 53 which will be replaced by Olmsted) are within the Louisville footprint. Among this network however many of the aging locks and dams located on the upper Ohio are at risk of failure after decades of underinvestment, potentially causing significant adverse impacts to the national economy.
Specific to Louisville, the average age of the navigation infrastructure along the river is approximately 46 years old, nearing their 50 year design life. There are many commodities that are moved throughout the basin via the locks and dams. As far as the economic impact of this, an average of over 22 billion dollars’ worth of commodities are shipped through the highest traffic area of the Ohio River. Barges on the Ohio River can move a ton of commodities 550 miles on one gallon of fuel, as compared to 400 miles on railroads, and 150 miles on trucks, an efficiency which results in reduced fuel emissions. Waterway transportation also alleviates highway congestion. A 15 barge tow, common on the Ohio River, has the same capacity as over 800 trucks, and over 200 railcars. This reduction in transportation cost translates to lower end-user prices for goods transported on the waterway, including decreased energy costs from coal.
Colonel Gant stated that the top five Ohio River Commodities by tonnage are coal, grains, aggregates, chemicals, and petroleum. She added that when most discuss the Ohio River especially in the navigation industry, there is one stretch of the river that is always mentioned, locks and dams 52 and 53. This strategic reach of the Ohio River provides a connection between the Mississippi River, the Tennessee River, and the Cumberland River. More tonnage passes this point than any other place in America’s inland navigation system. And while it’s the busiest, it is also one of the oldest. Completed in 1928 and 1929, the antiquated design and age of these structures make it impossible to meet current traffic demands without delays. The existing structures have deteriorated structurally as was shown in pictures, and are overstressed during normal operating conditions. In just FY 2017 alone, the Corps of Engineers has invested $13.2M to repair, operate and maintain locks and dam 52 (normally $2.5M for high lift facilities). Constructors installed anchors to assist with safe dam operations, a contractor is on sight 24 hours a day, seven days a week to assist lock and dam 52 employees, and make repairs when conditions allow. Currently the third rock installation contract is underway. The rock dikes will allow for the fixing of four holes in the navigable pass section, and there have been multiple miscellaneous contracts for hydraulic repair. During a recent 14 day closure, an $8M impact was identified by the ship carriers but it goes further. Total river closures in 2017 have had an estimated impact of over $35M to the nation.
However, the Olmsted project is near completion. Once Olmsted is operational, locks and dams 52 and 53 will be demolished. The Olmstead project is ahead of schedule and under budget. All precast concrete on the project is complete. Remaining critical low water season activities include tainter gates bay number five unwatering (side seals and sill installation), completion of left boat abutment cast-in-place concrete, removal of Illinois side of left boat abutment cofferdam, and set/tremie of navigable pass-12A. Key pieces of the puzzle that allowed such progress have been efficient funding, advantageous river conditions which have allowed the work to expand beyond the contractual low water season (15 Jun – 30 Nov) and partnerships with the navigation industry, which contributes through a fuel tax. Colonel Gant shared a few photos which described the complexity of this $3 billion project.
Colonel Gant stated while there is excitement surrounding the completion of Olmsted, they still recognize that there are issues throughout the basin, outside of navigation. With that, along with other sister river districts and the division, they are seeking to address such issues with a basin-wide approach. The recent partnership between the Ohio River Basin Association and the Ohio River are steps in the right direction in assisting the Corps and others in efforts to identify strategies and priority actions which can be addressed using a interrelated voice. Colonel Gant stated they just concluded their first Ohio River Basin Tour in Pittsburgh to replicate the Great Lake Restoration Initiative for the Ohio River. This initiative will continue with Huntington and Louisville Districts over the next two years. She added they are excited to announce The Ohio River Basin Climate Change Adaptation/Mitigation Strategies Pilot Study sponsored by the Institute for Water Resources, featuring climate modeling for anticipated precipitation and temperature changes through 2099 as well as adaptation strategies for infrastructure and ecosystems that may be impacted by these forecasted changes. Efforts such as this help to establish a baseline of current conditions that will advance all future planning activities and provides a common operating picture basin wide. Colonel Gant concluded with the mission at the Louisville District, which is to deliver solutions and manage resources supporting regional and national requirements utilizing the best engineering practices and strategic partnerships to reduce disaster risk, strengthen the economy, and support national security.
In response to a question asked by Senator Bowen concerning the other locks and dams on rivers other than the Ohio River, Colonel Gant stated that along the Green River, there are two for which the Corps has primary responsibility. Sharon Bond, Chief of Planning, Louisville District, stated there has been a disposition that some of those locks and dams are no longer in operation. She added that locks and dams three through six on the Green River and one on the Barren River are no longer being used for navigation. A disposition study was done and there was legislation passed by Congress that directed the disposition of those properties in 2016. She added for the Kentucky River, they have transferred locks and dams five through fourteen to the Kentucky River Authority. Another disposition study is being done at locks and dams one through four on the Kentucky River and it is yet to be determined who those would be turned over to in the future.
In response to a question asked by Representative Fleming concerning safety, specifically levee safety, Colonel Gant stated the district has a dam safety and levee section and it is their responsibility to inspect those levies and dams in the district and report back with critical issues. She added the criticality rating will determine the types of funding that is used for the repairs. She added at this point, she is unaware of any criticality which would result in complete failure.
In response to an additional question asked by Representative Fleming concerning the district’s relationship with Homeland Security, Colonel Gant stated the district has a responsibility to be able to communicate with Homeland Security where there are issues. She added the Emergency Operations Center is in contact with Homeland Security regularly sharing information.
In response to a question asked by Representative Miles, Sara Konish, Strategic Initiatives Specialist, stated The Water Authority has leased the Rochester Dam property for what she believes is a twenty year lease. The authority has been in contact with the district about changes and improvements they would like to make, and they have worked closely with them to accommodate any changes they have requested.
Presentation on Kentucky Riverports
John Moore, Executive Director, Division of Planning, KYTC, Lynn Soporowski, Transportation Engineering Branch Manager, Multi-Modal Programs Branch, KYTC, and Greg Pritchett, Port Director, Henderson Riverport Authority, gave a presentation on the Kentucky Riverports. Ms. Soporowski stated that Kentucky currently has eight operating public riverports, four that are developing, and two that are in question. She stated that in FY 2016 there was a return on investment of 422 percent for the project list. In FY 2017 the unfunded amount significantly increased, yet there was a still an excellent return on investment of 212 percent for the project list. She added in FY 2018, fewer projects were able to be funded and still had a 225 percent return on investment on those projects.
Ms. Soporowski provided charts that showed how much of the $500,000 a year that has gone to the public riverports for maintenance of access and dredging has been allocated to activities such as pavement projects, rail projects, cranes, conveyors, scales, dredging, barge access, dock improvements, and security from FY 2013 to FY 2018. She added because of the way the funds were distributed as a line item in the transportation budget, some of those funds were lost. There was a project in FY 2013 that was canceled late in the process because the railroad decided not to participate. Because of that, $50,000 was lost to the riverports and went back to the General Fund. The Riverport Financial Assistance Trust Fund was created in FY 2010 and Ms. Soporowski stated they propose that this is where these funds need to go. They allow for the funds that are canceled to again be used by the riverports, not lost. It will also streamline the auditing process and allow for longer term planning and larger construction projects. The Riverport Financial Assistance Trust Fund will be administered by KYTC and may receive appropriations, federal funds, contributions, gifts, and donations. The purpose of the trust fund is to improve riverport facilities and infrastructure, to capture the economic and trade potential, but shall not include routine operations, and maintenance. Also, according to notwithstanding KRS 45.229, moneys remaining in the fund shall not lapse but shall carry forward and interest earned shall accrue to the fund. There is also a minimum of a 20 percent match, but can be set at a 50 percent match, depending on the funds that are available. The Riverport Marketing Assistance Trust Fund is to be administered by the Cabinet for Economic Development. This fund may also receive appropriations, federal funds, contributions, gifts and donations. The purpose of this fund is to promote and market Kentucky’s riverport to industrial, businesses and commercial prospects, to attract economic development. Money shall also be carried forward into the succeeding fiscal year. Grants under the section of KRS 1584.80-140 shall not exceed $15,000 per project or $30,000 per port per year and the project shall be completed within one year of the funding, with the applicant having at least a 50 percent match.
Ms. Soporowski stated that Kentucky is working with Fortune 500 companies to try to bring them into the state, however, in the Kentucky Constitution (section 164) it states that no county, city, town, taxing district, or other municipality shall be permitted to make any contract for a term exceeding twenty years. Before granting such franchise or privilege the municipality shall first, after due advertisement, receive bids therefore publicly, and award the same to the highest and best bidder. This section does not apply to a trunk railway. This portion of the Kentucky Constitution has not been revised since September 28, 1891. Ms. Soporowski stated the problem with a franchise limit of 20 years is that businesses want and need long term agreements to make their private investment lucrative.
Ms. Soporowski gave an overview of some of the projects that KYTC has dealt with over the past few years including the FY 2016 and FY 2017 Eddyville-Lyon County Riverport and Industrial Development Authority with expanded truck queuing and improved grain pit access and technology. She also gave an overview of the FY 2016 Greenup-Boyd County Riverport Authority with included 4 railroad crossings and 176 cross-tie replacements. The FY 2017 Henderson County Riverport Authority also had a dock crane restoration project. In FY 2014, 2016, and 2017, the Hickman-Fulton County Riverport Authority funded dredging for slack water harbor. Hickman, and Fulton County also replaced a 40 year old crane that increased capacity by 150 percent, as well as replaced conveyors from 1974 that also increased capacity by 150 percent. The Louisville Jefferson County Riverport Authority, from FY 2013 through FY 2018, completed rail rehabilitation and replaced 1,770 cross ties with new plates, spikes, anchors, and ballast. The rail rehabilitation was particularly important due to the approximate 225,000 tons of throughput of material such as petroleum coke, clay, coal, and coils to name a few. The Owensboro Riverport Authority in FY 2017 performed a project for security on an inner loop road which provides single access points for external traffic, secures the entrance (gate) 24 hours a day, seven days a week, and 365 days a year. This project also included a detour to the guard building and safe parking for truckers. Ms. Soporowski stated other projects that Owensboro has done has included a 40,000 square foot tolling and storage facility, and an 100,000 bushel storage and conveyor upgrade for Bunge North America. With those two projects, Solvay and Bunge, Kentucky invested approximately $150,000 to $160,000, however Solvay and Bunge invested over $25 million. In FY 2017 The Paducah-McCracken County Riverport Authority completed dock dredging, as well as obtaining new truck scales, and conveyor refurbishment.
In conclusion, Ms. Soporowski stated Kentucky’s public riverports need allotments to be put in The Riverport Financial Assistance Trust Fund per KRS 1747.210, for limits to be eliminated on contracts per the Kentucky Constitution Section 164, and an increase in funding to improve Kentucky’s economy.
In response to a request by Representative Riggs, Mr. Pritchett stated that other communities that do not have riverports still benefit from them due to the raw materials that are disbursed all throughout the Commonwealth that are brought in by using those riverports. Ms. Soporowski also added that the environmental footprint is reduced due to the usage of riverports as well.
Senator Bowen acknowledged the manager of the Owensboro Riverport Brian Wright who was in attendance and thanked him for his dedication and hard work. He also reiterated Representative Riggs point as to the many benefits of riverports across all communities in the Commonwealth.
Co-Chair Harris stated he believes as we look forward in the Transportation budget, that there will continue to be money being put into developing all modes of transportation, riverports included because all of the modes of transportation are integrated and critical to the success of Kentucky businesses.
In response to a question by Senator Higdon concerning the need for a constitutional amendment to change the 20 year franchise law, Ms. Soporowski stated that the need for a constitutional amendment is what attorneys have told her would need to happen in order to solve this issue, however she stated she is open to other ways to expand the time limit on the franchise law.
Presentation on the Kentucky Waterways Industry and Local Impact
Robbie Englert, Senior Vice President of Operations, Crounse Corporation, and Justin Dickens, Manager, Risk and Administration, Crounse Corporation gave a presentation on the Kentucky Waterways industry and its local impact. Mr. Englert stated the Crounse Corporation is a Paducah, Kentucky based barge line that was founded by George Crounse in 1948. The Crounse Corporation has approximately 300 employees. Mr. Crounse chose Paducah as the headquarters for the Crounse Corporation due to the close proximity to the Ohio, Tennessee, Cumberland, and Mississippi Rivers. The Crounse Corporation operates approximately 34 tow boats and a fleet of about 1,150 barges. Mr. Englert stated there are seven or eight employees operating a boat and they work on the boat 21 days at a time and then they are off for 21 days. These jobs are career path oriented leading to possible positions of becoming an engineer, a wheelhouse/pilothouse or captain on a boat which requires coast guard credentials to operate the boats. Being a Kentucky based corporation, Mr. Englert stated they move a lot of coal, some from riverports that were mentioned earlier. He also added that the corporation moves about 30 million tons of material a year, most of which is coal and aggregate. Together with other service providers and barge lines and terminal people, congressional district one has approximately 7,000 jobs in the river transport industry. He added Kentucky is fifth highest in the nation for the number of employees in the maritime industry.
Mr. Englert stated one barge can hold 16 rail cars and the biggest gondola cars are 100 ton cars. He added that fifteen, 150 car unit trains will only fill up nine or ten barges and they move 15 of them at a time. To further elaborate the amount of materials being moved, Mr. Englert stated 1,000 tractor trailers on the road would fill up one barge. Mr. Englert stated a newly implemented regulation stated the vessels must be inspected which makes this mode of transportation even more safe. Mr. Englert stated there is over 20,000 miles of navigable waterways in the United States therefore, water transportation has an important part to play in the well-being of the country.
In response to a question asked by Co-Chair Harris concerning a possible increase in barge traffic from the Panama Canal, Mr. Englert predicted that there will be an increase in barge traffic, however, there will need to be an inter-modal place where rail, truck, and barges can all distribute containers, and that key place has not yet been located.
Senator Smith elaborated on the concern of the river capacity due to the shallowness of certain waterways. He also questioned who is responsible for maintaining the various locks and dams. Mr. Englert stated that in the river transportation industry they pay 29 cents per gallon on every gallon of fuel that is used for propulsion. He added they are the only stakeholders that pay into the waterway trust fund, and then the federal government matches those funds which are then used for projects that Colonel Gant and the Louisville District oversees.
With no further questions to come before the Committee, Chair Rader adjourned the meeting at 2:07 P.M.