Thursday, September 8, 2011

Transportation Committee Notes

The Senate and House Transportation Committees met separately today in Frankfort to discuss a variety of issues. Both committees had the same agenda, with the exception of an update from KY Speedway on parking and traffic improvements related to the NASCAR race that took place several months ago. The Senate Transportation Committee included this as part of their agenda, while the House committee did not.

KY Speedway
Mark Simendinger, the General Manager at Kentucky Speedway, gave a good review of the problems that they experienced with traffic and parking at the recent NASCAR Sprint Cup Race, to Senate Committee members this morning. As part of their effort to improve track operations before next year's race, the Speedway has purchased land for additional parking. In addition to this improvement, the state has agreed to fund the construction of a tunnel connecting the new parking lot to the track and also a new lane exiting off of I-71. The total cost to the state will be $3.6 million. Several Republican senators were critical of using public monies to pay for a private venue for an event that will take place one time per year. Secretary Hancock said that they will use funds from the Cabinet's contingency account. In response to questions from Senator Givens, Hancock explained that the account contains approximately $31 million annually, and those funds are budgeted by the General Assembly.

Road Fund Update
A brief update was given by the Cabinet on the status of the Road Fund. As has been reported, revenues have exceeded Road Fund estimates, to the tune of $73 million in FY 11. The following questions were asked:

Senator Shaughnessy asked for a breakdown of the gas tax by county and the Cabinet responded that it is not reported in that manner. Shaughnessy has requested a meeting with Hancock and Finance Cabinet officials to determine if that data can be determined.

Senator Thayer asked how the additional revenues would be spent and Hancock told the committee that the funds will support state funded construction projects.

There were a couple of questions related to electric vehicles and how funding for roads will continue with this movement away from gasoline. Hancock said that all states are wrestling with this issue and they are hopeful that Congress will provide guidance. Senator Higdon mentioned that he is aware that a bill will be filed in the 2012 session to allow for tax credits for electric vehicles.

In the House Committee, Chairman Collins mentioned the car trade-in tax credit and his desire that the credit be placed back into the budget this coming session. He believes the program has been positive for revenues. There were additional questions related to how the additional revenues would be used, and as in the Senate committee Hancock said they will go toward state funded projects. As part of this conversation, Rep. Combs expressed concern that the construction jobs are not going to labor workers and instead going to out of state workers. Rep. Henley echoed those concerns.

I-69 Update
Ted Merryman was introduced as the project manager for the I-69 project. Merryman gave the background and then an update on where the state is with I-69. The interstate will cover approximately 160 miles, with 140 miles along the existing parkway system. Last week 55 miles were branded as I-69. Eventually 10 miles of new road and 1 new bridge will need to be added as part of the project. Jody Wassmer, with the Owensboro Chamber of Commerce and Brad Schneider with the Henderson County Chamber of Commerce spoke in support of the project. In the House Committee, Chairman Collins asked how the project would be funded. Hancock said that innovative financing will be an option as well as state funds; they will be looking for the right mix. Arnold Simpson followed up by asking if tolls were the innovative financing that Hancock referred to. He said that, yes, tolls would be looked at for the project. Simpson also asked about the support of the Congressional delegation. The answer he received was limited to contacts with Whitfield, McConnell, and (to a lesser extent) Rogers. Steve Riggs tried to hone in on whether Paul supported the project. It seems that there has not yet been contact with Paul.

KAVIS Update
Representatives from the Cabinet, Tom Zawacki and others, gave an update on the implementation of the new Automated Vehicle Information System. The current system, AVIS, needs to be replaced because of new technology and to improve certain processes and customer service to the public and to county clerk office. The vendor that the state is using is 3M and they have successfully implemented similar programs in several states. Currently AVIS has high maintenance and programming costs and the new KAVIS system will reduce those numbers by half. In addition KAVIS will allow for digital documents, more reporting options, and more online renewal options. The Cabinet has set August of 2012 as the earliest possible go live date, but have a secondary date of the end of 2012, if need be due to the heavy workload the County Clerks will have working on the November 2012 presidential election. House committee members asked questions regarding the potential that exists with driver's licensing and paperless titling. The Cabinet says that the new system is designed to handle both of these, but will not be implemented at this time. A driver's licensing system would require an additional capital investment as well.

Estimating Procedures for Highway Construction Contracts
Finally, Secretary Hancock and Steve Waddle (State Highway Engineer) gave an overview of how the cabinet goes about putting together engineering estimates to be used in bidding highway construction contracts. The state's engineer estimate is the baseline for a project and the Cabinet will use that to analyze and review the bids they receive. The estimates for all highway construction projects are kept confidential.
Two methods are used: a historical data approach and a cost-based analysis. The Cabinet will use both of these approaches and sometimes a combination of the two depending on the project.

In response to questions, particularly in the House committee, the Cabinet said they get more bids on projects than they have in the past and specifically are averaging 3 bidders per project. In some instances, they have had as many as 11 bids on a single project. Rep. Riggs asked if the process that is used is audited and the Cabinet said that it is audited frequently. There was also some discussion as to whether contractors were able to hire from the cabinet staff who put together the engineering estimates. Hancock and Waddle mentioned the ethics laws and also said they didn't see where it would be an issue, although they did ultimately say that would look into the issue further.

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