Kentucky House Bill 407 dominated the conversation at Saturday's meeting of the Kenton County Mayors Group.
Introduced by Pike County Democrat Leslie Combs, the bill would allow public-private partnerships, or P3, in which a private entity could oversee the execution of a public project.
The method could be used to move large regional projects forward such as the expansion of the Northern Kentucky Convention Center. The legislation could also pave a path for tolls to be used to finance the Brent Spence Bridge project.
HB 407 made it through the House budget committee ten days ago and will now be considered by the full House.
The possibility that the legislation may lead to tolls on the $2.5 billion bridge project led Ft. Mitchell Mayor Chris Wiest to bring a resolution to his fellow mayors, just as he did at February's meeting. At the previous meeting, the resolution was tabled and then amended before returning on Saturday.
The resolution would put the group on record as "adamantly opposed to tolls" and P3 legislation that would enable them and that if the only way the bridge project could be completed is through the use of tolls, then the group would oppose moving forward on it.
"We can pass the resolution, not pass the resolution, it doesn't really matter to me at this point," Wiest said. "I've been in contact with the state Senate and if we don't get the amendment in the House, we'll get it in the Senate."
The amendment Wiest referred to is one proposed by Rep. Arnold Simpson (D-Covington) that would prevent the legislation from enabling P3 to be used for any bridge that connects Kentucky to Ohio on the interstate. Simpson offered the amendment in committee but it was not taken up. He intends to try again on the floor of the House.
"I think it would be helpful for this group to let legislators know where we stand," Wiest said.
But like at the February meeting, no vote was taken on the resolution. Several mayors present pointed out that their councils have gone on record in opposition of tolls, including Wiest, Crescent Springs's Jim Collett, and Villa Hills's Mike Martin.
Lakeside Park's city council recently considered Wiest's resolution but took no action.
"Council members said we don't want to see tolls more than anybody else (but) they did not want to pass this particular resolution," Mayor David Jansing said. "I think they are being realistic about it. It comes down to, do we want to see a bridge or not? I don't think I'll see a bridge in my lifetime and I'm only sixty."
Jansing also said that he would like to see recommendations made by the Kentucky League of Cities as they relate to HB 407, referenced by Covington Mayor Sherry Carran. KLC is in support of HB 407 but Carran said that the organization has made recommendations that would give local governments more say in how P3 is used.
"I support the KLC approach on this so if I was to vote on this (resolution), it would be counter to what KLC is recommending," Carran said.
The Covington City Commission also recently passed a resolution about the bridge project but the wording stopped short of opposing tolls as a possible funding mechanism.
"The Simpson Shutdown"
Northern Kentucky Chamber of Commerce interim President Brent Cooper also spoke to the mayors group, warning, as he did in February, that delaying the bridge project would be detrimental to the region.
"I would ask if you take any resolution that it be stated clearly that not getting a bridge built over the next five years comes with a significant cost," Cooper said. "There is a cost to not building this thing."
Cooper argued that the bridge was built to handle a capacity of 80,000 daily commuters but during research with the Ohio Kentucky Indiana Regional Council of Governments (OKI) this week, found that peak traffic typically includes more than double that, 179,600.
Average daily use is 161,000, Cooper said.
Between the February and March meetings of the mayors group, the Northern Kentucky Chamber of Commerce and the Northern Kentucky CEO Roundtable each came out in support of moving forward on the bridge project through the use of tolls. Cooper asserted that the business community, based on the traffic numbers, would be paying the bulk of the tolls.
He said a $10 toll for the 22,000 large commercial trucks and a $5 toll for the 14,000 medium-sized commercial vehicles would outweigh the collection of a $1 or $2 toll collected from the average user.
Mayor Wiest, in his request that the group take a position on HB 407, said that President Barack Obama's recent pursuit of $300 billion in funding for transportation could potentially be a source of money for the Brent Spence project. Cooper disagreed.
"President Obama's bill isn't going to happen. It's dead on arrival," Cooper said, adding that the preference, even for those in his organization in support of moving forward with tolls, would be for the federal government to pay for the project.
But, "Right now, we don't see any path forward without some sort of tolling component," Cooper said.
That's why Cooper is particularly troubled by Rep. Simpson's proposed amendments to HB 407 in Frankfort.
"Northern Kentucky is not going to shut down but it's not going to grow like it should if we don't build the bridge sooner rather than later," Cooper said. "Because the public and many of you are in a position of 'no, we're not moving the needle', (legislators) look at us like we have a third eye when we say P3 is bad."
"I am a friend of Arnold (Simpson) but this would in essence be a Simpson Shutdown if this goes through."
Simpson: Doesn't mean we just sit on our hands
Rep. Simpson, who spoke with The River City News by telephone Saturday, said that he is in favor of P3 legislation in general, but not if it leads to tolls on the bridge project.
"If this amendment passes, it doesn't mean we just sit on our hands," Simpson said. "We must continue these dialogues. We must assure ourselves that when the time is right, we are prepared to bring about all the parts and make this a reality."
He is in agreement with points made by Covington City Commissioner Chuck Eilerman, who was also at the mayors group meeting, that Covington has not had all of its issues addressed in terms of access to Devou Park and various streets as well as diversion issues as drivers potentially avoid a tolled bridge, including the impact on the Clay Wade Bailey and Roebling Suspension bridges.
"I'm not saying the business community is wrong. I know they're probably mad at me and see me as an obstructionist," Simpson said. "Once again, it's proven to measure twice and cut once." He said he is "not going to embark upon a course of conduct" that could cause adverse effects to Covington.
"I don't think that's responsible."
Simpson and Cooper spoke by phone after the mayors group meeting and Cooper apologized for his characterization of a "Simpson Shutdown". Simpson accepted.
"I'm so happy to have him and his business in Covington and to seize the opportunity to (offer) his time for the Chamber," Simpson said. (Cooper owns C-Forward, an information technology firm located in Downtown Covington.) "We'll work through our differences and work toward the common goal of making our community the best possible community."
But Simpson is not wavering on the toll issue. He opposes the proposed "user fee" so much that he was one of a handful of Democrats to vote against the budget bill that passed the Democrat-controlled House by a vote of 53-46.
A proposal in the budget would allow various member schools of the Kentucky Community & Technical College System (KCTCS), including Gateway in Covington, to embark upon one large-scale infrastructure project each. Gateway would move forward on a project in its Downtown Covington urban metro campus. The projects would be financed through bonds.
Simpson said the bonds would be paid for through student fees, something he called a toll. "I recommended against it in subcommittee. It sets a dangerous precedent," Simpson said. "It's a user fee. It's a fee on the poorest students in the higher education community for the privilege of walking into a public center of education."
"It's not like a student fee at a university to build a student union. This fee is for an academic building. We've never charged students a fee for the privilege of going in and that's what these tolls are and because it's a user fee, politicians can get by with building more. We're passing the cost on to the public. It's a shell game and it's working. It's dangerous."
Simpson believes that tax reform would generate the necessary revenue for the state to fund such projects without passing the cost on to the students.
As with the state's responsibility in building academic buildings on college campuses, Simpson also believes it is the federal government's responsibility to build bridges on interstate highways.
"If I passed a law that says cities and counties, we can no longer fund the National Guard, that's a state obligation, therefor we're going to force that as an unfunded mandate, I would be ridden out of Covington on a rail," Simpson said. "Why do we give Senator (Mitch) McConnell, Senator (Rand) Paul, and Congressman (Thomas) Massie a free pass on (the bridge)? I'm not willing to give them a free pass. If they don't want to do their job, I want to see them replaced."
How much would the user fee be on the bridge?
There has been widespread discussion over how much an average driver would spend to cross the bridge built adjacent to the Brent Spence Bridge as part of the $2.5 billion corridor project.
Recent speculation placed the cost at $6.50 for a one way trip, prompting an email exchange between the executive director of OKI and Kentucky's Secretary of Transportation. The River City News obtained a copy of the emails.
"Of all the things that we have heard in the past year that stretch credulity in regards to the Brent Spence Bridge is a recent claim that the tolls on the bridge are going to be $6.50," wrote Mark Policinski of OKI to Secretary Mike Hancock. "That is a one way toll, by the way. Can you please clarify that this is not the case?"
"That is certainly not the case," Hancock responded. "As included in the Options Analysis the Transportation Cabinet publicly released with the Ohio Department of Transportation last fall, two tolling scenarios have been evaluated thus far. The base, per-trip rate for a passenger vehicle was between $1 and $2. For light trucks (box trucks), rates from $3 to $6 were evaluated, and for heavy trucks (semis), rates ranged from $5 to $10."
"It is important to note that these are preliminary rate scenarios and are subject to change as traffic and revenue analyses continue and the ultimate plan of finance is developed. At no time has a toll rate of $6.50 for one-way passenger vehicle travel ever been discussed or been remotely considered."
But without toll-enabling legislation, the point is moot. While Ohio is prepared to move forward, Kentucky must pass the P3 legislation in order for the project to advance.
Governor Steve Beshear's highway funding plan includes $60 million for the bridge project, a drop in the bucket of the overall cost but money that could be used to keep moving forward and money that could be lost if HB 407 is defeated.
A vote on HB 407 could come as early as Monday.
"The danger of Rep. Simpson's amendment is that it prevents any kind of P3 or toll ever being on the bridge," said Pat Crowley, a partner with Strategic Advisers, a Northern Kentucky-based lobbying and public relations firm. "The problem is there is $60 million in the bill now that will keep it going forward." Crowley suggested that some of those funds could be used to address Covington's concerns.
"If Rep. Simpson's floor amendment survives, we all know how Frankfort works. They'll take that money out of it. It will stop the project and who knows when it will come back again."
Crowley said a similar circumstance emerged in the early 1990s when Northern Kentucky legislators opposed then-Governor Wallace Wilkinson's Kentucky Education Reform Act (KERA) and then state funds for a proposed arena in the region disappeared.
"I don't know that that's true," Mayor Wiest told Crowley. The Ft. Mitchell mayor suggested that Simpson's floor amendment would only require another bill to be passed. Meanwhile, Rep. Sal Santoro (R-Florence) will also offer an amendment that would require a separate vote of the legislature before Kentucky could enter into a bi-state authority with Ohio as it would relate to tolls on the bridge.
Wiest said that he has concerns about Santoro's amendment because it doesn't come close enough to preventing tolls.
Taylor Mill Mayor Dan Bell also questioned what the governor's proposed highway spending plan would do for the region beyond the $60 million. "There is nothing...that augments the point about infrastructure to handle traffic which will avoid the toll," Bell said. "They have a grandiose idea that no one is going to avoid the toll because of the time and money study. I don't think that's true."
"What we've been asserting all along," Cooper said, "is negotiating from a position of no is not helping. I would assert that we're nowhere at the moment. The point is we're not negotiating in a comprehensive Northern Kentucky way. We've got to come together on this. That's what has to happen."
Kenton County Commissioner Kris Knochelmann at Saturday's meeting spoke in support of P3 and of a unified message on the bridge issue.
"No major projects are going to get done in Kentucky without P3 legislation," Knochelmann said. "Because there are no more earmarks, the days of getting these huge projects paid for (by the federal government) are gone. In the long-term discussion, this group can say one very clear thing: everyone in this room is for redoing that corridor and building a new bridge. When I have been in Frankfort and DC, the message has been that (they have) not heard that Northern Kentucky wants the bridge. If we can't get clear on that message, everybody is going to ignore us."
Written by Michael Monks, editor & publisher of The River City News