Public-private partnership bill that affects N. Ky. bridge and other projects clears House panel

03/06/2014 07:49 AM

Legislation paving the way for local and state agencies and public universities to engage in partnerships with private companies to fund projects cleared its first step, passing the House budget committee Thursday 23-1 with one pass.

The public-private-partnership bill, nicknamed P-3, would codify what universities like the University of Louisville and University of Kentucky already done by going in with private firms to build new dorms. Those private companies are then paid back using income from student residence fees. It has allowed those universities to build new residence halls when the General Assembly hasn’t approved authority to sell bonds to cover the costs.

Rep. Leslie Combs, D-Pikeville, said there remains some question about whether current law clearly allows such public-private-partnerships. Her bill, House Bill 407, would more clearly permit such arrangements.

“It gives us new financial opportunities,” Combs said. “It usually refers to longer agreements and lots of money.”

Any agency looking to pay for a project would have to submit requests for proposals. The Kentucky Finance Cabinet would have to approve it. Any project costing less than $25 million would require approval from the legislature’s Contract Review Committee. Anything over $25 million requires approval of the full General Assembly, Combs said.

Road projects also would be covered by the bill, which was a point of contention for Rep. Arnold Simpson, D-Covington – the lone no vote on the bill in committee.

Simpson said he was frustrated he wasn’t able to amend the bill to prevent it from applying to a proposed $2.6 billion bridge to carry I-75 and I-71 traffic across the Ohio River between Northern Kentucky and Cincinnati. Simpson is opposed to tolls, which would be used to collect money to pay back private companies that help cover the cost of the bridge.

Rep. Sal Santoro, R-Florence, voted for the bill after working with Combs to change the original version to now require that the full General Assembly approve any bridge project between Northern Kentucky and Ohio.

But Simpson said he doesn’t want to open the door to any tolls, which he says will disproportionately affect Northern Kentuckians who commute to Cincinnati.

Simpson went back and forth about the tolls with Kentucky Transportation Secretary Mike Hancock during the committee meeting.

“It’s a tool we believe has its rightful place when the situation dictates,” Hancock said of the P-3 bill.

Hancock told Simpson the bill would apply to the proposed Northern Kentucky bridge, because that project will require tolls to help cover the cost as outlined by the financing plan Kentucky submitted to the federal Transportation Department.

“Tolls will be a part of this project. Otherwise there simply isn’t the money to cover the project,” Hancock told Simpson.

He said the tolls would be set by a joint board from the financing authorities and transportation departments of Kentucky and Ohio. Hancock informed Simpson in a letter Wednesday that the tolls could be $1 or $2 each way. But Simpson said the wording of the letter indicated it could be higher.

Warren Rogers — president and CEO of W. Rogers Co., a water treatment contractor — said public private partnerships are “not the end all be all” but could jump-start projects that otherwise would lay on drawing boards until governments come up with funding.

He said he hears from local government officials in Kentucky who said they need new waste-water or water treatment facilities but put them off because they don’t have the money.

Thirty-four other states have statutes that allow such partnerships.

The Kentucky Chamber of Commerce backs the legislation. Chamber President Dave Adkisson pointed to public universities, such as the University of Kentucky and University of Louisville, that have worked with private companies to build new dormitories with those firms getting paid back by residence fees students pay to the universities.

“We think it’s a win-win,” Adkisson said.


Subscribe to email updates.

Subscribe and get the latest political intelligence delivered to your inbox.