Committee members let's take our seats, and I want to call the April 30th transportation meeting to order. And first let's greet our Sergeants at Arms Carlton Adams, Charles Godwin, Martha Parrish, Antoine Marshall. We have pages, if you'll stand and wave as I call your name. Kaylen Kacura, Wake County, Representative Stam. Kaitlyn Mons, Harnett County, Representative Tillis. Kiera Rose, Wake County, Representative Storms, B Storms. Carrington Royals, Harnett County, Representative Lewis. And Christian Campbell, Bladen County, Representative Brisson. Thank you all for being here. Thank you for your service today. Ladies and gentlemen, we've got one bill on the agenda. We cleared the agenda for this one bill. And I'm going to introduce my coach here, Representative Bill Brawley to talk about House Bill 817, Strategic Transportation Investments. And we have a PCS. I need a motion for PCS to be before us. Okay, I've got Representative Torbett. All in favor say aye. All opposed no. You're recognized Representative Brawley. SPEAKER CHANGES: Thank you Mr. Chairman. A couple weeks ago the governor made an announcement of a new transportation initiative. And I was trying to think how to put this whole thing in context today and I realized something. The current transportation methodology for North Carolina came out in 1989. And in 1989, I was a technical guy with a computer company. I traveled all over North Carolina. I had a computer on my desktop about as big as a microwave oven. It had 40MB hard drive and ran MS-DOS 3.0. I traveled around. I had a phone card and a pocket full of quarters for transportation. And the way that I would access things remotely was I had three 5.25 floppy disk drives with EasyWriter II and a couple of other things that I would put in demo machines when I worked with my dealers. Now I carry a phone where I can surf the web. I can do all kinds of things. And there's a thousand times the storage and power in my phone than there was in my whole computer. I would not go back to the way I did business in 1989. But if we're beginning to wonder why the way we do roads isn't working so well, it's not 1989. We have new methodologies for determining traffic, new methodologies for determining the impact of roads on economic development, and we're not taking advantage of that. So, the idea is to refocus through more strategic priorities in building roads. So, let's build the roads we need, instead of the ones we can fund, and let's not worry about the silo programs. But except we're dealing with transportation, and that may include rail, it may include bridges, it may include airports. But what we really need is if we're going to put billions of dollars into transportation, let's get billions of dollars of results. To start I would like to ask the chairman's indulgence that Jim Trogdon, Chief Operating Officer of DOT, give us an abbreviated overview of the governor's transportation initiative. SPEAKER CHANGES: Representative Brawley, we recognize General Trogdon. I'm not sure we've got our IT connection or not. Okay. Okay, General Trogdon can talk through it I believe. SPEAKER CHANGES: Yes sir, Mr. Chairman and Representative Brawley, thank you very much. And understand that if you didn't get a chance to see the presentation that the governor and secretary made with the speaker and president pro tem, we have those slides available and I'll make sure everyone on this committee gets it. I did have a few that I wanted to focus on, but since the IT's not working, I'll do that verbally. It's on here? SPEAKER CHANGES: Mr. Chairman? Mr. Chairman? SPEAKER CHANGES: Yes? SPEAKER CHANGES: Mr. Chairman? SPEAKER CHANGES: Yes, Representative Brawley? SPEAKER CHANGES: Would this not be reminiscent to Representative Brawley's 1989 he was referencing? SPEAKER CHANGES: Point well taken. SPEAKER CHANGES: I'll start by saying that really the problem that exists that we've identified, and the secretary, cause the infrastructure
[0:00:00.0] …Is over the next 10 years in North Carolina using the projections on population growth across the state over 10 years we will grow 1.3 million in population so that line will go up over the next 10 years. At the same time primarily because of lower consumption due to café standards, more fuel efficient vehicles are primarily our motor fuel tax revenue will continue to decrease about 2% rate but in total over that 10 year period we anticipate their bill 1.7 billion dollar reduction in revenues from the current and that’s total of all transportation dollars. So, if you look over 10 years with a 1.7 billion dollar reduction with that line going down and the population growing up that creates what the Governor and Secretary referred to is the infrastructure gap. [Laughter] [SPEAKER CHANGES] [Inaudible] ___[01:04] [SPEAKER CHANGES] Just back in 1989. [SPEAKER CHANGES] So, part of that solution is how do we address those shrinking revenues and if you kept up with current events I know Virginia has passed in their latest session how they are transitioning away from dependence on motor fuels? Virginia solution was go to a variable rate on the whole so that we currently use our motor fuels but have be much less relying on motor fuels and they are going to be more relied on sales tax, yes. [SPEAKER CHANGES] [Inaudible] [SPEAKER CHANGES] So, part of addressing that gap is how do we address those revenues over the future and what we need to look like as you already know we have one of the highest, if not the highest motor fuels tax rates in the South East and about the 10 times in the nation and where 60% of our revenue comes from that so we are heavily dependent on motor fuels and if we know that’s a declining revenue source in the future just like Virginia what do we are gonna do to address that short fall? Being the 10th highest in motor fuels tax we are still 48 out of 50 states in total revenues per miles. So, in simple terms that tells me if this was stock I’m under diversified in my stocks and I’m overly dependent on the performance of the few and the biggest part of that if you is declining overtime. So, how do we address that revenue shortfall that’s part of the problem and what we are proposing to do is start aggressively working with the General Assembly and the municipalities and counties and all of the transportation groups across the state and let it over the next 12 months determine which direction we need to go and North Carolina resolve this problem, the revenue problem in the long run. However in the short run, we believe what we need to do is efficient as we possibly can with our existing resources and that’s why we are here today to talk about that efficiency standpoint and how do we move from where we have been since 1989 when the Trust Fund passed and in 99 when it passed it was probably one of the most significant pieces of legislation at least in the South East that moved us from that what we are in the 70s and 80s into the gangs that we made since then but as even if you talk to many of the people and I have talked personally with the Secretary of Transportation then Jim Harrington and he said, “Hey, when we pass that we really thought we would be looking at it and adjusting it as we go every 10 years and we have not.” So, maybe it’s the time as Representative Brawley said, “We need to think about changing from our computer technology and communications technology of that age to where do we need to go over the next, at least 10 years as we move forward.” So, the simple proposal which I know fiscal research briefed the details on the bill but it is take our existing trust fund revenue not adjusting the revenue, the total revenue pictures but it still allocating it to the regions and then ultimately down to the divisions the way they are now where all projects complete in the division that we have three levels of competition and that would be a statewide level of competition for strategic projects across the state then a regional level and then finally the division level with the funds and the trust fund coming and the percentage is shown 40% to the statewide tier competition, 40% to the regional and 20% to the division. That way projects would have… [0:04:59.4] [End of file…]
Opportunities to compete, and the best projects could compete and succeed across the state. Probably unlike what you see though in Virginia, the way it is now, most of the capital projects in that state are built in the northern Virginia region, in the tidewater area with the majority of the rest of the state being primarily just maintenance and operations. We still have seven regional distributions, is what we’re calling here, so you get the statewide competition of those critical projects, and then you still have a regional distribution, and then down to the division the way it is today. In our initial assessment and the reason why we believe this is the right time to consider this, is running good candidate projects that are already in our transportation improvement program, many of them, though not funded, but running those projects through this type of formula, purely on just the quantitative, then they’ll discuss the details on the bill on the qualitative or local rankings at the regional and division level, but purely based on quantitative data, and our assessment, we would see this kind of return, because, we go from what we have currently planned – about 175 projects in our current ten year plan – to possibly a little over 260, but then the real impact is the short term and long term jobs impact, which would be from 174,000 projected, based on running it, and we would do that based on running it through what we call the TREDIS model, which is transportation and economic development infrastructure system. We’d run that through the models and this is the kind of results that we got. The simple explanation for this is two things: it’s using money in the trust fund, primarily what we’ve been spending on secondary road paving and aid to municipalities, but also it focuses more heavily across the state on travel time savings. And with travel time savings, you get increased productivity, and with increased productivity that affects your GDP, and the GDP is what’s creating the potential for the long term increase in employment. This includes both short term and long-term employment opportunities. So with that, I give it back to Representative ?? [SPEAKER CHANGES] Thank you General. Were there questions for the, were you going to take questions for Mr ?? [SPEAKER CHANGES] I did have one hand that went up, that I saw, was Representative Hamilton, was that for General Trogdon? [SPEAKER CHANGES] Thank you Mr. Chairman, thank you General Trogdon. Just curious, you mentioned the highway trust fund money, taking it from secondary and local, does that include Powellville money? [SPEAKER CHANGES] Yeah, the proposal is that, we have two components. And I’ll start with secondary road paving. Right now we pave secondary roads in North Carolina, this isn’t maintenance, this is just the secondary road paving, going from unpaved to paved. A portion of that, and the majority of it, comes through the highway fund, and a portion comes from the trust fund. The proposal is to eliminate the trust fund side of that and maintain the highway fund until an adequate number of secondary roads are paved across the state. With the aid to municipalities, the proposal is to only fund it out of the highway fund, but keep that program whole as it is today. [SPEAKER CHANGES] And that does include Powellville money? [SPEAKER CHANGES] That is the Powellville money. [SPEAKER CHANGES] That is the Powellville what you’re referring to. Follow up. [SPEAKER CHANGES] Follow up. [SPEAKER CHANGES] Thank you Mr. Chairman. That will make it, steady, or will it increase with inflation, will it stay flat? [SPEAKER CHANGES] It’s revenue dependent. It’s all revenue dependent. But right now it would be a percentage of the highway fund. So as we move forward it’s still going to have those challenges that we’ve already identified on, if highway funds continue to go down at a significant rate, we’ve got to address that, and that’s the proposal to address that over the next twelve months [SPEAKER CHANGES] Just as point, we’re going to have an explanation of the bill, and we can get into the weeds in greater detail on that, and there will also be some additional information, I know everybody’s question’s going to be, “How does this affect my district?” and we’re generating a lot of that information and it’ll be distributed via e-mail. Also want you to know this is not the entire trip for this bill, this is to start with a framework, or structure. From here it will go to Finance, where a lot of the money questions will start to be answered. From Finance it will then go to Appropriations where it gets a full bath there. So everyone in this room is going to hear this bill twice.
Go ahead today the hearing examiner financial appropriations which every year and a lot of answer all questions why less than a lot of funding things that we call this together, send money committees with a larger bodies ago have the same structure gamble, and its profits from transportation owner you of that is, that's all right of like the way and have fun jobs. Over the buildup, though some of the five names Mattel will hold until jobs as gesture of the bill that's OK (SPEAKER CHANGES) with share price that suggested they have questions specifically about the macro level for the general in the information is presented yes and are willing to talk about operation and we'll get the bill explanation or the names of dead-and-black well , I can assure me that you have a question I think for general fund and the builder and this may be getting into what rich and a brawl ensued we need to deferring you can say that again after year when I ask you one of baton looking at the project's up your own 175 going up to 260 and my understanding is that the bill before us if we go forward in school and the result and that encouraged and we get here the explanation earlier about the guy at the infrastructure gap) use going down so I'm just trying to be clear in my mind as to whether the increase in projects as a result of simply shifting resources that will not be replaced elsewhere are or are you see it as soon as some change in finding that would continue to fund other projects that some more wobbles to what they are currently being funded, but withdrew from resources yes but there's a brawl your present job now it to say that Mr. Chairman, Mr. Bush should the voters think sir, but I do have the specific on question may require four jolt Rodney king live, in any way you choose but that is what made by the way we question to which allowed them talked about all running various things from one which my question would be of much walked away from all include an Amtrak 111 or all projects in the 85 rule slimmer can and if that's not been blown out one would like to request an?? (SPEAKER CHANGES) that if I can mention one thing in our view of the bill also last page Perry is a discussion of the future forms which will rush to come back to this body of storytellers first amendment down to be approved, both as a specific answer that a job to get from them to lose some of the actual all built draft a bill! Until we go through the entire process will begin estimate from our son projects that we believe in areas that we believe will be well on specifically project criteria all however until it goes through and the Indians and the audios say here's how we might these fears the weights we believe a report in our area we really don't know so were calling you know, project on a stone wall, Tom savings and economic competitiveness and most things as we see a wet with tears as a schedule following a report of all those funds or in a sense, bill Simon-long as there is some of the family please come in and if we do as George fraud from suggest in legal old way through ole on mechanics between the bay and roll Ariel’s are the owner rob want to be a kid on gels. Would have taken as chairman of members of the committee ??...
A referring to the summit is firm and provided 25 could briefly summarizes internal first the major section of the building is section 1.1 day in which the Mexico City participation funding formula which would govern use of all transportation construction funding on the comes from the highway trust fund the Federal aid funds accept four funds that are listed as exceptions about formula on the funds will be distributed up 40% to stay one strategic mobility projects which are defined or 2% for regional impact projects which are also defined 20% of division the projects and Alyssa the back of your summary there's a chart that gives details of a pro forma loss of operates on are two types are eligible for each of these categories of funds from our list and the criteria also on the beauty when you start as each category as specified in the bill in section 1.1 on a variance to the formula used false arrest over five year. (SPEAKER CHANGES) Well and are also incentives for local funding and local acceptance of: projects without bonus allocation authorized that's a brief summary of sections 1.1 on which the one below 0.2 the next major part of the building VOL second air routes which is sections 2.1 through sections 2.9 and two major themes in this part of the bill, first as they sell, lease on second year reconstruction program on a requires say what participation four 2nd are rude on unpaved road paving the third major part of the bill is some affects from stated misspellings which is known as the probable funds as a section 3.1 and 3.2 the bill this pump those two sessions and built a similar fund revenues allocated on a first to dispel these from 1.34¢ per gallon of them are still starts to 10.4% of the minimal produced during the fiscal year decision on is speculated two on old girl bill funds for months and it's funnier. (SPEAKER CHANGES) Sections 4.1 through four points and 10 the bill are conforming changes on baby primarily on repeal provisions of the highway trust fund which would no longer be applicable on with the occupation of the new formula enacted by the bill will call your attention to on section 4.8 which includes substitute for provisions on inserting on debt funding four particular on the turnpike authority projects sections 4.924118 on a single artistry repeal solve this server which rose from such as similar to sections 5.135.6 of the bill for a addressing the turnpike authority's on authorization to educate projects it changes the offer us a list of projects but turnpike authority's local press undertake an addition of section 5.2 authorizes the year to year the turnpike authority to ensure in 2023 on the partnership agreements for project development and construction section 6116 points to the bill are wrong records studies that were mentioned earlier in the discussion on the first and occurs to you to you to submit a report on its on new strategic procession planning criteria and formulas by August 15 of this year and additional October and January of 2014 and 16 to 6.2 authorizes some of the action requires you to Singapore of transition from the current funding formulas to the uninformed listener offer us, bill and finally section 7.1 is the second day and it requires on it provides that builds up become effective until the current corporations act on our precise implement provisions of the bill would do such a mission: to get back to Mr. Campy is just a couple of things and we talked about moving the 4040 points by region one the statewide projects will be driven almost exclusively by data that will be by step on how the impact ??.....
the ability of the overall state to compete. Some of the examples is in rural areas, for example, you would include them in statewide projects to give them access to job centers so people could work. In some areas, like, say, northeastern part of the state, rather than trying to build them another road to Raleigh, build them roads into Hampton roads. Do the model kind of like the Fort Mill v Charlotte thing. Fort Mill was a small, sleepy town south of Charlotte. South Carolina put in a big chunk of I-77 to get them into Charlotte. People began to work in Charlotte. The next thing you know, people moving into the area moved into Fort Mill, worked in Charlotte. Now, they started getting small and medium-sized business headquarters out of Charlotte into South Carolina. Now some of the big companies are moving out of Charlotte into South Carolina. If they can do it to us, why can't we do it to them? But the idea is these are data-driven. We're getting some of the old politics out of it. The second group for the regional, they are 70% data-driven, 30% local decision making. The people actually in the area will have a lot of windage on the application of the money. The divisional money's 50/50. It's 50% data, 50% local input. Those projects that rank as a state level project are also eligible for finding in the regional and the divisional level. Regional projects are also fundable at the division level. There is encouragement for some toll projects where significant money will come in through public/private partnerships. This will also have a provision that, in areas where a major road improvement is tolled, rather than completely financed by the state, the amount of funding provided by the other entity- there's a percentage of that that will also be spent on related road projects in the same area, and in the hot lanes and tolls projects we anticipate, such as the I-77, as the state shares in the revenue, that will be dedicated to additional road projects in the area of the tolling project, so, there is incentive there to bring in other funds. It also, if other areas bring in additional funds, they're incented with additional matching funds from the state. The unpaved roads program currently allocates the money by county. There are some counties that are close to built out, while some of the more rural counties have a much more significant number of unpaved roads. This would shift more money to paving roads for the first time in those counties that have a lot of unpaved roads. Power bill money is designed to hold these cities harmless, and also will give them some growth in the later years. Additional, relative thing: on the statewide programs, in five year slices, there is a limit of any project exceeding 10% of the total money, so regardless of how important for the state an entire project is, it can't suck up all of the money, and it will be divided up over the five year program. Now, there is the opportunity for local participation that can advance projects, but the idea is we want to, regardless of what the data says, we just can't have one thing become a black hole. We're also doing away with a lot of the silos. Right now, this is transportation money. If you have a project where you need more rail than roads, if that's where the benefit is, then you need rail money. If you need roads, you need road money. Right now, we're seeing in come areas, people are building what they can get funded, not what they need, so the idea is to shift from, this is what you can get funded, just do that. It's to what do you need to grow your area? How do we build the state by allocating scarce resources? We're not coming up with new sources of revenue, but I'm gonna say yet, because I'm pretty sure the governor will be visiting that, but that's beyond the scope of this bill. We're just trying to get a structure to start building roads in a more realistic vein, and, at this point, if there are more questions for staff or for me and the rest of the sponsors. Mr. Chairman? [SPEAKER CHANGES] Okay, I wrote down Representative Starnes twice, so he really wants to ask a question. Representative Starnes. [SPEAKER CHANGES] I don't know if my question's any more important than anybody else's, but I do have a couple of questions. You're changing the way that you're dealing with
roads and in the western part of the state where I live we have counties that have a lot of miles of unpaved roads. But it says this want to go to a statewide prioritization. How do you prioritize statewide unpaved roads across the state typically we've done it by county and shouldn't it give a little more weight the counties that have the most miles of unpaved roads? [SPEAKER CHANGES] Thank the gentleman for his question. That's the idea behind the statewide prioritization. Right now the money is more or less spread out everywhere. Everybody gets to name their 10 worst roads and they're all paved. And if you've got 12 roads and you've paved 10 and then Burt county's got 120 roads and you've paved 10 does that make sense. Wouldn't it make sense to pave more roads in Burt county. And that's the idea that's it's a statewide spread rather than county by county spread. [SPEAKER CHANGES] Ok. Follow-up? [SPEAKER CHANGES] Thank you. In section 4.8 it says that currently administrative cost is 4.8 percent and it will go to the appropriation, the amount appropriated by law. What is that, I mean? Could that be higher or lower than the 4.8%? [SPEAKER CHANGES] Sir I'm on finance. I don't know what appropriations gonna do. [SPEAKER CHANGES] Could staff address that please? [SPEAKER CHANGES] I believe Ann has got an answer for that. [SPEAKER CHANGES] I am the camera and fiscal research. With the highway trust fund growth it would seem that the administration shouldn't be based on the percentage growth that is allowable in the highway trust fund. The intent is to have that amount be lower than the growth rate for administration. But it will be up to the appropriation chairs to determine how much lower. [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] Did that answer your question Representative Starnes? [SPEAKER CHANGES] Thank you. [SPEAKER CHANGES] Representative Dobson. If you hold it down it might work. You tried that. Ok. [SPEAKER CHANGES] The recorder won't pick it up if you don't use the microphone. [SPEAKER CHANGES] That might be a good thing. Just a quick comment if I may Mr. Chairman. I think I'm understanding the concept and overall I agree with it. I do share some concerns of the other members but I think it's a good thing. I do have some concerns about how it is going to effect rural areas like Representative Wilkins has talked about. So I hope that we can get some of those resolved and maybe you and I can sit down and discuss that at a later date and I'll leave it at that for now Mr. Chairman. Thank you. [SPEAKER CHANGES] Thank you. Representative Tine. [SPEAKER CHANGES] Thank you Mr. Chairman. I am encouraged by the bills sponsor's mention of the northeast and feeding in to an economic center in the Hampton Road Center area. What I'm having a difficult time understanding is the practicalities of how a project like that might occur because the way that I'm reading this is that there are two competing policies. One is the increasing the speed to reach and that's one of the issues that's considered. The other is the policy in the rural areas is transportation to unlock opportunity that's not being tapped into right now. So it couldn't be measured by the same data of increasing speed to access. And what I'm reading in the 40% on the state's side is that it's mainly driven by increasing access or speed times as opposed to unlocking economic potential. The first time I see it mentioned is in the regional 40% which then talks about economic impact but it doesn't give me any specifics in regards to how it might be weighted in the consideration. So I was wondering if you might be able to elaborate some on that. You know, you gave that example of that project. How might that work its way through the system that's being set up here to be competitive in the 40% state area? [SPEAKER CHANGES] Representative Tine, I can't give you the details but I can tell you the example was used by the governor as something that this program would allow to happen which is difficult to do now. But the idea of connecting Northeast North Carolina into the economic centers of North Carolina makes less sense than tie you into a closed economic center in Virginia. So having said that Governor McCrory used that
Example of what he wanted to do, I would, I would infer from that that your chances are good. [SPEAKER CHANGES] Follow up, Mister Chairman? [SPEAKER CHANGES] Follow up. [SPEAKER CHANGES] And I, and I understand that, but as we move towards the data driven, taking the politics out of it, it, it might not matter what the Governor ends up saying that he's for or against, and the real competing political issue is untapping economic potential versus beating up highways, access to economic centers. So is there some provision that I'm missing or is there some consideration that might bring some balance under the state 40%, which is the one I'm afraid the rural issue, rural areas might be excluded from. Is there some consideration to bring economic impact, future impact into that portion of the state appropriation? [SPEAKER CHANGES] I think what I would infer from your question is you're really talking more of a formula level decision and this has not been fleshed out to that point. This is more of a framework as those decision methodologies are developed in greater detail, they will be brought back to the joint transportation oversight committee, and in fact the bill requires reporting to begin this August, and there will be, there's several dates. [SPEAKER CHANGES] October first and January one. [SPEAKER CHANGES] Yeah. So that, that question hasn't been completely answered, but will be, and this body will have a significant say in the answer to that question. [SPEAKER CHANGES] Representative Brawley, I believe Anne may be able to add to that. [SPEAKER CHANGES] For members, the prioritization process is being set by the DOT prioritization office, and they have established a lengthy work group with NPOs and RPOs which will be setting the criteria. And the RPOs may choose for example to say, well, this is what the formula we want for our area, as opposed to a, the one size fits all. [SPEAKER CHANGES] Okay. Representative Tine, does that, does that help? [SPEAKER CHANGES] That sounds like the local, how the region and the division. My question is at the state level, which according to the information that DOT put out in their slide presentation, the state, the only mention for the criteria was the speed side of it, so it sounded like some of those decisions were already being made and again I'd be happy to work with you as well as we move this bill through, and I appreciate the time. [SPEAKER CHANGES] If I could be helpful, stepping out of my chair just a second, I believe connectivity is the term that's being used also, connecting rural and other areas that make economic sense. And also the formulas, as we said, will be coming back for our oversight. It's different times the rest of the year. This is the framework we're looking at now. [SPEAKER CHANGES] Additional questions? Okay, Representative Starnes? [SPEAKER CHANGES] Thank you. Well, you know I've never been a real fan of toll roads, but I guess this bill embraces them by increasing the projects from five to nine. Is that an accurate statement? [SPEAKER CHANGES] There is a potential for more toll roads. [SPEAKER CHANGES] Any further questions? Comments? Representative Hamilton? [SPEAKER CHANGES] At the appropriate time I'll make a motion. [SPEAKER CHANGES] Okay. Any further comments? Okay, and you'll make a motion and include a referral to finance, correct. [SPEAKER CHANGES] You may have to help me with that mister Chair. I was gonna make a motion favorable for the PCS, unfavorable to the original. Let's see a referral to finance. [SPEAKER CHANGES] Thank you. You all have heard the motion. Any additional comments or questions? All in favor say aye. [SPEAKER CHANGES] Aye. [SPEAKER CHANGES] Opposed no. Thank you, Representative Brawley. Have no further business, we're adjourned.