News and Tribune

October 16, 2012

UPDATE; Development agreement approves tolls on new bridges

Joint board will be formed to decide on tolling

By BRADEN LAMMERS
braden.lammers@newsandtribune.com

— A development agreement has been reached between Indiana and Kentucky to oversee the long-term financing, construction and maintenance for the Ohio River Bridges Project.

The development agreement was one of the final hurdles the states had to clear before they moved forward on solidifying plans to build their respective portions of the $2.6 billion project. Indiana is responsible for constructing an east-end bridge and the approaches on both sides of the Ohio River. Kentucky will construct a new downtown bridge and reconstruct Spaghetti Junction. The projects are expected to cost about $1.3 billion each.

“This is another milestone in an extraordinary, cooperative effort to finally make the Ohio River Bridges Project a reality for both Kentucky and Indiana,” said Kentucky Gov. Steve Beshear in a press release.

The Bistate Development Agreement and an interlocal agreements were approved by the Indiana Finance Authority and the Kentucky Public Transportation Infrastructure Authority at separate meetings Tuesday in Indianapolis and Frankfort. The development agreement spells out rights and responsibilities for each state, according to a press release. It details provisions for moving the project forward to construction and for long-term operation including, budget and financing, environmental and work force commitments, operations and maintenance and tolling collection and enforcement.



TOLLING ISSUES

Tolls will be a part of all three spans considered to be part of the bridges project — the east-end bridge, new downtown bridge and the existing Interstate 65 Kennedy Bridge. Tolling is set to begin on each span when it is opened to traffic.

A schedule spelled out that both states have an unofficial substantial completion deadline for their portions of the project by July 1, 2018.

For both Kennedy spans, tolling is set to begin when the new bridge is “sufficiently complete to be open to traffic, the date of east-end crossing substantial completion or June 30, 2018,” according to the development agreement.

In addition, “the states’ parties agree that the tolling shall be uniform and comprehensive for all bridge components of the project.”

According to the agreement, revenues from tolls collected on all of the bridges in the project will be split evenly between the two states. However, there are still several factors that were not outlined in the development agreement that must still be determined.

The states will need to include, when developing a tolling policy that is “sensitive and responsive” to low-income and minority populations. Other factors that will be considered in developing the tolling policy are vehicle classes, time-of-day modeling, congestion based pricing and regional interoperability and reciprocity among other factors.

Also not outlined in the development agreement were the toll rates that will be charged to vehicles. Toll rates have long been estimated at $2 for cars, which include passenger vehicles and sport utility vehicles, $5 for smaller trucks with six wheels and $10 for semi-trucks. A $1 frequent toll rate is also expected to be offered to local commuters.

No end date was given for when the tolling agreement will end.

“The tolling framework, parameters and procedures provided for herein shall continue for the duration of this agreement, and may be extended thereafter by agreement of the states’ parties,” according to the agreement.



FUTURE OVERSIGHT

With the passage of the development and interlocal agreement the Louisville and Southern Indiana Bridges Authority is expected to meet within the next two weeks to grant its approval, which will delegate to the two states the authority’s powers to deliver the project.

Indiana Department of Transportation Spokesman Will Wingfield said the bistate authority will still meet in order to carry out its statutory requirements, such as providing an annual update on project.

The development agreement will also create a joint board that will have long-term oversight and management responsibility for the bridges project.

According to the release, the joint board will consist of four members, the leaders of the two states’ transportation agencies — the secretary of the Kentucky Transportation Cabinet and the commissioner of the Indiana Department of Transportation — and the leaders of the two agencies overseeing project financing — the chairman of the Kentucky Public Transportation Infrastructure Authority and the public finance director of the Indiana Finance Authority.

Members of the joint board, together with one additional representative each from KPTIA and IFA, also will function as a tolling body that will develop tolling policy, according to the release. The additional members are to allow local representation on the tolling body, but a local representative is not required.

The joint board will set the tolling policy that includes the rates for the tolls, staffing for the tolling facility and the duration of the tolls on the bridges.

The development agreement also outlines that each state “shall use their best efforts” to accept contracts for construction and design before the end of the year.