House Finance Transportation Subcommittee
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1 Ohio Turnpike and Infrastructure Commission Budget Testimony 2015 Jerry N. Hruby Chairman Randy Cole Executive Director House Finance Transportation Subcommittee Wednesday, February 11, 2015 Joseph A. Balog Vice - Chairman Sandra K. Barber Secretary - Treasurer George F. Dixon Member Timothy J. Paradiso Member Jerry Wray Director of ODOT Member Ex-Officio Timothy S. Keen Director of OBM Member Ex-Officio Gayle L. Manning Ohio Senate Member Michael D. Dovilla Ohio House Member
2 Chairman Grossman, Vice Chairman Dovilla, Ranking Member Reece and members of the House Finance Transportation Subcommittee, my name is Adam Greenslade, and I serve as the Director of Government Affairs, Marketing and Communications for the Ohio Turnpike and Infrastructure Commission. I have submitted to the Subcommittee a copy of Executive Director Randy Cole s testimony from last week, which provides a comprehensive overview of our operations, current budget and long-term capital plan. I would be happy to address any questions you may have regarding this prior testimony. But, first, I would like to use this opportunity to directly address a couple of concerns raised during Mr. Cole s testimony before the full Finance Committee last week. Questions were asked regarding Governor Kasich s Jobs & Transportation Plan; specifically, the Commission s previous revenue projections vs. actual income and our ability to perform required maintenance while meeting additional debt obligations. I appreciate these questions and the opportunity to address them for you. Concerning the Commission s revenue, it s important to first discuss the toll rate schedule adopted in This schedule implements only a 2.7% increase in tolls every January for the next 10 years, and freezes local E-ZPass trips over the same period. To put that in perspective, toll rate increases over the past 20 years averaged about 7% annually. In fact, if you look back at the most recent increase, prior to the current schedule, the toll rates adopted in 2009 required an immediate increase of up to 46% depending on the vehicle class and method of payment, with another 10% increase to follow in Unlike the abrupt and sizeable increases of the past, the current schedule provides stable, predetermined toll rates from at the historical rate of inflation. 1
3 Following the ten-month study undertaken by the Governor, ODOT and OBM, the Turnpike projected our revenue over the next 30 years, taking into consideration the scheduled 2.7% annual toll increases through 2023 and estimated traffic volume. From that, we subtracted our estimated future operating expenses and capital expenditure requirements over the next 30 years to arrive at the amount of funds available for debt service. In proceeding to the bond market, we made sure our debt service payments would not exceed the amount of funds that were available for debt service each year, after paying operating expenses and leaving enough to take care of the road. We are working hard to stay on course financially. In fact, as Executive Director Cole reported to the Committee last week, we are on pace for the 2018 bond issuance for additional Infrastructure and Turnpike projects. The second concern was in regards to the Commission s ability to meet our traditional level of service and maintenance, while also managing current debt obligations. As Executive Director Cole stated in his testimony, last December the Commission approved its largest capital budget in more than a decade, with $125 million dollars available for Turnpike projects. This significant investment demonstrates our commitment to maintaining and improving the structural integrity of the Ohio Turnpike. And, it is a covenant in our Master Trust Agreements with our bondholders that we maintain the road in good condition and repair. As for day-to-day maintenance services to our customers, a particular, and timely, concern was raised last week in regards to our snow and ice operations. Attached to my testimony, you will also find a historical review of our snow and ice operations with comparative metrics. As you will see, there has been a trend since 1955 of increasing miles of roadway maintained per employee. The physics of snow and ice removal hasn't changed much over the last sixty years, in terms of mechanical removal and chemical melting. What has changed is equipment reliability and innovation, as well as material quality, properties and logistics. Today s trucks exhibit far more reliability in engine, suspension, electrical, and salt spreading components. Equipment today uses non-corroding components, electronic and computer guided controls, reliable hydraulics, carbide steel blades, constant-flow liquid spray nozzles, tow-plows, among other innovations to help more efficiently and effectively complete the task. 2
4 Today's rock salt passes strict gradation requirements, is coated with anti-clumping agents, and stored under cover resulting in a reliable supply of rock salt. Liquid chemicals used today are enhanced with other materials to make them not only more effective at lower temperatures, but also less corrosive than the ones used in years past. Chemical storage was expanded in the mid- 1990's, adding 6 auxiliary salt domes which reduced the spacing of rock salt storage to approximately 15 miles apart to enhance logistics in the reloading of rock salt. All of these advancements result in a more efficient operation; permitting the lane miles being maintained per employee to increase, while still meeting our historic level of service expectations. As with our snow and ice operations, we will continue to look for advancements in all of our operations. We will continue to embrace new techniques and technologies to make our operations more efficient and ensure we are meeting the expectations of our travelers and partners. Chairman Grossman, Vice Chairman Dovilla, Ranking Member Reece, again, I appreciate those questions, your interest in our operations and thank you for the opportunity to address this Subcommittee. I ll be glad to answer any additional questions. 3
5 OHIO TURNPIKE COMMISSION MAINTENANCE WINTER MAINTENANCE MILES OF ROADWAY MAINTAINED PER EMPLOYEE (2 SHIFTS ROADWAY AND DIVISION) NUMBER OF DUMP TRUCKS OR OTHER EQUIPMENT USED FOR SNOW AND ICE CONTROL COMMENTS motor graders Responsible for Roadway Operations 2. In lieu of Division Personnel, Part-Time Employees were used to supplement forces for snow and ice control from 1955 through the early 1980's miles in length. First year of 3rd lane additions Peak of 3rd lane construction Tail-end of 3rd lane construction Includes 8 tow behind plows Includes 8 tow behind plows YEAR (January 1 Staff Levels) SECTION ROADWAY AND BACKUP BUILDING CHECKMAN 1 DIVISION AND SIGN SHOP PERSONNEL AVAILABLE FOR SNOW AND ICE 2 TOTAL EMPLOYEES AVAILABLE FOR SNOW AND ICE TOTAL LANE MILES 3 TO BE MAINTAINED (INCLUDES INTERCHANGES) SUMMER MAINTENANCE MILES OF ROADWAY AND ROADSIDE MAINTAINED PER EMPLOYEE (1 SHIFTS ROADWAY ONLY)
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