in re: kentucky river authority · 22 ended the month end balance as $755,821.14. 23 tier ii, the...
TRANSCRIPT
1
COMMONWEALTH OF KENTUCKY
IN RE: KENTUCKY RIVER AUTHORITY
MEETING NO. 183
________________________________
May 16, 20171:00 P.M.
Waterfront Restaurant220 Athens Boonesboro Road
Winchester, Kentucky ________________________________
APPEARANCES
Mr. Rodney Simpson CHAIR Mr. Houston Wells Mr. Mike Flynn Mr. James Kay Ms. Pat Banks Mr. Jack Stickney Mr. Mark Smith Mr. Barry Sanders Mr. Kevin Rogers Ms. Judith Piazza (Proxy for Finance & Admin. Cabinet)
Mr. Bill Caldwell (Proxy for Energy & Environment Cabinet) KENTUCKY RIVER AUTHORITY
Mr. Jerry Graves EXECUTIVE DIRECTOR
___________________________________________________________
CAPITAL CITY COURT REPORTINGTERRI H. PELOSI, COURT REPORTER
900 CHESTNUT DRIVE
FRANKFORT, KENTUCKY 40601
(502) 223-1118___________________________________________________________
2
APPEARANCES(Continued)
Ms. Sue Ann Elliston Ms. Sara Rome
Mr. David Hamilton Mr. Tom Russell KRA STAFF
Mr. Ben Webster Mr. Daniel Gilbert Mr. Ryan Barrow Mr. John Brady Ms. Sandy Williams Mr. Jeff Woods Dr. Lindell Ormsbee Ms. Malissa McAlister Ms. Jane Vanhook Mr. Jerry Weisenfluh Mr. Damon Talley Ms. Donna Powell Mr. Rodney Kidd Mr. Ken Parsons Mr. Alan Banks GUESTS
3
AGENDA
Motions ................................... 4 - 5
1. Call to Order ............................. 6 2. Approval of KRA Minutes #182 .............. 7
3. Financial Report - Sara Rome .............. 7 - 12
4. Presentation from previous Kentucky Watershed Management Grant recipients...... 12 - 23
5. Presentation and consideration of Kentucky Watershed Management Grant, FY 2018 - Malissa McAlister ......................... 23 - 36
6. Presentation and consideration of U.S. Geological Gaging Station contract, FY 2018 - Jeff Woods ......................... 36 - 46
7 Presentation and consideration of Bluegrass Water Supply Commission contract, FY 2018 - Damon Talley .............................. 76 - 79
8. Presentation by Office of Financial Management, possible construction of Lock and Dam 10 - John Brady and Ryan Barrow ... 46 - 62
9. Engineer’s Report - David Hamilton ........ 62 - 76
10. Consideration of 50% cost share of the removal of Lock 12 dwellings - Jerry Graves 79 - 81
11. Executive Director’s Report - Jerry Graves 81 - 83
12. Discussion of KRA subcommittee appointments - Rodney Simpson ............. 84 - 88 13. Chairperson’s Report ...................... 88 - 90 13. Adjourn ................................... 90 Court Reporter's Certificate .............. 91
4
MOTIONS
MOTION TO APPROVE MINUTES OF MEETING #182.............PAGE 7, LINE 10
MR. FLYNN: I move to approve.MR. ROGERS: I second.CHAIRMAN SIMPSON: We have a motion and a second by Kevin to accept the minutesfrom the last meeting. All in favor, sayaye. Motion carries.
MOTION TO APPROVE FINANCIAL REPORT ..................PAGE 12, LINE 1
MR. WELLS: Move for approval.MS. BANKS: I’ll second.CHAIRMAN SIMPSON: We have a motion and asecond. Is there any other discussion? All in favor, say aye. Motion carries.
MOTION TO APPROVE KYWATERSHED MANAGEMENT GRANT FOR FY 2018 .......PAGE 35, LINE 25
MR. WELLS: I make a motion that weaccept that.MR. STICKNEY: Second.CHAIRMAN SIMPSON: We have a motion and asecond for this expenditure. All infavor, say aye. Motion carries.
MOTION TO APPROVE USGSGAGING STATION CONTRACTFOR FY 2018 .............PAGE 45, LINE 19
MS. PIAZZA: Motion.CHAIRMAN SIMPSON: If you look in theyellow area right there, you’ll see whatyour motion should include.MR. WELLS: Second.CHAIRMAN SIMPSON: We have a motion and asecond. All in favor, say aye. Motioncarries.
MOTION TO APPROVEONE-YEAR EXTENSIONTO BLUEGRASS WATERSUPPLY COMMISSION CONTRACT ..............PAGE 79, LINE 8
5
MR. KAY: I’ll make a motion.MR. STICKNEY: Second.CHAIRMAN SIMPSON: All in favor, say aye. The ayes have it.
MOTION TO AUTHORIZEEXECUTIVE DIRECTOR TOPROCEED WITH GATHERINGINFORMATION ON DEMOLITION OF LOCKHOUSES AT LOCKS 1 AND 3......PAGE 81, LINE 17
MR. FLYNN: So moved.MR. KAY: Second.CHAIRMAN SIMPSON: I heard a motion and asecond. All in favor, say aye. Motioncarries.
MOTION TO APPROVESENDING KRA STAFFTO WORLD CANALCONFERENCE, NOT TO EXCEED $4,500 ........PAGE 82, LINE 23
MR. STICKNEY: So moved.MR. FLYNN: Second.CHAIRMAN SIMPSON: We have a motion and asecond to send three people to canal training. All in favor, say aye. Motioncarries.
MOTION TO APPROVESUBCOMMITTEE ASSIGNMENTS ..........PAGE 88, LINE 2
MS. PIAZZA: MotionCHAIRMAN SIMPSON: We have a motion. Ineed a second.MR. STICKNEY: Second.CHAIRMAN SIMPSON: We’ve got a second. All in favor, say aye.
MOTION TO ADJOURN.....PAGE 90, LINE 9
MR. KAY: So moved.MS. PIAZZA: Second.
6
1 CHAIRMAN SIMPSON: For the
2 purpose of opening the meeting at 1:00, I’m going to
3 go ahead and open it a couple of minutes early for
4 roll call. There won’t be any business conducted
5 until 1:00. And if Sue would do the Board roll call,
6 then we’ll have that out of the way.
7 (ROLL CALL)
8 MS. ELLISTON: We do have a
9 quorum.
10 OFF THE RECORD
11 CHAIRMAN SIMPSON: My name is
12 Rodney Simpson. I’m the Board Chairman. I’m
13 fortunate enough to be a Chairman of such a fine
14 working Board and we have such a good time working
15 with such a beautiful river as the Kentucky River.
16 I don’t think you will find a
17 more pretty, pristine river in the United States or
18 anyplace in the world actually.
19 So, we’re very fortunate,
20 indeed, to be a part of this and see to it that it
21 operates in a very businesslike manner and affords a
22 lot of fun to the recreational boaters and the
23 kayakers and canoers and also provides water to about
24 three-quarters of a million folks in the central part
25 of Kentucky.
7
1 So, with that said, I think
2 we’re at the right time now. We’ll start this
3 meeting. I’ll call it to order officially at this
4 point in time for the business end of it.
5 Our first item is the acceptance
6 of the minutes from our last meeting. I’m assuming
7 that the Board members have had time to read through
8 them over the last week or so that you’ve had. I’ll
9 entertain a motion to approve them.
10 MR. FLYNN: I move to approve.
11 MR. ROGERS: I second.
12 CHAIRMAN SIMPSON: We have a
13 motion and a second by Kevin to accept the minutes
14 from the last meeting. All in favor, say aye. Motion
15 carries.
16 Our next item of business will
17 be our Financial Report. Sara.
18 MS. ROME: For the month ending
19 January 31st, Tier 1 beginning cash balance was
20 $758,467.20. The Tier I fee receipts were $16,406.46
21 and the interest income was $405.67 for total revenue
22 of $16,812.13 in January. Expenditures were
23 $84,150.66 which included salary and operating
24 expenses and the cash balance at month end was
25 $691,128.67.
8
1 For Tier II, the beginning cash
2 balance was $4,146,637.58. The receipts for the month
3 were $72,251.40 and interest income was $2,188.28 for
4 total revenue of $74,439.68. A transfer of $465,900
5 was made to the Design Dam 10 Fund and the fund ended
6 the month with a cash balance of $3,755.177.26.
7 The KRA Replacement Fund
8 beginning balance was $21,718.43 and there was revenue
9 of $25 for navigation charts which made the month end
10 cash balance $21,743.43.
11 The General Fund began the month
12 with $114,344.54. Expenditures were $22,471.33 and it
13 ended with a balance of $91,873.21.
14 The Capital Project Funds.
15 First we have Dam 8 Renovation Fund that had
16 expenditures of $563,206.06 and ended with a balance
17 of $751,411.08.
18 Lock 1 and 2 had expenses of
19 $1,109.07 which ended the month with $12,279.53 and
20 Interest Earning Capital had interest of $568.80,
21 ending with a month balance of $44,336.59 and, then,
22 Dam 10 received the $465,900 transfer from Tier II and
23 had architectural/engineering fees of $102,737.69. It
24 ended the month with a balance of $497,265.60.
25 MR. STICKNEY: Sara, did we not
9
1 receive these packets?
2 MS. ROME: Yes, you did.
3 MR. STICKNEY: Did we get them
4 in an email because I didn’t see them? It’s just kind
5 of hard for me to follow it without looking at it.
6 MR. WELLS: Well, it’s still
7 helpful to just hear it, I guess.
8 MR. STICKNEY: Yes.
9 MS. ELLISTON: I’m sorry. I
10 apologize. I didn’t hand them out.
11 MR. STICKNEY: Thank you.
12 MS. ROME: Does anybody have any
13 questions for January?
14 Then, I will move on to
15 February. Tier I, the beginning cash balance in
16 February was $691,128.67. The receipts were
17 $172,783.29 and interest income was $421.70 for total
18 revenue of $173,204.99. Expenditures were $100,182.41
19 and the ending balance was $764,151.25.
20 Tier II, the beginning balance
21 was $3,755,177.26. Tier II receipts were $810,729.97.
22 Interest income was $2,341.96 for total revenue of
23 $813,071.93. There were no expenditures. So, the
24 month end balance was $4,568,249.19.
25 The Replacement Fund beginning
10
1 balance was $21,743.43 with revenue of $25 for
2 navigation charts. There were general operating
3 expenses of $225 which made the month end balance
4 $21,543.43.
5 The Lock and Dam Operation Fund
6 began with $91,873.21. The expenditures were
7 $20,220.77 and the month end balance was $71,652.44.
8 The Dam 8 Renovation Fund had
9 expenditures of $211,491.20 and ended with a balance
10 of $539,919.88.
11 The C6TR, interest income
12 account, had interest of $488.15 and then ended the
13 month with a balance of $44,824.74.
14 Dam 10 Design had fees of
15 $154,323.57 and ended with a balance of $342,942.03.
16 Are there any questions for
17 February?
18 Last, we have March. The
19 beginning Tier I balance was $764,151.25. The
20 receipts were $45,534.43 and interest income was
21 $531.81 and the expenditures were $54,396.35 which
22 ended the month end balance as $755,821.14.
23 Tier II, the beginning balance
24 was $4,568,249.19. Receipts were $24,548.29 and
25 interest income was $2,903.04. A debt service payment
11
1 was made on March 6th in the amount of $533,022.51 and
2 ended the month with a cash balance of $4,042,678.01.
3 The KRA Equipment Replacement
4 Fund beginning balance was $21,543.43 with revenue of
5 $348.25 from scrap metal. There were no expenses.
6 So, the month end balance was $21,891.68.
7 The Lock and Dam Operation Fund
8 began the month with a cash balance of $71,652.44.
9 The expenditures were $21,275.31 and ended the month
10 with a balance of $50,377.13.
11 Out of Capital Project Funds,
12 Fund C6NU had expenditures of $8,250 and ended the
13 month with a balance of $4,029.53. And, then, C6TR
14 earned interest of $410.40, ending the month with a
15 balance of $45,235.14.
16 And Dam 10 had architectural/
17 engineering fees of $130,796.32 and ended the month
18 with a balance of $212,145.71.
19 Any questions for March?
20 CHAIRMAN SIMPSON: Is everybody
21 good with January not being in front of you? Jack,
22 are you okay with that?
23 MR. STICKNEY: Yes.
24 CHAIRMAN SIMPSON: I just need a
25 motion.
12
1 MR. WELLS: Move for approval.
2 MS. BANKS: I’ll second.
3 CHAIRMAN SIMPSON: We have a
4 motion and a second. Is there any other discussion?
5 All in favor, say aye. Motion carries.
6 Our next item on the agenda is a
7 presentation from the Watershed Management grant
8 recipients. Is that you, Malissa?
9 MS. McALISTER: I’m going to
10 start. I’m Malissa McAlister. I’m the Kentucky River
11 Basin Coordinator and I work through UK’s Water
12 Research Institute in this role, and you all have
13 funded this position for a long time now. I’ve been
14 doing this for about fourteen and a half years.
15 I know some of my presentation
16 will be redundant for some of you that have been on
17 the Board for awhile but I know there are some new
18 faces.
19 So, in a minute, we’re going to
20 go through exactly what it is that we do for you at
21 UK; but before I do that, I wanted a chance to get you
22 to meet a couple of the people from the organizations
23 that have received watershed grants from the Kentucky
24 River Authority.
25 You all have been issuing those
13
1 for fourteen years now in amounts of up to $3,000,
2 usually four to seven a year, five to seven a year,
3 and I have had the privilege of working with some
4 great people to do some really neat, local projects
5 that help with water quality, outreach, education and
6 improvement all throughout the Kentucky River Basin
7 and I have invited a couple of them here today to
8 speak to you a little bit about what they have managed
9 to do with the funding that you have provided them.
10 So, I’m going to introduce them
11 and let them talk and, then, Dr. Ormsbee and I will
12 give our presentation.
13 So, first we have Jerry
14 Weisenfluh is here from Lexington. He did a project
15 at the Colony Neighborhood in Lexington on Wildcat
16 Branch.
17 MR. WEISENFLUH: The Colony
18 neighborhood station lies on the west side of
19 Lexington inside New Circle Road. So, it’s a very
20 urban site and we have been doing a stream restoration
21 for the past three years with the objective of
22 contributing to improvements in water quality in the
23 Wolf Run Watershed that feeds in eventually to the
24 Kentucky River.
25 It has some special
14
1 characteristics because of its urban setting, and the
2 picture on the left-hand side is what the site looked
3 like before we got started. It’s sort of a typical
4 stream. It’s a small headwater stream and it was
5 invaded by bush honeysuckle primarily.
6 So, our idea was to take that
7 out and replace it with native plants and then use
8 this as an educational site to show people why you do
9 this to improve water quality.
10 So, the picture on the right-
11 hand side is what it looked like after we did the
12 honeysuckle removal. So, that gives you an idea of
13 what the stream size is. It’s about a 650-foot
14 stream.
15 The thing that is kind of unique
16 about this as far as stream buffer restorations is
17 that it’s inside a well-established neighborhood.
18 It’s right by the entrance to our neighborhood. So,
19 everybody sees it when they come in.
20 On the north side of the stream
21 to the right, there were four property owners who were
22 not overly excited about us removing their screening
23 from our side of the stream and, then, on the other
24 side is a public greenway that our neighborhood
25 association is responsible for. So, most all of our
15
1 work was on the south side of the stream.
2 Normally, when you do these
3 projects, you take out the invasives. You put in some
4 tree whips and you broadcast a mix of native seeds
5 and let it take off and it goes wild. We couldn’t do
6 that. We needed this to look presentable. So, we
7 came up with a design to put in a large diversity of
8 native plants and attend them a little more than you
9 normally do in a stream buffer restoration.
10 Then, you all gave us some money
11 to turn this into an educational site and that’s what
12 I want to talk a little bit about. The money from KRA
13 we used to buy plant markers so people like me who
14 don’t know a lot about native plants could come to
15 someplace and see what they look like and learn their
16 names and learn how you might place them in a stream
17 buffer.
18 Can we go back a slide? And,
19 then, we’re going to do a field guide so people can go
20 out and read about what we’ve done. The field guide
21 is going to have photographs of the plants. It’s
22 going to have links to national websites that has more
23 information about what their value is and what their
24 uses are. So, that’s all in place now. We’ve got
25 that together. We’ve taken photographs and we’ve
16
1 written the background information about the project.
2 Go to the next slide. This is
3 our stream markers. This is the money we used from
4 your grant. We bought plant markers, really nice ones
5 we got from a company off the website. So, we have
6 these installed now on over about eighty plants that
7 we have identified that we’ve installed from twenty-
8 four different plant families. So, it’s a really nice
9 site for learning about plants.
10 The next slide. The photo down
11 to the right is what the site looks like now. That
12 was taken actually last fall. Plants are getting
13 bigger now. We’re in our third year on those, so,
14 they are really starting to grow now.
15 We’ve gotten a lot of attention
16 that we didn’t expect. So, the plant people are
17 getting interested in this because of the plant
18 identifiers that we put out there. The folks from the
19 state Fish & Wildlife, I found them out there
20 surveying our site last summer because they’re
21 interested in the pollinator aspect of the plants
22 we’ve put in. So, they told us we have the largest
23 monarch weigh station that they’ve measured so far in
24 their program.
25 So, we’re really proud of this
17
1 and we really appreciate the support we got that
2 allowed us to put these plant markers in because I
3 think that’s what makes it a really special site.
4 MR. STICKNEY: Is it largest
5 from size or by how many monarchs visit it?
6 MR. WEISENFLUH: Size. I don’t
7 know if they measure it in acreage or linear feet but
8 they were measuring it and recording what kind of
9 plants we had. So, I think biggest in size is what
10 they were talking about. Now, I don’t know if that’s
11 the biggest but that was the biggest one they had seen
12 at that time. They were just starting their program
13 of documenting these. Thank you.
14 MS. McALISTER: Thank you,
15 Jerry. So, the other person I invited to come today
16 is Jane Vanhook from Lincoln County and she has been a
17 dedicated Watershed Watch volunteer for many years,
18 she and her husband, and she and her local
19 organizations have received a few KRA watershed grants
20 and I asked her to speak about them also.
21 MS. VANHOOK: I just want to
22 start off by saying thank you because when I retired
23 after thirty-three years of teaching science, I wasn’t
24 finished and, so, I wanted to make sure that I could
25 continue this.
18
1 And, so, one of the ways that I
2 was able to do it is that in my own community which is
3 Stanford in Lincoln County, there is a very important
4 spring and that is St. Asaph Spring. We are currently
5 in the Fort Boonesboro area and there’s Fort Harrod,
6 but Logan’s Fort was the third fort in this area. So,
7 this has a very historical significance.
8 St. Asaph springs and creeks
9 still runs today as it did two hundred and forty years
10 ago. So, it’s just a great thing to be able to study
11 it, but the best thing is is to get the citizens in
12 the county and in the city involved in the study of
13 it.
14 I had a City Council person ask
15 me why do we need to do this after I explained what
16 the grant was going to be doing and it gave me an
17 opportunity to explain to them why we needed to do
18 water chemistry, why we needed to do biological
19 assessments. People just don’t understand. They
20 think you’re going to get them in trouble if you’re
21 testing the water. And, so, it’s been a really great
22 experience.
23 And you can see here. This is a
24 little preschool that I’ve actually taken out two
25 years in a row now. We actually get in. They get
19
1 excited and they wear their boots and we actually get
2 in the creek. And this is right south of the
3 courthouse in Stanford and St. Asaph Creek actually
4 runs all through Stanford. It’s two miles long and we
5 do water testing at four different places in that
6 creek in that two miles just to make sure that
7 everything is the way it should be.
8 We really enjoy having these
9 kids come in. We pull out a lot of the living things.
10 Malissa came the first time that I did this and helped
11 with this, and it’s just amazing what you can pull out
12 of this creek. We’ve had the crayfish and all the
13 macroinvertebrates. The kids identify them. As young
14 as this, they’re really good at finding them and
15 they’re closer to the water and they can see them
16 before I do. They absolutely have a great time.
17 We just recently did this just a
18 few--well, actually just a few days ago, I took them
19 out again, the next group. And, so, we spent a lot of
20 time out there. They get their nets. We study it.
21 I also do the water chemistry.
22 We just did that last weekend.
23 This has been great because I
24 started talking about doing this grant, and all of a
25 sudden, people started approaching me and said, do you
20
1 know what? I’d like to help you with this. And I
2 went, all right. So, Malissa came and we did the
3 training. This is my husband. I trained him because
4 he knew nothing about what he was doing, and, so, I
5 trained him. This is actually at the springs. We had
6 been a Water Watch volunteer for many years. And, so,
7 I showed him how to do this. He’s getting pretty good
8 at it.
9 This is actually at St. Asaph
10 Springs. We have a fort there, a partial fort, hoping
11 to build it completely, but the spring just flows.
12 It’s amazing how the spring still flows after all
13 these years.
14 This one, this is Jason. I went
15 down there the first time that we tested and he had
16 his pickup truck backed back there. He had everything
17 laid out exactly. He does this and takes it very
18 seriously. It’s just been good to work with these
19 people. Jason actually fishes for salmon in Alaska
20 for three months in the summer. So, he is really into
21 water quality and his house backs up to this creek and
22 his kids play in it. So, he has a vested interest in
23 it.
24 This is Amanda Wheeler. She is
25 a coworker now because at the time I did this, I did
21
1 not work for the Lincoln County Public Library. And,
2 so, now I do and, so, she’s a coworker. She is a very
3 environmentally conscious person. So, she does it
4 where it actually runs into Logan’s Creek.
5 We do water quality testing with
6 the chemistry. So, we have uploaded all that
7 information to the website - Malissa does that - and
8 we have been very pleased with our findings. So,
9 that’s the first grant.
10 The recent grant that I’ve got
11 is to purchase the EnviroScapes and those are actually
12 going to be able to be checked out through the
13 library.
14 And we are really excited about
15 that because I kept having to go up to Bluegrass
16 GreenSource and get theirs to use and now we have them
17 right there at the library and the teachers can check
18 those out or I can go out with them and show them how
19 to use them.
20 I have been quite happy since I
21 retired, quite busy but quite happy since I retired
22 because I get to do these things because I love to
23 teach kids but I love to teach kids science.
24 And also I just recently, well,
25 I will graduate June 1st with my Professional
22
1 Environmental Education Certification. It’s a year-
2 long certification. And, so, this has all been part
3 of it and it all comes together. And, so, I just
4 wanted to thank you. Yes.
5 MR. WELLS: How did you find out
6 about this program?
7 MS. VANHOOK: Well, I’ve
8 actually gotten several grants before these last two.
9 The only way I was going to get anything done at
10 Garrard County High School was to get grants and I
11 wrote them myself, or I collaborated with some very
12 well-known people in Garrard County that helped me
13 with some other grants. You just start searching out
14 these grants and I honestly can’t remember exactly.
15 MS. McALISTER: When we announce
16 the grants, like application deadlines, I send it out
17 to all of the Watershed Watch samplers. So, they’re
18 aware and, then, I work with them to try to help them.
19 MS. VANHOOK: Yes. So, that’s
20 how it would have been because I’ve been a sampler for
21 many years.
22 MR. STICKNEY: So, how is the
23 water quality and has it changed at all over the years
24 in the spring?
25 MS. VANHOOK: Everything has
23
1 been good so far. We did have a little high on
2 nitrates right below the city, and Malissa and I
3 talked about that and we’re looking at some issues but
4 we’re pretty certain that it’s a storm drainage and
5 maybe some - hopefully not - but there could be some
6 sewer failures there, but everything has been good as
7 far as E.coli and everything has been good or I would
8 not have put those kids in that water. So, so far
9 it’s been great and it’s been good to see that. Yes.
10 MS. PIAZZA: I missed what you
11 said was at the library.
12 MS. VANHOOK: EnviroScapes.
13 These are models that you can use to show watersheds
14 and runoff. And since Lincoln County also has one of
15 the largest landfills in the state, I got one that
16 demonstrates a landfill and the other one is a water
17 treatment and sewage treatment center.
18 So, there’s three different
19 models, and that grant was for $2,978, just below
20 $3,000, but it’s been great. Those have already been
21 purchased. We’ve already received them and I look
22 forward to using them.
23 Any other questions?
24 MS. McALISTER: Thank you, Jane.
25 DR. ORMSBEE: It’s great to be
24
1 with you this afternoon. My name is Lindell Ormsbee.
2 I’m the Director of the Water Institute at UK, and
3 like Malissa said, I know a lot of you all have been
4 on the Board for several years but we have a few new
5 faces. So, each year as we present the contract, we
6 like to go back over a few minor details about the
7 Watershed Program.
8 And, so, first off, really the
9 impetus for the program really kind of came back from
10 the actual statute. When the River Authority was
11 created, there was actually in the statute a couple of
12 provisions authorizing the River Authority to do
13 sampling or water quality issues and also to solicit
14 reports and analyses.
15 And, so, at the time, Hugh
16 Archer was the Executive Director and he came to UK
17 and solicited our help in fulfilling or helping to
18 fulfill this component of the statute.
19 And by way of a little bit of
20 the history, so, our partnership really started back
21 in 1998. And at that time, the Division of Water had
22 implemented a watershed management framework process
23 for the entire state and that was envisioned to focus
24 on different river basins and each river basin was to
25 go through a five-year process of different
25
1 activities.
2 And, so, the Kentucky was kind
3 of identified as the first basin to go through that.
4 So, we were kind of the pioneers for the rest of the
5 state. And, so, the River Authority volunteered to be
6 kind of the one main partners in that initiative and
7 that kind of got this process started.
8 We went through that five-year
9 process, and at the end of that or at the same time, I
10 forgot to mention, the Kentucky River Watershed Watch
11 group was also formed. And, so, both of these came
12 about at the same time.
13 So, there was a partnership
14 established there as well whereby the River Authority
15 worked with the River Watch group to provide some
16 funding for monitoring and analysis and also some
17 technical support.
18 We also developed a website for
19 them to provide reports. There was an annual
20 conference as part of that and the Executive Director
21 was always one of our key speakers at those meetings.
22 So, that’s been a fantastic partnership. As you just
23 heard, some of our other projects have come about by
24 partnership through that activity.
25 And, then, after we went through
26
1 that five-year process, in 2002, the leadership
2 decided to kind of make a more direct focus on the
3 Kentucky River Basin. So, we still maintained an
4 association with the State and their process, but we
5 tried to start focusing more directly on some of the
6 issues in the Kentucky River Basin.
7 And as part of that process, in
8 2003, that’s when we started this little grant program
9 that you’ve heard two of the participants’
10 presentations to really focus on issues directly in
11 the Kentucky River Basin.
12 And, so, the way that we kind of
13 developed a process in the basin to eventually address
14 larger problems is we start very small typically
15 sometimes with some of our volunteers with the
16 Watershed Watch.
17 They may just be sampling in
18 their back yard, for example, and, then, we try to
19 work with them to start getting groups together to try
20 to focus on more local problems, and this can result
21 in focused sampling in their area or they can get
22 together and put together sort of a citizen action
23 plan to try to identify issues and address those.
24 And once we’ve got that kind of
25 momentum going, they’re then typically a potential
27
1 candidate for one of the River Authority grants which
2 then allows them to kind of take the next step. In
3 many cases, some groups have used that funding to
4 actually incorporate themselves as an NGO which then
5 opens them up to additional funding sources. We’ve
6 had several groups that have done that.
7 And, then, the next step
8 typically is to help them, work with them, and that’s
9 one of the activities that Malissa is engaged in to
10 try to go after some larger grants, and we’ve been
11 very successful in the Kentucky River Basin in doing
12 that.
13 We’ve had several groups that we
14 have been able to work with to get federal funding
15 through the Division of Water through something called
16 a 319 Grant and this has in some cases brought grants
17 as large as $100,000 to work on specific problems.
18 We’ve had watersheds outside of
19 Lexington, some in Lexington that have started to
20 tackle local problems at a pretty significant level,
21 develop actual watershed plans for their individual
22 basins and also develop and implement best management
23 practices to address some of those problems.
24 So, just to kind of summarize
25 that process, this map here in your Powerpoint, all
28
1 the little dots are locations where we have volunteers
2 that go out four times during the year to sample their
3 local stream or streams, and they would typically
4 sample for bacteria, for nutrients, for metals, and in
5 some cases, they will also sample for biology, looking
6 at macroinvertebrates, small bugs and insects to try
7 to assess how healthy the stream is.
8 This next map shows over the
9 last thirteen years or so where you all have actually
10 funded these different watershed projects illustrated
11 by the different river basins. And I think you can
12 see from that map, we’ve had a very diverse
13 distribution of projects all across the basin, from
14 the headwaters all the way to the outlet of the basin.
15 And, so, that’s been again an
16 incredibly successful program. The River Authority
17 has gotten an immense amount of I think recognition
18 from all these projects, and Malissa will talk more
19 about that in a second.
20 And, then, finally as we talked
21 about some of these larger grants, this map shows some
22 of the priority watersheds that the Division of Water
23 has identified that we have been able to work with
24 groups in those areas.
25 And, so, there’s five watersheds
29
1 in particular that we have been able to secure a lot
2 of federal money to come in and help. In fact, we
3 were just over at the Division of Water earlier this
4 morning, Malissa and I, talking about another
5 watershed that we’re getting ready to try to leverage
6 some additional federal dollars to help in the
7 headwaters.
8 And, so, the contract that you
9 all have funded each year really has five components.
10 We have a project coordination component, a technical
11 assistance component. In addition to the watershed
12 activities, we basically are on call if there’s a
13 technical issue that might come up related to the
14 River Authority or the locks and dams that we can help
15 out.
16 In the past, for example, we
17 have developed some computer models that the River
18 Authority has used in helping to come up with valve
19 operation plans and so on. And, so, we have expertise
20 that we can bring to that.
21 Of course, the bulk of the
22 activity is the watershed management activities, and
23 Malissa basically coordinates that and she will talk
24 more about that in just a second, and, then, we also
25 sponsor and pay for the water quality analysis for all
30
1 the watershed volunteers and, then, finally the
2 watershed grant program that was initiated.
3 And, so, as part of that
4 process, just to break those down a little bit as
5 related to the different budget items, there’s the
6 project management component where we just handle all
7 the basic financial management and report writing and
8 so on.
9 And, then, really the bulk of
10 the activity is the next step which is the watershed
11 coordination activity. And for that, I’m going to let
12 Malissa explain some of her activities in more detail.
13 MS. McALISTER: So, these are my
14 main activities on the screen in addition to many
15 random calls that I get throughout the week.
16 I help with Watershed Watch at a
17 variety of different levels. That’s the citizen
18 sampling organization. I help coordinate the
19 watershed grant program that you all have funded. I
20 provide technical assistance on general water quality
21 concerns.
22 I am a liaison to the Division
23 of Water on your behalf and UK’s Water Research
24 Institute. I’m there regularly - Bill will attest to
25 that - usually a few times a month and, then, I
31
1 convene a Kentucky River Basin team twice a year to
2 talk about a variety of issues in the basin.
3 As we’ve already talked a little
4 bit about Kentucky River Watershed Watch but we are
5 currently sampling three times a year. Every time we
6 look at field chemistry and, then, two to three times
7 a year, we look at pathogens, so, that’s E.coli, and,
8 then, in the fall, we look at additional water
9 chemistry, nutrients and metals.
10 There are somewhere between 160
11 to 200 sites. It seems to be creeping back up again.
12 We’ve had renewed interest lately. We have about 250
13 active volunteers; and at the end of the year, we put
14 together an annual report summarizing our findings.
15 We do a presentation at their annual conference and we
16 make all this information available on a website that
17 we host which the address is right there.
18 Also to recap the grant program,
19 you all have funded over the years eighty-four
20 different projects totaling over $200,000. That is a
21 great enticement for me to offer people to do a little
22 bit extra and kind of energize communities about water
23 issues and that has been fun to watch and see
24 different projects develop and get to know people that
25 are directly involved.
32
1 There are a whole range of
2 things that people do with those. They do the startup
3 activities for the nonprofit organizations. They do
4 cleanups, tree plantings, different education and
5 outreach.
6 That picture is a project in
7 Wilmore on their Town Creek and that also started out
8 of a Watershed Watch volunteer’s interest and they
9 received a grant to do an Arbor Day tree planting and
10 there’s a school right adjacent to it and they bring
11 the kids in and get them involved.
12 This is the ongoing technical
13 assistance. This is one of the random calls that I
14 have gotten. The Boyle County Solid Waste Coordinator
15 calls me periodically and she was having issues with
16 people driving their cars into the creek and just
17 washing them there, like, soap, everything, the whole
18 deal. And, so, we did some educational outreach on
19 maybe why that wasn’t the best idea.
20 I help people, as we said,
21 develop different grant projects. I talk to student
22 classes pretty frequently. I was out in the rain on
23 Friday with a couple of high school classes and they
24 were very enthusiastic in spite of the rain.
25 And, then, I go to the Division
33
1 of Water and I work with them on a variety of
2 different projects. I have counterparts throughout
3 the state that work in the other river basins and we
4 meet once a month to work together on projects and to
5 network and get ideas from each other. So, that’s
6 helpful, and, then, I provide guidance on funding some
7 of the projects that the Division of Water is able to
8 fund.
9 And, then, finally, there’s a
10 Kentucky River Basin Team that is a very broad
11 spectrum of people who have interest either at the
12 local level or from their agency’s perspective on
13 water quality and water issues in the Kentucky River
14 Basin. Several of you have been to those meetings,
15 and we’ll have another one in the fall and you all are
16 welcome to attend. They’re not closed meetings.
17 Anyone is welcome to join, and we just go around the
18 table and talk about different projects and try to
19 offer support to each other in the projects.
20 DR. ORMSBEE: Thanks, Malissa.
21 And, so, the last slide, and this is also in your
22 packet, is our budget proposal for this year. This
23 basically follows the different components that we
24 just outlined.
25 This is up a little bit from
34
1 last year. We had two adjustments. One was we add a
2 little more for the sampling analysis, up from $17,000
3 and, then, we made a little bit adjustment on the
4 watershed management item which is Malissa’s position.
5 We had some benefits we had to pick up as part of UK’s
6 requirements. So, that’s made an adjustment.
7 I will point out over the years
8 that we’ve had this program which is approaching
9 twenty years that UK itself has put in probably about
10 $800,000 of its own money in support of this.
11 And through a lot of the
12 grantsmanship that Malissa has been able to engage in,
13 we estimate we’ve probably leveraged about $5 million
14 of additional funding, federal funding and so on into
15 the river basin for various projects.
16 So, it’s been an incredibly
17 successful program. I think it’s somewhat looked at
18 not only from our state but other states that has
19 really fascinated me. We present some of the things
20 we do at national conferences and so on and people are
21 very intrigued about how this operates.
22 The State, in fact, based on the
23 success of your all’s grant program, has decided to
24 try to start something at a state level and give one
25 grant per each of the major river basins, trying to
35
1 mimic what we have been able to succeed with with our
2 grant program.
3 So, it’s been a highly
4 successful program and continues to be. And, again,
5 this is our proposal for this year to continue these
6 activities and the success that you all have
7 supported.
8 And with that, I will be glad to
9 field any questions that anyone might have. And Jerry
10 has been fantastic to work with, I might say.
11 MR. GRAVES: Thank you. This is
12 a program I fully support. They do a great job, plus
13 it’s part of our Mission Statement. So, I appreciate
14 working with you guys and this is something I do
15 support.
16 AUDIENCE: I just wanted to add.
17 I have been testing our water on Water Creek for ten
18 years. We just had new neighbors move in with little
19 children. We were able to go to the Water Watch
20 website, check the data and say, yes, your kids can
21 play in the water.
22 CHAIRMAN SIMPSON: So, what
23 we’re going to need is a motion from the Board and a
24 second for the $122,506 expenditure.
25 MR. WELLS: I make a motion that
36
1 we accept that.
2 MR. STICKNEY: Second.
3 CHAIRMAN SIMPSON: We have a
4 motion and a second for this expenditure. All in
5 favor, say aye. Motion carries. Thank you very much.
6 Our next item has to do with our
7 water gages up and down the river. David Hamilton
8 will speak on this and we’ve got a speaker from USGS.
9 MR. HAMILTON: The next agenda
10 item is another contract up for renewal for the next
11 fiscal year and that’s the US Geological Survey’s
12 gaging network that the KRA has funded to some extent
13 ever since I’ve been here.
14 And for those not familiar with
15 it, it is used really at all water levels. It’s used
16 in your two extremes. It’s used in your flood
17 prediction services.
18 If you ever get on there and you
19 look at the flood predictions that say Lock 4, Lock
20 10, Lock 14, the National Weather Service is the one
21 that is calculating those predicted flood levels but
22 what they’re basing that on is the actual gage data
23 that they’re reading off of these realtime gages that
24 the KRA funds.
25 The other extreme that it’s used
37
1 is in times of drought - Bill Caldwell here can attest
2 to that - and it’s used primarily for two reasons.
3 One is the historical data they provide. Some of
4 these gages go back to the early 1900's. So, you’re
5 talking about 100-plus years of data. So, it really
6 gives you a glimpse of what the river can do in times
7 of extreme drought.
8 And, in fact, we base our water
9 supply planning on two of the major droughts that
10 occurred historically - the 1930 drought and the 1953
11 drought. So, there’s the historical data that’s
12 important and also just the realtime operation. The
13 water withdrawal permits are all tied to realtime
14 stream flow, so, both of those aspects are important.
15 And also when the river is at a
16 normal level, it’s used by recreational boat traffic.
17 If you’re in a boat and you want to know if the river
18 is two feet over crest, it’s getting a little sketchy
19 to be out there in a boat or if it’s six inches and
20 you go out there, it would be pretty safe. So, the
21 recreational community uses it a lot, not only the
22 realtime data but also the predictions.
23 So, those are the three primary
24 uses - your drought uses, your flood forecasting and
25 also your recreational traffic.
38
1 The proposal this year is the
2 exact same gaging network that we had last year. If
3 you remember last year, we dropped off one gage. The
4 costs went up slightly that year. So, to counteract
5 that, we ended up dropping the gage at Hickman Creek
6 and I believe our costs might have gone down for that
7 year.
8 The network as they propose this
9 year is the exact same amount of gages. The cost is
10 virtually the same, maybe three dollars difference or
11 something but virtually the same price.
12 Jeff Woods with USGS is here
13 today to go over some of the stuff that they do. And,
14 then, at the end of that, Tommy Russell, our Emergency
15 Management Planner, wanted to say a few words after
16 Jeff is done and we’ll take it to a vote as far as
17 renewing the contract.
18 MR. WOODS: Thanks, David. I
19 appreciate your time letting me come talk to you
20 folks. I think most of you are probably pretty
21 familiar with what we do.
22 USGS actually operates just
23 under 12,000 stream gages across the country and U.S.
24 territories. So, we have quite an extensive network.
25 And within the Kentucky River Basin, we actually have
39
1 twenty-two stations that we operating with you folks
2 right now, all of which are measuring water level,
3 and, then, we are computing the volume of flow moving
4 past each one of those points so that you actually
5 know what’s going by and that kind of relates to what
6 David was talking about so you know your water
7 availability and water usage ratios.
8 No changes to any locations this
9 year, like he mentioned. A lot of these gages have
10 been fixed in place for a long time.
11 There’s also four rain gages
12 that you folks helped fund as well and that provides
13 operational information, particularly during those
14 heavy rain events.
15 And some upcoming changes that I
16 just wanted to make you folks aware of. Since most of
17 these gages are fixed in the same location for long
18 periods of time, there are times when we have to do
19 some adjustments.
20 And some that we see coming up
21 this year are first at Lock 10. When the construction
22 starts, we will actually have to move the gage across
23 the river probably to the Winchester Municipal
24 Utilities’ water intake structure that’s across the
25 river. We have been in talks with them already. It
40
1 sounds like they’re very willing to have this over
2 there. So, we will be able to continue data
3 collection at that point but it will be at a new
4 location and we take care of all of the movement of
5 the gage and costs and all of that. So, we’re using
6 the same equipment. It’s just more relocating it and
7 making sure that the pool level still matches up with
8 what we’ve had in the past.
9 That will start probably
10 sometime this summer because I believe construction
11 begins maybe in the fall, somewhere around there,
12 next year. So, we will have it in by the fall for
13 sure so we can start getting some data ahead of time
14 so that we can see if there are any differences and
15 make those adjustments.
16 And the other is at Lock 8 now
17 that construction is pretty much wrapped up. The
18 current gage is in the floodplain actually right now
19 and it’s something we’ve wanted to move for awhile but
20 we didn’t want to do it until construction was
21 finished because of the earth-moving and things like
22 that going on.
23 The sensor there is what’s
24 called a bubbler and it actually has an orifice line
25 that runs underground and it puts gas out and that’s
41
1 how it measures the water levels.
2 So, now that the construction is
3 complete there, we are going to work to move it
4 actually up the hill on the same bank it’s on right
5 now and then put in a more permanent line and that
6 will then be better situated for any type of high
7 water that may come in the future.
8 And also right now, it’s a bit
9 of target for people who are looking for some after-
10 hours recreation as well with their guns. So, we’re
11 also looking to get that out of its obvious spot and
12 maybe have it a little more protected. It has a lot
13 of steel inside it right now to keep it protected.
14 David mentioned it but our
15 proposed agreement renewal, there’s no real change to
16 the cost. And this just kind of gives you a breakdown
17 of the contributions from not only yourselves but also
18 from the USGS bringing federal funds from two separate
19 pots of money. And also there are some other
20 cooperators that help fund partially some of these
21 gages as well. So, you can see this here.
22 KRA is covering about 44% for
23 the cost of this network right now with USGS picking
24 up 36% and then other cooperators picking up the other
25 20.
42
1 CHAIRMAN SIMPSON: That’s just
2 in this basin here?
3 MR. WOODS: That’s correct.
4 That’s for these twenty-two sites that are operated
5 that we’re talking about here in the Kentucky River
6 Basin. That’s about it.
7 MR. STICKNEY: The eight rain
8 gages, are they still necessary with all of the
9 Kentucky mesonet stations that are found throughout
10 Kentucky? Couldn’t you use that information from
11 those mesonet stations instead of having your stand-
12 alone rain gages?
13 MR. WOODS: That’s I guess up to
14 you folks really. Typically, those rain gages, we
15 operate them kind of at the request of people we are
16 working with. Those are treated a little bit
17 differently than our other gages in that that data is
18 more of a temporary realtime decision-making type of
19 thing and not necessarily long-term published data.
20 So, it would just depend on what you thought was
21 appropriate for your need.
22 I will say I think that’s a
23 relatively minor cost. I think you guys are covering
24 four and I think they’re eight hundred bucks apiece.
25 MR. FLYNN: Where are those
43
1 located?
2 MR. WOODS: If you scroll back
3 to that map, I may have the locations on there.
4 MR. STICKNEY: Didn’t you say
5 eight of them? I thought you said eight.
6 MR. WOODS: You guys are funding
7 four. I think there’s eight within but the Corps of
8 Engineers is funding the other four.
9 MR. HAMILTON: We’ve got one in
10 Frankfort. I think we’ve got----
11 MR. FLYNN: They’re specific to
12 the locks and dams along the Kentucky River.
13 MR. WOODS: Yes.
14 MR. FLYNN: Jack, the mesonet
15 sites, I don’t know that they’re going to be
16 geographically located maybe in the areas that would
17 be relative to those sites.
18 I know when we’re looking at wet
19 weather and data for that wet weather for our area and
20 measuring flows in our sewers and that type of stuff,
21 you want it relatively close to where you’re looking
22 at that data. And if you’ve got it ten, thirty, forty
23 miles away from where you’re wanting, the rain
24 variance can be quite different and you not get the
25 data that you’re looking for. That’s just an
44
1 observation.
2 MR. RUSSELL: My name is Tom
3 Russell. I’m the Director of Emergency Management for
4 Frankfort and Franklin County and I’m sure I speak for
5 all of the EM Directors that rely on USGS stream
6 gages.
7 Let me say this, that we thank
8 you all for picking up this share of the contract for
9 these things for the simple fact that without these,
10 everything that I put out for flooding in Frankfort
11 since I’m the largest river town on the Kentucky River
12 relies on these stream gages.
13 I was thinking back probably to
14 1937 - probably only the Judge and Jerry can remember
15 that, the ‘37 flood - we sent a rider upstream - I
16 don’t know how they did it back then. Maybe there was
17 a stream gage or something, but, like I say,
18 everything that I do relies on these gages coming from
19 Beattyville coming down to us at Lock and Dam Number
20 4.
21 So, this is a huge, a huge asset
22 for us and actually it’s a huge asset for my budget
23 because for us to have to pick this thing up on our
24 own in Frankfort which I could only do one and I need
25 the ones upstream as much as I need the one in
45
1 Frankfort. Mike Callahan, USGS, and the Flood
2 Prediction Center at Ohio, they help us immensely.
3 So, realtime stuff is that we cannot protect the
4 citizens in the basin without these gages, no ifs,
5 ands or buts, because I can’t make the predictions on
6 the flooding levels and who needs to get up, get out
7 and when and where.
8 MR. GRAVES: I would like to
9 echo Tommy’s words of talk here. This is highly
10 important to the Kentucky River Authority and the
11 people up and down the Kentucky River. It’s something
12 very valuable.
13 As Tommy said, it beats running
14 down to Lock 4 every twenty minutes and checking on
15 the gages. This is a great tool for not only boaters
16 but people who live up on the river banks. And I live
17 on the river bank, so, it’s highly important to me as
18 well as other people.
19 MS. PIAZZA: Motion.
20 CHAIRMAN SIMPSON: If you look
21 in the yellow area right there, you’ll see what your
22 motion should include.
23 MR. WELLS: Second.
24 CHAIRMAN SIMPSON: We have a
25 motion and a second. All in favor, say aye. Motion
46
1 carries.
2 Our next item of business is
3 going to be from our illustrious bean counters in
4 Frankfort, John Brady.
5 MR. BRADY: My name is John
6 Brady and this is Ryan Barrow. We also have Sandy
7 Williams with us. We’re with the Office of Financial
8 Management, and I think it’s been a little while since
9 our office has gotten in front of the Board and given
10 a presentation. So, we just wanted to do a brief
11 overview on a few different topics before we get into
12 discussion on the potential funding of the Dam 10
13 project.
14 A few of the topics we will go
15 over real quick are we’ll tell you a little bit about
16 our office and the kind of work that we do, some of
17 the past bond transactions we’ve done with the River
18 Authority. We’ll take a look at the total current
19 debt service that the River Authority has, the Dam 10
20 project cost and what that will ultimately mean for
21 the Tier II rate, and we also have the preliminary
22 findings of the schedule.
23 So, a little bit about us. The
24 Office of Financial Management, more commonly referred
25 to as OFM within the Finance Cabinet, we’re made up of
47
1 three different areas - debt, investments and
2 accounting. We have four to five employees in each
3 area. I’m an analyst in the debt staff. Sandy is the
4 Deputy Executive Director of the debt staff and Ryan
5 is the Executive Director of OFM and he oversees all
6 three areas.
7 The debt staff, what we do is
8 basically finance the projects that the Governor and
9 the legislators put in the budget. The investment
10 staff manages three to four billion dollars in
11 investments for the State, and the accounting section
12 basically makes sure that the debt service gets paid.
13 Here we have a list of the bond
14 deals that we’ve done for the River Authority. The
15 first one was to construct Dam 9. We issued those
16 bonds in a par amount of $15.72 million and that was
17 done in October of 2008.
18 We refinanced this since, but
19 the piece that we couldn’t refinance and is still
20 outstanding is that $680,000 and that will be paid off
21 in April of next year. And with this bond deal came
22 the need to raise the Tier II rate to six cents per
23 thousand gallons.
24 In May of 2013, we issued bonds
25 in the amount of $17.21 million to construct Dam 8 and
48
1 renovate the locks at 1 and 2. Most of that debt is
2 still outstanding - $15.76 million. Since there was
3 additional debt, there was also the need to raise the
4 Tier II rate to the thirteen cents per thousand
5 gallons.
6 And, then, last May, we
7 refinanced the Dam 9 project for $10.85 million.
8 Basically all of that is still outstanding. No
9 additional debt. So, the Tier II rate stayed the same
10 and it actually was a very successful refinancing. It
11 brought savings to the River Authority of about $1.76
12 million.
13 We refinanced a lot of bond debt
14 last year, ten to fifteen million or more, but I think
15 that this deal had the highest percentage savings in
16 bonds refundable than any deal we did all year. So,
17 it was very successful.
18 This just takes a look at the
19 total current debt service for the River Authority.
20 It goes out to 2033, about $27.185 million principal
21 outstanding.
22 And if you take a look at down
23 in 2031 in the debt service column, we used that
24 number, that $2,424,687, we used that to calculate our
25 debt service reserve fund. The debt service reserve
49
1 fund has to be at least equal to the MADS or what we
2 call the maximum annual debt service. So, if you ever
3 see that term or that name, that’s where we get that
4 number from.
5 And, then, you also see the rate
6 stabilization fund behind it. How we get that is it
7 has to be 15% of the MADS, so, if you ever are looking
8 to calculate that or wonder where it came from.
9 MR. WELLS: John, is that about
10 a 3% interest rate?
11 MR. BRADY: This right here?
12 MR. WELLS: Yes.
13 MR. BRADY: This is blended of
14 all the--this is a mix of all three projects.
15 MR. WELLS: What’s the normal
16 rate right now?
17 MR. BARROW: That’s a pretty
18 complicated question, depending on credit, but your
19 model is about 4%.
20 MR. WELLS: Four percent?
21 MR. BARROW: And that’s got some
22 fluff in it right now.
23 MR. BRADY: The first project
24 was issued in ‘08 and has been refinanced since. I
25 think that had an interest rate of about 6%. And,
50
1 then, when we refinanced the last time, of course,
2 rates were very low but I think we refinanced it at
3 about 2.3, 2.4%. Like Ryan said, it just depends.
4 And, then, Ryan is going to talk
5 about the Dam 10 project.
6 MR. BARROW: John basically
7 covered kind of our interaction with you over the last
8 decade, two capital fundings and then a refunder where
9 we saved about $1.75 million.
10 So, what we’re going to address
11 next is the policy decision of the Board - we were
12 given these numbers by Jerry and company - so, to run
13 through the model.
14 Basically, the Dam 10 project
15 that we have estimated in the following sheets is
16 $23.3 million. Then, 10% of that is additional
17 contingency. There’s always contingency in a project.
18 Ten percent I’ve seen in a number of projects, so, we
19 assumed 10%, and, then, engineering fees on top of
20 that. So, the capital project, $27.8 million is what
21 we’ve modeled up.
22 When you fund a revenue-based
23 credit which this is, it’s a revenue credit, meaning
24 revenue is collected to service debt, you have to have
25 what’s called a covered factor. So, anybody in the
51
1 industry, the City of Winchester borrows money based
2 on water and sewer rates - I’ve done a lot of work for
3 a sanitation district - there’s always a covered.
4 So, what has been modeled
5 historically for the River Authority is 135, meaning
6 if you have a dollar in debt, you collect $1.35 in
7 revenue and then the excess revenue stays within the
8 bond and other capital projects and emergencies are
9 addressed in the Tier II structure.
10 In addition to that revenue
11 credit, you typically have a debt service reserve
12 which John mentioned is a max set-aside for what
13 happens in a severe drought when you don’t collect
14 enough money. The thing about debt service, you’ve
15 always got to pay, and you also have a rate
16 stabilization fund that’s on top of that.
17 So, the $27.8 million there is
18 the debt service reserve that has to be funded on that
19 when you borrow money along with the rate
20 stabilization fund. So, basically you’re going to
21 borrow that amount of money to complete the project
22 and you’re going to borrow additional money as a set
23 aside in the debt service reserve fund.
24 We’re going to talk later in the
25 next meeting, assuming you want to proceed, of the
52
1 intricacies of that, but it’s not just as simple as
2 let’s borrow $27.88 million from the market and
3 complete the project.
4 So, that background helps me
5 walk through this table. So, you can see kind of the
6 middle column and the cash contribution column added
7 together will basically fund the project. We don’t
8 really show the debt service reserve fund here but
9 there is an additional layer to the calculation.
10 So, a decision point, a policy
11 decision for the Board is do we want to do the
12 project. That’s clearly a decision point.
13 Another is how do we fund it.
14 We can fund it via all debt which would represent the
15 first line. So, what the first line option one is we
16 use zero cash, the excess cash that I described where
17 that we accumulate over time which we have excess
18 coverage. We borrow the full amount of the project.
19 This is the estimated debt service, and, then, we
20 translated that into the rates.
21 The rate is thirteen per
22 thousand right now. So, it would essentially go to
23 twenty-five cents from the current thirteen if you
24 elected to do the project, first decision point, in
25 the debt finance at all.
53
1 So, what we can do is drop to
2 the last scenario where we’ve assumed that there’s
3 about five or six million dollars of cash the carrier
4 is holding onto from the excess coverage. You would
5 want to keep some of that - I don’t necessarily have a
6 specific dollar figure - but a million plus for
7 emergencies.
8 But if you went to the bottom
9 scenario and you used $4 million in cash on that
10 $27.88 million, you would only be borrowing just under
11 $24 million. So, let me just point to those since it
12 might make it easier.
13 So, again, this scenario we
14 borrow it all - $27.88. This scenario we use $4
15 million in cash. We only borrow $24 million and then
16 the rate would be twenty-three cents. So, it goes
17 from thirteen to twenty-three.
18 This is a decision point that we
19 wanted you all to think about. So, if you want to do
20 the project and then how much cash do you want to use
21 are really the two questions.
22 MR. WELLS: Do you have a
23 recommendation?
24 MR. BARROW: Well, I personally
25 think it makes sense to use some cash. I don’t know
54
1 as much about the emergencies. So, I would look to
2 KRA about how much money do you really need sitting
3 around.
4 So, I would say a mix would be
5 where I would want to be, but I couldn’t say $2
6 million, $3 million or $4 million because I don’t know
7 enough about the type of emergencies that may arise
8 and how much those would be. Jerry would and other
9 members of the KRA staff would. My recommendation
10 would be to use some cash but where in that, we look
11 to management.
12 MR. GRAVES: I think
13 historically, the Kentucky River Authority, the Dam 8
14 project we funded $1 million up-front cash and that
15 would probably be my recommendation to do this on the
16 next project, to move two to three million dollars in
17 reserve because if we were to have a failure at one of
18 these facilities, then we’ve got to go into an
19 emergency management plan of retaining water. So,
20 two or three million dollars on putting a temporary
21 dam in wouldn’t go very far.
22 So, we always try and maintain a
23 pretty good cash balance because of that. Again, this
24 is all food for thought for today.
25 MR. ROGERS: You mentioned that
55
1 there’s some excess coverage, so, you would be
2 building up some cash. About how much in reserve
3 would that be building up a year?
4 MR. BARROW: I think currently,
5 it’s about $200,000. So, it would be another hundred
6 to a hundred and fifty thousand on top of that per
7 month.
8 Now, the way the waterfall works
9 and maybe it’s a good time just to go through it -
10 we’ll show graphics the next time. I didn’t want to
11 hit you with too much what I consider exciting
12 investment stuff. You guys may have a different
13 terminology for it.
14 Basically the way it works is
15 you collect money and then that money goes into a
16 principal and interest account. And, then, any
17 deficiencies in the debt service reserve then fund the
18 rate stabilization fund and then it goes into the
19 excess.
20 So, in the beginning, the answer
21 is not as much until after all those funds are funded,
22 but, yeah, you would have access so that when we have
23 this conversation in five years from now and there’s
24 another high capital need, you could then make that
25 decision to use cash. So, that’s kind of how it
56
1 works.
2 You have to have excess coverage
3 for investors to be able to buy the paper, and 135 is
4 probably pretty conservative. I’ve gone as low as 115
5 for Detroit a long time ago and that proved not to be
6 sufficient for them. So, 135 is what we modeled.
7 Now, I should have given my
8 explainer since I’m the finance person. These are
9 predicated on an assumed interest rate and there’s
10 also some other assumptions in those funds there.
11 So, this is a discussion today
12 and we can’t guarantee twenty-five cents per thousand
13 and twenty-three but these are to help the Board make
14 that policy decision because, again, interest rates
15 are subject to market and there are some other
16 assumptions that we can go through later in the next
17 meeting for specific rates.
18 And, then, that will be the
19 decision the Board will make if they choose to move
20 forward on how much is this project capital and we’ll
21 have to make it work.
22 So, decision point one is do we
23 do the project? Decision point two is how much cash
24 do we devoid? Obviously, the argument for cash is if
25 you’re going to do a capital project, you may want to
57
1 use some, but it may and certainly in this
2 illustration, these interest rates, it will keep the
3 rate a little bit lower potentially.
4 So, let’s talk about that
5 process. We were asked here today to just give some
6 rough estimates to allow the Board to say, well, how
7 much is it really going to cost; and from your
8 perspective, it’s a rate. So, we’ve provided that on
9 the prior page.
10 The next meeting, if you decide
11 to move forward, we’ll come back and give more detail
12 and it will be even more exciting. We’ll even talk in
13 more detail the bond process and show you some
14 schedules, etcetera. We’ve done that with previous
15 bond deals that we’ve done for you all.
16 And, then, in January, we’ll
17 have to work with KRA under a lease investment. We’ve
18 got to make sure we sell bonds after we know how much
19 it’s going to cost. So, basically we’re going to
20 release an RFP in January is the rough flight plan.
21 February we would come back and
22 we would approve the bond issue and the rate increase.
23 Both things would happen in a Board meeting. Then we
24 have State approval processes that we staff - and we
25 do all three - a State Property and Buildings
58
1 Commission. This is State level approval. I consider
2 it to be the executive approval. Secretary Landrum
3 sits on that board and the Secretary of the Cabinet,
4 etcetera. CPBO in February is legislative approval.
5 We take all of our bond deals to them.
6 And, then, we would basically
7 get the bids back. Staff would review them, make sure
8 that it’s reasonable and what they need and then we
9 would sell - I say sell - price the bonds after we
10 have that contract amount. And, then, a few weeks
11 later, we would close, meaning the money would flow
12 into your all’s accounts to proceed with the project.
13 So, the key sequencing there is
14 Board action, meaning you all, State level approvals,
15 bids are back and then we price the bonds is the
16 sequencing that we’ve made work here. I think that is
17 it.
18 For the Board presentation, the
19 other thing that we were asked to provide today, too,
20 is an estimate of Lock 10. So, this isn’t cumulative
21 rates. We kind of made this as an additional option.
22 So, if we were to do the Lock 10
23 renovation at this construction cost at 10%
24 contingency and that engineering fee estimate, we
25 created a new debt service basically with an assumed
59
1 interest rate and some other assumptions, it’s an
2 additional six cents. So, take the previous line and
3 add six cents if you wanted to do both projects.
4 Clearly, whatever the Board
5 wants to do, we will just execute the funding on that
6 but we wanted to give you this information, too, just
7 so you had some options.
8 MR. FLYNN: Just for everybody’s
9 knowledge and mine - I’ll show my ignorance, I guess -
10 the Tier I rate, there’s no impact at all to the Tier
11 I? Is there any impact at all for the Tier I?
12 MR. GRAVES: No. We’re not
13 raising Tier I at all. That’s Tier II only.
14 MR. FLYNN: Okay, Tier II only.
15 And I know these, but for the benefit of the others,
16 the Tier I and Tier II rates per thousand, as we sit
17 here today?
18 MR. GRAVES: As we sit here
19 today, Tier II is thirteen cents per thousand, Tier I
20 is 2.2 cents, eight-tenths of a cent less than three
21 cents.
22 MR. BARROW: Basically, Tier II
23 is all capital. So, it’s spent in two different ways.
24 It’s spent for debt service or cash funding of capital
25 projects. So, these rates, you’ve got all Tier II.
60
1 MS. BANKS: So, that would add
2 the six cents to the twelve cents because it doubles
3 when you go back to the----
4 MR. BARROW: No, no, and we did
5 it this way a little bit because it was an add-on.
6 So, let me just make sure that we’re 100% clear.
7 MS. BANKS: Because that started
8 out at thirteen cents.
9 MR. BARROW: The current rate is
10 thirteen. So, basically, if we did option five, you
11 would be adding ten cents. If you did option one, you
12 would almost be doubling the thirteen and the
13 additional twelve. So, thirteen to the twenty-five.
14 And, then, if you wanted to do the lock, you add
15 another six.
16 MS. BANKS: Six. Okay. So, it
17 wouldn’t be doubling the six. It would just be adding
18 the six to that.
19 MR. BARROW: Yes. It would just
20 be additive. That was what we were asked to do based
21 on some preliminary discussions was show what the new
22 rate would be for Tier II and then give you all a
23 decision point on how much extra if you wanted to do
24 the lock.
25 MS. BANKS: And, so, the
61
1 average household would use I’ve heard 4,000 gallons.
2 What does the average household use?
3 MR. GRAVES: The average
4 household right now is using about 4,000 which is
5 running the average bill from the Kentucky River
6 Authority about sixty cents. That’s what an average
7 user would use right now.
8 So, if you look at your water
9 bill, which, since I came on board, that’s what I
10 started doing. So, mine runs about sixty, sixty-two
11 cents per month. I think that’s pretty well standard
12 unless you’ve got a bunch of teenagers.
13 MR. WELLS: That’s sixty cents
14 based on 4,000----
15 MR. GRAVES: Four thousand
16 gallons.
17 MS. BANKS: And, so, we’re
18 talking about this major, important project. And, so,
19 we’re saying that a consumer is going to spend less
20 than a cup of coffee to go with everything that we
21 want to do. That seems amazing. What a great deal.
22 MR. BARROW: Well, it’s only
23 really about forty cents more. The increment, it’s
24 already at thirteen. So, to go to twenty-five or
25 twenty-six.
62
1 MS. BANKS: And I understand
2 it’s spending real money, but I think people assume
3 that we’re going to be maintaining these locks and
4 dams. A lot of people assume that we’re doing that.
5 And, so, raising the money to actually do the project,
6 I mean, we’re fulfilling our mission of taking care of
7 the property, being stewards for them because we’ve
8 got several projects to go.
9 CHAIRMAN SIMPSON: Do we have
10 any other questions for the folks in Finance?
11 MR. GRAVES: Thank you, guys.
12 Appreciate it. Thanks for coming.
13 MR. HAMILTON: Pat, your words
14 gives me a good segway to my discussion. You should
15 have a copy of these Powerpoint slides in your
16 handouts that were passed out this morning.
17 So, for the Engineer’s Report,
18 since we don’t have a whole lot going on with Dam 8,
19 they still have yet to get out there and do their last
20 bit of grading work and reseeding, so, not a whole lot
21 to report on that today.
22 So, I would like to use the
23 report just to go over - and Rodney and Jerry and I
24 kind of discussed this over the last few weeks - they
25 wanted me to go over some of the project history,
63
1 project need because this project goes back quite a
2 ways. And with the Board turnover, pretty much
3 everyone has come in at various points of the design.
4 So, they just wanted me to touch on the project
5 history.
6 Before I do that, though, I do
7 want to reiterate what John and Ryan were saying in
8 regards to schedule. So, the design itself is
9 complete. In fact, Ben just delivered the final hard
10 copy today at the Dam 10 meeting this morning, but the
11 design is complete. They are still working on some
12 permitting issues and hopefully get those done this
13 year.
14 As far as today goes, the
15 current Board meeting that we are, this discussion is
16 just for informational purposes only. We’re not
17 looking for Board action at this point. It’s just to
18 put everything out on the table and see where we are.
19 So, you already had the
20 financing discussion from OFM and then I will just
21 here in a bit go over why Lock and Dam 10, what is it
22 at the forefront as far as our capital construction
23 projects go.
24 And then following that up, our
25 next quarterly Board meeting in September will be an
64
1 opportunity for updates, further questions and
2 followup to today’s information. And, then, the
3 November Board meeting is when we proceed with kind of
4 the watershed decision from the Board as to what to
5 proceed with, whether that’s constructing the dam,
6 constructing the dam and the lock, no project,
7 whatever the Board decides. We want to set the
8 November Board meeting as that target date to come up
9 with the project that we’re going to proceed with.
10 Following that, in February,
11 assuming that there is a project that we’re proceeding
12 with, as Ryan was saying, that would be the time when
13 they would look for the Board to vote on bond
14 financing. And I believe at that time, the rate
15 increase associated with that bond financing would be
16 voted on. That Tier II rate increase would not be
17 effective until April 1st of 2018.
18 And this whole schedule is set
19 up to allow for construction to begin spring of next
20 year basically when the contractor will be able to get
21 out there, given the river conditions.
22 So, any questions on the
23 schedule? It depends on how it would unfold over the
24 next six months, but any questions or comments on how
25 that would play out?
65
1 Okay. So, I’ll go ahead and
2 dive into the project history. Like I said, a lot of
3 folks on the Board have been here for the last couple
4 of years, but this project really goes back eighteen
5 years or more.
6 And I will start really with
7 some of the original studies because the Kentucky
8 River and what to do with the aging infrastructures
9 has been studied quite a bit over the last twenty,
10 thirty years.
11 So, if you get back to ‘85,
12 really at the very beginning, that’s when the
13 Commonwealth of Kentucky originally took over the
14 lease of Locks 5 through 14.
15 And at that time, the very first
16 thing that the Commonwealth did is they commissioned a
17 study to see what the structure would need to work to
18 rehabilitate the entire system. That was the
19 Daugherty & Trautwein Study of 1985.
20 And there’s two key conclusions
21 from that study. One was they concluded that the
22 entire system needed to be looked at in a very long-
23 range fashion, not just looking at what do we do in
24 the next twenty years but this has got to be a viable
25 water source for Central Kentucky for the next hundred
66
1 years plus. So, that was the first thing.
2 The second thing was a
3 recommendation that the entire system be maintained as
4 a combination of near-term or interim rehabilitation
5 projects and an eventual complete replacement so that
6 all fourteen structures would be replaced over a 55-
7 year period. Basically they had to set up that a new
8 dam would be constructed about every five years.
9 So, beginning in the mid-
10 nineties--well, I pointed that out. Actually the
11 recommendation of combining the interim repairs with
12 longer-term complete replacement structures, I
13 highlighted that because that’s precisely what the KRA
14 has done over the last twenty years.
15 Beginning in the mid-nineties,
16 numerous projects were done to rehabilitate Locks 4
17 through 14. This primarily involved the installation
18 of sheetpile cutoff walls and infill along the
19 upstream faces of the dams.
20 The dams to receive that
21 treatment were Dams 4, 5, 6, the auxiliary dam at 9
22 and 10 and 11, 12, 13 and 14, and this significantly
23 addressed a lot of those structural needs that were
24 highlighted in that Daugherty & Trautwein Study from
25 1985.
67
1 Here are some photos of that.
2 And if you were around Frankfort in the late nineties,
3 this was from 1999, the repairs to Dam No. 4. You can
4 see on the spillway, the concrete refacing where it’s
5 completely dewatered and significant concrete repairs
6 were made. And on the upstream side of the dam,
7 you’ll see the installation of the sheetpile wall. It
8 was backfilled and they also captured a new layer of
9 concrete.
10 And there was a similar type
11 project at Lock and Dam No. 6 where you completely
12 dewatered the face of the dam and redid that entire
13 surface of the apron and spillway. Again, that type
14 project was done at most of the structures. It was
15 not done at the main spillways of Locks and Dams 9 and
16 10.
17 So, following all of these
18 interim repairs during the mid-nineties of most of the
19 structures, one of the most comprehensive analysis of
20 any of the structures took place.
21 This was done by Fuller
22 Mossbarger Scott & May Engineering and this was funded
23 in a cooperative effort. It was funded by the
24 Kentucky River Authority, East Kentucky Power which at
25 that time had an active power plant that used Pool 10
68
1 for water cooling, Kentucky American Water Company and
2 the Lexington-Fayette Urban County Government, and
3 they were tasked with three primary items.
4 One, they performed an active
5 geotechnical analysis of the dam. They conducted a
6 stability analysis of all the existing structures that
7 were essential to the water supply. And, finally,
8 they did a preliminary analysis of coming up with
9 preliminary designs for a new 50-year design.
10 During that analysis, they used
11 several different loading conditions. They used
12 maximum design load, normal loading conditions, normal
13 with ice loading, normal with earthquake conditions as
14 well.
15 And the findings were that the
16 calculated levels of stability of all the existing
17 structures associated with Lock and Dam No. 10 were
18 found to be significantly less than acceptable
19 standards. And what those standards were is they used
20 the current Corps of Engineers’ Engineering Circular
21 at that time for the design of concrete gravity
22 structures. So, that was the standard with which they
23 were measuring the structures against.
24 So, let me reiterate that. The
25 report - and this should have been handed out to you
69
1 as well. You should have the entire body of the
2 report. There are several appendices that are not
3 included, but between now and the next Board meeting,
4 you can peruse through that. If any of you are
5 interested in seeing a little more detailed analysis
6 or delve into the calculations that were used, I can
7 provide those, but the body of the report gives you
8 all the findings, the conclusions, the summary which I
9 will be talking about here.
10 So, again, the calculated levels
11 of stability of the main dam, the auxiliary dam, the
12 lock wall and the abutments were all below acceptable
13 standards based on that engineering memorandum from
14 the Corps of Engineers for the design of concrete
15 gravity structures.
16 Another big thing that came out
17 of the report is that is when they discovered during
18 their geotechnical analysis that clay/shale seam that
19 is underneath that dam and that is one of the leading
20 contributors to such low factors of safety at this
21 particular site.
22 So, following that report,
23 you’re probably wondering, so, how do we get from a
24 report in 1999 or 2000 that shows all these
25 deficiencies, how do we get from there to 2017 with no
70
1 project. So, that’s kind of the next part of this
2 presentation.
3 So, following this report that
4 came out in--this technically came out in 2000, Ernie
5 Fletcher, who was a Congressman at that time, got us a
6 Congressional AD and that was to be an 80/20 cost
7 share to stabilize and renovate Lock and Dam No. 10,
8 and I believe that was maybe in 2001, 2002, something
9 like that.
10 So, at that point, the Corps of
11 Engineers took over the lead of the project. They
12 retained FMSM Engineers who did the original study as
13 the design consultant. At that point, they started
14 looking at numerous alternatives.
15 The Corps does one thing very
16 well. They don’t just take one approach. They’re
17 going to look at it about ten or twelve different
18 ways. So, they looked at rock anchoring. They looked
19 at using a cellular structure which is in the current
20 design. They looked at no projects, basically just
21 leaving it in place.
22 So, from the early 2000's to
23 probably ‘07, there was a lot of studying done but
24 very little construction. There was a minimal amount
25 of near-term construction that the Corps completed
71
1 where they grouted underneath the toe of the main dam
2 and that was something that they saw was necessary to
3 be done before the reporting had got done. So, they
4 went ahead and did that.
5 However, at that time - and
6 Bill, you will remember some of this - during the
7 early 2000's, that was following the 1999 drought,
8 water supply was all over the table. We had the
9 pipeline discussion, alternative water supply, raising
10 the dams.
11 And, really, at that point,
12 that’s when adding storage at Pool 10 started coming
13 into the mix. So, at that point, we started looking
14 at adding either a fixed crest at the top of Dam 10 or
15 a movable crest.
16 To be honest, for three or four
17 years, that really bogged things down because when you
18 start raising water levels, you start getting into
19 environmental issues, real estate issues. And, like I
20 said, the project kind of got bogged down.
21 The last funding we received on
22 it from the federal side I believe was in 2007. The
23 project kind of sat there for several years because at
24 that time, the Executive Director of the Board really
25 didn’t want to pursue it with a chance that we may get
72
1 that federal funding back.
2 After several years of not
3 seeing that, we assumed that that federal funding was
4 pretty much dead, and at that point, the KRA decided
5 to go ahead and pursue this project on its own.
6 So, that’s kind of why we’ve
7 got this report in 2000 and here we sit in 2017 and it
8 still hasn’t happened. I know Mike hadn’t been on
9 that board that long, but how long do you go back with
10 Winchester?
11 MR. FLYNN: I remember the
12 report and the discussions about raising the height of
13 the dam with a removable crest and fixed crest. I
14 remember all of that, but you’ve done a very good of
15 sculpting the history. You probably left out a few
16 parts that I wouldn’t have left out, but, regardless,
17 I mean, it is what it is and it’s a dam that needs to
18 be replaced.
19 MR. HAMILTON: So, at this
20 point, like I said, we’ve basically come back. We’re
21 not looking at a crest gate at this point. We’re just
22 looking at similar type construction to what we’ve
23 done at 9, 8 and 3.
24 I will close with a real quick
25 summary. So, what I’ve gone over today is, one, we
73
1 have a structural stability analysis, the original one
2 done in 1985 by Daugherty & Trautwein that shows that
3 a long-range approach to the entire system - not only
4 Dam 10 but all of them eventually - need to be
5 replaced because they’re integral to the water supply
6 of Central Kentucky.
7 Not only is Dam No. 10 important
8 to Winchester which has a direct withdrawal out of
9 that pool but it’s important to the entire upper
10 system. And by the system, we’re talking about Pools
11 8 through 14. So, that’s Nicholasville, Lancaster,
12 Kentucky American/Lexington, Winchester, Richmond,
13 Irvine, Beattyville.
14 Really, when you have an extreme
15 drought, those four reservoirs, five reservoirs really
16 are a system of stored reservoir water. So, having a
17 reliable water supply at Dam 10 is not only integral
18 to Winchester but all those other utilities around it.
19 So, that’s the first thing I wanted to summarize.
20 Secondly, we have the report.
21 It’s the one that’s in front of you. That’s our most
22 recent comprehensive stability analysis of any of the
23 structures on the Kentucky River system. And per
24 records, that was about I believe 550,000 in 1999
25 dollars. It wasn’t just a go out and observe type
74
1 thing. It was an intrusive coring, a complete
2 geotechnical stability analysis.
3 And from that analysis, it shows
4 that pretty much every water-retaining component is
5 significantly below current design standards, not
6 close but significantly below.
7 And, then, finally, the
8 construction of a new dam fits with the long-term
9 approach of eventually replacing all of the
10 structures. This certainly won’t be the last
11 structure that gets replaced on the Kentucky River
12 system.
13 And, finally, the last thing
14 that you really can’t overlook is we have a
15 significant investment of the design at this point,
16 not including all the geotech done back in ‘99, not
17 including the 20% cost share that we invested with the
18 Corps but just the recent design that’s basically
19 ready to roll off and be put out for bid as soon as
20 permitting issues are taken care of.
21 That alone, you’re looking at a
22 couple of million dollars invested in design. Now,
23 that by itself is not a reason to pursue the project.
24 You never want to throw good money after bad, but in
25 this case, it’s not bad money. We’ve got reports that
75
1 show that the structural needs are there. You’ve got
2 the critical supply need of the structure itself. So,
3 that’s one thing to consider is you’ve got this design
4 investment but it shouldn’t factor into the decision
5 of the Board.
6 So, again, today’s presentation
7 was just to kind of get the Board up to speed of how
8 we arrived at this point because up to this point, I
9 know a lot of you have seen presentations on the new
10 structure but you haven’t necessarily seen why the
11 project needs to be done.
12 Again, at the November meeting
13 is really when we want to decide which options we want
14 to proceed with. February will be the bond financing
15 approval, rate increase approval and the rate changes
16 would occur in April of next year.
17 It was kind of hard trying to
18 last night go over this and get all of this twenty or
19 thirty years of history and shorten it up to where you
20 wouldn’t fall asleep but make it comprehensive enough
21 that it would give you enough information to make a
22 decision come November.
23 So, any particular questions?
24 MR. GRAVES: Good job, David.
25 MR. HAMILTON: And as you’re
76
1 going over the reports between now and the next Board
2 meeting, if there’s anything in there you need
3 explanation on or comment on, feel free. You don’t
4 have to wait until September or November to get a hold
5 of us.
6 CHAIRMAN SIMPSON: I’m sure
7 David will accept phone calls twenty-four hours a day
8 if anybody has any questions. So, if you all would
9 look through this. This is where it’s all at
10 apparently. If you have any questions, right there is
11 where you want to go to and I’m sure we can get David
12 to talk to us at our next meeting, and like I say, you
13 can give him a call if you run by something that is a
14 little bit fuzzy to you. Thank you, David.
15 We’ve got to do a little switch.
16 We’re going to back up to Item 7. I skipped it awhile
17 ago. So, it deals with the Bluegrass Water Supply
18 Commission, David Talley.
19 MR. TALLEY: Good afternoon,
20 everyone. Mine will be very brief but I will be
21 available to answer any questions that you might have.
22 I’m here today on behalf of the
23 Bluegrass Water Supply Commission. Our Chair is Tom
24 Calkins from Nicholasville. He’s retired now. So, he
25 was too busy to come to the meeting because he’s
77
1 retired and he’s got two part-time jobs. So, I’m here
2 in his place.
3 We have three folks from
4 Lancaster - Donna Powell who is Vice-Chair of the
5 Bluegrass Water Supply Commission and Lancaster’s
6 representative on the Commission; Ken Parson who is
7 the City Council member from Lancaster and has been
8 very involved with the project, and we brought the
9 Chief of Police along in case anybody gets out of
10 order here, Rodney Kidd who is the Chief of Police and
11 he is working with the City Council on this project
12 doing some administrative things.
13 A few years ago, the General
14 Assembly awarded a $900,000 grant to KRA on behalf of
15 the Bluegrass Water Supply Commission. We’ve drawn
16 that grant down over the years, and now there’s
17 approximately $180,000 left.
18 Last year, we were before you to
19 get a one-year extension and we’ve drawn some more
20 money now, and now this hopefully will be the final
21 year, the final extension.
22 We still have about three or
23 four communities. Nicholasville still has a little
24 money in theirs. Lancaster and Paris are the three
25 entities that still have got a lot of skin in the game
78
1 here and that’s why we’re asking for another one-year
2 extension so that we can utilize these funds for water
3 supply in projects in the Central Kentucky area.
4 Any specific questions that you
5 might have, I’ll be happy to address those.
6 And, again, this money does not
7 come out of your operating budget. This was a special
8 authorization from the General Assembly and we’ve been
9 drawing it down now. So, there’s about $180,000 left
10 in this.
11 MR. GRAVES: The Kentucky River
12 Authority was made a flow-thru agency. Basically, we
13 really don’t have a lot of dog in the fight except
14 that when I came aboard, I made sure that anything
15 that was taken from a point since 2011 had to have
16 Board approval, and this is something that David has
17 asked for. This was appropriated way before, fourteen
18 years ago maybe. Is that right?
19 MR. TALLEY: Two thousand nine,
20 I think, and then it’s been reauthorized since then.
21 MR. GRAVES: Okay. I’m sorry,
22 but it’s been a few years back. So, we’re just a
23 flow-thru agency, and I just brought it to the Board’s
24 attention and the Board decided that any other
25 expenditures would have to have an approval through
79
1 this agency here.
2 CHAIRMAN SIMPSON: So, you
3 need a motion to continue another year with this?
4 MR. TALLEY: A one-year renewal
5 on the Memorandum of Agreement.
6 CHAIRMAN SIMPSON: Are there any
7 questions on this?
8 MR. KAY: I’ll make a motion.
9 MR. STICKNEY: Second.
10 CHAIRMAN SIMPSON: All in favor,
11 say aye. The ayes have it. Thank you, sir.
12 MR. TALLEY: Thank you very
13 much.
14 CHAIRMAN SIMPSON: Next we have
15 the Executive Director’s report.
16 MR. GRAVES: Next on your agenda
17 is the cost share on removal of 12. I would like to
18 table that for the next Board meeting on a bill that
19 we received that hasn’t been justified yet. So, we’ll
20 talk about that at a future date.
21 But I would like to get approval
22 from the Board to move forward and look into the
23 demolition of the lockhouse at 3 and two at 1, so,
24 three buildings that need to be removed.
25 There’s a process. We’ll have
80
1 to go through the historical side of the table. We’ll
2 have to get a cost and a final way to dispose of
3 this.
4 So, I would like for the Board
5 to approve the process and allow me to meet with the
6 historical people to find out, (a), what we’ve got to
7 do to remove those buildings, (b), we’ve got to go
8 through the Corps, and, (c) find a cost and bring it
9 back to the Board and say this is what it is actually
10 going to cost.
11 Carrollton called me, the
12 Tourism Director called me two days ago. We have a
13 lot of issues at Lock 1 and we’ve got some illegal
14 activities going on in those houses. These three
15 houses, two at 1 and one at 3, are beyond renovation
16 and they are a liability to this organization as well
17 as me and other people.
18 So, I’m asking for approval to
19 move forward through the process.
20 MS. PIAZZA: And by moving
21 forward, what would we be approving for you to do?
22 MR. GRAVES: To contact the
23 Corps and get permission, to go to the historical
24 people to get permission since they’re on the
25 historical list and, three, to get a cost. And once I
81
1 get those three things, I’ll come back to the Board
2 and say this is what it’s going to cost and we have
3 been approved.
4 CHAIRMAN SIMPSON: For three
5 houses?
6 MR. GRAVES: Three houses. One
7 at No. 3 and two houses at 1, especially at 1. We’ve
8 got illegal activities going on like beyond your
9 imagination.
10 MS. PIAZZA: So, this is for
11 information gathering?
12 MR. GRAVES: Yes, ma’am. That’s
13 all I’m asking for right now. Proceed with the
14 process. I’ll come back with a dollar amount and say
15 this is what it’s actually going to cost to demo these
16 houses which are right now liabilities.
17 MR. FLYNN: So moved.
18 MR. KAY: Second.
19 CHAIRMAN SIMPSON: I heard a
20 motion and a second. All in favor, say aye. Motion
21 carries.
22 MR. GRAVES: While I’m here,
23 I’ll go ahead and do my Director’s report. I know
24 this has been a lengthy meeting.
25 Also, I need approval for
82
1 expenditures to travel to the World Canal Conference
2 which will be held in Syracuse, New York in September.
3 There’s been two other conferences held, one two years
4 ago and one four years ago, and the Board approved
5 this.
6 I’m asking not to exceed $4,500.
7 I think that’s about what we spent last time to send
8 three people. I think David told me just to register
9 alone for three people was right at $1,800 alone.
10 This is something that has been worthwhile and we’ve
11 attended this two years ago and four years before
12 that. That’s the only frills we’ve ever asked for in
13 the six years I’ve been here.
14 MR. KAY: Are you taking three
15 people again?
16 MR. GRAVES: Maybe. If it’s
17 three, that’s what it’s going to run. If it’s going
18 to be two, probably two-thirds that amount. No more
19 than three people. Last time it was Jenny, David and
20 myself. I don’t know what Sara’s schedule is but I
21 know David wants to go. Right now we’re looking at
22 two but maybe three.
23 MR. STICKNEY: So moved.
24 MR. FLYNN: Second.
25 CHAIRMAN SIMPSON: We have a
83
1 motion and a second to send three people to canal
2 training. All in favor, say aye. Motion carries.
3 MR. GRAVES: One other thing.
4 We’re going to be moving again. Where, how, when and
5 what we’ll find out soon. So, we will keep you
6 informed.
7 There were a couple of letters
8 to editors. One letter I know is going to go in the
9 Heartland Boating magazine which is a big deal and a
10 lot of people will see that. So, I entertain you to
11 read those letters.
12 Lock season opens up in two
13 weeks, the 27th I believe of May. Rocking Thunder is
14 doing an excursion this coming Saturday and take some
15 writers, people who write about the Kentucky River and
16 other rivers. They’re coming up and they’re going to
17 do an excursion, lock through 4. So, that’s going to
18 be a good plus for the Kentucky River Authority to get
19 some more exposure.
20 David and I spoke to a group of
21 boaters, the Power Squadron in Louisville last
22 Thursday, well-received. We had about fifty people
23 there in attendance, so, that went over well and
24 that’s pretty much it. I appreciate it. Thank you
25 for coming today.
84
1 CHAIRMAN SIMPSON: Thank you,
2 Jerry. I’m going to make my part real brief.
3 The next item on your agenda is
4 for some subcommittee appointments. I think about
5 everybody has been contacted in here either by myself
6 or your proposed subcommittee chair.
7 I’m hoping that we could get a
8 Marketing and Recreational Subcommittee. The
9 reasoning behind that that I have is we spent quite a
10 bit of money on the 1 through 4 locks and we haven’t
11 spent any money to market this.
12 If you’re in Louisville or
13 Cincinnati, you still run into boats that is still
14 unaware that the Kentucky River’s first four pools are
15 open for recreational boating operation. So, we need
16 to get the word out there if we can. I’m hoping this
17 subcommittee can pull together and put together a good
18 plan of attack and see what we can do.
19 As a little side note to that,
20 we’ve got the first commercial boat built for the
21 Kentucky River in the last one hundred years has just
22 been completed. It will be in Frankfort actually
23 Saturday. It’s Rocking Thunder’s new 24-passenger
24 boat. They bring folks from Madison, Indiana to
25 Frankfort for an overnight stay and they’re going to
85
1 increase that and stop at Carrollton, bring folks from
2 there to Frankfort. So, we’re bringing some tax
3 dollars, some tourism dollars in to the State of
4 Kentucky with the Kentucky River. So, I think we’re
5 doing good on that part, but I think this subcommittee
6 will add to what we’re trying to do.
7 James Kay will be the Chair.
8 Pat Banks will be the Vice-Chair. Mark Smith down in
9 Carrollton - we’ve kind of spread you out along the
10 Kentucky River - Sue would be the staff member and I
11 will be an ex officio on that subcommittee.
12 I’m going to need a motion on
13 this when I get done. Again, I’m going to go through
14 this pretty quick.
15 The next subcommittee I propose
16 for you guys is a Finance Subcommittee. This
17 subcommittee will study in greater detail and report
18 to the Board - all of these will report back to the
19 Board. There won’t be any spending or anything going
20 on at the subcommittee level unless the Board approves
21 it, but the Finance Committee I’m hoping will be able
22 to look over project bids and proposals and anything
23 that goes through this Board as a spending item would
24 first go through the subcommittee for their
25 consideration and report back to the Board at the next
86
1 scheduled meeting.
2 Judge Wells will be Chair,
3 Mayor Rainwater, Barry Sanders. Judith will be on
4 that subcommittee for obvious reasons, Jerry Graves,
5 Sara Rome and others as needed, as Jerry feels needed
6 as far as staff goes.
7 The last subcommittee I would
8 like to have in this motion would be a Water Quality
9 Subcommittee. We need to start looking at some of the
10 stuff we don’t necessarily think about. We’ve got
11 liquid petroleum lines across the river at various
12 places. This came about through Marathon when they
13 first contacted David. He put them in touch with me
14 to see if we could get them up the river to do some
15 type of test on their liquid petroleum line.
16 A very little bit of examination
17 told us that there wasn’t a liquid petroleum line in
18 Pool 4. It was in Pool 5. It kind of scares you when
19 you think a liquid petroleum company is not sure which
20 pool their liquid petroleum line is in.
21 If you go back in history, I
22 think it was 2006, we had a 24-, 32-, 28-inch I think
23 it was down at Pool 1 that broke and I think it was
24 around 800,000 gallons of liquid petroleum, the
25 product being a crude oil, went into the Kentucky
87
1 River and then on into the Ohio River. It was
2 actually tracked all the way down below Paducah on the
3 Ohio River. So, it’s a very nasty item that goes
4 through from place to place. We don’t know where they
5 are.
6 So, Mike has agreed to head up
7 this subcommittee and do some inquiring as to what
8 problems we could have up the river. Interstate road
9 crossings, there’s some scary stuff that goes down our
10 interstate highways. Railroad tracks, there’s some
11 strange things that travel across the country on
12 railroads.
13 And what they would do is
14 identify any potential problems that would create a
15 problem for our number one duty and that’s to provide
16 safe drinking water to Central Kentucky.
17 It would be Mike Flynn as Chair,
18 Kevin Rogers, Jack Stickney, Tom Gabbard and our
19 faithful backup right here, and David Hamilton will be
20 the staff member, Tom Russell as needed as our
21 contractor.
22 Did everybody get a copy of this
23 in your mailouts? If you have any questions, give me
24 a call. I would love to get you all started. The
25 only reason we’re not already up and running, we had
88
1 to wait for this motion----
2 MS. PIAZZA: Motion.
3 CHAIRMAN SIMPSON: We have a
4 motion. I need a second.
5 MR. STICKNEY: Second.
6 CHAIRMAN SIMPSON: We’ve got a
7 second. All in favor, say aye. Thank you. I think
8 you will find that to be a rewarding ambition.
9 We’re going to do a little bit
10 of training in the upcoming meetings. It will be like
11 a 15-minute educational process that you will be able
12 to put in your toolbox as a Board meeting.
13 Judith has agreed to get us a
14 couple of speakers. We will do one training a
15 meeting. The next one will probably incorporate it
16 with our next one anyway and that will be bonding. I
17 certainly can use a little more information on
18 bonding. I’m not the bonding whiz.
19 And, then, the following one,
20 Judith is going to bring one of her legal beagles and
21 teach us the legal rights as a Board member. It will
22 be some areas that I’m sure you will find beneficial.
23 David has agreed in the
24 winter/spring meeting to do lock and dam terms and
25 characteristics. We talk about dams, we look at dams
89
1 but there’s a lot of lingo that goes along with those
2 and he’s going to educate us on the terms that we
3 should be using or can use to impress our friends and
4 family.
5 We’re going to do a Tier I, Tier
6 II, General Fund discussion in the following meeting.
7 Sara is going to teach us what the Authority uses Tier
8 I funds for and Tier II fees for so we’ll have a
9 better understanding and so on and so forth.
10 So, if you’ve got any ideas or
11 you’ve got any blank spots you’d like to have a little
12 help with, let us know and we’ll get somebody to come
13 in and give us a little education.
14 The last thing I have, just pass
15 these down. This is a writer that came up the
16 Kentucky River last year. He wrote this article.
17 It’s going to go in Heartland Magazine, the Louisville
18 newspaper, Frankfort newspaper. He has given us
19 approval to put this in any public writings we want to
20 submit it to.
21 It’s kind of a neat little
22 article where he and his wife traveled the Kentucky
23 River from Ohio. Their boat is down in Florida. I
24 think they went to the Carribean after they left
25 Frankfort and it’s just a neat little adventurous
90
1 story what he saw and what he did coming up the
2 Kentucky River and bragging on it and bragging on
3 Jerry’s folks and how they made it more pleasant.
4 Is there any discussion that
5 anybody would like to bring up at this point in time?
6 Otherwise, I will entertain a motion to adjourn.
7 MR. KAY: So moved.
8 MS. PIAZZA: Second.
9 CHAIRMAN SIMPSON: All in favor,
10 stand up. Thank you all very much for your patience.
11 MEETING ADJOURNED
12
13
14
15
16
17
18
19
20
21
22
23
24
25
91
STATE OF KENTUCKY
COUNTY OF FRANKLIN
I, Terri H. Pelosi, a notary public in
and for the state and county aforesaid, do hereby
certify that the foregoing pages are a true, correct
and complete transcript of the proceeding taken down
by me in the above-styled matter taken at the time and
place set out in the caption hereof; that said
proceedings were taken down by me in shorthand and
afterwards transcribed by me; and that the appearances
were as set out in the caption hereof.
Given under my hand as notary public
aforesaid, this the 19th day of May, 2017.
_______________________ Notary Public State of Kentucky at Large
My commission expires February 10, 2021.