By Mark Hansel
NKyTribune managing editor
The topic at the July Northern Kentucky Chamber of Commerce Eggs ‘N Issues meeting at Receptions in Erlanger was infrastructure and there was plenty to talk about.
The panel included Adam Chaney, executive director of Northern Kentucky Sanitation District No.1 (SD1), Wade Williams, senior vice president for the Northern Kentucky Tri-County Economic Development Corporation (Tri-ED) and Bob Yeager, chief district engineer for Kentucky Transportation Cabinet (KYTC) District 6.
The panel for the July NKY Chamber of Commerce Eggs ‘n Issues discussion included (l to r) Adam Chaney of SD1, Wade Williams of Tri-Ed and Bob Yeager of KYTC District 6. Moderator Rhonda Whitaker of Duke Energy is at far left (photos by Mark Hansel).
Rhonda Whitaker, chair elect of the NKY Chamber and district manager of government and community relations with Duke Energy, was the moderator.
Discussion ranged from the burden consent decrees place on SD1’s ability to increase capacity, to the impact of infrastructure on economic development, and the challenge of maintaining and expand the state highway system, with limited financial resources.
Williams joined Tri-ED in 2011. He oversees marketing and tracking of new industries to the Northern Kentucky region, manages the organization’s business retention and expansion program and contributes to its day-to-day operations.
He began the discussion by explaining how infrastructure impacts economic development and said it wouldn’t be possible in this community without the partners on the panel working together.
“We have about 90 prospects a year that we work with,” Williams said. “Nationally, when you look at the reasons that companies make location decisions, infrastructure is always in the top five. They make decisions based on where the location is and the ability to meet their needs from an infrastructure perspective – that’s roads, that’s utilities, that’s across the board.”
Chaney became executive director of SD1 in January. He also served on the SD1 board, beginning in 2014 and became its president in 2015.
Chaney said growth in the region has been a key topic since he has become a board member and the number one thing SD1 can do is communicate with the other infrastructure partners.
“SD1 is in a little bit different position because we have something called federal regulations that we are dealing with,” Chaney said,
In 1972, the federal government passed the Clean Water Act and overflows of the sanitary sewer system, which were previously considered an inconvenience, became illegal.
“In the 90s and early 2000s, the federal government decided they were going to crack down on violators, and rightfully so,” Chaney said. “Our system was built to carry sanitary sewer. When it rains, that dirty water comes out of the tops of our manholes, flows through your yards, flows into your streams, and it flows into, sometimes, basements.”
SD1 has negotiated settlements to clean that up, which requires, among other things, the replacement of the existing infrastructure with larger pipes. The cost of that cleanup, which is not an optional program, is $2 billion by 2025. SD1 could face stiff fines if it fails to meet the terms of the settlements, known as a consent decree, and the sanctions would not relieve it of the obligation to provide the upgrades.
“So what we’ve done since I’ve become involved with SD1, is try to prioritize the best that we can… between growth and environmental regulations,” Chaney said. “We’re looking at our priority list and saying, ‘are there certain projects that can provide for sanitary sewer overflow mitigation, but also provide for growth,’ and that is a tremendous balancing act.”
Yeager started with KYTC District 6 in 1975 and has worked as a maintenance engineer and as a branch manager for operations and planning. After a stint in the private sector, he returned to KYTC District 6 as branch manager for project development and was named Chief District Engineer in 2015.
He agreed that transportation and economic development go hand-in-hand.
“The question is, which hand goes first,” Yeager said. “We’ve all been built in with the confidence that if we build roads they will come and I can tell you, if they come, we will build roads. But if we don’t do something soon about where the money comes from, we’ll only be in the maintenance business, we won’t be building any new infrastructure.”
Yeager spoke about the KYTC Pause-50, plan to restore funding back to normal operating levels.
“What we’ve been doing for a number of years now, is we have been putting plans together that have no money behind them,” Yeager said. “It’s all well and good for you all to come up with five, or six, or seven warehouses, but if you don’t have the money to do that, they are just lines on a page.”
That is what the state’s six-year road plan has become – lines on a page that don’t come close to funding levels.
Pause-50 has put a halt on new projects in the last year and because of all the obligations that are outstanding, KYTC has about $50 million to spend in the Fiscal year that began in July, In Northern Kentucky alone, there are more than $200 million in projects already on the books.
The Transportation Cabinet developed the data-driven system based on safety, congestion and other factors, including economic development, to determine a priority list.
“With or without Pause-50, all of the projects that we have in there weren’t going to get built anyway,” Yeager said. “Hopefully, by the time we are finished, we’ll tell you which project are going to move forward and if those aren’t the right ones, we’ll make some adjustments, accordingly.”
Williams said infrastructure cost is also a major concern for companies looking to locate or expand in Northern Kentucky.
“Is it going to borne by them or is it going to be some sort of shared-cost scenario?” Williams said. “It’s not just new market companies, it’s also expansions. Companies are making expansion decisions…based on whether or not they can get the trucks in or out; based on whether they can get the infrastructure needed.”
There are no easy answers, but many of the infrastructure challenges the region will face are based on the attractiveness of Northern Kentucky to companies and residential developers.
It was pointed out that Amazon didn’t choose Boone County for its $1.5 billion Prime hub because Northern Kentucky has outdated infrastructure and inaccessible roads. This region was chosen because of its highway system, infrastructure, a major airport that has reinvented itself to accommodate cargo carriers and its quality-of-life amenities.
That decision by Amazon, as well as the continued expansion by DHL and the addition of other new companies and residential development will, however, continue to increase the burden on the region’s infrastructure.
The consensus is that it will take all of the region’s leaders, working collaboratively, to address that challenge.
Contact Mark Hansel at mark.hansel@nkytrib.com
“We need to end our investments in the suburban pattern of development, along with the multitude of direct and indirect subsidies that make it all possible. Further, we need to intentionally return to our traditional pattern of development, one based on creating neighborhoods of value, scaled to actual people”, Charles Marohn These guys and the rest of the leaders in northern Kentucky need to watch this: https://www.youtube.com/watch?v=sD47xo3c7WU
The development community has built us a situation where the revenue collected does not come near to covering the costs of maintaining the infrastructure. The reason we have this gap is because the public yield from the suburban development pattern, the amount of tax revenue obtained per increment of liability assumed, is ridiculously low. Over a life cycle, a city frequently receives just a dime or two of revenue for each dollar of liability. The engineering profession will argue that we’re simply not making the investments necessary to maintain this infrastructure. This is the problem no one talks about. We’ve simply built in a way that is not financially productive. In the near term, revenue grows, while the corresponding maintenance obligations are a generation away.