Good morning. One more time, good morning. [SPEAKER CHANGES] Good morning. [SPEAKER CHANGES] Thank you very much. We're gonna go through a little bit of housekeeping before we get started. As you've noticed, we've had some changes. There's an on air light on the wall. There are round devices scattered around the tables. This committee for the first time is going live, so for committee members and people listening, welcome to the first meeting of this session for House and Senate joint transportation appropriations. I'd like to welcome everyone here and those of you in the audience and listening at home. First like to introduce our House sergeant in arms. We have Carlton Adams Jr., Joe D. Austin, Martha Gaddeson, and for the Senate sergeant in arms, Terry Barnheart and Steve Wilson. Thank you all for being here today, and thank you most importantly for what you do each and every day here at, at the state capitol. We also have some folks visiting us today, and helping us get through. We have Senate page Ben Marklin. Ben, welcome sir. I don't know why they put you all the way in the back. You can come up front, son, if you'd like. And he's from Mocksville, and he's sponsored by Senator Andrew Brock. And for the House, we have Kayla Ramos. Kayla, are you here? Good morning. I don't know why they put you on the back row either, but welcome. And when you figure all this out, would you please come explain it to us. She's from Cumberland, and she is sponsored by Rick Glazier. Thank you all for being here and thank you for taking an active want to participate in your government. At this time, I see on the agenda committee member introductions, so I'm gonna take just a moment and go around the room and, well I'm gonna start with the co-chairs here, and if you have a few moments or a few minutes to say, I would, I would remind you of a good action word called brevity. So I'll start with Senator Meridith. [SPEAKER CHANGES] Good morning. I'm Senator Meredith the senator from district 19 which covers Cumberland County. Glad to be here and thank you all for participating. [SPEAKER CHANGES] Chairman Iler, and we'll just go down the table and come back around. [SPEAKER CHANGES] Thank you mister chairman. Frank Iler, Brunswick county, represent most of Brunswick county, district 17, and been on this committee for couple of, of sessions now, and we learn a lot every time that we thought we knew before, and it refreshes our memory so that we can do a better job on the budget. And I appreciate you all, all all being here. [SPEAKER CHANGES] Good morning. I'm Representative Phil Shepard from Onslow County, and I've served on transportation, appropriations, all six years I've been here. I'm looking forward to working with all of you. Hope we can put together something good for the transportation budget for the state North Carolina and protect the infrastructure we've got. Thank you for being here. [SPEAKER CHANGES] I'm Representative Paul Tine. I represent Dare, Hyde, Washington and the northern part of Beaufort. I'm a recent convert from the finance committee so I'll be trying, I don't know how, two weeks in, I'm three weeks behind. But my door is always open. I appreciate you all being here. [SPEAKER CHANGES] Representative Carl Ford. I represent parts of Cabarrus and Rowan Counties. I look forward to being a part of this committee. [SPEAKER CHANGES] I'm Senator Rick Gunn. I'll be, I'm the lowly, low in the totem poll rank and ??. I would love to figure out questions that Senator Blue and Senator Ford and ?? [SPEAKER CHANGES] Thank you Senator. So, should I allot say, 30, 35 minutes for your, for your questions? Thank you. And also like to thank staff for being here today, and we'll go ahead and let staff introduce themselves as well. [SPEAKER CHANGES] I'm Karlynn O'Shaughnessy. I am the ?? for transportation and information technology for fiscal research, but ?? information technology. [SPEAKER CHANGES] Luke? [SPEAKER CHANGES] I'm Luke Gillemore. I'm a staff ?? [SPEAKER CHANGES] Thank you very much, and as you probably know by now, we really couldn't do this if it weren't for some good folks we have in our offices and that's our legislative assistants or research analysts, and I'd like
To introduce themselves as well. [SPEAKER CHANGES] [inaudible] [SPEAKER CHANGES] Thank you, and I am your chair for the day, Representative John Torbett representing what I refer to as the Garden of Eden in North Carolina, which is Gaston County. A little bit of housekeeping, gentlemen, if I use a round disk as a red light we have two options that we can do. We can leave them on or if you choose to speak, please push the button. So what I'd like to do at the beginning is start with if you need to speak just push the button and if we can't remember to do that we'll just push them and leave them on, so either way. We have another member joining us. Representative Bumgardner, once you sit down we're going to ask you state your name, where you're from, just a little introduction. [SPEAKER CHANGES] Representative Bumgardner, District 109, Gaston County. [SPEAKER CHANGES] Thank you. Moving right along on the agenda, the first presentation is by Nick Tennison, Chief Deputy Secretary of the North Carolina Department of Transportation. He'll be addressing general remarks and management introductions. [SPEAKER CHANGES] Thank you, Mr. Chairman. I am Nick Tennison, Chief Deputy Secretary for NC DOT. The Secretary of Transportation this morning is at an event that he agreed to attend some weeks ago before the schedule was known and so I apologize for the fact that that conflict occurred, but I'm here to deliver greetings on his behalf. I also would like to take the chance to introduce a few members of the management staff for the NC DOT who are present this morning. You'll meet many more of those folks during the next few weeks and we'll see these folks again I'm sure. Starting with the gentleman who's currently signing in, Mike Holder, who's Chief Engineer for NC DOT. Mike, of course, has presented over the years several times and so Mike will be again on the schedule of presentations later. Next to him is Reston Jones. Reston is with our legislative liaison capacity and will be ably representing us and will certainly be a contact that you could reach out to. Next to her is a stranger to you or at least most members of the House, Mary Turnigan who is our Director of Legislative Policy and Government Affairs, recently joined NC DOT and has already had an impact on making sure that we are getting it together and I hope that you will agree and help her help us succeed. Next to Mary is Rudy Lupton. Rudy is the Director of Logistics for NC DOT, has a primary responsibility for the global transport and also works on issues related to keeping us, working on the port tranpark liaison and works with the ports although obviously the Port Authority is a separate body. Next to Rudy is Jeff Mann. Jeff is Deputy Secretary for Transit. Under Jeff's able stewardship, all the non-highway modes of transportation so rail, public transportation, bike, ped and aviation. [SPEAKER CHANGES] Ferry. [SPEAKER CHANGES] And ferry, oh my Gosh. Alright, well, thank you very much. I'll never forget the ferry division, sir, in case you're ever looking for advice. I, so, anyway, Jeff's handling that. I think, oh, yeah, ha-ha, and Kelly Thomas was here, oh, Kelly, you're hiding behind the camera. [SPEAKER CHANGES] [??] [SPEAKER CHANGES] There you go. This represents the orderly way that I manage the team. Kelly Thomas is Commissioner of DOT. I was proud to have that occupation for three months and Kelly has certainly taken over and provided a strong leadership for that division, a very important function of NC DOT. Was there anybody else from NC DOT that I, oh, Susan Pullium is Director of Strategic Planning. She's the person who has been working very hard on all sorts of aspects of long range planning and the whole thing that if you haven't known before, you
---there is some very quiet audio. I tried to pull what I could from it. My apologies. ...the ??? aware that nothing in transportation happens without this extraordinarily long planning process. Susan works with the folks that help to make that happen, and also right now, is facilitating the workgroup that is working on potential revisions to criteria and waiting and things like that for the STI process so was there anybody else here that's from the NCDOT? Susan ??? Well this is because, again, you know him so well, Bo Memory, who is, began work with NCDOT yesterday as executive director of the turnpike authority so Bo is somebody that is certainly at least I believe you have come to rely on in the past and I believe you can rely on him now as NCDOT member so I think that's it for who we've got. I did want to take a moment also to thank those of you that were members of the General Assembly in the 2013 session for the great thing that I believe we all did together which was reform the process by which we prioritize and select projects for construction. The process wasn't something that I think anybody whose involved in man-made things ever would believe was perfect, but it was a huge advance and I think it's put us in the vanguard of the states in the United States that are trying to solve this problem of what to do in an environment where you don't have as much money as you need to do the work you need to do. How do you prioritize? How do you choose? And I think we've made a really good start in that direction. The result of that first STI process is the currently circulating currently publicly available draft State Transportation Improvement program that drafts ??? is out. If you have not already seen it. If you have questions about it. If you'd like to go over it we are certainly happy to do that. I also want to take this chance to encourage you as we are encouraging them to be in touch with your division engineers in your area and with the Board of Transportation board members. They're folks that are intimately involved in what we are getting done and a lot of times, certainly the division engineer level can provide an immediate answer to a question that you might want to know the answer to about a certain operation in your area. As an elected official in - on my resume I was, for a couple of terms, Mayor of the city of Durham, I believe I know a lot of what you're going through in terms of being responsive to constituents and trying to make sure you're balancing the public need, the public good, with the needs of individuals that come to you with things that are important to them. We are as responsive as we can possibly be, and on those occasions we're not as responsive as you believe we need to be, I hope you'll feel free to be in touch with me or the secretary to try to find out where the missing link is. Again, I think this next two weeks will be very productive, certainly two or three weeks will be very productive, in terms of these meetings and informing you on transportation. I'd be happy to answer any questions that you might have right now although I'm confident I wasn't allocated the 35 minutes on the agenda. [SPEAKER CHANGES] Any questions of Mr. Tennyson. [SPEAKER CHANGES] Thank you, sir. [SPEAKER CHANGES] Nick, thank you for being here today and having your whole team DOT with you. My apologizes to Debbie, we jumped right over so we'd like for you to let us know your name and who you represent and where you're from. [SPEAKER CHANGES] I'm Debbie ????? [SPEAKER CHANGES] And we have another Senator that has joined us if you would. We did a brief letting folks know who we are, where we are from before you got here so if you'd like. [SPEAKER CHANGES] Senator Kraweic? representing ??? counties. [SPEAKER CHANGES] Thank you and good morning. [SPEAKER CHANGES] Good morning. [SPEAKER CHANGES] Moving along the next one is committee protocol. We have a Mr. Bryce Ball from physical research will be reporting, and if you don't get a chance please try to take a chance, step out of your way, and congratulate Bryce during the interim I believe you became a father, did you not? So I'm sure life changed not at all for you, is that right?
Not at all. Thank you. Ladies and gentleman, Mr. Ron Small. [SPEAKER CHANGES] Thank you very much, Mr. Chair. Good morning to the committee. We're going to continue with some housekeeping items. If you will refer to a handout in your packet labeled joint transportation appropriations committee, committee protocol for presenters and audience, these are standard procedures for presenters and audience in addressing the committee, but there have been two changes that I want to call your attention to and those are items five and six with respect to the submission of handouts and presentations to the committee. All materials, final versions of handouts, presentations are to be sent to both the chairs and to fiscal research staff by noon on the day prior to when the information is to be presented. With handouts, fiscal staff will consult with the chairs and respond to the submitter to let them know whether the handout will be permitted the following day, and again, final presentations are due by noon on the day prior to the presentation being given, and you'll see with items seven and eight, those pertain to the distribution of hard copies but with our technological capabilities there is the ability to go paperless so we want to gauge the members and see if there is interest in going to a paperless distribution. Of course, this does not preclude the production of copies by your LAs for reference during the meetings. [SPEAKER CHANGES] And let's stop right there and get an idea of how do we want to choose to move forward. Do we want to continue getting a pretty good amount of paperwork? Do we want to try to be as paperless as humanly possible or do we want to go entirely paperless? [SPEAKER CHANGES] I want to make a motion that we go paperless. If a member needs it they can get their LA to run it off. [SPEAKER CHANGES] Wonderful. Thank you, Senator. You've heard the Senator's comments and offered a motion that we go to a paperless. [SPEAKER CHANGES] I second that. [SPEAKER CHANGES] And seconded by Chairman Iler, any other discussion? Hearing none, I'll just ask for a show of hands to approve. Pretty much unanimous, thank you very much, and should a member request, as Senator Meredith stated, a hard copy or something that is, of course, their prerogative. So thank you very much, you can continue, Ron. [SPEAKER CHANGES] Thank you, sir. Then we'll move on to the next item on the agenda, the budget process. Most are fully acquainted with these topics, but as a refresher I'm going to quickly cover the budgetary process, also discuss the roles of staff and that of the agencies and then preview the tentative schedule for the committee. First, the process. Appropriation of the budget starts almost immediately after the last appropriations bill is enacted and certified. The effort culminates with two documents, the continuation and the expansion of budgets. The continuation specifies the level of funding that's needed to maintain program service levels accounting for enrollment growth, annualization, inflation and non-recurring adjustments. Secondly, the expansion budget outlines the Governor's priorities and recommends changes to programs and individual allocations. Together these comprise the Governor's recommended budget. As shown in the chart, we anticipate the Governor's budget to be released to full Appropriations and the committee sometime between late February or early March, meanwhile the Appropriations committees are charged with meeting jointly to receive background information on programs, budget drivers and other priorities. The allotted time for this education period is roughly ten weeks but the meeting frequency is flexible. Next, the House will take the input from these joint meetings and break off to prepare its version of the budget, passing its recommendations on to the Senate where the committee process is then replicated. As implied by the chart, we've yet to receive target dates for the House and Senate budget passage respectively. In prior years approximately four weeks has been afforded for each chamber's deliberations. Assuming that the House doesn't concur with the Senate's adjustments, the bill would then be referred to conference committee to sort out the differences and then a conference report would be voted up or down in each chamber and then if passed, enrolled and sent to the Governor for approval. Now the process, the joint process is especially beneficial because it reduces duplication, helps to identify any gaps in information and also highlights areas of agreement early on which saves time on the back end, however the success of this process is contingent upon member feedback so I would encourage you to ask questions and provide direction during this process. To that end, staff has been working with the agencies to frame the presentations that you'll receive so that they convey both the necessary background and also more focused and issue driven and with transparency in mind, all subcommittee presentations and handouts are posted online for public consumption including materials from prior sessions
There's a considerable amount of reference material that's already available on the website, so I encourage you to explore it at your convenience and also to refer to it regularly. You'll find both the 2011 and 2013 regular session and short session materials online. For today's purposes, you also have hard copies of transportation acronyms, a glossary of transportation related terms, and a contact list for agency and staff as well for your reference. Before getting into responsibility of staff, I will again draw your attention to Karlynn O'Shaughnessy from fiscal staff, Amna Cameron who has, who was double booked today with senate finance, and Luke Gillenwater as well from bill drafting. These are your principle staff to the committee. Fiscal research specifically is charged with analyzing and preparing the budget, conducting public and confidential fiscal analysis of proposed legislation, performing special studies at the general assembly's directions, and also responding to ad hoc requests from members. Staff assists in coordinating the appropriations process, and when not in session, oversees the implementation of the budget for the joint legislation transportation oversight committee and joint legislative commission on governmental operations. Each analyst on the transportation information technology team specializes in certain policy areas and serves as a principle contact for corresponding issues. In general, Amna Cameron covers all roadway related aspects, and I cover intermodal, logistics, and division of motor vehicles issues. Karlynn again serves as our team leader and statewide information technology analyst, lending her expertise for GOT and DMV IT initiatives. You'll see on the next slide that you have our specific assignment areas, so please consult those in terms of making any requests to staff. Bill drafting and research division staff also play vital roles in this process, drafting budget provisions and legislation, and also researching legal, regulatory, and other policy issues. Bill drafting services is the primary legal resource for the appropriations process, whereas research supports the concurrent activities of the policy committees. Additionally, the program evaluation division is tasked with conducting formal, longer term evaluations of programs focusing on performance assessment, activity based costing, and providing actual recommendations which we find often make their way to the appropriations committees for consideration. And lastly, the office of state budget and management and executive agency staff preparing to present the governor's budget and justify any recommended adjustments. They orient the committee to the programs that they administer. They assist fiscal staff in obtaining data for the committee, and of course, they're the ones who are ultimately responsible for carrying out the directives of the general assembly. So where are we headed? This is our tentative schedule for the committee. You'll see tomorrow that you'll receive the transportation primer. The following week, you'll receive a presentation on transportation funding. Then we'll move into overviews of this NCDOT programs and kinda delve more so into the specifics of operations. We have an NCDOT 101 orientation to divisions and programs, followed by the division of highways presentation focusing on the maintenance and construction programs as well as staffing and budget issues. Then we'll kinda switch gears and move to strategic transportation investments update, move on to debt, affordability, and tolling issues, and then begin logistics presentations with state ports and a focus on dredging issues. So that completes my presentation, sir. [SPEAKER CHANGES] Thank you, Brian. If you have any questions from committee members? The planets obviously are perfectly aligned, having no questions from committee. We're gonna move onto the math section of committee. There is no test today, so just letting everyone know. Budget starting points, referencing the long sheet, 2015-17 consensus revenue forecast, and again, Bryce Ball, fiscal research. [SPEAKER CHANGES] The chairs have requested that staff provide you with a sense of where we currently are, where we've been, and what is the context for where we're going to go from a numerical perspective. So I'll call your attention to three handouts. The first being a legal sized sheet, a spreadsheet format. The second in order you should have a flow of funds chart, and lastly it's the January consensus forecast, another spreadsheet format. We'll first tackle the, the long sheet. And the intent here is to just take a moment to orient you to the current biennial budget as a starting point for consideration
future adjustments to the 2015-2017 budget. This is intended as a reference. As we go through the individual presentations, we’ll delve into greater detail, into the individual line items that you see on the spreadsheet, but just again to orient you to the material, on the leftmost column you’ll find the categorization of program and line item allocations according to fund and purpose. Moving from the left to the right, the first set of columns that you’ll see are the Governor’s recommended adjustments for the 2015 biennium. From there, the second set of columns to the right, you’ll see the… actually the third set of columns to the right, you’ll see the 2013 enacted biennium budget – that’s the adjustments from the 2013 regular session – and then the focal point of the spreadsheet is really the last set of columns, which is the 2014 short session adjustments for the current fiscal year. These, when adjusted for nonrecurring actions and also actualization of programs, will really serve as the starting point and basis for consideration of adjustments for the 2015-17 biennial budget. If you’d like to consult the totals associated with the overall appropriations, as well as the availability and any adjustments to those, you’ll find those on page 3 of the spreadsheet. So we’ll move to the next handout, which again is the flow of funds chart. Again, this is included for your reference; it will be addressed in the presentation tomorrow as well, but you’ll see within the chart, the chart is depicting the incoming receipts by major category for each of the respective funds, and the relationships between those receipts for the individual divisions and programs that are funded. For the highway fund, you will note a direct line relationship between those receipts to the NCDOT programs. For transfers to external agencies, you’ll see a dotted line relationship; the NCDOT does not administer those funds directly. And then to the right you will see the highway trust fund; again, the receipt’s in direct line relationship to program allocation as well as federal aid. And the last category of other receipts or revenues and how they are used refers to other receipts that generally do not hit the highway fund or the highway trust fund from a non-budget perspective. The last handout that you have that we’ll take a few moments to cover is the January consensus forecast. This forecast of course will be updated in May to reflect current data at that time, but bottom line, this is based on available data. The best sense of what availability will be for the fiscal year 2015-17 biennial spending, as shown when you look at the rightmost columns for fiscal year 2015-16 and 16-17 in relation to the highlighted column in the middle, fiscal year 2014-15, we’re forecasting a combined loss of 212 million dollars for the next fiscal year, and 138 million dollars for the fiscal year 2017. Again, this is relative to the current year’s budget, fiscal year 14-15. This drop is largely driven by falling wholesale prices for fuel, resulting in combined annual motor fuel tax rates that are approximately 6.6 cents per gallon and 5.7 cents per gallon, lower than the budgeted rate for 2015. This drop in the motor fuels tax revenue is partially offset by rebounding DMV fees, principally the highway use tax, which again goes directly to the highway trust fund but does not bolster the highway fund. So these individual components are going to be addressed in the presentation tomorrow in greater detail, but to the extent that there are any questions about this information in the reference material, sure, I’ll go ahead and take those. [SPEAKER CHANGES] Any questions from committee members? Senator Gunn, ?? allocate you to 35 minutes. [SPEAKER CHANGES] I’m going to sit here and be quiet, thank you. [SPEAKER CHANGES] Excellent. We have another committee member? Representative Hall, we took just a moment to introduce ourselves if you’d like at this time. [SPEAKER CHANGES] Thank you, Mr. Chairman. Duane Hall, Wake County, District 11. [SPEAKER CHANGES] Thank you very much. Well we’ve pretty much covered the material. Is there any…? Chairman ?? [SPEAKER CHANGES] Quick question. Since we’ve gone all paperless, are these papers going to be in our folders tomorrow also, and are we going to have these available on the committee page? [SPEAKER CHANGES] They should have been posted to the website at 8:30 when the meeting convened. [SPEAKER CHANGES] When the meeting…? [SPEAKER CHANGES] When the meeting convened. [SPEAKER CHANGES] Where will I find this on the website? We’ll do that after. [SPEAKER CHANGES] Let me actually take a moment to
...orient you to the... [SPEAKER CHANGES] Because this benefits [INAUDIBLE] tracking at home as well if they want to through and see the information that we're seeing. [SPEAKER CHANGES] So, navigate to the homepage and from there click on 'Committee'. [SPEAKER CHANGES] And that's a North Carolina General Assembly homepage. [SPEAKER CHANGES] From there you can either select the House or Senate standing committees. Scroll down to 'Appropriations and Transportation'. From there you can access the Committee website link and at the bottom of that -- again, you'll find this in both the House and the Senate appropriations website -- the link to the joint website. From there you see the reference materials that have been pulled forth from prior sessions and then the 2015 session materials. You'll see that quotas have already been created for today's meeting and for tomorrow's meeting. For today's meeting all materials have been posted. [SPEAKER CHANGES] Chairman Shepard. [SPEAKER CHANGES] [INAUDIBLE] question. So, there will be a way to print these off the day before? Like for me, that I do want a hard copy, so I can do that the day before even though they're not posted until 8:30 in the morning? [SPEAKER CHANGES] Procedurally, we will make a point of staff to send out all the electronic copies to committee membership and events. Any further questions? And we'll reiterate the website addresses and locations just to make it easier to follow. That sometimes keeps you from getting out in the weeds when it comes to accessing websites. That concludes our business. Senator Meredith, any closing remarks? [SPEAKER CHANGES] No. Thank you, Mr. Chairman. [SPEAKER CHANGES] Senator Iler? Or, Representative Iler. Representative Shepard? [SPEAKER CHANGES] No, Chairman. [SPEAKER CHANGES] Representative Bumgardner, you had a question. [SPEAKER CHANGES] Yes, sir. Did you say this all is going to be kept in our folder, especially these acronyms and all this stuff? [SPEAKER CHANGES] We can make sure that that's done. Yes, absolutely. [SPEAKER CHANGES] Because I don't want to carry it around with me, but I want to look at it while I'm in here. [SPEAKER CHANGES] Correct. Correct. [SPEAKER CHANGES] Any further business? Say none. I will remind you that once again tomorrow morning at 8:30 in this room we'll have a second meeting. Look forward to your attendance and with no further ado, this committee stands adjourned.