Study: Kentucky Riverports Need Millions, Revamped Funding

Results of a newly released Kentucky multimodal transportation study show the state’s public riverports have $12.3 million in unmet needs.

Additionally, a state grant program does not provide sufficient funding, lagging behind other states, and should be restructured, according to study recommendations.

The Multimodal Freight Transportation System Improvement Task Force released its findings in a memo to the president of the Kentucky Senate, speaker of the Kentucky House of Representatives and members of the Legislative Research Commission on December 11. The memo was co-authored by the commission’s co-chairs, Sen. Jason Howell and Rep. Suzanne Miles. While it also addresses the need for reviewing and updating railroad funding mechanisms and studying highway congestion and a lack of truck parking, the first three of its six recommendations relate directly to ports and waterways.

Howell said that after developing a friendship with the executive director of a public riverport in his district, he came to understand some existing needs at the port. After speaking with representatives from Kentuckians for Better Transportation, he learned of other needs across the state and wanted to help address them. Additionally, he said, he was convinced that the state’s waterways could be better used as an economic development tool, but that they were often “underappreciated and underutilized.”

“This was an area I thought was vital to all Kentucky and especially the rural areas,” Howell said. “The importance of the river industry to rural economic development hasn’t even had the surface scratched yet.”

One issue that caught Howell’s attention was the Kentucky Riverport Improvement (KRI) Grant Program, established in 2013. KRI funds are a general fund appropriation in the Kentucky Transportation Cabinet budget with a current budget allocation of $500,000 annually. The grants require a 50 percent local match.

In studying surrounding states, the task force found they spent much more on their port grant programs, Howell said. As an example, he cited Missouri’s 14 public ports and said that it spends more than $500,000 at its least-funded port.

“That was a real eye opener for me,” Howell said.

As a result, the study’s first recommendations is that the Kentucky General Assembly should consider an increase in annual grant funds, an expansion of fund use eligibility to allow the funding to be used as federal grant match requirements and that the program eliminate a requirement that all funds be spent by the end of the fiscal year to ensure that they can be used for major capital improvements.

The task force’s second recommendation calls for public riverports to submit a list of priority projects to the 2024 General Assembly for a “one-time infusion of funds to maintain current business operations.” Additionally, public riverports should also create and submit a 10-year asset preservation plan for long-term sustainable planning for riverport operations, according to the recommendation.

Howell said he envisioned a system much like Kentucky’s public colleges and universities employ, in which they bring a deferred maintenance list to state legislators and ask for funding based on priority needs, which may vary from year to year.

The taskforce also recommended that the Department for Local Government should encourage riverports and other eligible entities to use provisions of House Bill 9 from the 2023 regular session, which provides limited funding as a potential source for local match funds to be used in federal grants.

Brian Wright, chair of the Kentucky Association of Riverports and executive director of the Owensboro Riverport Authority, said that with seven active public riverports and three developing public riverports in Kentucky, their financial needs are great, and that he is encouraged by the task force’s findings and recommendations.

The multimodal study built upon the Kentucky Riverports, Highway and Rail Freight Study, which was completed primarily in 2020 and 2021.

“It was obvious from the study that holistically, across the state, we were falling behind in terms of preservation of our riverport assets,” Wright said.

He also noted that while both studies note $12.3 million in Kentucky’s public riverports’ unmet needs, that figure was reached prior to inflation that accompanied the COVID-19 pandemic. Now, he said, he believes that number to be about $15 million. That amount would allow preservation of current business, he said. To modernize and expand the riverports, he estimates that $6.7 million annually is needed over the next five years.

Wright said he has already provided a five-year capital improvement needs list across all active public riverports.

Wright said the study is correct that revamping the state’s port grant program is essential. Currently, he said, some of the public ports throughout the state are not in a position to pursue any federal grants without having difficulty meeting the required local match.

Wright added that while HB9 is helpful in allowing some state funds to be used to meet federal grant matches for government bodies, including port authorities, ports must compete with much more visible county and municipal needs for those funds. Restructuring the port grant program to allow it to use funds for grant matching opportunities would be beneficial for riverports, he said.

An extended timeline to the use the funds would make that more practical, he added.

“Federal grants take years of planning, submitting, engineering and consulting,” Wright said.

He also compared the state’s annual $500,000 in port grants to Missouri, which provides an average of $15 million a year, Ohio, with $25 million a year and Virginia, which provides more than $40 million annually, he said.

Wright hopes the task force’s findings and recommendations will help continue to educate legislators not only about the value of the state’s ports and waterways but also how the different modes of transportation work together for the good of the state and its businesses and how they can be an economic development tool.

“I feel like we’ve made some headway in making that point understood across the state,” Wright said. “We’ve still got a long way to go and will continue to do so every opportunity we have to improve the connection between river, rail and road.”

No bills have been filed in the Kentucky General Assembly session that started this month that would address the task force’s findings or recommendations, but Howell said he is in the process of working with various transportation-related agencies in developing potential legislation.

The task force’s complete findings and recommendations are available here.