Report: City Faces Huge Increases in Road Pavement Costs

At Current Levels of Funding, Half the Streets will Fail by 2032, Costs Increase to Over 400 Million Dollars – Since 2009, the Vanguard has been sounding the alarm that the condition of Davis’ roadways has been deteriorating and, without an influx of money, the city would be facing tens of millions in deferred maintenance costs in the future to restore roadways to passable conditions.

In 2009, the Vanguard noted that the street maintenance was currently being funded at a traditional $800,000 baseline level.  However, we noted from then-Finance Director Paul Navazio, “The current funding level is insufficient and it leads to the deterioration of street conditions.”  The funding to address the current backlog would require an increase to $2.8 million per year, and full funding to maintain the desired pavement index is in excess of $3 million per year.

In 2011, that funding number dropped to zero.  Part of the $2.5 million in personnel cuts passed in June of 2011 by a 3-2 vote was to put $1 million into street maintenance funds.

It was a strategy derided by firefighters’ union President Bobby Weist.

“I didn’t hear one dime of that $2.5 million going into retiree medical or anything else.  I heard it going into roads and other things and infrastructure, nothing else,” Mr. Weist said at the time.

Tonight the Davis City Council will hear a report on pavement management, and the number is no longer $2.8 to $3 million to keep roadways from deteriorating.  The number is now $7 to $8 million.

The report commissioned from Nichols Consulting Engineers examines three scenarios:

1.       What condition will our streets be in after 20 years, if we fund street maintenance at $1 million per year and bike path maintenance at $200,000 per year?

1.     What funding is necessary to bring the city-wide average PCI (Pavement Condition Index) up to a PCI of 70 and maintain that PCI for 20 years (this scenario was not feasible for the bike paths)?

2.      What level of funding is necessary to maintain the current backlog ($21 million for streets and $13 million for bike paths)?

Writes staff, “While the City Council has recently provided additional funds for pavement maintenance, the past five budgets have contained about $1 million per year of total funding with approximately $800,000 per year allocated to streets and $200,000 per year allocated to bike paths. Under this funding scenario, more than half our streets and approximately 26% of our bikepaths will have failed by 2032.”

While the previous indications were that road maintenance was a problem, even a crisis, the findings here are off the chart compared to previous estimates.  At the current level of funding, the city will have $439 million in deferred maintenance by 2032 – just under 20 years from now.

However, that number can be reduced if the city uses a principle, according to the Nichols report, “that it costs less to maintain roads in good condition than those in bad condition.”

The Nichols report serves as a dire warning to the city.  At the current level of funding, Nichols warns, “Based on an existing funding level of $20 million over 20 years, with approximately 3% allocated for preventive maintenance, the condition of the network will deteriorate to a PCI of 27 in twenty years and the deferred maintenance or unfunded backlog will dramatically increase more than ten-fold from $21.4 million in 2012 to $439.4 million in 2032.”

Bike paths suffer as well, “The current funding level of $200K/year will result in the PCI dropping from 59 to 46 in the next twenty years. The deferred maintenance or unfunded backlog will increase from $1.3 million to $27.7 million by 2032.”

The second scenario involves improving the PCI to 70.

They write, “In order to increase the current network PCI of 62 to 70 by one point a year and then maintain it at 70 till 2032, a total of $160.6 million is required over the next twenty years. However, the unfunded backlog will still increase from $21.4 million to $119.8 million by 2032.”

For bike paths, however, they warn, “Due to the nature of the decision on tree and network conditions of the bicycle paths, maintaining the PCI of the overall network at 70 was not a viable option.”

Finally, in maintaining the current unfunded backlog, they write, “In this scenario, the City will require a total budget of $139.5 million for the next twenty years with around 5.4% allocated for preventive maintenance in order to maintain the current backlog of $21 million. The PCI will increase from 62 to 70 in twenty years.”

For bike paths, “The City will need a total budget of $13.1 million to maintain the same unfunded backlog as in 2012. This scenario would help improve the PCI of the network to 69 by 2032.”

Nichols writes, “”Deferred maintenance” or “Unfunded backlog” consists of pavement maintenance that is needed, but cannot be performed due to lack of funding. These terms are often used interchangeably.

“Shrinking budgets have forced many cities and counties to defer much-needed road maintenance. By deferring maintenance, not only does the frequency of citizens’ complaints about the condition of the network increase, but the cost to repair these streets rises as well.”

Councilmember Brett Lee said he was surprised by how large that number is.

“I was surprised,” he said.  “I don’t know how long the million dollar payment has going on, but clearly doing that into the future (is) unacceptable.”

“Clearly looking at the report, you can pay a little bit up front and take care of your roads and the costs are rather modest.  If you neglect them, the repair costs mushroom,” he said.

The amazing thing is that the million dollars in road repairs marks an increase from the traditional $800,000 and a vast increase over what was budgeted in the last few years when federal and state funding fell off.

According to the city’s staff report, “the City surveyed approximately one-fifth of the City’s streets each year to evaluate the pavement condition and update our program. The last such survey was conducted in 2009, just before City budget conditions resulted in a 40% loss of transportation personnel, including the City’s pavement maintenance engineer.”

The report notes that some of the city streets have not been surveyed since 2005.

One of the big differences is that the city had previously surveyed all streets and bike paths using a manual method where “a person visually inspects each street (or path) segment and conducts a detailed survey of 10% of the segment considered to be representative of the segment’s condition.”

The current street surveys were “using a vehicle equipped with a video or digital camera.”

The images were then analyzed by office staff to gather condition data. This method surveys “one entire lane on residential and collector streets and one lane in each direction on arterial streets.”

“This was done with a machine instead of visually,” said City Manager Steve Pinkerton.  “It looked at more of the pavement.  It was a larger sample size.”

Using this method, Nichols found the average 2012 PCI to be far lower than previous estimates.  The average was 62 which puts in the network in the fair condition category with a significant portion of the network suffering from “load-related distresses.”

Writes Nichols, “If these are not addressed, the quality of the road network will inevitably decline. In order to correct these deficiencies, a cost-effective funding and maintenance and rehabilitation strategy must be implemented.”

“Using the StreetSaver budget needs module, pavement needs over the next twenty years were estimated at approximately $142 million for the City. If the City of Davis follows the strategy recommended by the program, the average network PCI will increase to 72 by 2032.”

That strategy requires, however, an increase from $1 million in 2012-13 to over $7 million per year.

Another factor in the cost increase is related to the inflation in the cost of asphalt price.

“Asphalt prices keep going up,” City Manager Pinkerton told the Vanguard.  We use less products that contain petroleum so fewer items are sensitive to the rises in the cost of oil than they were back in the early 1970s.  “But there is one thing that continues to be very sensitive to petroleum prices, asphalt.”

As Nichols reports, “An inflation rate of 8% was used for the budgetary analyses. The inflation rate was calculated based on the asphalt price index together with the inflation rate used by the Sacramento Area Council of Governments (SACOG) in the Metropolitan Transportation Plan 2010.”

“The asphalt price index has increased by about 15% annually between 1999-2012,” they write, compared with 3.1% for all other costs.  They used a weighted average of these two inflation rates to come up with 8%.

One of the keys, Mr. Pinkerton said, “More money upfront saves us a lot of money later.”

“It’s daunting,” he said.  “We don’t have a solution yet.  What we’re doing tomorrow night is really setting the table, just kind of giving people an idea of what we’re dealing with.”

He said this is a mode that the council is going into – having the discussion first rather than trying to solve everything on the first turn.

“I think better policy is made when you have time to absorb information,” he said.

“One of the things I said last year was that we do need to talk about the ‘r’ word as well,” he said.  “Revenue and whether that’s a consideration or not.”

He did argue this was a simplified and preliminary analysis of the pavement situation and that there may be multiple ways to get there.  But on the surface, the city is now looking at increasing their expenditures for road repair by about $6 to $7 million per year.

At a time when people are being asked to pay more for water, are they prepared to also be paying more for road maintenance?

In the meantime, the bargaining units of DCEA (Davis City Employee’s Association) and the firefighters keep holding out.

“I don’t want this to wait 14 months like it did the last time on additional dialogue,” City Manager Pinkerton said.

—David M. Greenwald reporting

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