Cost of Deferral - Reconstructed
For many municipalities around the US the most distressed roadways are likely in need of a full reconstruction. That’s an expensive task. But before you find yourself looking down a multi-million dollar pavement budget hole, take note of a few possible alternatives to reconstructing all of your agency’s failed streets.
Selecting the proper rehabilitation technique for each segment of road and identifying the optimal year to perform this treatment is what pavement management is all about. Factoring in local circumstances such as weather, soil and traffic conditions enables municipalities to determine when a road’s deterioration curve is at its steepest. An experienced pavement management expert will develop a strategy to capture roads before this point, thereby minimizing deferral costs and maximizing limited available funds.
When it comes to pavement management, failed streets that require a full reconstruction have a major difference over all other streets. They will require a full reconstruction no matter how long rehabilitation work is delayed. That means that their cost of deferral is effectively zero (discounting inflation). Compare this to your average local street with a PCI in the low 60s or mid-50s range – this street will gradually increase in repair costs the longer work is delayed. For this reason, municipalities commonly refer to failed streets as “backlog” and frequently allow them to remain in their condition until greater funding is secured.
Let’s take a look at some general rehabilitation rates that will help make this deferral concept clear:
Draw your attention to the colored boxes in the image above. The box that includes “Thin Overlay” (Green) is recommended at a minimum PCI of 60 (marked by the red arrow). The cost associated with this particular rehab activity is approximately $18.00 per square yard.
Directly below the green box is a yellow box; this box identifies “Moderate Overlay” rehabilitation range. The minimum PCI for a moderate overlay is 10 PCI points below the PCI recommended for the thin overlay. Notice the cost difference between the two groups amounts to $3.00 per square yard. This is the cost of deferring a thin overlay candidate for about 5-10 years.
Beneath the yellow box is an orange box which represents “Thick Overlay”. In this grouping the cost per PCI point has jumped from $21 to $32. This $11 per square yard difference represents the cost of deferral associated with going from a moderate to a thick overlay.
Finally, notice the surface and base reconstruction candidates in the bottom red box. The red arrow points to a minimum PCI range of 25 for a surface reconstruction. This rehab activity is recommended only 15 PCI points lower than the thick overlay, and yet, the cost of deferral has inflated to nearly $26.00 at a total of $58 per square yard. This area is the steepest part of a roads deterioration curve and if deferred any longer will ultimately result in a full base reconstruction totaling a whopping $70.50 per square yard.
The rehabilitation activity needed for a road becomes progressively more expensive the longer repairs are deferred; however once it reaches a PCI under 40, surface or full base reconstruction becomes the only viable method to restoring a road to full-service. At this stage, cost effective overlays are no longer a workable rehabilitation option. Further deterioration of a base-reconstruction candidate will not change its rehabilitation prescription; therefore the cost of deferral will not increase beyond this point.
Financially Savvy Deferrals
As shown in the above example, an optimal pavement rehabilitation plan is built around a strategy that minimizes the cost of deferral. Let’s consult the colored chart one more time and see if we can determine the most cost effective way to prioritize our planned work.
If we were to prioritize work solely based on cost of deferral it would look something like this:
However, budget constraints, level of service goals, and even the political environment in a municipality often impact these priorities. For example: when considering budget constraints, one of the more frequent questions that we field on our analysis relates to "fall through year" rehabs. These are streets identified as a need in an analysis year that funding won't cover. Most clients assume that they are prioritized in the next year, but many times they are not. The reason is that, often, these streets drop into the next rehab category. They now have more time in the new rehab category before becoming a "critical" roadway that is within 2-3 points of dropping into the next rehabilitation band. It's all about time left in the current rehabilitation category and which road segments are in their “need year”.
If a particular segment of road is designated for a surface treatment, but the street’s deterioration curve forecasts that it will still be in the rehab category of surface treatment for another 4 years, it should not be prioritized over the moderate overlay candidate that is set to fall into the thick overlay category in the next year. This “Need Year” methodology prioritizes rehabs on a case by case basis, and only selects a road for treatment when it is on the verge of dropping into the next, more expensive, rehab category. This allows municipalities to perform maintenance work on only the segments of road that are an immediate risk of a cost of deferral increase.
The street segments that each municipality selects for rehabilitation can be seen as an entirely unique and case by case process. Each municipality faces its own set of budget constraints, level of service goals, and other local factors that must be considered in this process. It is for that reason that there is no generic “one size fits all” solution. There are, however, some basic considerations that every municipality should think about when it comes to the cost of deferral and rehab selection. By organizing maintenance work along these principles, municipalities can take tremendous steps toward optimizing pavement management funds, and providing the best service possible to taxpayers and residents of their community.
For more tips on managing your pavement budget, check out "Managing a Pavement Budget" HERE.