One of the requirements for receiving Measure M2 funding is for cities to adopt and maintain a biennial Pavement Management Program (PMP). The PMP is a report outlining the City’s pavement network conditions, including funding analyses and budgetary forecasts over a seven-year period. The report is mainly designed to provide objective information and useful data enabling management to make consistent, cost-effective, and defensible decisions related to the preservation of the City’s pavement network.

Per the 2020 PMP update (Attachment 1) and reflected in the PCI City Map (Attachment 2), the City’s network PCI has declined from a score of 76 (2018 PMP) to a score of 71 (2020 PMP).  This declining trend has been present since 2014 when the City’s PCI had a score of 79. Concurrently, the City has also seen a steady decline in grant funding for capital street improvement projects. An 18-year analysis (Attachment 3) shows the declining funding levels for grants; there has been minimal state or federal grant programs for road resurfacing projects for the past ten years. State grant opportunities now prioritize active transportation projects (bike and pedestrian) or traffic signal improvements that target high accident areas.  Additionally, by maintaining current budgetary levels, the network’s PCI is anticipated to continue dropping, while costs for deferred maintenance will continue to rise proportionally. It costs less to maintain streets in good condition than to repair those that have failed. Thus, by letting pavements deteriorate, streets that once cost $0.55 per square foot to slurry seal, may, in a few years, cost as much as $5.00 per square foot to overlay, or up to $10.00 per square foot to perform full depth reclamation. With rising material costs, the timeliness of repairs becomes even more critical.

The following table illustrates how repair costs increase exponentially as streets deteriorate:

The 2020 PMP presents three budgetary scenarios. The two most feasible scenarios include budget scenario numbers one and two. Scenario one is presented as keeping the existing budget level while scenario two involves maintaining the PCI at 71. The following summarizes both approaches.

Scenario One “Keep Existing Budget Level” - This approach assumes the City will spend the projected budget of $45.6 million over the next seven years in rehabilitation projects. Identified funding sources include Measure M2 and all Gas Tax disbursements (Fund 207, 208, 209). 

•  This approach will result in a 15 point decline in the network PCI to 56
•  42% of street network will be in "Very Good/Good" range

•  22% of street network will be in “Fair/Poor” range
•  35% of street network will be in “Very Poor” range
•  Deferred Maintenance almost triples to $298.4M by FY 2026/27

However, it is important to note, the City will also be committing an additional $1M annually from CDBG for rehabilitation work. This additional funding was not reflected in the PCI calculation since this decision was made after the publication of the 2020 PMP Report. This additional funding will increase the Scenario One spending from $45.6M to $52.6M. The additional $1M allocation of CDBG funds will assist in slowing the decline in the network PCI but it is not enough to make a substantial improvement. Also, Gas Tax revenues were projected at a lower level to reflect any immediate COVID-19 fiscal impacts.  It is anticipated these revenues may rebound as the pandemic recedes, which would also increase street maintenance funding.

Scenario Two “Maintain PCI at 71” – This approach requires the City to spend approximately $23.6 million annually for a total of $165.4 million over the seven-year analysis period. This approach would require an additional $17 million annually from other city funding sources:

•  Network PCI remains at 71
•  64% of street network will be in “Very Good / Good” range
•  18% of street network will be in “Fair/Poor” range
•  17% of street network will be in “Very Poor” range
•  Deferred Maintenance would equal $110.4 million by FY 2026/27

Aside from evaluating budgetary needs and the implication to deferred maintenance, the PMP is the mechanism by which Orange County cities report any changes in their PCI score in competing for grant funding. The Measure M2 Regional Capacity Plan, which provides Measure M2 competitive grant funding for arterial, intersection, and freeway/arterial improvements, assigns a ten percent (10%) matching fund reduction if a participating agency either: (1) shows measureable increase of paved street conditions during the previous reporting period of one PCI point or (2) has an overall network PCI of 75 or higher. Looking back at the past two grant cycles, the City was able to receive a combined match reduction of approximately $107,000 for the Euclid/Westminster Intersection Improvement Project.

Staff has implemented a number of techniques to extend pavement life given limited resources.  The first is a technique used by our Streets Maintenance staff wherein they patch limited failed areas of local streets with high-quality patches and then slurry the entire street.  This typically extends the life of the street by 4-5 years.  The last two techniques have only recently been implemented on Garden Grove arterial streets, depending on the degree of cracking.  For slight to moderate cracking, staff uses Kevlar fiber reinforced asphalt to overlay streets to extend the life of the street approximately 4 more years over conventional overlay projects.  For streets with a greater degree of cracking but not yet requiring reconstruction, staff uses a layer of asphalt emulsion and pea gravel aggregate over the existing street and overlays it with 2” of asphalt to extend the life of the street by as much as 20 years as indicated by independent pavement studies. Staff is closely analyzing and tracking the effectiveness of these processes.

Going forward, staff will strive to maintain a PCI rating in the range of 60 - 71 by implementing the following strategies: 1) Continue to commit a minimum of $1M in CDBG funds to street maintenance for the next seven years; 2) Continue to implement targeted strategies to maximize pavement life in coordination with available funding; 3) Establish an infrastructure funding plan that will identify potential additionl revenues that may be allocated for street maintenance in the FY 2021-2024 Biennial Budget; 4) Update the Pavement Management Program report to track progress and affirm long-term funding needs in 2 years.  

It is recommended that the City Council:

• Receive and file this report. 

By: Ana V. Neal, Sr. Administrative Analyst