COUNTY OF SAN MATEO

Inter-Departmental Correspondence

Department of Public Works

DATE:

May 23, 2005

BOARD MEETING DATE:

June 7, 2005

SPECIAL NOTICE/HEARING:

None

VOTE REQUIRED:

Majority

TO:

Honorable Board of Supervisors

FROM:

Neil R. Cullen, Director of Public Works

SUBJECT:

Revising the Standard Used to Evaluate the Condition of the County Maintained Road System

Recommendation

Adopt a resolution revising the standard used to evaluate the condition of the County maintained road system as required by Government Accounting Standards Board Statement No. 34 (GASB 34), by reducing the percentage from 75% to 65%, of secondary County maintained roads having a Pavement Condition Index (PCI) of 40 or better in any given year.

Vision Alignment

Commitment: Responsive, effective and collaborative government.

Goal(s): Government decisions are based on careful consideration of future impacts rather than temporary relief or immediate gain.

The proposed revision in the previously adopted GASB34 standard is in recognition that the County currently does not have the funding available to finance projects to meet the higher standard.

Background

Previous Board Action

Adopted a resolution setting the minimum pavement condition level standards for County roads, in order to allow the Department to continue to use the Modified Approach in the financial reporting of road system assets as provided by GASB34.

History

GASB34 requires local governments to report the value of their infrastructure assets as part of their financial statement in order to provide a realistic representation of the local government’s assets and liabilities. We use the Modified Approach as allowed by GASB34, as we believe this method provides more information about the condition of the roads - the asset - while providing a management tool that is used in making decisions as to when roads should be resurfaced and the type of treatment that should be used.

The pavement conditions were determined using the Metropolitan Transportation Commission’s (MTC) Pavement Management Program. The road system was segregated into primary (157.14 miles of road) and secondary (160.43 miles of road) classifications based on whether or not the road has a designed structural section. Each road was then divided into appropriate road segments, and each segment was initially rated and assigned a Pavement Condition Index (PCI) from zero to one hundred (0-100). MTC’s program defines road pavements with PCI’s of 40 or better to be in a “Fair” or better condition, and roads with PCI’s of 55 or better to be in a “Good” or better condition. PCI condition assessments are performed every year on 1/3rd of the approximately 316 miles of the maintained road system.

The minimum condition levels established by your Board in 2001 requires 75% of primary roads to be maintained at least in a good condition - a PCI of 55 or better; and 75% of secondary roads to be maintained at least in a fair condition - a PCI of 40 or better.

Discussion

The condition levels recommended and adopted by your Board in 2001 were based on the amount of dedicated revenue - primarily fuel taxes and sales taxes on fuel – that the County had or was anticipated to receive each year.

However, since 2001, gas tax revenues have been flat and the State has taken the sales tax on fuel to help fund its obligations.

The Department has recommended various road surface treatments - slurry seals, cape seals, overlays or reconstruction - to continue to maintain the PCI’s of the roads, but we have been unable to meet all the road needs with the reduced funding. As a result, the percentage of secondary roads that meet the minimum condition levels established by your Board has been declining. The County must either increase the funding of road related projects to sustain the established minimum condition levels, or reduce the percentage of roads required to be maintained at the established levels, in order to continue to use the Modified Approach in financial reporting.

There is a proposal by the Governor to return the sales tax on fuel back to local government in the coming fiscal year. However, we believe that it is prudent at this time to reduce the percent of secondary roads maintained at a condition level of 40 or above from 75% to 65%, as reducing the percentage does not prevent us from improving pavement conditions should increased funding become available. The proposed reduction equates to 16.04 additional miles of secondary roads (i.e. 10%) having a PCI of less than 40 in any given year. The minimum condition level for primary roads will remain the same.

A resolution has been approved as to form by County Counsel.

Fiscal Impact

Reducing the minimum condition level for secondary roads revises the standards used in reporting the condition of the County road assets, but has no fiscal impact to the General Fund or to any other fund administered by the County.