Consider Recommendation to City Council to Temporarily Increase Funding for Pavement Management Program and Street Maintenance Budget 

Purpose:
The purpose of this case is to consider making a recommendation to City Council to temporarily increase Pavement Management Program funding and the street maintenance budget to address unmet needs due to the street reconstruction “bubble”.

Background:
Temporarily Increase Pavement Management Program Funding
Attached is AgendaQuick case #13332 with all attachments from the June 21st Public Works Committee meeting, which includes all relevant background information for the Pavement Management Program (PMP), the street reconstruction “bubble” facing the City due to 40-percent of City streets being constructed between 1975 and 1985 and now hitting the end of their useful lives, and a high-level overview of the funding needs associated with this street reconstruction bubble.  Also attached are unapproved minutes from this meeting. 
 
Updated Costs for 2022-2031 Capital Improvement Program PMP Projects
Staff updated estimated costs for street reconstruction projects included within the 2022-2031 CIP.  All estimated project costs were increased by 25-percent to account for project cost increases observed between 2021 and 2022. Staff anticipates oil and bituminous prices will remain level through 2022 and into the 2023 bidding season. After that, oil and bituminous prices will likely slowly recede, though concrete and utility costs may not recede as quickly over time.  
 
Estimated costs for street reconstruction projects in the 2022-2031 CIP total $16,079,940.
 
Estimated costs for overlay projects in the 2022-2031 CIP total $5,775,750.
 
Updated Costs for Unmet PMP Project Needs (Not in CIP)
Staff estimated costs for street reconstruction projects needed to meet the unmet needs of the 2022-2031 CIP due to the street reconstruction bubble, which includes all streets with PASER values of 4 or less not in the 2022-2031 CIP.  These estimated project costs include the same 25-percent increase to account for project cost increases observed between 2021 and 2022 as the CIP projects have. 
 
Estimated costs for street reconstruction projects needed to meet the unmet needs of the 2022-2031 CIP due to the street reconstruction bubble total 12,739,625.
 
NOTE: Staff did not explore unmet pavement overlay needs.  If the Committee would like Staff to explore this as well, please provide direction as such.
 
Updated Costs for “Light” versus Standard Street Reconstruction Projects
As previously discussed, the Committee may wish to recommend that the City Council consider temporarily completing more PMP projects as “light” street reconstruction projects versus standard street reconstruction projects.  Such “light” street reconstruction projects would involve reconstructing streets by reclaiming the existing bituminous pavement plus an inch or two of underlying aggregate base, leaving all or most of the reclaim material on site as a thicker aggregate base section, then paving a single 2-inch lift of bituminous pavement over the compacted reclaim material, which would generally provide a pavement section similar or slightly better than pavement sections constructed up to the early 2000’s that generally met a 5-ton pavement design strength. Whereas today’s standard street reconstruction projects involve reclaiming the existing bituminous pavement plus an inch or two of underlying aggregate base, leaving 1½-inch less reclaim material on site as aggregate base, then placing 3½-inches of bituminous pavement on top to meet a 7-ton design strength.

Staff completed a deeper dive on costs associated with completing such “light” street reconstruction projects, which Staff now calls “reclamation rehabilitation” projects.  Based on our latest calculations Staff estimates these projects will cost between 50 and 85-percent of a standard street reconstruction project. Therefore, utilizing reclamation rehabilitation projects would allow the City to reconstruct between 15 and 50-percent more streets than if standard street reconstruction projects are utilized. However, it is critical to remember that the anticipated useable life of streets constructed as reclamation rehabilitation projects would be between 25 and 40 years and would not allow an overlay of the pavement, while streets constructed as standard street reconstruction projects have an anticipated useable life of 60 years, which allows for 2 overlays. In addition, pavement design strength would be reduced which could cause issues during spring load restrictions requiring increased enforcement actions by Ramsey PD and other Staff.

Staff can support this option if the Committee feels the benefits received from completing 15 to 50-percent more street reconstruction projects having useful lives between 20 and 35 years less, and generally having a 2-ton reduction in pavement design strength, outweighs the increased costs associated with completing standard street reconstruction projects.
 
If reclamation rehabilitation projects are utilized, Staff will need to inventory these streets separately from all others to ensure they receive proper maintenance on a regular basis.      

Advancing Street Reconstructions to Overlay Improvements
Staff further explored whether streets identified as street reconstruction projects in later years of the CIP having PASER values higher than 4 may be suitable for pavement overlay improvements in earlier years to extend the life of the pavement enough to allow the street to be reconstructed after the street reconstruction bubble passes to help prevent a similar street reconstruction bubble in the future.

Attached to case #13332 are four figures showing streets with PASER ratings between 5 and 8, any of which could potentially be identified in a 10-year CIP as street reconstruction projects closer to the end of the 10-year period based on projected pavement decay curves, underlying soils, etc.

Staff reviewed the 2022 – 2031 CIP to identify streets with PASER ratings between 5 and 8 that might meet this qualification. Staff only found one street segment that provided enough benefit to outweigh the additional cost due to overlaying a pavement section past the point of achieving 15 or more years of pavement life following an overlay. Staff therefore continues to assert that there is enough value associated with this option to pursue it any further at this time.  However, Staff will continue to monitor this in future years and will pursue this option if and when it makes sense to do so.  
 
Temporarily Increase Street Maintenance Budget
Staff estimates there are 19 miles of streets across the City that are experiencing significant surface stripping but are not identified for overlay or reconstruction improvements in the 2022-2031 CIP.  Pavement on these streets will be prone to accelerated deterioration due to water pooling in the surface depressions, which is then forced between the pavement base and the wear courses as vehicle tires drop into the depressions and push the water into pavement voids. The rideability on these streets will also continue to decline while other streets are receiving overlay and reconstruction improvements. Staff therefore recommends spray patching these streets while PMP projects in the 2022-2031 CIP are completed, and as streets constructed between 1975 and 1985 having PASER ratings of 4 or less that are not included in the 2022-2031 CIP can be reconstructed.
 
Based on 2022 bid prices, estimated costs for contracted spray patching on 19 miles of City streets having an average need of 100 tons per mile totals $750,000.
 
Impacts to staff would generally be minimal, though Staff would need to coordinate this work with contractors, inspect the contractor’s work, issue payments to contractors, and respond to public questions, concerns and/or complaints.   

Staff anticipates 60 minutes will be needed to present and discuss this case. 

Alternative #1 – Motion recommending City Council approval to temporarily increase Pavement Management Program funding at an annual amount of $____________, and to temporarily increase the street maintenance budget at an annual amount of $____________.

Alternative #2 – Motion of other. 

To be discussed as part of the 2023 budget discussions.

Available funding sources include bonding, franchise fees, levy, and special assessments.  

Staff recommends temporarily increasing annual PMP funding to mitigate unmet street reconstruction bubble needs and to minimize annual maintenance cost, and to minimize the term of the increased funding as much as practical to reduce impacts to the street maintenance budget including equipment and material costs, professional services, and staffing. However, as annual PMP funding amounts increase, so will impacts to engineering costs, including engineering staff and professional services.  
 
Staff recommends increasing the street maintenance budget by $750,000 to allow an estimated 19 miles of streets to be spray patched while PMP projects in the 2022-2031 CIP are completed, and as streets constructed between 1975 and 1985 having PASER ratings of 4 or less that are not included in the 2022-2031 CIP can be reconstructed.  

Motion recommending City Council approval to temporarily increase Pavement Management Program funding at an annual amount of $____________, and to temporarily increase the street maintenance budget at an annual amount of $____________.