1. The Highway Fund – Planning, Measuring, and Reporting Mike Holder, PE, Chief Engineer 2015 CAPA / DOT Workshop February 24, 2015

2. Funding Allocations For Maintenance, Preservation, and Construction Activities Federal Funding Interstate Maintenance Bridge Program State Highway Funds Bridge Program Highway Maintenance Contract Resurfacing Pavement Preservation Program Secondary Road Paving Program Small construction Public access Spot safety Contingency 2

3. Interstate Maintenance Program $100M/yr Pavement $91M Bridge $9M Bridge Program FFY 2016 $100M FFY 2017 $75M FFY 2018 $50M Federal Funding 3

4. Highway Maintenance (FY 2015 = $514.7M) Distributed by: Primary System Secondary System General Maintenance Reserve Serves as primary funding source for all routine highway and bridge maintenance operations Funds allocated to highway divisions by needs-based formulas Some funds set aside for snow and ice removal and emergencies 4

5. Primary and Secondary Road Maintenance Division Needs Statewide Needs Division Administration + Allocation Formulas Division Administration Landscaping Incident Management Rest Areas Traffic Signalization Statewide/Division Needs Calculation For Assessed Needs: Funds Needed to bring assets to current target. Examples: Bridges, Pavement, Unpaved Shoulder, Ditches, Ground Mounted Signs, etc. For Non-Assessed Needs: Based on cyclical cost or historical expenditure data Examples: Mowing, Litter, Guardrail, Unpaved Roads 5

6. = $8,866,417 Primary Allocation Example: Division 5 Division Needs Statewide Needs Statewide Allocation Division Administration $6,253,894 $37,042,462 $35,367,693 $501,471,677 X + X + 6

7. General Maintenance Funding 7

8. Challenges Material Costs Asphalt (+133%) Salt (+134%) CRS2 (+162%) Unit Costs Patching (-8%) Pipe Installation (+35%) Guardrail Installation (+114%) Striping (+50%) 8

9. What does North Carolina’s System Look Like? System size second only to Texas Approximately 60,000 miles on Secondary Paved System; 50,000 have less than 2000 vehicles/day 54% have Plant Mix 44% have Asphalt Surface Treatment 9

10. Contract Resurfacing FY 2015 = $408M Needs assessed through pavement condition survey 100% of pavements surveyed Formula for annual distribution to Divisions: Division Needs Statewide Needs 10

11. = $39,646,023 Contract Resurfacing Allocation Example: Division 5 Division Needs Statewide Needs Statewide Allocation $405,548,088 $40,225,895 $411,479,733 X X 11

12. Resurfacing Single lift of hot mixed asphalt Pavement is in fair to good condition Patching of failed localized areas for good performance Requirement to let to contract 70% of program funds by Sept 1, 2016 12

13. Contract Resurfacing Letting List

14. Contract Resurfacing Let List https://connect.ncdot.gov/letting/12%20Month%20Tentative %20Letting%20Library/CR-12LL-Feb16-2015.pdf https://connect.ncdot.gov/letting/12%20Month%20Tentative %20Letting%20Library/CR-12LL-Feb16-2015.pdf

15. Pavement Preservation FY 2015 = $65M Formula: Division Needs Statewide Needs Based on Pavement Condition Ratings 15

16. = $4,688,667 Pavement Preservation Example: Division 5 Division Needs Statewide Needs Statewide Allocation $65,045,024 $7,276,628 $100,947,331 X X 16

17. Why Pavement Preservation? Planned vs. Reactive Strategy Up to a 6 to 1 savings ratio vs. “worst first” Cost Effective Approach Prevents failures before they occur Results in smoother, safer roads Reduces vehicle operations costs Improved highway/user satisfaction Reflects favorably on agency and paving industry Good Pavements Stay Good 17

18. Pavement Preservation Outsourcing 2014-2015 Budget:$65 Million Funds allocated for pavement preservation should meet the following targets: Mileage requirement:4300 lane miles Outsourcing requirement: FY 2015 :20% FY 2016 : 30% FY 2017 :55% FY 2018 :80% 18

19. Funds allocated for pavement preservation should meet the following targets: FY 2014-2015 2150 lane miles paved by June 30, 2015 4300 lane miles paved by the end of the 2015 paving season FY 2015-2016 4300 lane miles paved by June 30, 2016 19 Pavement Preservation Outsourcing

20. 20 Statewide Summary

21. Rehabilitation Pavement is in poor condition Traffic volumes exceed current strength Pavement is structurally inadequate Can be funded from Contract Resurfacing 21

22. Primary $140.8M General Maintenance Reserve $111.1M Contract Resurfacing $408.1M Pavement Preservation $65.0M Bridge Preservation $153.0M Secondary $262.8M Final FY15 Funding By Category 22

23. Staffing Study – Transportation Divisions Consolidated Division functions for smaller organization structureIncreased Worker to Supervisor RatiosIncrease Construction Engineering Inspection outsourcing4 –year Plan for Increased Outsourcing of Pavement PreservationContinued Assessment for Needs Based Staffing 23

24. Funding Categories:Need State Allocation Federal Allocation Impact i. Contract resurfacing (Primary and Secondary) $411,480,000$408,173,000 Currently fully funded Interstate pavement resurfacing $101,000,000 $91,000,000 ii. Pavement preservation$100,947,000$65,045,000 Pavement lives will shorten, condition visibly degrading in next 4-5 years iii. Routine highway, bridge and pavement maintenance, and culverts $899, 127,000$439,413,000 Targets continue not to be met. Targets and priorities to be reviewed to optimize current funding levels and enable consistent application across the State. Primary$456,514,000$154,626,000 Secondary$442,613,000$284,796,000 iv. Disasters and emergencies$74,133,000$56,500,000 Shortfalls will be addressed using routine maintenance funds. Further reducing the abilities to meet targets. Primary$43,443,000$33,118,000 Secondary$30,670,000$23,382,000 v. Structurally sound bridge preservation $60,000,000 Primary$48.000,000 Secondary$12,000,000 vi. Structurally unsound bridge rehabilitation, repair or replacement. $325,000,000$153,008,000$191,000.000 More of our bridges will become structurally deficient as they exceed their average replacement age at higher rates than previously seen Primary$195,000,000$91,805,000 Secondary$130,000,000$61,203,000 Total$1,870,668,000$1,122,139,000$282,000,000 24

25. Needs Increased resurfacing funding for pavement rehabilitation Increased pavement preservation funding Increased maintenance funding flexibility 25

26. Highway Maintenance Improvement Plan Includes: Year work is to be completed Specific roadways in each county Specific sections of roadways to be treated Type of treatment applied Estimated cost Plan Year CountyRouteBegin DescriptionEnd DescriptionLengthBudget Group Treatment Estimated Cost FY 2016BertieSR 1107SR 1106END MAINT0.880PreservationSplit Seal $ 35,000.00 FY 2016BertieUS 17NC 308 + 1.793 milesSR 1001 + 1.082 miles2.000Resurfacing Mill 1.5" & Replace (B Level) $397,750.00 FY 2016 BertieUS 17.4 mile E NC 308NC 308 + 1.793 miles1.793Rehabilitation Mill 1.5" & Replace / 1.5" Overlay (B Level) $354,750.00 (Sample from Division 1) 26

27. Future HMIP Cycles Divisions report delivery of Year 1 Divisions modify Years 2 & 3 as necessary Year 2 & 3 become new Years 1 & 2 Divisions add a new Year 3 in consultation with PMU Board adopts new 3-year HMIP New HMIP posted on web by April 1, 2016 27

28. Legislative Directives - Summary Report on the condition of the State highway system and maintenance funding needs GS 136-44.3 MOPAR delivered January 2015 Annual Highway Maintenance Improvement Program GS 136-44.3A First one to be delivered on April 1, 2015 Pavement Preservation Outsourcing GS 136-44.17 Annual Report due December 1 of each year Contract Maintenance Resurfacing Program Letting Schedule SL 2014-100, Section 34.11(e) 70% of the FY 2016 program funds must be let to contract by September 1, 2016 Staffing Study for Transportation Divisions SL 2014-100, Section 34.16(a) and (b) 28