Office of Project Development

Department of Highways Retreat

June 12, 2008

Project Development

• Highway projects can be generally characterized into two broad types of projects:– One of which is to provide access and mobility– The other is related towards preserving our

current highway system

System Preservation Activities

• System Preservation – any activity to maintain our existing highway system– Examples from the PreCon database include:

• Resurfacing and asphalt overlay• Bridge and pavement rehabilitation• Bridge replacement• Restoration• County Road Aid• Transportation Enhancement

Access & Mobility Activities

• Access & Mobility – any other activity to enhance and add capacity to the current highway system– Examples from the PreCon database include:

• Major and minor widening• New route construction• Reconstruction• Relocation• Interchange reconstruction

Total Historic Expenditures by Phase

DRU % of Total Project Expenditures

Expenditures by Type of Work (for all Phases)

Total Expenditures by Phase

So where are we now?

Active Preconstruction 6YP Projects

Total Projected Funding by Phase

Projected Funding by Type of Work (for all Phases)

Total Projected Funding by Phase

Total Projected Funding by District (Through FY 2010)

Historic Fiscal Issues

• In 2000, the General Assembly mandated a spend-down of the $800m cash reserve and transition to Cash Flow Management system

• The proposed gas tax increase was not passed by legislation, causing the Six-Year Plan to become unbalanced and grossly under-funded

We had to pull a rabbit out of our hat

Creative Financing Solutions

1) $440m in GARVEE bonds– $150m in FY05, $290m in FY06– Used for IM and NH projects on I-65 and I-75

2) $650m in state bonds– $300m in FY05, $350m in FY06

• Total bonds were more than $1 billion– All funds went towards the construction phase

and is complete or currently under construction

Creative Financing Solutions (cont.)

3) Deferred construction payments– Increased cash on hand for future projects

4) Cash Flow Management process– Projects were let with cash on hand– Projected future revenues had to be higher than

current expenditures to remain balanced

Current Financing Issues

1) Our credit card is maxed out

2) We have no new revenue source

3) Not as much construction for the same price– The Producers Price Index for highway

construction shows:• Using 2000 as the base year, a 43% increase through

2007• Using 2007 as the base year, a 12% increase through

April 2008

It is time to pull out another rabbit

New Transportation Delivery Process

1) Take a business approach to analyze the transportation system we are delivering• Satisfy our customers• Deliver our transportation system more

prudently and at a more economical cost

2) Satisfy only purpose and need of project3) Streamline organization

• Transition current staff into flexible positions• Explore potential for additional outsourcing

New Transportation Delivery Process (cont.)

4) Improve technological delivery processes and cost-saving measures, such as:• Efficient management tools for project managers• Expand databases to allow electronic delivery of project

information, plan sets, and procurement documents• Implement a GIS-based right-of-way system and a holistic

approach to right-of-way and utility activities

5) Focus on type of road and safety need, such as:• Spot improvements• Safety improvements• Bridge replacement• Median-crossover protection• Roadside hazard-elimination• Upgrading our existing infrastructure

Developing Projects with Limited Funds

• Options to continue a sustainable highway network with limited funds:– Develop innovative financing methods to

continue highway projects– Develop cost-effective projects– Focus on smaller budget items such as highway

safety

Rural Highway Mileage

Rural Highway AADT

Fatal Rural Crash Rates (per 100mvm)

Urban Highway Mileage

Urban Highway AADT

Fatal Urban Crash Rates (per 100mvm)