The Zimmer Report: Budget Consequence

There is a way to confidently answer your “What if” questions.  What if we reduce the pavement rehabilitation budget? What is the effect on pavement conditions?  Conversely, how much will it cost to improve the pavement condition by 10 points?

Our Budget Consequence Figure presents a powerful tool to determine M&R budget levels. It is an analysis of the effect of setting a minimum acceptable pavement condition on the rehabilitation budget and an average pavement condition. Our example is from a large mall which is in Good overall condition. The cost calculation (blue shaded area) is the total amount budgeted over a six-year period and the PCI is the predicted average in 2023. The 2018 average condition rating of 69 PCI is shown as the thin red line. The Figure illustrates the predicted change in average pavement condition and budget as the minimum acceptable condition varies from 0 to 100.

For the typical Mall, where the two condition lines intersect represents the “breakeven” point.  Management units maintained before they hit the breakeven PCI will improve the property’s overall condition. Waiting until after the breakeven point can result in a lower average condition. At this property, the two lines intersect at about a 45 PCI. Management units rehabilitated before they hit 45 will improve the property’s overall condition. And importantly: delaying work past 45 will allow further deterioration of the average condition. The cost to maintain the current condition average is around $1,500,000 for rehabilitation of ten management units. This is known as the Breakeven Budget. This can be normalized to a cost per square foot by dividing $1.5 million by the pavement area.  

To determine the effect another budget level will have on future condition, enter the chart on the right with the total 6-year cost. Move left to the total cost line, then up to the average PCI, 2023 line. From there, move left again to the pavement condition axis and read the predicted average condition for 2023. To restore all pavements and management units, the computer generated 6-year budget requirement is $2,805,000 to restore the 85 management units.

You can use this figure as a quick check o a property’s pavement budget level.  Will the proposed five-year budget improve conditions? Maintain current conditions? Or will conditions decline?  

Think of the ease of knowing the effect your portfolio budget will have on pavement conditions.  And answering is the budget level maintaining my client’s assets?

Figure from Zimmer Consultants.

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