Summary
About half of our major roads are in poor condition. To fix this, the city must change the way it funds road repairs.
Ideally, the drivers who use Ann Arbor’s roads would pay for road maintenance. Commuters, who don’t live in Ann Arbor, but do use the city’s roads, would pay their fair share. That way, less of the burden would fall on Ann Arbor taxpayers.
Currently, the city does the opposite by using tax money to make driving artificially cheap. It does this by subsidizing parking structures that are are not self supporting. This makes the burden even heavier for residents. Commuters pay below-market rates to drive and park in Ann Arbor, and taxpayers get stuck with bad roads, high taxes, and traffic congestion.
The city can escape this trap by doing two things:
- Legalize private parking facilities and get out of the parking business.
- Consider replacing the city’s street repair millage with a road user fee.
Current Conditions
Road Quality
About half of our roads are in poor condition.
The Michigan Transportation Asset Management Council tracks road conditions across the state. Their data shows that Ann Arbor has 324 lane miles that are eligible for federal-aid. State and local agencies inspect these roads and judge their quality on a 1-10 scale. Roads that score 4 or less are considered poor. In Ann Arbor, 53% of major roads (172 lane miles) are poor.
Staff from the Washtenaw Transportation Study recommend that cities reconstruct poor roads, rather than just do maintenance. That means the the city needs to reconstruct 172 lane miles of major roads, and do preventative maintenance on the rest. Detailed data on local streets is unavailable, but many of them also need repairs.
Since 2006, the quality of our major roads has been stable.
Funding
Repairing our roads will cost several hundred million dollars.
A public service administrator gave me cost figures for repairing and reconstructing roads. Preventative Maintenance costs $52.5 per square yard, and reconstruction costs $112.5 per square yard. With these number, it is possible to make some rough estimates about the costs of repairing all of the city’s damaged roads.
A mile-long lane that is 12 feet wide lane has 7,040 square yards of surface area. As I discuss below, The city has 171.8 lane miles of major roads that need to be reconstructed. That means there are about 1,208,472 square yards of major roads that need to be reconstructed. This will cost about $136 million.
Data is only available for major roads, but the city also need to reconstruct many local roads. It also needs to do preventative maintenance on both major and local streets.
The city currently spends about $11 million a year on road repair.
The Budget contains a section called “Budgeted Capital Improvements by Project Type”, which shows annual street construction spending.
- 2016– $10.5 million
- 2015 – $8.0 million
- 2014 – $11.5 million
- 2013 -$13.9 million
- 2012 – $10.3 million
Over the last 5 years, the city has spent an average of $10.8 million on road repair. Almost all of this spending is paid for by the city’s street repair millage, which is a property tax that raises about $10 million a year. The federal government pays for the remainder out of Surface Transportation Funds. The State of Michigan’s Act 51 also provides some funding for routine maintenance like snow plowing and street sweeping, but not street reconstruction.
If the city does not increase its spending, it will not be able to do preventative maintenance on streets that are deteriorating. It will be more expensive to fix these streets later.
The city’s new funding plan is a positive step.
In March 2016, I met with the city’s public services administrator, Craig Hupy, and he explained the city’s new strategy to repair roads. Starting in 2016, the city will do much more preventative maintenance than it has in the past. This will prevent roads in decent condition from needing expensive maintenance later. The trade off is that some poor quality roads will not be reconstructed as quickly. Hupy showed me the city’s model’s for estimating future road quality, and they show that by 2015 only 17% of our roads will be in poor condition. There is also a chance that the State Government will increase local Act 51 funding, which could make improvements happen faster.
I support this plan, because there is evidence that preventative maintenance is more cost effective than letting roads deteriorate and then reconstructing them. However, it remains to be seen whether the city’s models are realistic. If they turn out to be correct, and our roads rapidly improve over the next ten years, the city can focus on offering better street services like:
- Faster repairs.
- Faster plowing.
- Higher quality roads that come with longer warranties.
- Sidewalk Plowing
- Pedestrian Infrastructure
- Road plowing when there is less than four inches of snow.
- Snow removal near parked cars and in bike lanes.
These needs will require long term funding.
Improvements
Long Term Funding
Ending the city’s parking monopoly would save millions each year.
The city bans private parking facilities and runs its own facilities. As I discuss on the parking facilities page, these facilities are not self-supporting. They require extra money from property taxes.
For example, the underground library lane parking structure loses about $2.0 million a year after accounting for debt payments. In a few decades, the debt for the structure will be paid off, but the investment will never be profitable after accounting for opportunity costs, because the $2.0 million a year could have been invested in much more profitable investments like preventative road maintenance.
A road user fee would have many benefits.
Ideally, the city could pay for road repairs with a user fee instead of property taxes. One way to do this would be to charge property owners a fee for each parking space they have. It would be easier to enforce this kind of fee if it only affected property owners with many spaces. A parking fee would have several benefits.
- It would charge property owners in proportion to the amount of traffic they create. This would give property owners an incentive to have less parking and create less traffic. It would also make drivers pay the full costs of their road use, instead of using taxpayer money to subsidize driving.
- It would provide a stable, dedicated source of road repair funding. Unlike general fund dollars, road-fee revenues could only be used for road repairs. The fee could be adjusted based on need, without the steps necessary for a millage.
- It would require the University of Michigan to pay for the road damage they create. The University does not have to pay any property taxes, but it does pay city fees. U of M already pays waste-water fees, and the city might be able to require it to pay a road fee.
A user fee might be legal.
The legal standard of whether a fee is truly a fee, and not a tax, comes from a recent Michigan State Supreme Court case Bolt vs. Lansing. Fees must serve a regulatory purpose, charge an amount proportionate to the service offered, and be voluntary. It seems to me that a parking space fee would satisfy this standard.
However, a lawyer who filed a brief in the Bolt case told me that the courts would probably not allow a parking fee, because it would amount to a city excise tax, which is not legal in Michigan. He also feels that Ann Arbor’s storm water fees are legally dubious. If elected, I would ask the city attorney’s opinion on the matter, and get outside legal opinions as well.
If a parking fee is not legally possible, it is worth considering other ways to replace the street millage with a road user fee. Perhaps the city could install sensors on the curb cuts to large parking lots, and send a bill to the property owners at the end of the year, with a fee for each vehicle leaving the lot.
Better Repair Methods
The city should repair roads more quickly.
The city currently doesn’t give contractors strong incentives to do repairs quickly.
The city repairs roads by accepting bids from contractors. Contracts usually include a penalty for lateness. If a project is not finished on time, there is a daily deduction from the contractor’s payment. For example, the recent contract for the Pontiac Trail improvements deducts $350 for each day past the 152 day deadline.There are two problems with this kind of contract:
- There is no incentive for the builders to finish before the deadline.
- The penalty for being late is not high enough. The project cost $2.6 million, so $350 is only 0.01% of the project’s cost. In contrast, a recent $2 million MDOT project had a penalty of $5000 a day.
A better approach is to use lane rentals, which charge contractors for each day that a lane is out of service. Research suggests that they can speed repairs by up to 50%. The Michigan Department of Transportation has an innovative construction contracting guide that recommends lane rentals and other incentives. The city should adopt these methods, and also consider incentives for contractors to make roads more durable. One way to do this would be to require a two or three year warranty for new roads, rather than the standard one year warranty.
If the city does not give speed incentives, there will be heavy traffic congestion when the city spends adequate amounts on road repair. The public services administrator told me that when the city spent $13.9 million in road repair in 2013, many people complained about the amount of traffic caused by construction.
The city should do more preventative maintenance.
Doing preventative maintenance on roads should be a top spending priority, because it saves money in the long term. The Michigan Department of Transportation estimates that doing preventative road maintenance is 25% cheaper than waiting for roads to deteriorate completely before reconstructing them.