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City of Morgan Hill 2 Budget Options Report
March 2016
This report recommends the City to increase its average annual budget to $5.4 million to increase its PCI
from 67 to 70 by FY2021 and maintain the Deferred Maintenance at $25 million level for the next five
fiscal year period.
In the last report in 2014, the PMS budget analysis recommended $4.0 million per year of budget to
raise PCI from 70 to 72.
2. Purpose
The purpose of this report is to assist the City in utilizing the budget options analyzed in the PMS.
This report assesses the adequacy of the current budget and identifies a recommended budget scenario
that meets the M&R needs recommended by the PMS and that will improve the City’s M&R strategies
over the next five fiscal years, and compares this cost to the City’s current budget. The following
criteria were used in identifying a recommended scenario:
•
PCI value
: Maintain network PCI at the current value or higher
•
Cost-effectiveness
: Allocate more funds to arterial/collector roads than residential roads with
appropriate PM ratio
•
Affordability
: Provide a realistic expenditure plan that can stabilize Deferred Maintenance or
minimize increase.
3. Definitions and Assumptions
Deferred Maintenance:
Dollar amount of maintenance and rehabilitation work that
should have been treated, but funding was not allocated.
Inflation Rate:
3%
Interest Rate:
3%
PCI Treated:
Future PCI value with budget allocation. It shows PCI trends
with limited or unlimited budget.
PCI Untreated:
Future PCI value without budget. It shows PCI trends “what
if there is no fund for certain period of time”.