City of Morgan Hill Adopted Budget FY 2016-17 and FY 2017-18

8. Budget Scenarios Having projected the Budget Needs of the City’s road network, the next step in developing a cost- effective M&R strategy is to conduct various what-if analyses. The PMP budget scenario module can project the effects of the different scenarios on pavement condition and deferred maintenance. By analyzing the effects on these indicators, the advantages and disadvantages of different funding levels and M&R strategies become clear. The following scenarios were run and analyzed for a five fiscal year period. Scenario 1 - Unconstrained Budget: In this scenario, the total budget amount for the next five fiscal years is defined by the Budget Needs, or where the budget is not constrained. In order to gradually reduce the backlog, as opposed to the heavy front-loading approach by Budget Needs, this scenario distributed the total Budget Needs more evenly over the next five fiscal years (i.e., Budget Needs divided by 5 for an annual budget). Scenario 2 - Current Budget Level: Planned budget of $1.43 million per year with 29.9% of PM applied for the next five fiscal years. Scenario 3 - Maintaining Current PCI: This scenario identifies a budget scenario to maintain the current PCI of 67 over the next five years. StreetSaver’s Target Driven Scenario module was utilized to calculate the optimum amount of rehabilitation and maintenance for this scenario over the next five fiscal years. Scenario 4 - Increasing PCI: This scenario identifies a budget scenario to improve the current PCI by 5 points from 67 to 72 during the five fiscal year period. StreetSaver’s Target Driven Scenario module was utilized to calculate the optimum amount of rehabilitation and maintenance for this scenario over the next five fiscal years. The annual budget amounts in the Summary of Results tables in this section do not precisely match the total amount of actual spending. This is because the annual budget amounts are available fund and actual spending amounts are calculated by the StreetSaver program and vary annually depending on the selected streets for a particular year.

City of Morgan Hill 8 Budget Options Report March 2016