Section 33.2-232 of the Code of Virginia

( https://law.lis.virginia.gov/vacode/title33.2/chapter2/section33.2-232/) directs that by November 30 of each year the Commissioner of Highways (Commissioner) is to report in writing to the Governor, the General Assembly, the Joint Legislative Audit and Review Commission and the Commonwealth Transportation Board (CTB). The content of such report shall be specified by the Board and shall contain, at a minimum:

1. The condition of existing transportation assets, using asset management methodology pursuant to § 33.2-352;

2. The methodology used to determine maintenance needs, including an explanation of the transparent methodology used for the allocation of funds from the Highway Maintenance and Operating Fund pursuant to subsection A of § 33.2-352;

3. The allocations to the reconstruction and rehabilitation of functionally obsolete or structurally deficient bridges and to the reconstruction of pavements determined to have a combined condition index of less than 60 and beginning with the November 2020 report, the methodology used to determine allocations of construction funds for state of good repair purposes as defined in § 33.2-369 and any waiver of the cap provided for in subsection B of § 33.2-369;

4. The performance targets and outcomes for (i) the current two-year period starting July 1 of even-numbered years and (ii) the following two-year period starting July I of the next even-numbered year. The targets and outcomes shall state what is expected to be achieved, based on funding identified for maintenance and state of good repair purposes, over each two-year period;

5. A listing of prioritized pavement and bridge needs based on the priority ranking system developed by the Board pursuant to § 33.2-369 and a description of the priority ranking system;

6. The Department's (i) strategies for improving safety and security and (ii) strategies and activities to improve highway operations within the Commonwealth, including the use of funds in the Innovation and Technology Transportation Fund established pursuant to § 33.2-1531 and improved incident management;

7. A review of the Department's collaboration with the private sector in delivering services;

8. Traffic modeling results for all federally funded projects requiring a multi-alternative National Environmental Policy Act analysis;

9. A list of transportation projects approved or modified during the prior fiscal year (i) in each transportation district pursuant to § 33.2-214.1, including project costs, and (ii) in each transportation district not subject to § 33.2-214.1; and

10. A listing, by transportation district for the prior fiscal year, of the total number of lane miles of all primary and secondary roads that (i) have been resurfaced with asphalt or sealant and (ii) based on records of the Department at the close of the fiscal year, reflect a rating of "poor" or "very poor."

The Virginia Department of Transportation 2017 Annual Report is submitted in response to Section 33.2-232. Generally, the Virginia Department of Transportation (VDOT) Annual Report presents a snapshot of the Agency's activities and programs including the Commonwealth's road system for the fiscal year that ended June 30, 2017. Unless indicated otherwise, information presented herein is based on FY 2017. Section 33.2-232 requires the CTB to specify the content of this report. The following web address links to the CTB resolution specifying the contents of this report:

http://www.ctb.virginia.gov/resources/2015/sept/reso/Resolution_Agenda_Item_11.pdf

The body of the Annual Report is comprised of five chapters.

Chapter I reports on the requirements set out in items 1 through 5, above and item 10. With the third largest state maintained network of highways and roads in the United States, VDOT uses an asset management process' (see Figure 14) along with industry recognized practices to determine the condition of asset inventories and determine funding required to maintain and operate the state maintained assets. While Chapter I discusses performance, condition and the funding needed to maintain these assets, Appendix A provides a more detailed and technical discussion of the needs methodology within the context of VDOT's asset management processes.

Performance metrics are key components of the asset management process and provide one mechanism for setting benchmarks and quantifying success. VDOT's performance metrics are also useful when VDOT is developing recommendations for areas of emphasis going forward.

Chapter I discusses asset management and performance for all assets, both pavements and bridges as well as other assets. Examples of such other assets include tunnels, ferries, safety rest areas, as well as traffic and safety items.

VDOT assesses the needs(*2) of the asset inventory it maintains annually. To give the reader context on the cost, if the VDOT maintained assets were built today, the cost would be approximately $400 billion.

When reviewing this report, the reader should be aware of the following related to the VDOT maintained assets:

• VDOT is focused on the performance of core assets (pavements and bridges).

• As of the date of this report, the cost required to bring all of the Commonwealth's pavements and bridges to a condition of fair or better (100% level of performance) is over $13 billion, the achievement of which is not feasible. Of the $13 billion, VDOT' s cost is $11 billion.(*3)

• The assets are aging and most were built over 50 years ago.

• VDOT has set statewide performance targets following asset management practice and industry standards (discussed later in the Condition of Existing Assets portion of the report).

• Based on the current statewide performance targets set by VDOT, the cost to fund the needs of pavements and bridges alone is about $1.8 billion. The $1.8 billion excludes any fully funded needs.

• VDOT costs to keep the core assets at a steady state in subsequent years after reaching VDOT's current statewide performance targets would be over $1 billion annually.

• VDOT has only been able to fund a portion of needs required for pavement and bridge assets to achieve statewide performance targets described later in the Summary of VDOT Needs vs. Proposed Funding section.

Figure I on page iv graphically depicts what is described above.

The Governor's 2015 Omnibus Transportation Bill (Chapter 684, 2015 Acts of Assembly) created the State of Good Repair Program (Code of Virginia Section 33.2-369). The State of Good Repair Program provides funding for work on pavements and bridges. The second enactment of Chapter 684 requires the CTB to develop a priority ranking system for the State of Good Repair Program. Pursuant to that requirement, the CTB approved, by resolution, the State of Good Repair Prioritization Process Methodology on June 14, 2016. A link to the resolution, including the Prioritization Process Methodology follows:

http://www.ctb.virginia.gov/resources/2016/june/reso/Resolution1.pdf

Chapter II responds to those items set out in item 6, to include VDOT's efforts to improve the safety of the motoring and non-motoring public along with an overview of the agency's security programs and protocols. Safety is paramount when developing and implementing any transportation project or program. This chapter also discusses VDOT's strategies and activities to improve highway operations, including the use of funds in the Innovation and Technology Transportation Fund. The final section of this chapter looks at VDOT's efforts to improve incident management.

Chapter III reports on VDOT's efforts in working with the private sector.

Chapter IV presents traffic modeling results for all federally funded projects requiring a multi-alternative National Environmental Policy Act analysis.

Chapter V addresses projects, by district, both subject to and not subject to § 33.2-214.1, approved or modified during the prior FY 2017.
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(*1) Asset management process is a systematic process based on economic, engineering and business principles that monitors the performance of transportation assets and aides in making informed decisions about managing the network over the assets' entire lifecycle. More details about VDOT's asset management process may be found in Appendix A of the report.

(*2) In this report "needs" refer to the costs for existing assets to achieve and/or sustain a State of Good Repair over time, where "State of Good Repair" is defined in Code of Virginia § 33.2-369.

(*3) This represents an update to information provided to the CTB in June of 2017 at which time the cost to bring all of the Commonwealth's pavement and bridges to a condition of fair or better (100% level of performance) was reported as $12 billion.