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122 APPENDIX E SURVEY RESPONSES: FACTORS AFFECTING BUDGETING The budgeting component of the study survey elicited agency responses on the importance of several factors to budget development. These factors included the following: x Importance of previous budgets on the current budgeting cycle: the budget in the previous cycle, and the budget in the previous fiscal year. x Importance of "top-priority" designations to the budgeting process: first priority given to preservation, first priority to bridge replacement and major bridge capital projects, and first priority to major bridge projects with the balance to the remainder of the bridge program. x Importance to budgeting of methods of determining needs or identifying projects: needs determined by BMS-assisted estimates tempered by engineering judgment; needs determined by districts, MPOs, or others through a bottom-up process; and needs analyzed in terms of the political jurisdictions in which major bridge projects or replacement projects occur. x Importance of different tradeoff analyses to budgeting: tradeoffs based on subjective executive and managerial judgments; tradeoffs analyzed across bridge maintenance, rehabilitation, and replacement needs; and tradeoffs between the bridge program and other transportation programs. x Importance of project delivery method to budgeting: performance of bridge work by in-house forces versus contract forces. Respondents rated the importance of each factor on a scale of 1 (unimportant) to 5 (very important). Results are presented in a series of histograms that allow for easy comparison. For each budgeting factor, its histogram shows the numbers of responses by degree of importance, 1 through 5. The histograms are drawn compactly so several can be viewed at a time; the horizontal and vertical scales in each histogram are identical so they can be readily compared to one another "by eye." Up to 21 respondents participated in this survey component; the exact numbers that answered each question varied from 17 to 21, however, which also affects the heights of the histogram bars. The basic shape of a given histogram enables one to get a quick impression of the overall importance of that budgeting factor as judged collectively by the survey respondents. For example, a histogram skewed to the right (value of 5 on the horizontal scale) indicates consensus on the high importance of that factor to budgeting. A skew to the left (value of 1 on the horizontal scale) reflects agreement that it is unimportant. A distribution with a central peak (i.e., many ratings at or around 3 on the horizontal scale) indicates relative indifference to that factor in budgeting. A uniform distribution (equal numbers of responses for each rating 1 through 5) indicates the absence of consensus on the importance of that factor--for every agency that claims the factor to be significant, there is another indicating its lack of significance. Of course, a given histogram may combine more than one of these simple patterns. The results of this budgeting survey component reinforce in several ways the findings in chapter three on agency bridge management approaches and organizational roles in bridge decision making. The budgeting results are presented below in a series of figures displaying the histograms for each factor that was evaluated by the survey participants.

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123 Figure E1 compares the factors representing previous budget levels, whether the amount submitted in the prior budgeting cycle or as expended in the last fiscal year. Results likely reflect the degree to which budgeting is based on some prior level plus adjustments such as for inflation or updated revenue projections or splits. Opinions in both examples in Figure E1 are divided, with the previous fiscal year receiving a somewhat greater vote of importance. These varying opinions may be driven by the mix of federal versus state dollars that are funding an agency's bridge program, and how the state dollars are allocated. Federal bridge program dollars are dedicated and the apportionment is known beforehand. State funding depends on variable revenue projections and may be subject to competition with other state programs, although some states report taking bridge funds "off the top" or using set-asides. The inconclusive results displayed in Figure E1 likely reflect differing state situations and practices regarding funding mix and allocation in budgeting. Budget level in previous cycle 1 2 3 4 5 Budget level in previous fiscal year 1 2 3 4 5 FIGURE E1 Importance of previous budgets on current budgeting cycle. Figure E2 addresses the influence of different top-priority activities or projects on budgeting. Of the three options shown, replacement projects and major bridge projects were reported to have the strongest influence on budgeting. Bridge preservation as a first priority was judged to be moderately important, although some agencies rated this factor as minimally important. This difference of opinion may be due to varying composition and condition of agencies' bridge inventories. The third option, giving first priority to major bridge projects solely, received comparatively little support as an influence on budgeting, probably because major bridge projects are relatively few. Rather, bridge replacement work tends to drive the application of federal (and matching state) dollars in budgeting, according to the interviews with DOT bridge managers.

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124 First priority to bridge preservation 1 2 3 4 5 First priority to bridge replacement and major capital projects 1 2 3 4 5 First priority to major bridge projects with balance to rest of bridge program 1 2 3 4 5 FIGURE E2 Importance of "top-priority" designations to the budgeting process. The importance of different methods of compiling and expressing bridge needs is illustrated in Figure E3. The use of a BMS combined with professional judgment is unambiguously felt by respondents to be of paramount importance to budgeting. The interviews with bridge managers affirm that both elements of this statement are relevant: an agency's bridge management system irrespective of its analytic design, condition and performance measures, and decision-support algorithms; and the professional judgments of the agency's executives and managers, which are applied to evaluate and refine the BMS results. The second graphic in Figure E3 reflects the importance of DOT field offices, regional and metropolitan planning organizations, local governments, and other stakeholders in prioritization and project selection under new planning and programming guidelines initiated in ISTEA. The third graphic in Figure E3 demonstrates the relative unimportance of the jurisdictional distribution of major bridge projects and bridge replacement projects to statewide budgeting. Major projects are relatively few in number and, unless mandated by law, are judged on their individual merits. Bridge replacement is typically driven by NBI and other findings on structural or functional deficiency. Because they are costly, bridge replacements and major projects are often funded using federal bridge program monies, unless other mechanisms such as bonds backed by toll revenues or public-private partnerships are used. In any case, the jurisdictions in which these projects are located are not the main drivers of programming and budgeting.

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125 BMS-assisted estimates of bridge needs f tempered by engineering judgment 1 2 3 4 5 Bridge needs determined in districts, MPOs, etc. -- "bottom-up" process 1 2 3 4 5 Political jurisdictions in which major bridge projects or replacement projects occur 1 2 3 4 5 FIGURE E3 Importance to budgeting of methods of determining needs or identifying projects. MPOs = Metropolitan Planning Organizations. Agencies have different perspectives on tradeoff analyses, and the variability in survey ratings of the importance of these analyses to budgeting reflects this diversity. One point agencies do agree on is the key role of professional judgment in assessing tradeoffs (first graphic in Figure E4), reinforcing the findings in Figure E3 regarding subjective managerial judgments in needs estimates as well. Surveyed opinion on tradeoffs among bridge treatments is very mixed (second graphic, Figure E4), probably due to the variety of programming methods and criteria used among agencies and the different ways in which budget constraints are dealt with. The third aspect of tradeoff analyses in the survey--to evaluate resource allocation between the bridge program and other programs--was not rated highly in importance by the respondents. The reasons very likely are as follows: x Bridge projects involving replacement, substantial rehabilitation, and major structures typically involve federal bridge program funding, which is a dedicated source and not subject to tradeoffs. Matching state money, which might be subject to tradeoffs, is often (according to interviews) taken off the top or from set-asides. Even if this portion of state funding is theoretically subject to competition and, therefore, tradeoff analysis, many agencies regard a full state match of available federal funding as a high priority in itself. x This type of program-level tradeoff is high-level, involves several executive and organizational units within a DOT, and may occur early in the resource allocation process. It may therefore be viewed as somewhat removed from the nuts-and-bolts of subsequent budgetary decisions.

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126 Tradeoff analysis based on subjective judgments of top managers and f professionals 1 2 3 4 5 Tradeoff analysis among bridge maintenance, rehabilitation, and f replacement needs 1 2 3 4 5 Tradeoff analysis between bridge and f other transportation programs 1 2 3 4 5 FIGURE E4 Importance of different tradeoff analyses to budgeting. The final factor that was evaluated by budget survey respondents is the proposed method of bridge project delivery: in-house forces versus contracted forces. Results in Figure E.5 indicate a very strong rejection of the importance of this factor to budget decisions. Analysis of bridge work by delivery f method -- in-house vs. contract 1 2 3 4 5 FIGURE E5 Importance of project delivery method to budgeting. A more general way to assess the overall relative importance of these factors to budgeting is to identify those that received the greatest number of responses in categories 4 and 5. The four factors that were judged most important according to these criteria are listed below, with the percentages of total responses they each received: x BMS-assisted estimates of bridge needs tempered by engineering judgment (67%). x Tradeoff analyses based on subjective judgments of top managers and professionals (67%). x Bridge needs determined in districts, MPOs, etc.--i.e., a "bottom-up" process involving other stakeholders (62%). x First priority to bridge replacement and major capital projects (52%). Other factors received votes from less than a majority of the respondents.

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