Methodology/Computations 

Approach to Valuing Infrastructure
VDOT Infrastructure Values June 30, 2000

Road Inventory

Factors

Interstate, Primary, Secondary, and Urban

Bridges, Culverts, and Tunnels

Right of Way

Depreciation

Work in Progress

Road Inventory - Factors

In developing a methodology to compute VDOT’s infrastructure value, many components, statistics and values were analyzed to develop average factors. VDOT suggests governments of the Commonwealth of Virginia take advantage of these average factors computed by VDOT when calculating infrastructure values. Please note, these factors were computed in the year 2000. In order to inflate these costs to current year values, we recommend you apply the appropriate rate from the Bureau of Labor Statistics Consumer Price Index which can be obtained at the website addresshttp://www.bls.gov/cpi/ .

Road Inventory - System

System	Average Cost to Construct One Lane Mile
Interstate	$                  1,874,055
Primary	$                     768,627
Secondary	$                     237,208
Urban	$                     779,775

Road Inventory - Bridges, Culverts, and Tunnels

Type	Average Cost to Construct One Square Foot
Bridges	$                             75
Culverts	$                           100
Tunnels	$                             20

Road Inventory - Right of Way

System	Average Cost per Acre	Right of Way Weighted Average Width in Feet per Mile of Road
Interstate	$                      13,608	265
Primary	$                      13,608	90
Secondary	$                      13,608	50
Urban	$                      13,608	90

 

Road Inventory - Interstate, Primary, Secondary, and Urban*

A. Determine lane miles by system, by year

B. Determine lane miles by system, by year related to bridges and tunnels

C. Determine current costs (FY00) to construct a lane mile of road by system

D. Determine a deflation factor by year, utilizing the Consumer Price Index

((A-B)*C)*D = VALUE 

*Please note, while VDOT does not consider Urban road inventory to be one of it's infrastructure assets, this same methodology used to calculate the value of Interstate, Primary and Secondary road inventory could be applied to the Urban system.

Road Inventory - Bridges, Culverts, and Tunnels

Bridges

A. Identify bridges, by year

B. Calculate the area (by square feet) or each bridge (length times width)

C. Determine the current cost (FY00) to construct one square foot of a bridge

D. Determine a deflation factor by year, utilizing the Consumer Price Index

(B*C)*D = VALUE

Culverts  

A. Identify culverts, by year

B. Calculate the area (by square feet) of each culvert (length * width)

C. Determine the current cost (FY00) to construct one square foot of culvert

D. Determine a deflation factor by year, utilizing the Consumer Price Index 

(B*C)*D = VALUE

Tunnels  

A. Identify Tunnels

B. Identify historical costs to build tunnels

Road Inventory - Right of Way

A. Determine miles, by system, by year

B. Determine average current cost (FY00) to purchase one acre of land

C. Determine acres per mile of road, by system as follows

• Determine average right of way width and road width by system
• Multiply the total average right of way width * the length of a mile (5,280 ft)
• Divide the total square feet per mile by the number of square feet in an acre (43,560)

D. Determine a deflation factor by year, utilizing the Consumer Price Index

((A*B)*C)*D = VALUE

Road Inventory - Depreciation

VDOT has selected to depreciate it’s assets utilizing the straight line depreciation method. We have estimated the useful life of a road to be 30 years and 50 years for structures and bridges*. Assets are depreciated as though they are held the entire year.

Shown below is an example of how VDOT’s June 30, 2000 road inventory assets were depreciated using this methodology:
(Columns A thru E)

Year	Road Value	One Year's Depreciation (Column B * Factor X)	Years of Accumulated Depreciation	Accumulated Depreciation (Column C * Column D)
1970	$181,538,570	$    6,051,286	30	$181,538,570
1971	119,686,188	3,989,540	30	119,686,188
1972	109,210,085	3,640,336	29	105,569,749
1973	43,637,279	1,454,576	28	40,728,127
1996	67,530,148	2,251,005	5	11,255,025
1997	145,352,852	4,845,095	4	19,380,380
1998	141,892,196	4,729,740	3	14,189,220
1999	167,833,089	5,594,436	2	11,188,873
2000	352,988,389	11,766,280	1	11,766,280

Depreciation life for roads 30 Years
Depreciation rate for roads 0.0333 (Factor X)

The same methodology could be applied to structures and bridges using a depreciation life of 50 years and a rate of 0.020.

*VDOT had decided to use a life-cycle design basis for their facilities.  Pavements and bridges are a substantial part of the cost of VDOT's total assets.  In this regard, VDOT's road pavements and bridges are designed for a 30-year and 50-year life, respectively.

For roads, VDOT uses a 30 year life-cycle cost analysis when designing the road and in determining whether to use asphalt or concrete.  Although asphalt generally lasts 10-12 years, while concrete lasts 30, VDOT engineers factor in 2 overlays to the cost of the road for a 30 year useful life expectancy.  This allows them to determine the most cost efficient road surface.  The same reasoning and life-cycle cost analysis is used when designing bridges.  Because the roadways and bridges are designed for a specific useful life, VDOT felt that this would be the best indicator of useful life, as well as the simplest.

Road Inventory - Work in Progress

The average time period to complete a road construction project is 24 months. Based on this, construction expenditures for the fiscal year, two years prior will be capitalized and classified as "work in process" (i.e. in FY01, expenditures for FY99 will be classified). This method of classifying capital expenditures was selected as opposed to tracking each construction project on an individual basis.

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