Transport and Energy

How to pay for roads that are not used often

Wednesday August 16, 2017 Julian Williams

BERL developed guidelines for road controlling authorities in consultation with the Road Controlling Authorities Forum. The guidelines provide a process to:

 

  • Calculate pavement consumption on low volume roads caused by industrial land-use.
  • Allocate the cost to industrial ratepayers, in an equitable way, using rules prescribed by local government legislation.

 

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A large proportion of pavement consumption on local roads occurs on low volume roads, caused almost entirely from commodity cartage. The Special Interest Group – Low Volume Roads (SIG-LVR) of the Road Controlling Authorities Forum (NZ) (RCA Forum) has sought to provide a process for:

 

  • Calculating pavement consumption on low volume roads caused by industrial land-use.
  • Allocating the cost to industrial ratepayers, in an equitable way, using rules prescribed by local government legislation.

 

The long-term pavement consumption by heavy commercial vehicles (HCVs) can be estimated in terms of Equivalent Standard Axles (ESA) per hectare of industrial land-use for the inputs and outputs of specific industries. Local authorities can calculate rating charges for ratepayers corresponding to their proportionate share of pavement maintenance costs using the total ESA by industry in their district allocated pro-rata to the land area in production for each ratepayer.

 

This allocation is reasonable for primary industries where production and hence pavement consumption is proportional to land area. In general this occurs for forestry, dairy farming and sheep and beef farming. For impacts not associated with land area, the method allows this area-based allocation to be further adjusted to account for:

  • Distance travelled on roads by HCVs from land in different locations.
  • Intensity of production arising from farming types that differ significantly from a national average (such as for the five classes of dairy farming and eight classes of sheep and beef farming).
  • Intensity of production, where this is influenced by factors other than land-area (such as for quarrying, processing of dairy, meat and wood, and port activities).

 

Alternatively, the method allows for allocations not associated with land area to be based on land value or capital value.

 

A stepped methodology is provided that shows equitable allocation of total roading costs, which is the sum of: (i) pavement consumption maintenance costs, allocatable as a targeted rate using these guidelines; (ii) fixed road maintenance costs, allocatable as a uniform general charge to each ratepayer; and (iii) other pavement maintenance costs, to be decided by Councils, allocatable as a uniform general charge to each ratepayer.

 

We recommend Councils use the method presented in this report as guidance to allocate long-term pavement maintenance costs for low volume roads. The method is not a prescription and there is no one “best” allocation formula for all. The Guidelines provide a consultative process to calculate industry impacts on local roads. Early engagement and collaboration between Councils and industries within their districts, with proactive information sharing, is likely to lead to better outcomes for all parties and is recommended.

 

It is important for Councils to be pragmatic and transparent. Hence we recommend that Councils emphasise simplicity when applying the method, as demonstrated in the worked example provided. Councils must consider outcomes such as benefits for all ratepayers from maintaining low volume road pavements. This task should be done with regard to the materiality of the outcome for pavement maintenance costs of low volume roads. We urge Councils to adopt a consistent approach to setting allocation formulae and recommend that Councils cooperate in setting allocation formulae.

 

Contributions for new developments, environmental impacts or public-private partnerships are not addressed by these Guidelines.

 

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