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Maintaining Traffic Sign Retroreflectivity: Impacts on State and Local Agencies

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5. National Impacts Assessment

5.1. Approach to Update the 1998 National Impact Assessment

The 1998 national impact assessment (Reference 6) described efforts to estimate the cost of bringing traffic signs into compliance with the proposed minimum maintained retroreflectivity levels across the nation, and developed a model to predict the costs to State and local agencies. The 1998 impact model has the following features:

• The density of various sign types per road mile, and their retroreflective condition, were compiled from data from two States and seven local agencies;
• Sign density distributions were translated to national levels by expanding the mileage in the study to the national mileage for similar roadways;
• Costs for sign face upgrading and replacement were derived from data on sign management processes gathered from 19 State and local agencies;
• Average values for sign size were used to estimate sign replacement costs;
• Data on sign retroreflectivity conditions were used to estimate the percentage of signs that did not meet the minimum levels specified in the 1993 tables; and
• Costs for sign replacement were based upon results of an agency survey (these results were noted to have a high degree of variability due to differences in agency practices and accounting methods).

The model was limited to signs manufactured with Type I and Type III sheeting. It was assumed that 50 percent of Type I signs would be upgraded to Type III, and all Type III signs that required replacement would be replaced with new Type III signs.

The model is considered fundamentally sound, but uses total sign replacement costs, and not the marginal cost of upgrading sign sheeting, to generate an estimated impact. These costs are believed to be an over-estimate of the impacts on State and local agencies since they are based upon full sign replacement costs outside of planned maintenance cycles for traffic signs.

Since there are no known recent studies that have led to new information on sign performance or the compilation of data on the retroreflectivity of existing signs, it was decided to use the same model to update the national impact assessment, with the following assumptions and revisions:

• It was assumed that the distribution of signs by type has remained essentially the same and that the sign density along State and local roads is similar to the conditions that existed when the 1998 impact assessment was conducted;
• Updated State and local mileage were obtained from Highway Statistics 2005;
• The assumption was made that Type III materials can be used to meet the minimum maintained retroreflectivity levels for the majority of signs; and
• Although proposed minimum maintained retroreflectivity levels have been updated, the current values are similar to the 1993 proposal, and thus it was assumed that there is no appreciable difference in the percentage of signs that need replacement.

5.2. Updated National Impact Assessment

The updated National Impact Assessment is intended to generate an improved estimate of the cost to State and local agencies of bringing the national sign system into compliance with the proposed minimum maintained retroreflectivity levels. This assessment includes an analysis of the marginal cost difference between sheeting materials in the sign face material costs for each subset of traffic signs. First, the model was used with weighted sign replacement cost factors that were scaled to reflect only the differential costs for higher performance sign face materials. This provides national impact estimates for regulatory, warning, and guide signs. Second, an estimate of the number of street name signs was generated and the costs associated with upgrading the sign faces for this subset of signs was computed. Last, the number of overhead guide signs was estimated and associated sign face upgrade costs were used to determine the cost impacts. The three estimates were then combined to determine the overall cost impacts. The methodologies, assumptions, inputs, and resulting estimates for each sign group are described below.

It is understood that there are several factors that affect the accuracy of the impact assessment. The most important are the actual number of signs that need to be replaced, and the distribution of signs by type along the roads. The numbers of signs that need to be replaced are based on agency reported data. These may represent proactive agencies, with lower than average percentages of non-compliant signs. The distribution of signs by type was also based on a relatively small sample set, which did not include every sign type. The 1998 study consolidated the sign types in large groups, as a means of reducing the possible errors due to missing sign types, but the data are still limited.

5.2.1. Regulatory, Warning, and Guide Signs

Previous estimates of the impact to bring sign systems into compliance with proposed minimum retroreflectivity requirements were based on total sign replacement costs, which included the costs for sign face materials, sign substrate, sign supports, and other elements. Since a key facet of the proposed rule is that agencies will be allowed to bring their signs into compliance over time, with a significant portion of sign replacements conducted during normal sign maintenance activities, the impact of the proposed rule is primarily due to the difference in cost of sign face materials. It is assumed that the most fundamental upgrade that agencies will select is to replace Type I sheeting with either Type III or Type IV sheeting. An additional impact is the conversion of the white legends and borders on post-mounted guide signs from Type III to Type VII, VIII, IX, or X sheeting. The total impact to State agencies is calculated using data on the four sign groups from Reference 6 (specifically the calculation of average sign size and the number of signs that need to be upgraded) and the current cost difference in sign face materials, plus the cost of upgrading sign legends. The results for State agencies are shown in Table 7 and the results for local agencies in Table 8.

Therefore, the cost impact for State highway authorities to upgrade all regulatory, warning, and post-mounted guide signs to meet proposed minimum maintained retroreflectivity levels will be approximately $5 million, and for local highway agencies will be slightly under $12 million.

An agency's past attention to signs will influence how many signs will need to be replaced. There will be costs in future years as currently acceptable signs age to the point that they need replacement.

5.2.2. Street Name Signs

The 1998 model did not include street name signs and there is no known source of data about the number and condition of these signs on the road network. To address this shortcoming, an analysis was undertaken using an estimate of 3 million intersections in the country, with approximately 10 percent of those signalized (estimate obtained from the FHWA's Office of Transportation Operations). This estimate has been regularly used in their analyses of traffic control needs. For this analysis, street name signage was considered to be different for signalized and unsignalized intersections with an average of eight large overhead sign panels assumed for signalized intersections and an average of six smaller signs assumed for unsignalized intersections.

It was assumed that 20 percent of all street name signs would need to be replaced, which is more than twice the percentage required for regulatory, warning, and guide signs. In addition, signs at signalized intersections will be upgraded from Type I to microprismatic sheeting, while signs at unsignalized intersections will use Type III or Type IV sheeting. The resulting estimate is provided in Table 9.

The impact to upgrade street name signs at all intersections to meet the minimum maintained retroreflectivity levels is estimated to be approximately $16 million, with a $1.6 million cost per year under a ten year implementation period. Lacking any specific information on the distribution by agency type, it was assumed that the impact would be proportional to road mileage. Thus, the impact to upgrade street name signs would be approximately $3.3 million for States and $12.3 million for local agencies, with the remainder under Federal jurisdiction.

5.2.3. Overhead Guide Signs

The numbers of overhead signs are estimated in two manners: using data received from 16 States, and using the sign densities for post-mounted guide signs found in Reference 6. The States that responded to an inquiry through the various FHWA Division Offices represented approximately 30 percent of the State-maintained highway mileage. The overall sign density for overhead signs was just over 0.11 signs per mile. The sign densities for post-mounted signs for State and local highways, with values of 0.38 and 0.06 signs per mile, respectively, provided a much higher estimate of the number of overhead guide signs. Averaging the two numbers resulted in a national estimate of 280,000 overhead guide signs.

The impact of upgrading the legends on overhead guide signs was determined using an average overhead sign panel size of 12 by 8 feet, with the legend accounting for no more than 10 percent of the sign face. The estimate assumed that the sign background would remain Type III or Type IV sheeting, while legends are upgraded to Type VII, VIII, IX, or X sheeting. The impact of upgrading all overhead guide signs with microprismatic legends is described in Table 10.

The impact to upgrade the legends on all overhead guide signs to meet the proposed minimum maintained retroreflectivity levels is approximately $5.4 million, which would be spread over a ten-year implementation period. The distribution by agency type was assumed to be the same as for post-mounted guide signs, as discussed in Reference 6, which is approximately 65 percent State and 35 percent local agencies. Thus, the impact to upgrade overhead guide signs would be approximately $3.5 million for States and $1.9 million for local agencies.

5.3. Overall Costs

The overall impacts to State and local agencies can be estimated by adding the sign face improvement costs for each subset of signs - regulatory signs, warning signs, post-mounted guide signs, street name signs, and legends on overhead guide signs. Table 11 provides the individual and consolidated estimates.

With implementation periods of seven years for regulatory, warning, and guide signs and ten years for street name signs and overhead guide signs, the annual impacts will be $4.5 million for years 1 though 7, and $2.1 million for years 8 though 10. There will be additional expenses in later years, as existing signs fall out of compliance and are replaced. However, many of these signs will likely not require upgrade, but will be replaced in kind during their normal servicing intervals. Also, the impact for the upgrade of overhead guide signs assumes that the legends on 100 percent of overhead guide signs need to be replaced, even though many States already use microprismatic sheeting for the legends. Thus, the estimated $37.5 million in costs that are directly attributable to the proposed rule are likely to be an over-estimation.

A 1992 survey conducted by the American Traffic Safety Services Association (ATSSA) reported that the total combined sign budgets for 37 State DOTs was $138 million per year; an average of $3.7 million per year per State. This implies a national total for the States alone of $185 million per year in 1992. Inflating this cost using the change in consumer price index from December 1992 to December 2006 (42.2 percent) results in an estimate of the total combined sign budget for the States of $263 million per year. The $1.4 million estimated additional annual costs for years 1-7 for State agencies would represent only a 0.5 percent increase in costs. Similar data are not available for local agencies. While their budgets may not provide as much funding per sign as is available to the States, the cumulative local agency budgets should still be commensurate with the greater number of signs under local jurisdiction. Thus, while it is not possible to generate a specific estimate of the percent increase in annual cost of signs for local agencies, it should be a relatively small percentage of the overall budget.

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