Transportation Asset  Management ‐THE BUSINESS OF DOING BUSINESS ‐

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Agenda • • • • • •

Introduction What is Transportation Asset  Management? Why Transportation Asset  Management? g How do we get there? C l i Conclusion SELF ‐ASSESSMENT

What is Transportation Asset Management ? Working Definition • No “definitive” definition • Bottom-line: Cost-effective resource allocation and programming i decisions d i i

What Is Transportation Asset  Management? A strategic approach to managing  t transportation infrastructure t ti i f t t Specifically Getting the Best Results/Performance for the Preservation,  Improvement, and Operation of Infrastructure Assets Improvement, and Operation of Infrastructure Assets  Given the Resources Available

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Asset Management

The Ultimate Question Q Search of Better Network  Investment Decisions and  Strategies How do I make limited budget  dollars stretch and provide a public  works system that offers a high  level of service? level of service?

What is Asset Management ? Key Elements Engineering

Economics

Business P Practices ti Combines Engineering business Engineering, management, economics, and the latest computer-aided technology.

What is Asset Management? What is Asset Management? • Systemized Systemized method of determining optimum  method of determining optimum allocation of funds for infrastructure items • True asset management involves more than  one type of inventory f • Typically computerized

Asset Management Systems g y A Vision …the Management System, through its computer network,  gobbles up all kinds of data from within the agency that is  even remotely associated with transportation systems. It even remotely associated with transportation systems.  It  then proceeds to : –make sense of the data –determine rehabilitation timing and select projects  –select optimum design –programs it i –follows it through construction quality control –tracks performance on every project cycle –tracks performance on every project cycle

What Is Transportation Asset  Management? • A philosophy p p y – – – –

Policy based Performance Driven Comprehensive Long term 

• A process – Investment choices, tradeoffs, decisions Investment choices tradeoffs decisions – Organizational roles and responsibilities  – Improved horizontal and vertical communication

• A set of technical tools – Data Acquisition and Management Systems – Integrated Analysis/Performance Prediction g y – GIS 9

Asset Management Asset Management

THE OBJECTIVE? THE OBJECTIVE? Invest wisely to maximize the  Invest wisely to maximize the return (raise the level of  service of the public system) service of the public system)  through a program that  balances long‐term and short‐ term maintenance strategies

What at is s Asset sset Management? a age e t Broad Range of Assets Highway Dollars People Data

Pavements Bridges Hardware Tunnels Signals Rest Areas i i i

Transit Tracks Rolling Stock Stations i i i

Air

Runways R Terminals Hangers i i i

Assets Typically Managed Assets Typically Managed • Typically limited to public works items Typically limited to public works items – Pavement – Sewers – Signs/markings/traffic control devices – Fire engines/police cruisers/ambulances g /p /

• Sometimes includes “soft” assets – Public education – Professional training – Public services

Right‐of‐Way Landscaping

Utility  poles

Traffic Signals Traffic Signals

Signs

Striping

Curb and Gutter

Manholes and  inlets

Sidewalks

Three‐Dimensional Three Dimensional Matrix  Matrix Structure Highway Facility

System Objective

Pavement

Service

Bridge

Operational Function

Condition

Roadside

Planning

Safety

Traffic Control Device

Design

Cost

Construction Condition Evaluation

Socioeconomic Factor Energy

M i t Maintenance

D t M Data Managementt

Improvement

Asset Management Asset Management • Goal – Use in both the short‐ and long‐term decision‐making in  the planning, budgeting, and operating functions so the  assets stays at the highest condition level.

• Items needed – Inventory  – Condition assessment,  – Asset valuation  – Performance prediction measures and trend indicators – Cost estimates of options and resulting impacts – Engineering/economic optimization tools.  Engineering/economic optimization tools

Framework for AMS Asset Inventory Central Database

Analysis Modules

Location/ Asset Referencing Systems Report Modules Graphics - Summaries - Map Links

Location/Asset Referencing  Location/Asset Referencing System • Geographic location • Reference system • Identifiers for equipment q p

Typical Data Elements Typical Data Elements • • • • • •

Identification Location Geometry C Cost Pavement Structure & History Traffic

Two Important Rules Two Important Rules • Collect only the data you need!

• Collect the data only when you need it!

Why Asset Management Driving Trends Technological Advances • Increasingly powerful computers • Sophisticated analytical tools and techniques • Advances in information technology

Integration with Current AMS Integration with Current AMS • PMS PMS  and BMS are a subset of AMS and BMS are a subset of AMS • Cities often have GIS/databases in place to  track inventory for GASB 34 track inventory for GASB 34 – Inventory and condition data – Little analysis capability Li l l i bili

• Output of these software packages used as  input for AMS

Integration with Current AMS Integration with Current AMS AMS GASB 34 Database

Budget simulation  Budget simulation report for mayor or  city manager

Sewer Condition Other D t b Databases

BMS

PMS

What Do We Do With the Data? • Database/GIS • Management  system • Image archives

Asset Condition Asset Condition

Data Integration Data Integration

Historic Approach Historic Approach • Asset‐by‐Asset Basis A t b A tB i – Preservation strategies were reactive  – Maintenance approach were reactive  • i.e. Fix the worst pavements

• Limited Investment on good / fair  structures • Limited review on investment history

New Approach New Approach • • • • •

Develop Long Develop Long‐Term Term Network Goals Network Goals Emphasize Preservation P Proactively Manage Deterioration  i l M D i i Develop Comprehensive Maintenance Plan Commitment to Allocate Necessary Resources

Principles  Principles • Policy‐based Policy based and Performance and Performance‐driven driven • Evaluate full range of options and tradeoffs • Investment decisions based on relative merit  d ii b d l i i reflecting costs and consequences • Strengthen credibility and accountability by  monitoring system performance and  reporting results

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Why Asset Management D i i Trends Driving T d Transportation Environment • System y Demands • Personnel Constraints • Increased I d Budget B d t Demands

Why Asset Management Driving Trends Accountability • Wh Whatt is i Bought B ht with ith Public P bli Funds • How Spending Decisions are made • What is Accomplished

IS IS IT HERE TO STAY? IT HERE TO STAY? • Can we defend not being strategic – g g not being  g comprehensive, long‐term, policy driven,  performance based? • Can we defend not considering options and  d f d d d tradeoffs? • Can we defend not setting performance goals and  Can we defend not setting performance goals and not measuring results? gp j y • Can we defend not being positioned to justify our  resource requests?

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CAN IT HELP YOU? CAN IT HELP YOU? • Systematic approach to defining needs and options • Improved use of available resources • Improved credibility and accountability for decisions • Improved performance and service to customers • Flexibility to make decisions based on performance Fl ibili k d ii b d f Improved communication and collaboration within your  communication and collaboration within your • Improved agency 36

Why Asset Management Driving Trends GASB Statement No. 34 • New Financial Reporting Requirement for Agencies • Requires R i R Recording di off LongL Lived Infrastructure • Depreciation or Preservation ((Asset Management) g ) Approach pp

In a Nutshell In a Nutshell • Governments generally don’t depreciate their  assets and the private sector does, but now  the rules have changed !!

GASB Statement No. 34 GASB Statement No. 34 Impact to Your Agency • Report information about public  infrastructure assets • Report on the overall state of the agency’s  h ll f h ’ financial health, not just individual “funds” • Provide comprehensive information  Provide comprehensive information reflecting the cost of delivering services to  citizens • Provide alternative methods for reporting  the condition of infrastructure assets

Key Asset Management System  Key Asset Management System Components to Support GASB No. 34 • • • •

Asset inventory database Asset valuation processes Performance measures and standards Performance measures and standards Condition assessment processes

Key Asset Management System  Key Asset Management System Components to Support GASB No. 34 • Asset management  planning/programming systems ‐ Pavement management systems ‐ Maintenance management system • Depreciation • Modified • Depreciation

Issues with AMS—New Issues with AMS New Technology Technology • No standards beyond GASB 34 No standards beyond GASB 34 – GASB 34 covers reporting, not analysis – If PMS standardization is any indication,  If PMS standardization is any indication, there will never be a “standard” analysis  method

• Limited software availability Li it d ft il bilit – Little interest in AMS until computers  became powerful enough to perform the became powerful enough to perform the  required calculations – Software would be customized for selected  analysis method analysis method

Key Asset Management System  Key Asset Management System Components to Support GASB No. 34 • Asset renewal/replacement analysis  methods ‐ Life‐cycle costing ‐ Cost‐effectiveness analysis C ff i l i ‐ Equivalent annual cost ‐ Longevity cost index • Asset disposal policies and procedures

Issues with AMS—Analysis Issues with AMS Analysis Methods Methods • Two methods popular with PMS software Two methods popular with PMS software – Cost‐to‐benefit ratio • DSS, AirPAV DSS AirPAV • Considered technically superior • More difficult to implement

– Funding by priority • MicroPAVER • Difficult to assign priorities across asset classes

• Other methods available

Cost‐to‐Benefit Cost to Benefit Ratio Method Ratio Method • Determine Determine how much value is added to a  how much value is added to a given asset (benefit) for different M&R  activities • Benefit is usually defined as the area under a  condition curve condition curve • Determine the cost of each M&R activity • The lower cost‐to‐benefit ratios are better

Cost to Benefit Ratio Cost to Benefit Ratio M&R and resulting deterioration  curve Conditio on

Benefit

Deterioration curve Deterioration curve

Age

Funding by Priority Method Funding by Priority Method • A Assets within classes are assigned priorities,  t ithi l i d i iti e.g., primary and secondary streets • Asset classes are assigned priorities, e.g.,  A l i d i ii streets are funded before sidewalks • The intra‐ h and inter‐class priorities are  d l multiplied together to create a priority matrix • This matrix is combined with condition to  determine which projects are recommended

Funding by Priority Method Funding by Priority Method Bridge  R k Rank High

Priority

Asset

Priority

1

Bridges

1

Medium

2

Streets

2

L Low

3 Sewers

3

Street  Rank High Medium

Asset priority table

Priority Bridges

Roads

Sewers

High

1

2

3

Medium

2

4

6

Low

3

6

9

1 2

Low

3

Sewer  Rank High

Priority

Medium

2

Low

3

1

Multiply asset priorities

How to Start ‐ An Example How to Start  An Example Pavement Condition Forecasting System Pavement Condition Forecasting System

• Need for Network Level Modeling Tool • Modeling Information  d li f i – Deterioration Rates – Historic Costs Data – Network Impacts of Work Activities

• Assess Current Business Practices

Strategy Development gy p An Example • Consider Impacts of Historic Approach • Recognize Benefits of Capital Scheduled  Recognize Benefits of Capital Scheduled Maintenance and Capital Preventative  Maintenance • Acknowledge 53% of Network is “Fair” • Good‐Fair‐Poor Distribution Drives Mix of Fixes G dF i P Di t ib ti D i Mi f Fi • Iterative Process for Varied Mix of Fixes &  F di L l Funding Levels

Pavement Network Goal Pavement Network Goal • Preserve Preserve the pavement network to insure  the pavement network to insure safety and serviceability, while optimizing all  available resources available resources. – Pavements of Critical Concern:  address 100% P t f C iti l C dd 100% – Freeway:  95% Good or Fair by 2008 – Non‐Freeway:  85% Good or Fair by 2008  d b

How Do We Do That? How Do We Do That? • Choose pavement types and rehabilitation activities so  that the flow of dollars into the pavement system are that the flow of dollars into the pavement system are  maintained at the lowest, constant level possible, yet  maintain the pavement in the an acceptable condition. p p • Key issues: – Average years of service remaining – Preservation procedures (Mix of Fixes) • Activities used to extend pavement life.  

– Network impacts – LCCA and total pavement costs

Preservation Categories “Mix of fixes”

• • • •

Maintenance Restoration   Resurfacing  f i Reconstruction – Last 3 are known as 3R – Which is used depends on existing condition.

Maintenance Maintenance activities maintain serviceability • High Benefit, Low User  I Impact • Manages Deterioration  Rates on “All” Rates on  All   Structures • Delays Category Drop  on “All” Pavements “ ll”

150

100

50

0 0

1

2

Poor

3

4

5

6

Fair

7

8

9

Good

Restoration Restoration restores pavement integrity • Manages Deterioration  Rates on “Fair” Rates on  Fair  Pavement Pavement • Delays “Fair” From  Becoming “Poor” • Cost Effective Fixes ‐ Touches More Pavements

150

100

50

0 0

1

2

Poor

3

4

5

6

Fair

7

8

9

Good

Rehabilitation Rehabilitation improves pavement condition • Improves Condition  Ratings – “Poor” to “Good” – “Poor” Poor  to  to “Fair” Fair – “Fair” to “Good”

• Prioritizes Critical  C Concern Structures S

150

100

50

0 0

1

2

Poor

3

4

5

6

Fair

7

8

9

Good

Reconstruction Replaces pavements • Address Other Pavement  Needs • Improves Condition  Rating

150

100

– “Poor” Poor  to  to “Good” Good  

• Prioritizes Critical  Concern Pavements

50

0 0

1

2

Poor

3

4

5

6

Fair

7

8

9

Good

Life Cycle Cost Analysis Life Cycle Cost Analysis A procedure to do economic A procedure to do economic comparison of all  comparison of all competing alternatives considering all significant costs  over the economic life of each alternative, expressed  in equivalent dollars. Life Cycle Cost Analysis –Applied at the project level. –The The performance parameters of alternatives are  performance parameters of alternatives are determined by the network needs •For this reason, must analyze the needs of the network 

Life‐Cycle Cost Analysis How it is done:

• Present Worth Analysis (PW) • Equivalent Uniform Annual Cost  Equivalent Uniform Annual Cost Analysis (EUAC)

Life‐Cycle Cost Analysis Present Worth Analysis:  Discounts all future costs (benefits) to the present Discounts all future costs (benefits) to the present Costs

Initial Cost Rehabilitation Cost Rehabilitation Cost Maintenance  Cost

Years

C Costs

Salvage  Value Present Worth 

Years

Life‐Cycle Cost Analysis Equivalent Uniform Annual Cost: Combines all  present and future costs (benefits)  into equal annual payments Costs

Initial Cost Rehabilitation Cost Maintenance  Cost

Years

Co osts

Salvage  Value Equivalent Uniform Annual Cost 

Years

Life‐Cycle Cost Analysis Basic Factors:

• Economic Factors – Discount rate Discount rate – Analysis Period

• Engineering Factors Engineering Factors – Comparable sections – Rehabilitation selection  Rehabilitation selection – Agency Costs – User costs  User costs

Life‐Cycle Cost Analysis Analysis Period:

• Normally equal for each alternative – Highway: 30‐40 years – Street: 20‐30 years – Airport: 30 years

• Include at least one rehabilitation – Needed to capture the true economic benefit of each  alternate

Life‐Cycle Cost Analysis Agency Costs:

• Initial cost of pavement • Maintenance and operation cost Maintenance and operation cost • Anticipated future rehabilitation costs – Engineering – Construction – Traffic Control T ffi C t l

• Salvage (recycling value)

LCCA Process LCCA Process • Design equivalent pavement sections • Establish strategies for analysis period  – Estimate agency costs E ti t t – Establish activity timing – Develop expenditure streams  p p

• • • •

Estimate user costs Compute NPV Analyze results Reevaluate strategies

What Is Multi‐Year What Is Multi Year Prioritization? Prioritization? • A A method of allocating limited resources in an  method of allocating limited resources in an efficient and cost‐effective way over a multi‐ year period through an evaluation of long‐ year period, through an evaluation of long term impacts

Benefits Provided By MYP Benefits Provided By MYP Forecast future conditions Analyze timing options y g p Evaluate strategy effectiveness Perform economic analyses Perform economic analyses Use of objective measures for  prioritizing needs d • Project future needs

• • • • •

Analysis Techniques Analysis Techniques Optimization Prioritization Ranking

Increasing Level of Sophistication

Ranking Current Condition

Select Treatment and Estimated Cost from Rules

Apply Weighting Factor

Match Ranked List to Budget

Rank by Criteria

Multi‐Year Multi Year Prioritization (MYP) Prioritization (MYP) Current or Predicted Condition

Select Treatment and Timing f Each for E h Segment S t

Estimate Costs

Match Prioritized List to Budget

Conduct Analysis

Optimization Current or Predicted Condition

Select S l t Projects P j t that Fit Strategy

Input p Budget g

Optimize Overall Network Strategy

Optimization Analysis Steps Optimization Analysis Steps • Determine Determine agency goals agency goals • Establish network‐level strategies that achieve  the goals the goals • Select projects that match the selected  strategies i

Markov Assumptions Markov Assumptions • Future Future condition is independent of past  condition is independent of past condition

Is Optimization Appropriate? Is Optimization Appropriate? • Select prioritization if: Select prioritization if: – Management wants to exercise significant control  over the planning and programming exercises over the planning and programming exercises.

• Select optimization if: – Management wants to take a global view and is  Management wants to take a global view and is willing to put substantial faith in a system.

Benefits of New Strategy Benefits of New Strategy • Network – Systematic Approach to Network – Proactively Manages Deterioration Rates Proactively Manages Deterioration Rates – Commitment to Do Right Work at Right Time on  Entire System Entire System – Ability to Meet Established Network Goals

Benefits of New Strategy Benefits of New Strategy • Organization – Increased Program Stability (Credibility) – Coordination with Other Programs Coordination with Other Programs – Organizational Commitment

Benefits of New Strategy Benefits of New Strategy • Customer – Reduced Impact to Motoring Public – Increased Program Stability Increased Program Stability – Efficient Investment of Tax Dollars

IMPLEMENTATION OBJECTIVE IMPLEMENTATION OBJECTIVE •Standard Standard Management Tool Management Tool •Integrated Into Daily Operations •Expect Decision Support E pect Decision S pport •Barriers Overcome

Benefits of AMS IImprove program quality lit Improve information and access to information F ili Facilitate economic assessment of various tradeoffs i f i d ff Improve documentation of decisions Improve information on return on investment and value of investments • Reduce short‐and long‐term costs

• • • • •

Issues In Asset  Issues In Asset Management • • • •

Adherence to worst‐first policy Outside influences Outside influences Large backlog of needs L k f Lack of cooperation and  i d coordination between users

Hurdles to Asset  Hurdles to Asset Management • Technical  • Institutional • Implementation

Institutional Issues & Barriers Institutional Issues & Barriers • People • Organization O i i • AMS design, development, and selection

People Issues and Barriers People Issues and Barriers • • • •

Turf protection Fear of exposure f Place of development Resistance to change

Organizational Issues and  Organizational Issues and Barriers Size of organization Organizational structure Organizational structure Organizational level P Past management and decision‐making  dd i i ki practices • Stability

• • • •

The practices review is a major implementation  p ase. phase. Agency structure. Communication flow. fl Existing data sources. Other affected infrastructure systems Other affected infrastructure systems. Current data flows. Decision‐making processes. gp Planning horizons. Constraints on selection of projects. Fixed facilities and processes. Resources (human, financial, equipment, etc.) Competing fund needs Competing fund needs. 86

Organizational Issues and  Organizational Issues and Barriers • • • • • •

Planning horizons Constraints on selection of projects Constraints on selection of projects Fixed facilities and processes R Resources One‐person show Competing fund needs

Good Engineering  G dE i i Practice

Eight Dirty Little Secrets 1. The cost of traditional TAMS deployments can overwhelm  your Agency 2 Cost‐justifying a traditional TAMS deployment is more  2. C t j tif i t diti l TAMS d l ti difficult than you think 3. Legacy TAMS can be as powerful and flexible as  contemporary deployments 4. Many TAMS lack a true necessity—detailed cost allocation 5. Poor TAMS flexibility, and the inability to rate and manage  Poor TAMS flexibility, and the inability to rate and manage your workforce as needed, will stifle your operations   6. The best TAMS available won’t improve your business if you  d ’t h don’t have operational transparency ti lt 7. Integration capabilities can make or break the success of  your TAMS 8. Not all TAMS implementation teams are created equal

How Do We Get There? Transportation i Asset A Management Workshops

How Do We Get There? Strategic Plan - Goals •Develop Partnerships •Develop Develop an Understanding •Develop Tools and Research •Inform Leadership on Use •Assist Each Other

Conclusion

Keys to Success • • • • • •

Sustained Political Commitment Executive Leadership Commit Resources - State and Local Level F ilit t Sharing Facilitate Sh i between b t Agencies A i Pool Organizational Resources Persistence