Use of Transportation Asset Management Principles in State Highway Agencies (2013)

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7 CHAPTER TWO LITERATURE REVIEW and FHWA in October 1997 in Troy, New York. The mis- sion of the workshop was to evaluate current AM practices, technologies, and tools, and to develop a strategy for moving forward a cooperative AM initiative. A basic definition of AM was introduced during the meeting and later adopted by AASHTO. These two events were the beginning of the ongoing biennial series of National Asset Management Con- ferences. The most recent conference (9th National Asset Management Conference) in San Diego attracted more than 320 attendees with 34 state DOTs represented. The following is a timeline of national-level AM activi- ties that started the effort to support AM development and implementation in the United States. • 1998: Following the two successful AM executive semi- nars, AASHTO created their AM Task Force to develop a strategic plan for implementing AM across the state DOTs. The task force was later converted to a subcom- mittee under the standing committee on planning and the standard committee on highways. The task force developed a strategic plan for AM implementation in 2002 that has been updated twice since then. • 1999: FHWA recognizes the importance of AM and creates a new office under the Infrastructure Program to support AASHTO and the state DOT’s AM efforts. In helping the states, the new FHWA Office of Asset Management agreed with AASHTO that— – AM needs to be flexible to address the varying needs of each state. – AM implementation must be voluntary. – It is important that AM involve a great deal of com- munication and education. • 1999: The 3rd Asset Management National conference was held in Scottsdale, Arizona, with a major focus on the Governmental Accounting Standards Board (GASB) statement 34. GASB 34 required state and local governments to begin reporting all financial transac- tions, including the value of their infrastructure assets, roads, bridges, water and sewer facilities, and dams, in their annual financial reports on an accrual accounting basis. GASB 34 included a modified plan that allowed agencies using AM to manage their assets to a defined level of service (condition level) rather than depreci- ate them to determine their financial value. GASB 34 required agencies to conduct asset inventories (major WHAT IS ASSET MANAGEMENT According to AASHTO, “Transportation Asset Management is a strategic and systematic process of operating, maintain- ing, upgrading, and expanding physical assets effectively throughout their life-cycle. It focuses on business and engi- neering practices for resource allocation and utilization, with the objective of better decision making based on quality information and well-defined objectives.” In the transporta- tion field, AM involves a large array of system components. Examples of these assets include “pavements, pavement mark- ings, raised pavement markers, structures, roadside signs, traffic signals, roadway illumination, traffic barriers, guard fences, attenuators, maintenance equipment, vehicles, intelli- gent transportation system (ITS) equipment, traffic detection equipment, real estate, corporate data and materials” (Kuhn 2011). The items under state DOT jurisdiction vary, but most often include a large amount of linear transportation assets. ASSET MANAGEMENT HISTORY Even though AM science and practice is not new—agencies in Europe, New Zealand and Australia, and Canada started in the late 1980s and early 1990s—transportation agencies in the United States were focusing on the management of pavements and bridges as individual assets rather than on a comprehensive, integrated, and long-term approach to man- aging all assets under their jurisdiction. In 1996, AASHTO and FHWA hosted an executive-level AM seminar in Washington, D.C., to introduce AM to the state transportation agencies. During this event, participants drawn from the leadership of AASHTO, FHWA, state trans- portation departments, private industry, utility companies, quasi-government organizations, and research and supplier communities shared experience and expertise to improve the quality of AM. The results are documented in FHWA’s Asset Management: Advancing the State of the Art into the 21st Century Through Public-Private Dialogue (1997), which describes the goals, attributes, and usefulness of AM. The seminar focused on the need for integrated decision making and the idea of going beyond just pavements and bridges. The executive seminar in the District of Columbia was followed by another executive workshop hosted by AASHTO

8 assets) and, if the modified approach is used, do condi- tion surveys. • 2000: TRB joins both AASHTO and FHWA and creates an AM Task Force to address the research and education needs of the agencies starting the AM process. This was later changed to a full committee (ABC40), which still maintains close communica- tion and coordination with the AASHTO and FHWA counterparts to advance AM science, practice, and implementation. In addition to the annual meeting, the TRB AM Committee holds a midyear meeting with the AASHTO AM Subcommittee. • 2001: The 4th National Asset Management Conference was held in Madison, Wisconsin. This meeting was focused more on AM as opposed to GASB 34, given that DOTs were still focusing on pavement and bridge assets rather than the holistic approach advised by the AM process. • 2002: AASHTO adopts the guide developed through an NCHRP project [20-24(11)] as its first Transportation Asset Management Guide (2002). As part of the guide, a self-assessment tool was developed to help state DOTs gauge their progress in AM implementation and identify areas that need additional effort. The self- assessment was used as the first survey as part of this synthesis that was completed by 18 state DOTs. • 2002: The National Highway Institute introduces a 1-day AM workshop based on the AASHTO Transportation Asset Management Guide. The work- shop would be later modified (on two occasions) to reflect changes in how state DOTs are responding to different AM principles and how some agencies are practicing AM. The workshop is still offered with an optional half-day that helps the DOT identify gaps, based on the self-assessment, and then develop steps to address those gaps on short- and long-term bases. • 2003: 5th National AM Conference is held in two locations (Atlanta and Seattle). This conference focused on an integrated approach and discussions on investment analysis. • 2005: 6th National AM Conference in Kansas City. The meeting was held in conjunction with the 1st National Conference on Roadway Pavement Preservation. The interaction among the two groups was very beneficial given that it introduced the concept of trade-off analy- sis between capital investment and asset preservation as an AM function. This synthesis survey addresses those questions and how some DOTs are dealing with those issues. • 2007: AASHTO/FHWA Asset Management Domestic Scan report. The U.S. scan was conducted in 2006 and included six DOTs (Florida, Michigan, Minnesota, Ohio, Oregon, and Utah), two metropolitan planning organizations, and several local agencies. The purpose of this scan was to identify best case examples of the application of AM principles and practices in U.S. trans- portation agencies. The scan findings can be summa- rized as follows (U.S. Domestic Scan Program 2007): – The importance of having a champion within the agency to push AM forward with support from executives – The importance of life-cycle cost decision making versus a worst-first approach – The use of performance measures that affect deci- sion making and guide investment – Little evidence of risk analysis and the inclusion of risk as part of the AM process – Data issues and the need for more cost-effective ways to collect asset data (inventory and condition). • 2007: 7th National AM Conference in New Orleans. A transit track was added to this meeting to shift the primarily pavement and bridge-based focus to other assets. The meeting included sessions on economic analysis as well as incorporating risk and performance as part of the AM decision making process. The syn- thesis survey explores how state DOTs have addressed those issues as part of their decision-making process. • 2009: 8th National AM Conference in Portland, Oregon. The Portland meeting was split into tracks that dealt with data, safety, and pavements. The data track covered performance-based and risk-based data needs for decision making. The safety track focused on how safety and AM can be integrated to support decision making and investment. • 2012: 9th National AM Conference in San Diego. This most recent conference had the largest DOT represen- tation to-date (34 state DOTs attended). The San Diego conference focused on AM implementation and high- lighted how some state DOTs are practicing AM. An AM Pooled Fund group (11 DOT members) met as a part of the conference and provided input on the analysis of survey results for this synthesis. AASHTO and FHWA also hosted an AM Peer Exchange during the conference. During this period, FHWA sponsored several peer exchanges on AM practices discussing Geographic Infor- mation Systems (Charleston, West Virginia, 2009), safety (Cheyenne, Wyoming, 2011), and implementation (San Diego, California, 2012). FHWA produced several case stud- ies on data integration, economic analysis, comprehensive AM implementation, and life-cycle cost analysis. Those case studies are as an excellent resource for other agencies inter- ested in implementing different components of their AM process. Information on all of these resources is available on the FHWA website and is listed as part of the resources section in the literature review. ASSET MANAGEMENT IMPLEMENTATION The AM implementation process provides a mechanism for the state DOTs to get started with AM activities. The Colo-

9 rado Department of Transportation (CDOT) identifies tasks as “near term” in order to determine items for immediate accomplishment. In doing this, CDOT defines organiza- tional and procedural needs that must be accomplished to promote the implementation of an AM program. This orga- nization allows all departments and management levels to be involved in the implementation process and lay out specific philosophies, management processes, tools, and perspec- tives to be applied in the future. Some of CDOT’s near-term tasks listed in the 2001 Colorado DOT’s Asset Management Implementation Plan and Tiered System Process (Markow and Racosky 2001) include the following: • To organize a task force chaired by the CDOT deputy director to provide leadership, demonstrate executive buy-in, guide and coordinate actions department-wide, and provide a focal point for strategic direction and communication of objectives and accomplishments. • To complete the Investment Category structure to pro- vide the goals, targets, performance measures, and analytic tools needed to use it to full advantage in plan- ning, program development, and system monitoring. • To communicate “what is asset management” and related CDOT actions to CDOT employees and to the Transportation Commission, stakeholders, and the public. • To make better use of existing information technology (IT) where possible, and to develop new IT applications and tools where needed to support AM. This objective is critical to the long-term success of AM and com- prises a number of tasks that could entail significant cost for development of IT applications and tools. CDOT is approaching AM implementation by “tiering of assets.” This system breaks the assets into categories such as “Interstate highways, non-Interstate National Highway System (NHS) highways, and other highways.” CDOT also devised tiers for other modes of transportation. Texas DOT also applies the near-term task philosophy when examining AM program implementation strategies. To assist with program implementation, an “Asset Management Guide- book” and an “Asset Management Screening Tool” were devel- oped to provide Texas DOT personnel with tools to help “define, develop, and implement asset management across all levels.” The Oregon Department of Transportation (ODOT) established a set of 10 principles upon which it bases all of its implementation and AM efforts. Every subcategory of the overall ODOT TAMP is based on the following 10 points: • Asset Management will add value. • Asset Management will be done well. • Asset Management will build on ODOT’s good man- agement system work. • Current efforts under way to gather or improve ODOT data will be supported. • Asset Management will be part of ODOT’s daily work function. • Asset Management will use trusted and reliable data. • Asset Management processes will be regularly monitored. • Asset Management will support broad-based funding allocation decisions. • Asset Management will allow readily available asset reports. • Asset Management will foster cross-asset communication. In the ODOT Asset Management Program Plan, these core principles are explained in detail and information is provided regarding the range of asset principles (ODOT 2008). New Jersey DOT (NJDOT) has developed a two-step approach for its AM program: • Developed an Asset Management Plan for NJDOT assets containing an inventory of specific assets, their condition, performance targets and a plan of how to achieve these targets through a mix of investments. • Advanced an Asset Management Improvement Strategy that examined NJDOT’s proficiency and maturity in Asset Management practice, identified strengths and weaknesses, looked at methodologies and practices, and set goals and objectives for improvement. The synthesis survey examines how much progress state DOTs are making in implementing AM practices. The results are discussed in Chapters three and four. ASSET MANAGEMENT AND RISK Asset management and risk management go hand in hand. FHWA’s Asset Management Overview cites that “applying risk management to look at decisions…makes it possible to identify threats and opportunities, asses and prioritize those threats and opportunities, and determine strategies so that decisions can be made on how to deal with future issues” (FHWA 2007). In other words, applying risk management concurrently with AM can assist agencies in clearly seeing the costs and benefits of an option and, in turn, make the most informed and cost-effective business decisions. Risk analysis can be extremely useful when included in the AM process. As defined by FHWA, “risk management is the systematic identification, assessment, planning, and management of threats and opportunities faced by our pro- grams.” FHWA has developed a risk management process that allows them to track the aforementioned components of risk management. Steps taken by FHWA to manage risks include the following: • Gathering information about future events, threats, and opportunities;

10 • Identifying what and how those future events trigger the threats and opportunities; • Assessing the likelihood and impact of risks; • Prioritizing risks by their expected value and their rela- tive importance to a program, project, or state; • Determining appropriate response strategies to risks; and • Carrying out response strategies, monitoring strate- gies, and reevaluating risks (FHWA 2007). This FHWA risk management process can help highlight the advantages and disadvantages of a possible decision as well as the assets that require the most and least immediate attention. RISK BASED DECISION MAKING The Washington State DOT (WSDOT) divided the risk anal- ysis and management process into the following four steps in order to make the best decisions for a TAMP: • Risk identification, • Risk analysis and prioritization, • Risk planning, and • Risk control and monitoring (WSDOT 2009). WSDOT applies this four-step process to each of their risk divisions: business/organization risks and technical risks. Business/organizational risks are risks that may affect exist- ing WSDOT business procedures, or the procedures of other groups involved in a transportation project. Technical risks then deal with items such as system implementation or new technological needs. For each type of risks, WSDOT uses the four-step system to assign each item a “risk score,” high- lighting them in red (ORG01 and ORG02) or yellow (BUS01) depending on the severity of the risk. Figure 1 shows an example page from a “Risk Register Log.” These risk register logs clearly allow WSDOT to see item priority, risk classifica- tion, risk owner, response options, and strategy notes when attempting to use a risk-based decision-making process. PERFORMANCE MEASURES AND ASSET MANAGEMENT In 2006, TRB produced NCHRP Report 551: Performance Measures and Targets for Transportation Asset Manage- ment (Cambridge Systematics, Inc. et al. 2006) as a review of TAM performance measures and targets. In this report, NCHRP suggested that many agencies created performance measures of a technical nature, but should also create mea- sures regarding “security, social, environmental, and eco- nomic issues affecting transportation decisions.” According to NCHRP Report 551, AM performance measures can revolve around multiple categories, including the following: • Preservation • Accessibility • Mobility • Operations and maintenance • Safety FIGURE 1 Risk Register Log [Source: (WSDOT 2009)].

11 • Environmental impacts • Economic development • Social impacts • Security • Delivery (Cambridge Systematics, Inc. et al. 2006). The Vermont Agency of Transportation (VTrans) devel- oped its own categories of transportation assets in order to have a system of performance measures: • Highway • Aviation • Public Transportation • Rail • Bicycling and Walking • Maintenance • Buildings • Central Garage • Department of Motor Vehicles (VTrans 2008). VTrans also created a target level of performance for each category, and rates its assets from “Excellent” to “Very Poor,” providing a clear understanding of asset condition. Minnesota DOT has a scorecard that summarizes the progress of statewide transportation goals. This scorecard uses graphs to review progress over the past few years, and assigns a symbol (red for markedly below target, yellow for slightly below target, and green for at or above target) to clearly show whether an asset area is deficient. The 2010 scorecard may be found in its Annual Minnesota Transporta- tion Performance Report (Minnesota DOT 2010). ASSET MANAGEMENT RESOURCES FHWA Asset Management Resources http://www.fhwa.dot.gov/asset/projects.cfm Transportation Asset Management Expert Task Group (2012) http://www.fhwa.dot.gov/asset/etg/index.cfm Asset Management Peer Exchange Transportation Asset Management—A Focus on Implementation (2012) http://www.fhwa.dot.gov/asset/pubs/hif12041.pdf Asset Management and Safety Peer Exchange Beyond Pavement and Bridges: Transportation Asset Man- agement with a Focus on Safety (2011) http://www.fhwa.dot.gov/asset/hif12005/hif12005.pdf Asset Management and Management of Highway Perfor- mance (Peer Exchange) (2010) http://www.fhwa.dot.gov/ asset/hif10006/index.cfm Managing Pavements, Monitoring Performance, June 9–26, 2011, Australia, New Zealand, Sweden, United Kingdom, and the Netherlands AASHTO Asset Management Subcommittee http://tam.transportation.org/Pages/AASHTO.aspx Research at the National Level Completed NCHRP Projects (past 5 years) Project 19-04, A Review of DOT Compliance with GASB 34 Requirements http://onlinepubs.trb.org/onlinepubs/nchrp/nchrp_rpt_522. pdf Project 20-24(11), Asset Management Guidance for Trans- portation Agencies http://downloads.transportation.org/amguide.pdf Project 20-57, Analytic Tools to Support Transportation Asset Management http://onlinepubs.trb.org/onlinepubs/nchrp/nchrp_rpt_ 545.pdf Project 20-60, Performance Measures and Targets for Trans- portation Asset Management http://onlinepubs.trb.org/onlinepubs/nchrp/nchrp_rpt_ 551.pdf Project 20-74, Developing an Asset Management Plan for the Interstate Highway System http://onlinepubs.trb.org/onlinepubs/nchrp/nchrp_rpt_ 632.pdf Project 20-74A, Development of National Level of Service Criteria for the Interstate Highway System http://apps.trb.org/cmsfeed /TRBNetProjectDisplay. asp?ProjectID=1638 Synthesis of Highway Practice 371: Managing Selected Transportation Infrastructure Assets: Signals, Lighting, Signs, Pavement Markings, Culverts, and Sidewalks http://onlinepubs.trb.org/onlinepubs/nchrp/nchrp_syn_371. pdf Project 08-69, Supplement to the AASHTO Transportation Asset Management Guide, Volume 2—A Focus on Implementation Project 08-71, Methodology for Estimating Life Expectan- cies of Highway Assets ht tp://apps.trb.org/cmsfeed /TRBNetProjectDisplay. asp?ProjectID=2497

12 Project 08-70, Target-Setting Methods and Data Manage- ment to Support Performance-Based Resource Alloca- tion by Transportation Agencies http://onlinepubs.trb.org/onlinepubs/nchrp/nchrp_rpt_ 666.pdf Project 20-83(03), Long-Range Strategic Issues Affecting Preservation, Maintenance, and Renewal of Highway Infrastructure ht tp: / /on l inepubs.t rb.org /onl inepubs /nch r p /docs / NCHRP20-83A_WorkshopFinalReport.pdf Ongoing NCHRP Projects Project 08-87, Successful Practices in GIS-Based Asset Management NCHRP 20-90 Improving Management of Transportation Information Future NCHRP Projects (2012–2013 program) 07-21 Guidance for the Management of Traffic and Safety Assets 08-90 Development of a Transportation Asset Management Gap Analysis Tool to Complement the AASHTO TAM Implementation Guide 08-91 Use of Cross Asset Optimization Results and the Impact on Performance Measures 08-92 Transportation Data Program Self-Assessment Guide AASHTO Standing Committee on Planning (08-36) pro- gram to develop TAMP templates for highway agencies. .