The National Academies Press

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From page 8... ... 8 This chapter explores other activities and plans within a TAM program and how they relate to and are supported by the financial plan within an integrated TAMP. Specifically, important concepts and practices in objectives, performance measures, life cycle planning and cost analysis, and risk management are introduced and their respective implications on financial planning are discussed. Read the entire page →
From page 9... ... Integrating Financial Plans into TAM 9 2. TAMP Requirements discuss the various federal minimum requirements for what must be included in an agency's TAMP. Read the entire page →
From page 10... ... 10 A Guide to Developing Financial Plans and Performance Measures for Transportation Asset Management strategic direction for an agency and more directly lead to performance measure selection (TPM Stakeholder Group 2018) Read the entire page →
From page 11... ... Integrating Financial Plans into TAM 11 on age, strategies will focus on repairing or replacing the oldest assets rather than those most in need of attention. If age and condition are not strongly correlated, the age-based performance measure will indicate progress toward asset maintenance while the overall asset condition is not actually improving. Read the entire page →
From page 12... ... 12 A Guide to Developing Financial Plans and Performance Measures for Transportation Asset Management TAMP Requirements Performance measures and gap analyses are essential components of the asset management plans required for NHS highways under 23 U.S.C. Read the entire page →
From page 13... ... Integrating Financial Plans into TAM 13 Performance Gap Measurement Once performance measures are established for an agency, it can be a valuable exercise to set target levels of performance and/or measure the gap in predicted and desired performance. A gap assessment is a required component of a TAMP prepared in compliance with 23 CFR Part 515. Read the entire page →
From page 14... ... 14 A Guide to Developing Financial Plans and Performance Measures for Transportation Asset Management Note that this practice example predates current TAMP and performance management requirements developed by FHWA. As noted above, performance targets developed for federal reporting under 23 CFR Part 490 are always fiscally constrained. Read the entire page →
From page 15... ... Integrating Financial Plans into TAM 15 its assets cost-effectively is central to financial planning. The motivation for considering lifecycle costs is simple: transportation assets are long-lived and require significant expenditures of public funds over time. Read the entire page →
From page 16... ... 16 A Guide to Developing Financial Plans and Performance Measures for Transportation Asset Management Figure 2-5. Example of life cycle cost calculations. Read the entire page →
From page 17... ... Integrating Financial Plans into TAM 17 TAMP Requirements FHWA requirements for state DOT TAMP development are detailed in 23 CFR. Read the entire page →
From page 18... ... 18 A Guide to Developing Financial Plans and Performance Measures for Transportation Asset Management • A strategy for managing each asset class or asset subgroup by minimizing its life-cycle costs, while achieving the state DOT targets for asset condition for NHS pavements and bridges under 23 U.S.C. Read the entire page →
From page 19... ... Integrating Financial Plans into TAM 19 overall funding levels established through the financial planning process may impact an agency's asset condition targets and approach to managing its assets. Documented procedures are required for life-cycle planning, and these should be available for supporting development of the financial plan. Read the entire page →
From page 20... ... 20 A Guide to Developing Financial Plans and Performance Measures for Transportation Asset Management critical issues to be resolved in the development of the financial plan. These critical issues represent potential risks to the agency. Read the entire page →
From page 21... ... Category Description Finances Risks to the long-term financial stability of the asset management program, including: Unmet needs in long-term budgets Funding stability Exposure to financial losses Information and Decision Making Risks related to the asset management program include: Lack of critical asset information Quality of data, modeling, or forecasting tools for decision making Security of information systems Business Operations Risks due to internal business functions associated with asset management programs, such as: Employee safety and health Inventory control Purchasing and contracting Asset Performance Risks associated with asset failure (whether acute, complete, or incremental) Read the entire page →
From page 22... ... 22 A Guide to Developing Financial Plans and Performance Measures for Transportation Asset Management From a financial perspective, project-level cost and schedule overruns are an important and common type of risk, and many agencies have well-developed business processes specifically for identifying and mitigating these risks. Many asset-specific risks can be mitigated in part using an agency's asset management systems. Read the entire page →
From page 23... ... Integrating Financial Plans into TAM 23 to agency business processes to handle additional types of risks programmatically. Identifying the specific mitigation approaches to implement is a key consideration as these priorities and approaches may drive scenarios in a financial plan. Read the entire page →
From page 24... ... 24 A Guide to Developing Financial Plans and Performance Measures for Transportation Asset Management inform scenario planning, assessing the likelihood of budget cuts or revenue increases. Further, those involved with asset management should work together to help quantify the consequences of failure or reduced performance of assets. Read the entire page →

From page 8...

... 8 This chapter explores other activities and plans within a TAM program and how they relate to and are supported by the financial plan within an integrated TAMP. Specifically, important concepts and practices in objectives, performance measures, life cycle planning and cost analysis, and risk management are introduced and their respective implications on financial planning are discussed.