Apr 23 2024
TRB Webinar: Incorporating Maintenance Costs into a Transportation Asset Management Plan
Virtual
Determining the value of a transportation organization’s physical assets is important for both financial reporting and transportation asset management (TAM). In financial reporting, determining asset value is a fundamental step in preparing a balance sheet for financial statements to inform regulators and investors. For TAM, presenting data on the value of physical assets, such as pavement, bridges, and facilities, communicates what an organization owns and what it must maintain. Furthermore, information about asset value and how it is changing can help establish how the organization is maintaining its asset inventory and helps support investment decisions.
Calculating asset value for TAM is not simply good practice; it is also required of state Departments of Transportation (DOT) by Federal regulations. Title 23 of the Code of Federal Regulations (CFR) Part 515 details requirements for State DOTs to develop a risk-based Transportation Asset Management Plan (TAMP). The TAMP must include a calculation of the value of National Highway System (NHS) pavement and bridges, as well as the cost to maintain asset value.
Recently NCHRP Project 23-06 was performed to develop guidance for calculating asset value to support TAM applications. This research resulted in the development of the Asset Valuation Guide. This document is intended as a companion publication to the Transportation Asset Management Guide published by AASHTO. The Guide is accompanied by a web tool with an online version of the guidance. The guidance was developed to provide immediate support to highway and transit agencies developing their 2022 TAMPs, and to provide continuing support for other TAM-related applications.
The NCHRP 23-06 research project that produced the asset valuation guide included an extensive review of the available literature related to asset valuation. Key references include:
• Accounting guidance and standards, including General Accounting Standards Board (GASB) Statement 34, standards of the International Financial Reporting Standards Foundation (IFRS) and the Organisation for Economic Co-Operation and Development (OECD) guide Measuring Capital.
• Asset management guidance, including the AASHTO TAM Guide, Federal Highway Administration (FHWA) TAM guidance, and Institute of Public Works Engineering Australasia (IPWEA) Infrastructure Management Manual and Australian Infrastructure Financial Management Manual.
• Additional documents describing approaches used or proposed for asset valuation, such as State DOT TAMPs and other references.
Other research projects (recently completed, active, or pending) in this area include:
• NCHRP Project 08-109: Updating the AASHTO Transportation Asset Management Guide—A Focus on Implementation, Phase 1
• NCHRP Project 08-137: Digital Enhancements and Content for the AASHTO Transportation Asset Management Guide
• NCHRP Project 19-12: Guide for Financial Planning and Management in Support of Transportation Asset Management
• NCHRP Project 02-26: Implementation of Life-Cycle Planning Analysis in a Transportation Asset Management Framework.
This proposed study will build on these recent efforts and serve to provide updated asset valuation guidance.
The objective of this implementation project support further testing and use of Asset Valuation Guide developed through NCHRP Project 23-06. This project will aid a set of transportation agencies in implementing the asset valuation guidance. A set of case studies will be developed based on the agency implementation efforts. Details on the case studies will be added to the web-based version of the asset valuation guidance and subsequent versions of the Asset Valuation Guide. Further, the web and printed versions of the Guide will be revised to reflect the additional experience gained from the case studies.
To support accomplishing the research objectives the effort will incorporate the following activities at a minimum:
• Delivery of a set of workshops to review and summarize the Asset Valuation Guide.
• Identification of a set of six transportation agencies to participate in implementation of the asset valuation guidance.
• Application of the asset valuation guidance for the selected set of agencies, resulting in calculation of asset value by asset class, the cost to maintain asset value and related measures such as the Asset Consumption Ratio, Asset Sustainability Ratio and Asset Funding Ratio.
• Illustration of how information on asset value can support improved TAM decisions.
• Refinement of the Asset Valuation Guide (printed and web versions) based on the results of the case studies.
• Development of supplemental tools and worksheets to assist in calculating asset value to support TAM utilize the Asset Valuation Guide.
The proposed research is needed to help transportation agencies meet Federal requirements for developing their TAMPs. It will help build on recently completed NCHRP research and maximize the value of the research to the transportation community. Benefits of the research will include:
• Dissemination of the research completed previously through NCHRP Project 23-06.
• Assistance with a selected set of transportation agencies in valuing their assets to support TAM using the previously developed asset valuation guidance.
• Refinement of the Asset Valuation Guide to reflect experience gained from implementation
• Strengthening transportation agency TAM practice to include improved calculations of asset value and additional measures related to asset value that will help support TAM decisions.
The target audience for this research includes executives, managers, and practitioners at state DOTs and at other agencies working to implement TAM and/or prepare financial plans and reports. It will be of value for asset managers, planners, and financial analysts. The guidance will be useful for helping establish asset value and related measures for asset classes including pavement, bridges, other structures, buildings, vehicles (including service vehicles, transit vehicles and ferries), rail track, traffic and safety assets, and other assets.
The results of this research will be highly applicable to the efforts of DOTs and national organizations such as AASHTO and FHWA in furthering the maturity of TAM and improving their approaches for TAMP development and financial reporting. It will help provide practical advice and overall guidance to agencies on how to value their assets regardless of their individual asset contexts, conditions, or budgetary situation.