Development of Financial Plans and Performance Measures for Transportation Asset Management

Transportation agencies face significant and continuing challenges in securing resources needed for preserving and improving the nation's transportation network, and in planning future expenditures considering investment needs, public expectations, asset deterioration, expected revenue streams, risk, uncertainty, and other factors. In addition, federal transportation legislation--Moving Ahead for Progress in the 21st Century (MAP-21)--requires states to develop financial plans for managing their National Highway System assets. Transportation asset management provides a framework for making resource allocation decisions about how best to preserve infrastructure assets, such as roads, bridges, and traffic and safety assets, and well as other asset types. Asset management emphasizes optimizing investment decisions to be cost-effective, improve performance, and control asset lifecycle costs. Much work has been performed nationally and internationally over time to develop asset management concepts and tools, such as those detailed in Volumes I and II of the American Association of State Highway and Transportation Officials (AASHTO) Transportation Asset Management Guide. However, available asset management guidance lacks details on how to develop financial plans for transportation assets, and what specific financial measures to use in characterizing asset performance. The Government Accounting Standards Board has provided guidance for development of asset valuation estimates though its Statement Number 34 (GASB 34), but in practice the existing measures of asset valuation, though important for accounting, have proven to be of limited value for developing future plans and characterizing performance over time. Research is needed to strengthen the financial management aspects of transportation asset management and to develop guidance for how to prepare financial plans for transportation assets and networks that comprise those assets. The research should draw on previous work in the United States and other countries to supplement existing AASHTO and GASB documents with step-by-step details for preparing financial plans as elements of transportation asset management plans. The research should address issues such as projecting available expenditures given uncertain revenue streams, reporting projected investment levels, inflation, selecting maintenance activities based on net present value analysis, understanding opportunity costs, and comparing projects for different assets using comparable financial metrics. The research should also describe specific measures for characterizing financial performance of transportation system assets and asset portfolios. The research should produce guidance for transportation agencies to use as they develop their asset management plans and will help foster increased emphasis on making investment decisions supported by consideration of financial concerns. Research tasks might include review of the current literature and ongoing research, characterization of the state of practice in financial planning for infrastructure in public and private sectors, review of federal and state regulations influencing financial management of transportation system assets, and analysis of what particular guidance materials would be most helpful to state transportation agencies for financial planning as an element of transportation asset management planning. Guidance materials to be developed might be tested and refined to ensure they are responsive to the needs and interests of agency officials and other potential users. The research may also include development of plans for further work to extend the performance measures and financial planning guidance developed in this research effort.

Language

  • English

Project

  • Status: Proposed
  • Funding: $350000.00
  • Contract Numbers:

    19-12

  • Sponsor Organizations:

    Federal Highway Administration

    1200 New Jersey Avenue, SE
    Washington, DC  United States  20590

    American Association of State Highway & Transportation Officials (AASHTO)

    444 North Capitol Street, NW, Suite 225
    Washington, DC  United States  20001

    National Cooperative Highway Research Program

    Transportation Research Board
    500 Fifth Street, NW
    Washington, DC  United States  20001
  • Project Managers:

    Lemer, Andrew

  • Start Date: 20150806
  • Expected Completion Date: 0
  • Actual Completion Date: 0
  • Source Data: RiP Project 40221

Subject/Index Terms

Filing Info

  • Accession Number: 01572379
  • Record Type: Research project
  • Source Agency: Transportation Research Board
  • Contract Numbers: 19-12
  • Files: TRB, RiP
  • Created Date: Aug 7 2015 1:01AM