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  • Asset management is a business process and a decision-making framework that covers an extended time horizon, draws from economics as well as engineering, and considers a broad range of assets. The asset management approach incorporates the economic assessment of trade-offs among alternative investment options and uses this information to help make cost-effective investment decisions.   Asset management has come of age because of          changes in the transportation environment,          changes in public expectations, and          extraordinary advances in technology.   An Asset Management philosophy focuses on the benefits of investment, as well as its costs, and takes a comprehensive view of the entire portfolio of transportation resources. Asset Management is an improved way of doing business that responds to an environment of increasing system demands, aging infra-structure, and limited resources.  
  • Transcript

    • 1. GASB#34 Asset Management TEAM Transportation Fair Presentation by: Charles J. Nemmers, P.E. October 8, 2004 St. Louis, Missouri
    • 2. Today’s Presentation:
      • Define:
          • ”What is GASB#34 ? Why Should I Care?”
      • Why is it important
          • “ Why Worst First Is Worst”
      • Implement:
          • “ Asset Management”
    • 3. GASB #34 What is it? Why should I care?
    • 4. GASB
      • Government Accounting Standards Board
      • NOT a government agency
      • Sets standards for States and Local entities
      • Basis of audit opinions
    • 5. #34
      • “Basic Financial Statements and Management’s Discussion and Analysis for State and Local Governments”
      • June 1999
      • Changed reporting from Optional to Required
    • 6. GASB #34 Objective:
      • To make government accounting more like private sector accounting
      • Defined Infrastructure Assets
        • roads
        • bridges
        • water and sewer systems
        • drainage systems
        • dams, tunnels, ...
    • 7. Asset Valuation: GASB #34
      • Requirements:
      • state and local agencies to include the value of physical assets in their financial statements
      • value based on depreciated historical cost, or historical cost without depreciation if the agency can demonstrate that they:
        • inventory their assets
        • assess every 3 years
        • spend funds sufficient to maintain at an established condition.
    • 8. GASB #34 gives 2 options
      • 1) Depreciate
      • 2) Modified Approach
    • 9. Modified vs. Depreciation Modified Depreciation Expense: Maintenance & Maintenance Preservation Capitalize: Additions and Preservation costs Improvements Additions & Improvements
    • 10. GASB #34 recognizes that factors vary among jurisdictions and among infrastructure assets
    • 11. In a Nutshell Governments generally don’t depreciate their assets and the private sector does, but now the rules have changed !!
    • 12. Why “Worst First” is “Worst” Comments on how to build an effective public works infrastructure program
    • 13. Worst First occurs because :
      • Easy to sell - lots of roads are in poor shape
      • Funding / budgets tilt toward new construction
      • No Ribbon Cutting
      • Deferred maintenance
    • 14. But “Worst First”:
      • Costs more - 6X more
      • Drags the whole system down
      • Is difficult to recover from
      • Is a difficult concept to counter
    • 15. Maintenance :
      • Routine
      • Reactive
      • Preservation / Preventive
    • 16. Build:
      • Replace / Reconstruct (improve structural condition)
      • Expand / New Facilities (add new capacity)
    • 17. Pavement Condition Optimal Timing Time/Traffic Rehabilitation Trigger Prevention Trigger Original Pavement
    • 18. Current Condition I (0-2) III (8-12) II (3-7) IV (13-17) V (18-22) VI (23-27) (years) Pavement Remaining Life Categories From Michigan DOT -- Galehouse 19% 10% 40% 8% 6% 17%
    • 19. Remaining Service Life Distribution State RSL average 8.32
    • 20. Remaining Service Life Distribution County Average RSL 6.9
    • 21. Ideal Condition I (0-2) III (8-12) II (3-7) IV (13-17) V (18-22) VI (23-27) (years) Pavement Remaining Life Categories 11% 18% 18% 16% 17% 20%
    • 22. Remaining Service Life Distribution State
    • 23. Remaining Service Life Distribution-Tooele County
    • 24. Remaining Service Life Distribution-Tooele County
    • 25. Reconstruction Strategy (25 Year Fixes)
    • 26. Combined Reconstruct and Rehab Strategies (15, 20 & 25 Years Design Life)
    • 27. Combined Reconstruct, Rehab, and Preventive Maintenance Strategies
    • 28. Keys to Success (from MiDOT/GaDOT):
      • Promote Preventive Maintenance Philosophy
      • Fix pavements BEFORE they are broken-select good pavements for treatment
      • Budget & fund Preventive maintenance
      • Shorten the time between assessment and maintenance
      • Build them excellent the first time
    • 29. “ Asset Management” to meeting GASB #34 using the Modified Approach
    • 30. Asset Management
      • What is it?
      • Improved way of doing business
      • Draws from economics & engineering
      • Focuses on benefit of investment
      • Shows How, When & Why resources were committed
      • Planning tool
    • 31. Asset Management
      • Inventory assets
      • Condition assessment
      • Value Assets
      • Performance prediction
      • Alternative / Decision analysis
      • Monitor and feedback
    • 32. Condition Survey
    • 33. Condition Assessment
      • .
    • 34. RSL of 0
    • 35. RSL of 8
    • 36. RSL of 20
    • 37. Pavement Performance Curve * Terminal Serviceability Lowest Annual Resurfacing Cost (Rehabilitation Treatments) Preventative Treatments
    • 38. Network Performance Objectives (Recommendations) State Network Interstate +12 Years 5% or less +15 Years 3% or less Percent Requiring Reconstruction Average RSL Arterials/Major Collectors (NHS and High Volume Roads) Major Collectors (Low Volume) and Minor Collectors + 10 Years 5% or less No more than 5% 10 Year(min.) Local Roads and Streets
    • 39. Needs Assessment County and City Networks
    • 40. Routine (reactive) Maintenance
    • 41. Preventative Maintenance
    • 42. Rehabilitation
    • 43. Reconstruction
    • 44. Predicted 10 Year RSL Average- Heber City
    • 45. Thank You Charlie Nemmers

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