The case studies presented in the ASCE report demonstrate how the adoption of asset management has greatly benefitted four diverse entities – three U.S. states and one state in Canada.
Starting an asset management program should not be an overwhelming task for an organization.
According to the report, several successful asset management programs started small with asset owners starting with an infrastructure segment with good existing data.
As data collection and reporting mechanisms improved, it expanded to additional asset classes.
Indiana State “Doubles Down on Asset Management”
Indiana’s Department of Transport asset management plan, which it has employed for a decade, improved its transportation assets. Improvements in the DOT’s assets have created a contrast between those infrastructure owned by local governments – the latter’s condition of assets was worse off than the state-owned ones.
These discrepancies have prompted the Indiana Legislature to support the development of asset management plans (AMPs) at the local level by providing expertise and incentivizing their use.
The state set up a fund to expand the utilization of AMPs at the local and regional level through free technical training and make AMPs a contingent for communities to qualify for federal funding.
The state also created the Indiana Local Technical Assistance Program (LTAP) to help develop and review AMPs. “The LTAP provides technical expertise and resources, checks for compliance with the Indiana Department of Transportation’s asset management template, and, where necessary, offer advice about areas that lack information.”
“Moving forward, Indiana lawmakers are also incorporating AMPs into water infrastructure projects. The fragmentation of the water sector – there are nearly 550 water providers throughout the state – presents a unique challenge. As such, lawmakers have incentivized water utilities to collaborate regionally to leverage technical support, share data and resources, and holistically consider future needs and solutions”.
Canada, “Asset Management Illuminates Investment Opportunities”
To prioritize infrastructure investment, Canada established Infrastructure Canada, a governmental department that will assist localities and states with all facets of infrastructure planning, building, and financing. Part of its task is to develop infrastructure policy.
One of it is policy initiatives is “a robust municipal asset management program (MAMP) set up in 2017 that serves as a “one-stop‐shop for training and best practices for localities to learn about, create, and implement asset management plans.”
However, the groundwork for developing AMPs in Canada started in 2007 when the Federation of Canadian Municipalities (FCM) reported a $123 billion infrastructure deficit at all government levels, which led Canada’s Public Sector Accounting Board (PSAB) to issue a regulation in 2009 requiring local governments to include their tangible capability assets on their annual financial statements.
Localities then began to know the value of their assets across all infrastructure throughout their lifecycle. This data helped them identify funding deficits and create their long-term plan to manage their assets.
MAMPs have raised local governments’ awareness of asset management. During its first year of operation, the workshops and informal training have helped educate local governments staff about the benefits of asset management plans and how to develop them.
“Michigan’s Infrastructure Database Provides a Roadmap for Smarter Investments”
Like many other states, Michigan struggles to maintain and modernize its aging infrastructure due to funding and financing challenges. Temperature variation further worsens the conditions of assets as backlogs of repair and replacement projects increase.
To address the problem and improve the state’s infrastructure for the next 30 to 50 years, the Governor called for creating the 21st Century Infrastructure Commission in 2016. But the challenge is daunting as the state has 3,350 separate asset owners that spanned multiple infrastructure sectors, let alone its 1,400 drinking water systems.
The Commission recommended a statewide infrastructure database and asset management plan to “identify existing infrastructure data and gaps, determine an appropriate comprehensive database system to house the data, and coordinate amongst the asset management data and planning sectors across the state.”
It started with 158 pilot communities that were able to catalog an impressive amount of information. The pilots were so successful that their work expanded to include varied infrastructure sectors across the states a year later.
Soon after the pilot communities submitted their report, the Governor legislated two new councils geared towards infrastructure management:
- Michigan Infrastructure Council and the
- Water Asset Management Council.
The Michigan Infrastructure Council is “charged with expanding the regional database into one that encompassed statewide assets, developing a long-term plan and strategy that included public and private infrastructure assets’ condition, needs, and priorities.”
“The Water Asset Management Council was created to assist Michigan’s communities in developing water asset management programs and issuing an annual report on their condition. A significant part of this effort has been providing grant funding to assist water utilities in developing asset management programs.”
“District of Columbia Identifies and Funds Unmet Capital Needs in 10 Years”
The District of Columbia had a mounting infrastructure issue due to an investment gap that persisted for ten years. The Districts Chief Financial Officer (CFO) ordered a comprehensive review and inventory of all asset classes across agencies to address these challenges.
Soon after, the D.C. Council mandated the CFO’s effort and tasked the office to produce an annual report on the maintenance and replacement schedule for capital assets, including its costs that will assist in the creation of a long-range financial plan.
A capital budget committee was organized to create a pilot to test the feasibility of developing an enterprise-wide, centralized asset registry using specialized software to create The Capital Asset Replacement Scheduling System (CARRS).
The system, implemented in 2015, basically answered four key questions: what assets does the District own, the condition of the assets, how should it prioritize its capital needs, and how much funding is available to address those needs.
Through the system, the committee was able to rank and prioritize capital needs. A few years later, 100% of the District’s assets have been added to the system, which functions as a centralized asset database, and is updated weekly.
The complete asset inventory made possible by CARRS has assisted the District to develop a six-year Capital Program Plan, helped them identify capital needs, and look for appropriate funding mechanisms to fill in the investment gap.
These four case studies record success stories and promising pilot programs and act as an example for entities who want to follow their success.