Economics in Asset Management
The Hillsborough County, Florida, Experience

Was It Worth It?

The implementation of Asset Management can be expensive. Hillsborough County has spent over $3 million to collect and enter data into HAMS. The county fully expects that the improved, detailed, capital planning enabled by HAMS will, over time, create equal or greater savings in annual maintenance costs. These savings will reduce the tax burden on county residents and help fund infrastructure enhancements, congestion mitigation programs, and other quality of life improvements.

The switch from reactive infrastructure management to an active, "get it done right" program is already yielding substantial benefits to the Public Works Department and to the residents of Hillsborough County:

• Improved financial efficiency. The ability to use HAMS to calculate future maintenance actions and to target funds where they will yield the greatest benefit lends much more credibility to the budget process. Accordingly, the Board of County Commissioners has recognized the need for preventive maintenance and has assured increased annual infrastructure funding of $10 million for the next 20 years.
  
• Improved communication with service users. Now, when a citizen calls to ask about the status of his or her streets, sidewalks, or drainage system, the county can respond with information on when and what type of preventive maintenance is scheduled for the asset over the next several years. Similarly, when a request comes in for an improvement, the county is able to respond objectively to the public about the relative priority of the requested improvement based on the budget and the need for improvements elsewhere in the county. Although evidence is anecdotal at this point, the perception of Public Works personnel is that the public is receptive to this information and that the number of complaint calls from the public about infrastructure has diminished.
  
• Rapid compliance with new accounting requirements for asset valuation. The ready access to asset data through HAMS made it possible for Hillsborough County to comply quickly with the accounting reforms required under GASB 34. GASB 34 requires that all long-lived capital assets (including roads and bridges) be reported in State and local government financial statements. The transportation infrastructure currently owned by the county is valued at $5.82 billion. GASB has formally recognized Hillsborough County for the speed with which it complied with GASB 34 requirements.
  
• Lower borrowing costs. The county's well-managed finances and ability to plan for the long term, evidenced in part by its ability to quickly comply with GASB 34, have contributed to its continuing to receive favorable bond ratings. The key credit rating agencies recently upgraded these ratings, ranking Hillsborough County in the highest level for Florida counties.
  
• Enhanced response to emergencies. Florida was struck by four severe hurricanes in a period of 5 weeks in August and September 2004. Three of the hurricanes-Charley, Jeanne, and Frances-impacted the Hillsborough County area. HAMS provided critical information to the county in its response to these events. The county used information collected in the HAMS stormwater and drainage inventory to pinpoint those locations most likely to experience drainage problems based on prior experience. GIS information in the database was critical to locating and responding to the sites and facilities where flooding was reported during the hurricanes. Data in HAMS also facilitated the county's ability to locate and clean up debris spread by the storms from streets and sidewalks across the county.
  
• Improved risk management and lower insurance rates. By pursuing preventive strategies and by having comprehensive data on asset conditions, there is a much lower risk of unexpected failure of critical infrastructure elements. Unexpected failures can impose major costs on society and are expensive to insure against. Good asset maintenance planning reduces risk and lowers insurance costs. For instance, the county believes that its Stormwater Master Plan, developed using HAMS data, likely contributed to an improved flood insurance rating from the Federal Emergency Management Agency.