Asset Management

Relationships Between Asset Management and Travel Demand:
Findings and Recommendations from Four State DOT Site Visits

Chapter 6. Findings and Recommendations

6.1 Key Findings

State DOTs have made great strides over the past decade in implementing TAM processes for a broad range of investment and strategic management activities. Existing TAM processes required significant investments in data collection and database maintenance, decision-support tool development, business process re-engineering, and human-resource development. However, even with these significant investments, progress in incorporating travel-demand measures into state TAM programs remains in its infancy. The following is a summary of key findings:

• TAM programs: Each of the agencies interviewed has in place either elements of or strong foundations for a TAM program. At a minimum, all states utilize both pavement and bridge management systems and data collection processes for maintaining the asset inventories used by management systems. In addition, most states maintain current databases of some other highway assets, including the location and condition (or age) of guard rails, drainage, signage, and a variety of other ancillary assets. Beyond these core programs, most states also maintain one or more decision-support tools designed to assist in selecting among a mix of potential rehabilitation options. For two of the study states, asset management analyses were either reflected in or very closely tied to development of the SLRP. Each state indicated a strong interest in further advancing their asset management program with several agencies actively participating in further development actions.

  The TAM programs for each of the four participant states remain primarily focused on system maintenance and preservation. This focus reflects the history of each program's development (developing from a kernel of pavement and bridge management systems) and the particular investment needs, legislative requirements, and "color of money" limitations within each state. Moreover, most agencies tend to focus on the short- to medium-term investment needs, but place less emphasis on long-term objectives (e.g., mitigating congestion). This emphasis is reflected in their TAM program goals and objectives, which are also primarily focused on maintenance and preservation.

• Travel demand forecasts and TAM: Each of the agencies interviewed maintains some level of travel demand forecasting capability. These resources are primarily used to provide technical support to local MPOs and RPOs (in many instances, the state's travel demand modelers develop and operate the travel demand models for the smaller MPOs and RPOs) or to support cost-effectiveness analyses of major investment projects. Only two of the four states interviewed maintained statewide travel demand models of sufficient quality to support development of a long-term, strategic assessment of state-wide capacity requirements or future performance expectations.

• Measures of current travel demand: In addition to generating long-term travel demand forecasts, each state also actively maintains databases of current travel demand (e.g., traffic counts, VMTs, truck counts) for all state-maintained facilities. Measures of current travel demand are generally available to all interested DOT staff, but are most often used by: (1) travel demand modelers as raw model input data, (2) managers with responsibilities for the preservation of bridges, pavement, and highway asset types, and (3) external users including MPOs, RPOs, municipalities, researchers, and even state residents.

Current and projected travel demand measures as inputs to the TAM process

• Infrastructure deterioration (e.g., roadway wear): Increasing traffic volumes and vehicle weights should result in increasing rates of roadway deterioration.

  While current travel demand volumes are frequently considered implicitly by agency management systems (e.g., through annual segment-by-segment roadway condition evaluations), these measures are rarely incorporated explicitly into assessments of asset deterioration rates or the subsequent maintenance and rehabilitation requirements. Similarly, projected future travel demand has not been used to model long-term maintenance and preservation needs.

• Investment prioritization: The benefits of reinvesting in existing infrastructure tend to be highest for segments with the highest travel demand (i.e., as there are more users to benefit from the improvements).

  Only one of the four study states (Utah) has developed a decision support tool that uses travel demand-driven investment benefits to help prioritize short-term preservation investments between locations or regions (i.e., where preservation activities in high utilization links can be prioritized over low demand links for a similar deficiency based on the higher benefits associated with higher volume traffic). While the other states do not explicitly include travel demand measures in their statewide investment prioritization, travel demand considerations are implicitly reflected through their traditional project review processes.

• Project benefit-cost and alternatives analysis: The cost-effectiveness (or return on investment) of major new investments and the relative benefits of project alternatives are heavily influenced by aggregate travel-time savings.

  Virtually all of the participant states regularly conduct benefit-cost analyses (or other cost-effectiveness assessments) of proposed major investment projects as well as their investment alternatives. A primary source of investment benefits for these projects are the estimates of aggregate travel-time savings for all travelers projected to use the proposed investment.

Using the TAM process to address issues related to travel demand

• Capacity improvements: As noted above, the rate of growth in travel demand remains well above the rate of growth in roadway capacity, leading to increasing congestion and travel times. Have state DOTs adopted TAM-related practices to help identify capacity improvement strategies or for prioritizing potential expansion investments?

  As noted above, two of the four participant states (Michigan and California) maintain statewide travel demand models and one (Michigan) maintains a truck model. Development of these tools is critical to the objective and consistent identification and assessment of those travel corridors (both current and future) expected to suffer most from travel demand growth and, hence, having the highest priority investment needs. Combining the data from these forecasting tools with other travel-related metrics, Michigan has identified and prioritized capacity investment needs for several "corridors of highest significance."

• Trade-offs between preservation and capacity needs: All state DOTs face the problem of balancing investment in existing roadway capacity with the need for additional capacity to address growing demand, all within limited financial resources. How have TAM and related processes been used to allocate funds between these and other competing needs, and how do travel demand measures inform this allocation?

  None of the four states interviewed has yet succeeded in developing an objective process or a decision support tool to optimize the allocation of funds across multiple investment uses (e.g., preservation, capacity improvements, safety, beatification). To a certain extent, these states have not addressed this possibility due to the existence of state legislation requiring the prioritization of preservation activities over capacity improvements (or the reverse) or due to color of money constraints at both the state and federal levels. A key exception here is Utah, which is working through the problem of establishing a robust benefit-cost process capable of making "apples-to-apples" comparisons between preservation and capacity improvement activities (despite the state legislative requirement that preservation needs be addressed first).

• Objectives and performance measures: TAM emphasizes the need to establish long-term system objectives and to develop processes and measures to evaluate success in attaining those objectives.

  The current goals and objectives of the participant states' TAM programs reflect the current focus of these programs (i.e., maintenance and preservation), and hence, place little emphasis on travel demand-related concerns (e.g., congestion). In contrast, each DOT's agency-wide goals and objectives, as expressed in strategic documents such as their SLRPs tend to be broader in scope and typically include the maintenance and improvement of mobility as a key goal.

• Long-term planning for growth in travel demand: What are state DOTs doing to plan for long-term travel demand growth?

  Each of the state DOTs interviewed has identified long-term strategies to address the issue of ongoing, long-term growth in travel demand. These strategies are most clearly expressed in each DOT's SLRP. While the mix of strategies to address travel demand issues varied by state, these strategies generally included the following measures:

  • Increased capacity (e.g., lane and bridge widening)
  • TDM strategies (e.g., telecommuting, real-time information, ridesharing)
  • Operational improvements (e.g., ITS, improved incident management)

• Long-term budgeting: TAM emphasizes the need to take a long-term, strategic view in establishing attainable organizational objectives within realistic resource constraints.

  The long-range budgeting processes utilized by state DOTs are somewhat rudimentary and have the primary objective of supporting preparation of the SLRP. According to state DOT staff interviewed for this study, long-range budget analyses have no regular "audience" beyond production of the SLRP (i.e., this information is not included in regular reports to upper management). Moreover, unlike MPO long-range plans, SLRPs are not required to be financially constrained (that is, demonstrate the likelihood that funds will be available to cover all proposed projects). Hence, the existing budget analysis within each of the study state's SLRPs represents their own efforts to generate a more comprehensive analysis and more informative document (but not necessarily to prepare a comprehensive long-term budget). The SLRPs for each of the four study states provides an analysis of their current revenue situation, while three of the four plans provide an analysis of the projected gap between long-term needs and anticipated future funding. Only one of the four states interviewed (Utah) prepared a long-term budget cash-flow projection showing the sources and uses of DOT capital and operating funds over the time horizon covered by the state's SLRP.

6.2 Recommendations

As a result of this study, the following are specific recommendations for state DOTs to enhance their existing transportation asset management programs. Also, based on comments received from state DOT staff participating in this study, a second subsection identifies ways in which FHWA may also help state DOTs to improve their existing TAM programs.

6.2.1 Suggestions for State DOTs

• Refine asset deterioration models (short- and long-term): While some participant states (most notably Utah and Michigan) have worked hard to develop good preservation investment tradeoff tools (focused on short-term preservation needs and strategies for a specific asset type such as pavement), none of the four states has developed a comprehensive long-term (i.e., 20-year) asset deterioration model that estimates capital reinvestment needs across all asset types and all regions (i.e., similar to HERS-ST). On the broader asset management front, such tools are critical in evaluating long-term funding requirements for asset preservation. Such models can also be used to evaluate the impact of changes in travel demand volumes (e.g., current and projected auto and truck VMTs) on asset deterioration rates and reinvestment needs. This analysis can help pinpoint which network assets are likely to most require future preservation investments.
• Develop statewide auto and truck travel demand models: A clear strength of Michigan's assessment of current conditions and future needs is the ability of the state's travel demand and truck models to evaluate future conditions within specific travel corridors. Statewide travel demand and truck forecasts provide the data required to think strategically about where to focus long-term preservation and capacity investment funds. The construction of such models is key to ensuring an understanding of current and future system performance (volumes, congestion, and trade flows) across their highway network. In support of this objective, FHWA may wish to help foster informational exchanges in the design and maintenance of statewide auto and truck travel demand models.
• Ensure consistency in project prioritization across regions and districts: For many state DOTs, the process of project prioritization takes place primarily within the DOT's district or regional offices (typically followed by some limited reprioritization between regions by headquarters staff). Moreover, it is not uncommon for this project prioritization process to vary appreciably from one state DOT district to the next. Such processes lack interregional consistency and, hence, may yield sub-optimal allocations of scarce investment funds. If they are not already doing so, state DOTs need to develop objective and consistent processes and tools to help prioritize investments by region. Such processes should recognize that investment benefits are generally higher on those segments with high travel demand.
• Ensure consistency between TAM program and SLRP: State DOTs should view their SLRP as a key component of their asset management program. At a minimum, the goals, objectives, and strategies of the SLRPs should be highly consistent and/or complementary with that of the asset management program and developed in coordination with asset management staff. Optimally, the SLRP should be recognized as a key component of the asset management program (providing a strategic roadmap for the future), with joint production responsibilities across planning, asset management, budget, upper management, and other key agency staff.
• Long-term budgeting: As noted above, while each state produces long-range plans in accordance with federal requirements, states do not always prepare an accompanying budget (in part, because these documents are not called for by existing management processes - hence, there is no immediate audience for these assessments, and in part because SLRPs are not required to be financially constrained). State DOTs should consider adopting the practice of preparing and maintaining a comprehensive long-range (i.e., 2-year) budget as a means of more effectively identifying and prioritizing financially attainable long-term investment solutions and performance objectives. A comprehensive long-term budget should include a detailed cash-flow analysis showing the anticipated sources and uses of all capital and operating funds over a long-term forecast horizon. Plans should also be founded on realistic and conservative assumptions regarding rates of inflation and the future funding capacity of state and federal funding sources.
• Improved coordination with county and local governments: With the exception of NCDOT (which holds responsibility for more than 80 percent of all roadway miles statewide), the state DOTs interviewed for this study are responsible for, at most, 15 percent of total roadway miles within each state. Hence, most roadway investment and maintenance activities within each state are managed independently by numerous county and local governments. Therefore, the effective development and deployment of a truly statewide strategic TAM program requires both: (1) the existence of TAM programs at the local and regional level, and (2) coordination of program metrics, objectives, and execution across all levels of government including state, regional, county, and local. Note that Michigan and Utah both have local and regional TAM programs that coordinate with and frequently obtain technical support from their state's DOT. State DOTs should work to promote TAM practices within the state at the county and local level and work with the state's regional, county and municipal governments to jointly identify, define, and pursue consistent, statewide TAM practices and objectives.

6.2.2 Suggestions for FHWA

• Technical guidance: Each of the state DOTs participating in this study indicated a strong interest both in advancing their own asset management program and in learning more about how other states (or other organizations with large asset bases) were addressing similar TAM-related issues. At the same time, these states are striving to derive operational solutions to technical issues associated with the implementation of asset management processes, in many cases working in isolation from each other in solving the same, fundamental technical problems. Examples include the development of comprehensive capital asset databases, robust decision support tools, and meaningful performance measures.

  Based on these and related observations, it is clear that the states would both benefit from and appreciate technical assistance in solving the technical issues associated with making asset management concepts operational. In this regard, many agencies interviewed were well aware of the problems they wanted to solve (e.g., develop metrics capable of effectively assessing investment tradeoffs between rehabilitation and capacity improvements), but frequently lacked the specific technical methods required to develop the associated support tools. Several respondents also suggested that the current asset management literature has proven highly useful in helping to identify the high-level structure, goals, and objectives of a successful TAM program, but offers less in terms of specific solutions to technical issues. The recommendation here is not to provide a single set of solutions that all agencies are expected to follow, but rather a set of suggested approaches to key technical issues (from which agencies can build their own solutions). Specific technical issues to address include:

  • Prioritization and tradeoff analysis: Many agencies lack analytic methods or capabilities to assess investment tradeoffs between highway asset types (including pavement, bridges, signage, landscaping, etc.), regions, and operations, preservation, and expansion.
  • Performance measures: Each of the four states interviewed has adopted or is in the process of adopting statewide transportation performance measures. The types of measures in use or being considered vary widely from state to state. To some extent, this variation reflects variations in the primary focus of each state's asset management program as well as differences in each state's long-term goals and objectives. However, these differences also reflect varying levels of experience in the development and maintenance of performance measurement systems such that one state suggested it would be beneficial to have further technical support from FHWA in this area (e.g., best practices, information exchange sessions).
  • Comprehensive asset inventory development: While most agencies have quality inventories of pavement and bridges, most agencies do not have a single comprehensive inventory of all highway infrastructure assets (e.g., drainage systems or rest area assets). A comprehensive database is valuable in conducting tradeoff analyses of reinvestment between multiple asset types.

• Legislative constraints: Existing legislation within each of the sample states as well as program requirements for several federal sources (e.g., federal aid funds) can severely restrict a state DOT's ability to use asset management techniques to optimize the allocation of funds. For example, North Carolina has a legislative requirement to complete build-out of the state's intrastate highway system, a mandate that is counter to the state's increasing need for preservation expenditures. Similarly, federal-aid funds such as the Highway Bridge Replacement and Rehabilitation Program limit the application of funding capacity to a specific purpose, which may not reflect prioritized investment needs. FHWA may wish to consider options by which funds with specific uses may be diverted to alternate uses if justified by supportable analyses. Similarly, state DOT representatives may wish to work directly with state regulators to loosen the fixed funding priorities embedded within existing state transportation legislation (if they conflict with the findings of their asset management programs).