John A. Roebling Suspension Bridge, connecting Covington, KY and Cincinnati, OH.
The Federal Highway Administration's Office of Asset Management is promoting a different way for transportation agencies to distribute their resources among alternative investment options. This new way of doing business, referred to as "Asset Management," is a strategic approach to maximizing the benefits resulting from the expenditure of agency resources.
For any transportation agency, the progression toward Asset Management will involve a myriad of activities. These endeavors will differ from State to State. For example, some agencies will pursue a data integration strategy in order to ensure comparable data for the evaluation of investment alternatives across asset classes. Others will move to deploy economic analysis tools to generate fact-based information for decision makers. Still others will want to integrate new inventory assessment methods into their decision-making processes.
Much can be learned from those who are readying for or have transitioned their organizations to Asset Management. To spark the exchange of information, we are conducting a series of case studies focused on agencies that are leading the way. To date, we have established five tracks of emphasis regarding Asset Management: data integration, economics in Asset Management, the Highway Economic Requirements System–State Version, life-cycle cost analysis, and bridge management. In upcoming years we will continue to add new State and local reports to each of the tracks and will create new tracks addressing additional facets of Asset Management such as change management and performance measurement.
On behalf of the Office of Asset Management, I am pleased to introduce this addition to the case study series. We believe the case studies will help agencies meet the challenges of implementing Asset Management programs.
King W. Gee
Associate Administrator, Office of Infrastructure
The Transportation Asset Management Case Study Series is the result of a partnership between State departments of transportation, local government agencies, and the Federal Highway Administration's (FHWA's) Office of Asset Management. FHWA provides the forum from which to share information, and the individual States and local government agencies provide the details of their experiences. For each case study report, State or local government agency transportation staffs were interviewed by FHWA, and the State or local government agency approved the resulting material. As such, the case studies rely on the agencies' own assessment of their experience. Readers should note that the reported results may or may not be reproducible in other organizations.
Walnut Street, Lawrenceburg, IN.
The Ohio-Kentucky-Indiana Regional Council of Governments (OKI), the Metropolitan Planning Organization (MPO) located in Cincinnati, is engaged in a process to improve its ability to plan transportation improvements through the use of economic analysis methods. These methods are intended to augment OKI's existing evaluation approaches to small- and large-scale transportation projects.
For analysis of individual projects in the Transportation Improvement Program (TIP), OKI staff utilizes a Prioritization Process, in which scores are applied to a host of transportation, planning, and cost factors. Projects are then ranked according to total scores.
In the past, OKI made occasional use of economic analysis for large corridor projects, although typically this analysis was limited to very large projects and was performed by outside experts. To attain broader application of benefit-cost techniques and also reduce the cost of such analyses, OKI has recently explored methods to do in-house economic analyses of surface transportation projects. As part of this effort, OKI investigated the potential use of the FHWA's Surface Transportation Efficiency Analysis Model (STEAM) software for the analysis of large projects and clusters of smaller projects.
The FHWA developed the STEAM software through a private contractor in the late 1990's to facilitate detailed corridor and system-wide economic analysis of large transportation projects. STEAM post-processes trip time, distance, and other information already generated by travel demand models to compute the net value of mobility and safety benefits attributable to regionally important transportation projects.
Using model documentation from the FHWA website for STEAM, OKI was able to integrate the STEAM software with its travel demand model and to run STEAM. In 2004, OKI contacted the FHWA to request some programming changes to STEAM to accommodate parameters needed by OKI, and to seek limited technical assistance on updating and interpreting STEAM data. The FHWA responded by commissioning updates to STEAM, establishing limited technical support services, and providing guidance on appropriate economic data. In April 2006, the FHWA also made a site visit to Cincinnati. This process contributed to OKI's successful conclusion of a STEAM modeling exercise for a group of five projects.
Lessons learned in the exercise have been beneficial to both OKI and the FHWA. OKI was able to establish a successful interface with the STEAM software that can be replicated in the economic evaluation of additional projects in the future. OKI enhanced the value of its analysis by thoroughly and publicly developing location-specific data for key STEAM inputs, by which OKI also improved its skills in updating and interpreting economic data associated with transportation projects. Finally, OKI identified important programming constraints of the STEAM software and reported them to the FHWA.
Through its cooperation with OKI, the FHWA team was able to make the STEAM software more useful for a typical MPO application. It improved the user interface and also developed a post-processing spreadsheet for the STEAM results that allows outcomes for a limited number of modeled analysis years to be prorated to all other years of the analysis period. This new spreadsheet tool greatly enhances the quality of STEAM's benefit-cost results and is now available for other users as well.
The FHWA also identified the need for additional technical guidance on integrating STEAM with travel demand models. Accordingly, the FHWA has commissioned the production of additional guidance to address what types of projects are appropriate for STEAM analysis; how to develop the appropriate STEAM inputs from the travel demand model for these projects; and how to determine if the results of the travel demand model analysis constitute valid input into the STEAM model.
OKI remains committed to implementing STEAM wherever appropriate in its planning process-generally for large projects or clusters of projects amenable to travel demand modeling and STEAM. As tools become available and staff expertise is developed, OKI will also make use of benefit-cost analysis tools that can be run independently of travel demand models to evaluate smaller projects. Collectively, OKI anticipates that the economic data provided by these tools will strengthen its Prioritization Process, enhancing the ability of the organization to demonstrate that the public receives the best value for its transportation dollars.
Carew Tower, Cincinnati, OH.
According to the American Association of State Highway and Transportation Officials, "Transportation Asset Management (TAM) is a strategic and systematic process of operating, maintaining, upgrading, and expanding physical assets effectively through their life cycle. It focuses on business and engineering practices for resource allocation and utilization, with the objective of better decision-making based upon quality information and well-defined objectives." Economic analysis plays a critical role in TAM by facilitating tradeoff analysis, in which the net benefits of competing investment options are compared in terms of their life cycle "dollars and cents" impacts on the public. Planners and engineers can use information from this analysis to identify the most beneficial investments based on economic considerations.
Ohio-Kentucky-Indiana Regional Council of Governments (OKI) is a Metropolitan Planning Organization (MPO) that considers a wide range of options for addressing transportation needs for its region. Within its Congestion Management Process (CMP), these options include capital investments as well as Transportation System Management (TSM) approaches. TSM is similar to and incorporates many of the key features of TAM. It is a process of broadening the range of alternatives that should be evaluated in addressing a transportation problem. Rather than focusing primarily on new construction to solve capacity problems, it emphasizes better management and operations of the existing system. Using TSM, OKI monitors the performance of the system, identifies alternative strategies to mitigate congestion, and assesses the effectiveness of implemented actions. To facilitate the comparison of alternatives, OKI utilizes a project scoring tool which incorporates social, environmental, and economic factors. The agency is aggressively pursuing greater use of life cycle economic analysis tools in its evaluation of alternatives.
The application of economic analysis by an MPO to planning, particularly within the context of a management system with TAM components, is a matter of particular interest to the Nation's transportation community. MPO's select almost all of the Nation's urban transportation projects, and are most directly confronted with the tasks of allocating capital improvement resources to accomplish multiple objectives, including congestion relief and infrastructure replacement and reconstruction. The FHWA's Office of Asset Management has therefore selected OKI as a case study for applications of economic analysis in TAM. OKI personnel represent an important national resource with regard to their experience in implementing economic analysis methods at the MPO level. The following case study summarizes this experience, highlighting the process, challenges, and potential rewards of the implementation of economic analysis techniques in MPO planning.
OKI is the planning agency designated as the MPO for the greater Cincinnati area. OKI is governed by a Board of Directors comprised of approximately 117 members representing elected officials from each member County and each city over 5,000 persons; county planning agencies; residents; transportation/transit agencies; townships over 40,000; and other elected or responsible persons.
The Board of Directors meets on a quarterly basis. An Executive Committee of approximately 40 members of the Board meets monthly to review and direct the activity of the staff. The Intermodal Coordinating Committee (ICC) meets on a monthly basis and makes recommendations to the Executive Committee and the Board of Directors.
Among its responsibilities, OKI develops the 20-year Long Range Plan and the four-year Transportation Improvement Program (TIP) for the greater Cincinnati region. OKI has final authority over selecting the transportation projects on which Federal dollars will be spent in the region. In 2005, OKI approved over $30 million in funding for projects in this region. The ICC deals with all aspects of the preparation, maintenance, and amendment of the TIP, including ensuring the precepts of TSM are applied in the process of short range planning.
The region covered by OKI is composed of eight counties in three states: Butler, Clermont, Hamilton, and Warren counties in Ohio; Boone, Campbell, and Kenton counties in Kentucky; and Dearborn County in Indiana. The total region included 1,940,545 people and 968,680 workers as of 2005 and 2,636 square miles of total area (see Figure 1). The region is expected to grow to almost 2.3 million residents and 1.2 million workers from 2005 to 2030. Hamilton County will remain the dominant county in terms of population and employment, but most outlying counties will gain increasing shares over the planning period.
Figure 1: The OKI Region.
Within the eight-county region are the following transportation assets and services:
Upper Tug Fork Road, Campbell County, KY.