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Conditions and Performance Report
Appendix I—Transit Investment Condition and
Investment Requirements Methodology

Conditions and Performance Chapter Listing

Conditions and Performance Home Page


Transit Economics Requirements Model

TERM's Structure

Asset Rehabilitation and Replacement Module

Asset Expansion Module

Performance Enhancement Module

Benefit-Cost Tests

Rural and Specialized Transit Service Investments

 

Asset Rehabilitation and Replacement Module

The Asset Rehabilitation and Replacement Module identifies investment to maintain and improve the physical condition of the existing transit asset base. The module simulates the deterioration of the asset base over time, requiring investments in rehabilitation and replacement of transit assets in order to maintain or improve overall condition levels. The module uses two key inputs:
  • National Transit Asset Inventory
  • Statistically determined models of how asset condition decreases over time.

National Transit Asset Inventory

The National Transit Asset Inventory is a comprehensive list of transit assets owned and operated in the United States. It includes records from FTA's National Transit Database (NTD) vehicle inventory, the Rail Modernization Study, and an expanded and more thorough database of additional transit assets developed specifically for us in TERM. The specialized TERM database includes over 22,000 records, detailed by five major asset types:
  • Guideway Elements
  • Facilities
  • Systems
  • Stations
  • Vehicles.

This extensive database allows the synthesis of assets where agency-reported data are missing or incompatible with the other known agency assets. Values used in the model's input parameter determine the specific threshold in the deterioration process at which assets are rehabilitated and replaced.

Modeling Transit Asset Conditions

The Asset Rehabilitation and Replacement module uses statistically determined functions to simulate the deterioration of transit vehicles and facilities. These asset decay curves predict asset condition as a function of asset type, age, usage rate, and maintenance history. For example, straight and curved track sections are deteriorated using different decay curves because these assets deteriorate at different rates. Assets that have greater use and/or lower maintenance typically have more rapid physical deterioration rates and a lower overall condition. TERM rehabilitates and replaces assets using thresholds that are independently established for each asset category.

Prior to the 1997 report, average asset age was used as the measure of vehicle condition. While this may be a useful, intuitive proxy for condition, this measure incorporates the implicit assumption that assets deteriorate in a linear fashion over time.

In order to improve on this simple methodology, the 1997 Report calculated asset conditions using a non-linear, logistic decay function (Exhibit I-1). This functional form was derived from earlier studies of asset conditions, based primarily on the rail assets of the Chicago Transit Authority. When decay curves of this form are used, most assets will be at either a relatively high or relatively low condition level, with relatively few in the middle range. These decay curves are then applied within the Transit Economic Requirements Model (TERM) to data on assets from the National Transit Database, thereby generating an average condition level for each asset type.

This report uses a significant improvement in the modeling of asset decay for two asset types: urban buses and urban bus maintenance facilities. This improvement comes via the 1999 National Bus Condition Assessment (NBCA), in which the condition of a stratified national random sample of buses and maintenance facilities was evaluated by direct inspections. Data from this sample were used to derive new decay curves for these two assets, which are incorporated into TERM. As such, the new data play an important role both in determining current asset conditions and in estimating future investment requirements. An example of the form of the estimated decay curve for bus vehicles is shown in Exhibit I-1. Note that the estimated decay curves for bus vehicles are substantially different from the logistic form noted above (and which continues to be used for other asset types). In this form, decay is relatively rapid in the early years, followed by slower decay for an extended period, and ending with a sharp decline in asset condition. Improvements planned for the next report include a similar assessment of rail vehicle conditions.

Exhibit I-1
Asset Decay Curves

The Cost to Maintain Conditions and Cost to Improve Conditions scenarios are calculated by the Rehabilitation and Replacement Module. The key choice parameter for these scenarios is the replacement policy, which is specified as the condition level (on the 1 to 5 scale noted above) at which an asset is replaced. TERM allows a different replacement policy for each of the five major asset categories, and this feature was utilized for this report (in model runs for the 1997 report, the replacement policy was set identically for each asset type). Multiple iterations of the model are then run until the "target" condition for each asset type at the end of the 20-year investment horizon is achieved. For the Maintain Conditions scenario, the targets are the initial average condition levels for each of the five asset types. For the Improve Conditions scenario, the target is a "good" (condition rating 4.0) level for each asset type. Each model run requires approximately 3½ hours on a 456 mhz, 128 mb PC, and each scenario required 7-10 iterations to reach the targets.

The Rehabilitation and Replacement Module estimates only investments required to maintain the base year fleet; it does not account for expansion assets purchased during the 20-year model run. This function is performed by the Asset Expansion Module.

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