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41 APPENDIX D Annotated Bibliography Eight articles, papers, or reports were identified and judged important The model employs regression analysis to predict the level of to this synthesis project. Seven publications document efforts to esti- vehicle procurement necessary. It uses vehicle fleet characteristics mate transit capital needs at three different aggregation levels: including make, model, and year of manufacture; mileage; and capacity. The model assigns a vehicle condition rating based on: 1. National. Two publications summarize efforts to estimate national transit needs. The AASHTO report (Cambridge Engine starting trouble Systematics, Inc. 2009) estimated national investment needs Engine running condition for both highways and public transportation. FTA's Transit Interior condition (upholstery damage, seats missing) Economic Requirements Model (TERM) is described in the A/C condition second paper (Laver 2009). FTA uses TERM estimates in its Wheelchair lift operation biennial report to Congress on the conditions and perfor- Exterior condition mance of transit. Mileage. 2. State. Two publications describe the approaches used in Alabama (Anderson and Davenport 2005), and in Illinois The condition rating is a five-point scale: (Booz Allen Hamilton 2003) to estimate statewide needs. The Illinois (Booz Allen Hamilton 2003) approach is also interest- 1. Bad: Vehicle needs immediate replacement. ing in that needs assessments are also prepared for the indi- 2. Poor: Vehicle should be replaced. vidual transit systems. 3. Fair: Vehicle is acceptable. 3. Local systems. Three publications describe how the tran- 4. Good: Vehicle has no outstanding problems. sit systems in Boston (Massachusetts Bay Transportation 5. Excellent: Vehicle is in new condition. Authority) (D'Allessandro et al. 2009; McCollom 2006) and Chicago (Regional Transportation Authority; RTA) (Yoder A series of regression models are tested using variables that and Delaurentis 2003) have developed transit asset manage- included vehicle age, annual vehicle mileage, wheelchair accessi- ment systems in efforts to bring their systems to a State of Good bility, and population over 65 years of age. The results show that Repair (SGR). The two publications about the Boston experi- vehicle age is the best predictor of vehicle condition. ence cover the model development and initial application in 2001 (McCollom 2006) and the recent use of the approach in 2009 (D'Allessandro et al. 2009). Booz Allen Hamilton, Downstate Illinois Capital Needs Assess- ment, PowerPoint prepared for Illinois Public Transportation The approaches described in these reports also varied in several Association, funded by Illinois Department of Transportation, respects including assets costs, SGR measure, and scenario testing Springfield, Oct. 2003. (see Table D1). Illinois DOT developed a capital asset needs model to estimate The last publication in the literature review, Transit State of Good 10-year capital needs for "downstate" transit agencies--Illinois sys- Repair: Beginning the Dialogue, is a summary of a workshop that tems located outside of the Chicago metropolitan area. The transit FTA recently held with 14 transit managers to discuss current practice agencies completed a detailed survey of existing asset inventory in transit asset management. The report identified a number of techni- (vehicle fleet and major facility components) and known investment cal issues that need further research including: (1) the definition of needs. The data included asset ages, acquisition costs, and lifetime state of good repair, (2) the effective use of condition ratings instead of mileages. just age, (3) the determination of optimal preventive maintenance, and (4) the estimation of the benefits (or consequences) of investment deci- In addition, on-site capital cost data collection and inspections of sions on operating costs, reliability, and safety. asset physical conditions were conducted at five agencies--three urban and two rural systems. Historical cost data were collected for: The participants in the workshop stated that few transit systems used ordinal ranking or other methods for prioritizing their expan- Facility construction and capital repairs sion, rehabilitation, and replacement investment needs. Instead, the Annual capital expenditures on other needs such as security- needs typically are prioritized in meetings of agency department related equipment, shelters, and radios managers. They also expressed strong interest in learning more Annual operating and maintenance costs about the use of decision support tools as a means of assessing and Engine/transmission rebuilds. prioritizing SGR needs. These onsite visits provided the data required to establish life- Anderson, M.D. and N.S. Davenport, A Rural Transit Asset Man- cycle cost curves for four types of buses and seven types of para- agement System, University Transportation Center for Alabama, transit vehicles. The life-cycle costs included (Figure D1): Tuscaloosa, June 2005. Original purchase (investment) cost This describes an Alabama Department of Transportation (DOT) Lifetime rehabilitation costs (engine and transmission rebuilds, asset management system used for transit vehicles purchased under mid-life overhauls) the FTA Section 5310 and 5311 funding programs. According to the Annual operating and maintenance costs. report, Alabama DOT uses the system to estimate the overall fleet quality, identify annual vehicle replacement needs, and to predict A minimum cost replacement strategy was used to minimize total future funding and budgetary needs. life-cycle costs. These costs were allocated over the life of a vehicle

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42 TABLE D1 SUMMARY OF ASSESSMENT APPROACHES IDENTIFIED IN LITERATURE REVIEW Geogra- Asset Costs SGR Measure Scenario Testing phic Replace- Mid- Condition SGR Service Prioritized Authors Area ment Life O&M Age Ratings Condition Performance Funding Pisarski/Reno U.S. X X X X X X Laver U.S. X X X X X X Illinois DOT Illinois X X X X Anderson/Davenport Alabama X X X Yoder/Delaurentis Chicago X X X X X McCollom Boston X X X X X X on a per mile basis. The purchase and rehabilitation costs per mile D'Alessandro, D.F., P.D. Romary, L.J. Scannell, and B. Woliner, decline over the life of the vehicle. In contrast, operating and main- "MBTA Review," Boston, Mass., Nov. 1, 2009. tenance costs per mile tend to increase as a vehicle ages. When these divergent unit costs are combined to produce a total life-cycle cost This summary is an update of the capital program using the SGR plan- curve, a minimum unit cost and its corresponding lifetime mileage ning process implemented by MBTA in 2001. It comments on the cur- can be determined (Figure D2). rent backlog of projects and annual funding requirements as follows: This lifetime mileage was used to establish when the vehicles For FY2010, over $3 billion worth of projects were identified by should be replaced in the Illinois DOT capital needs model. In con- the MBTA as needed to address SGR issues. Only 15 of those trast to vehicles, replacement needs for all facilities components 201 projects totaling $203M were funded. In other words, all but were determined based on standard useful lives. 6 percent of what was requested to address SGR issues went unfunded. The on-site data collection also provided the data required to evaluate the physical condition of downstate transit assets. The FTA Because it can fund only a small portion of the SGR backlog, vehicle decay curves (see Laver above) were recalibrated to reflect MBTA prioritizes annual capital projects against predetermined cri- the Illinois experience. teria. Each project is scored with low to high priority to a maximum of 100, based on: Illinois DOT has used the capital assets needs model annually since 2003 to estimate statewide capital needs. It also prepares Safety needs assessments for the individual transit systems that they can Health use in their capital planning. Environment SGR Operations impact Cambridge Systematics, Inc., A.E. Pisarski, and A.T. Reno, Bottom Cost/benefit Line Technical Report: Highway and Public Transportation National Legal commitments. and State Investment Needs, prepared for American Association of State Highway and Transportation Officials, Washington, D.C., This paper suggests that the SGR planning process implemented Mar. 2009. by the MBTA in 2001 has and continues to be useful for estimating capital funding needs. However, the paper indicates that the MBTA The report addresses the types of public transportation capital needs has not used its methodology to prioritize annual capital projects. including the: Elimination of the backlog of vehicle needs and replacement; Laver, R., First FTA SGR Roundtable, Transit Economic Require- and ments Model (TERM), PowerPoint presentation to the FTA First Rehabilitation of other existing transit assets, including track, State of Good Repair Roundtable, Washington, D.C., July 10, 2009. signals, maintenance facilities, passenger stations, and pas- senger fare systems to bring transit systems to a SGR. This presentation gives an overview of the Transit Economic Require- ments Model (TERM). TERM is used to analyze current asset condi- Urban and rural systems are looked at separately. tions with the objective of either maintaining condition or to improve condition and performance. TERM focuses on needs assessment--the replacement of assets and the expansion of the existing system. The analysis identified four different investment scenarios by applying combinations of physical conditions and service performance: The presentation also describes how TERM is used to determine investment needs for reaching a SGR over specified time periods, based on funding level scenarios. FTA uses TERM in its biennial 1. Maintain physical condition (insufficient funds to replace report to Congress on the conditions and performance of transit. asset based on recommended service life). 2. Improve physical condition (sufficient funds to replace asset based on recommended service life). 3. Maintain service performance. TERM COMPONENTS 4. Improve service performance. The TERM model consists of: The estimation models use an age-based approach to estimate SGR needs using data from the National Transit Database and other Model database FTA sources. The analyses parallel prior biennial reporting from the Inventory of U.S. transit assets U.S.DOT Condition and Performance Report to Congress. Agency-mode operating characteristics

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43 $2.20 Initial Investment $30 $2.00 $25 $1.80 Minimum Cost Replacement $20 Cost per Mile $1.60 $15 $1.40 $10 $5 $1.20 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 $0 0 200,000 0 400,000 600,000 6 800,0 000 FIGURE D2 Total life-cycle cost. LTD Miles Engine and Transmission Rebuilds Urbanized areas demographics $30,000 Cost and investment benefits data by mode Transmission Rebuilds User-defined investment scenarios $25,000 Asset rehabilitation and replacement polices Engine Rebuilds Budget constraints $20,000 Financial assumptions (inflation, discount rate). Cost per Mile Estimation of investment needs by type, mode, and urban area $15,000 size. Asset conditions forecasts. $10,000 $5,000 NEEDS INVESTMENT MODULE OVERVIEW $0 0 ,000 400,000 600,000 800,0 200, 000 The TERM model estimates national transit investment needs for LTD Mile es six scenarios: Mid-Life Rehab 1. RehabReplacement (Maintain or Improve Condition): $30,00 00 Total investment required for rehabilitation and replacement of the nation's existing transit assets. $25,00 00 2. Asset Expansion (Maintain Performance): Total invest- ment in new, expansion assets as required maintaining exist- Cost per Mile $20,00 00 ing transit performance given projected growth in transit $15,00 00 travel demand. 3. Reduce Crowding (Improve Performance I): Expansion $10,00 00 investments to reduce crowding in local agency modes with high vehicle occupancies. $5,00 00 4. Increase Average Speed (Improve Performance II): $0 $ Expansion investments in higher speed modes (heavy rail 0 000 400,000 600,000 800,0 200,0 000 transit, light rail transit, or bus rapid transit) to improve per- formance in urbanized areas with low operating speeds. LTD Miles 5. Benefit-Cost I (Maintain/Improve Condition, Maintain Performance): Evaluates cost-effectiveness of rehab replacement and asset expansion investments. 6. Benefit-Cost II (Improve Performance): Evaluates cost- effectiveness of performance improvement investments. An Asset Decay Simulation methodology is used for the Rehab-Replacement scenario to make an SGR forecast and Assets Condition forecast. The methodology simulates the full asset life cycle and decay of all transit asset types based on the following factors: Asset use (e.g., vehicle mileage, annual boardings, hours of service) Annual maintenance Aging (years of service) Life-cycle events (capital maintenance, rehabs/rebuilds, and FIGURE D1 Minimum cost replacement. replacement).

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44 The analysis relies on: Additional scenarios can be run that examine the consequences of constrained funding over a 20-year planning period. These con- A detailed transit asset inventory based on a five-point condition sequences include a summary of asset actions (replacement or mid- scale where 1 = poor condition and 5 = excellent condition. An life maintenance) funded on-time, later than scheduled, or not at all, asset reaches its mid-life when its condition rating = 3.5. An and changes in the backlog of actions throughout the period. asset reaches the end of its useful life when its condition rating = 2.5 to 2.75. The presentation also suggests potential enhancements to the Asset investment policy (timing of life-cycle events). model. These include the use of decay curves based on a preventive Empirically derived decay curves (predict asset condition maintenance program, treatment of multi-year funding of projects, and based on asset type, age, maintenance and utilization). deferral of a portion of a project cost if insufficient funds are available. The analysis predicts current assets physical condition and timing/ Transit State of Good Repair: Beginning the Dialogue, Federal cost of life-cycle events over the next 20 years. The aggregate physi- Transit Administration, U.S. Department of Transportation, Wash- cal condition rating uses the five-point rating scale. ington, D.C., Oct. 2008. McCollom, B., MBTA Systemwide Condition Assessment and FTA convened 14 representatives of transit systems and state DOTs Capital Investment Plan, presentation to the World Bank, Washing- in 2008 to discuss transit asset management and SGR at their agen- cies and what is needed to resolve critical capital needs. The intent ton, D.C., Mar. 28, 2006. was both to measure the extent of the problem and to look at cre- ative financing for maintaining and upgrading aging assets. Topics This presentation discusses the Massachusetts Bay Transportation discussed included capital needs and financing for aging transit Authority's SGR project. The objectives of the project were to infrastructure, defining SGR, inventory and tracking of transit assets, demonstrate ongoing funding needs through an engineering assess- maintenance/preventive maintenance practices and standards, and ment of current needs and to develop a long range capital planning tools and research needed to address SGR. model for project programming under limited funding availability. Seven papers are presented in the report covering: The model development focused on high-cost MBTA assets and did not try to establish a maintenance database of all assets. It also Current conditions of the nation's transit infrastructure focused on the ability to run "what if" scenarios in a reasonable time Defining and measuring state of good repair frame--less than 5 minutes. Transit asset management Standards for preventive maintenance The SGR scenario model inputs use annual budgets, asset table Core capacity of a transit system of key assets (vehicles, facilities, and systems), and condition mea- Alternative approaches to financing sures (age and life), and prioritization weighting scheme. The asset Research needs. table lists three attribute areas: The report documents that one-quarter of the nation's bus and rail 1. "Condition" measures assets are in marginal or poor condition and the proportion increases Age to one-third in the nation's largest rail systems. FTA estimates Life ". . . the total level of investment required to bring the nation's bus and 2. Project "action" costs rail assets to a state of good repair is currently estimated at $25 billion Replacement/renewal ($ 2004) . . . [and that] . . . after eliminating the backlog, an additional Contingency factors $9 to $11 billion from all sources is required annually to maintain this Cash flow years state of good repair into the future." 3. Ranking measures The report identified a number of technical issues that need fur- Condition measures ther research including: (1) the definition of state of good repair, Operational importance (2) the effective use of condition ratings instead of just age, (3) the Affected ridership. determination of optimal preventive maintenance, and (4) the esti- mation of the benefits (or consequences) of investment decisions on Candidate projects are then scored using a weighting scheme operating costs, reliability, and safety. and based on the following: The participants in the workshop stated that few transit systems Age (default weight 60%) used ordinal ranking or other methods for prioritizing their expan- Age as a percent of service life. sion, rehabilitation, and replacement investment needs. Instead, the Operational impact (default weight 20%) needs typically are prioritized in meetings of agency department Yes/no managers. They also expressed strong interest in learning more about Selected assets are essential to system operations the use of decision support tools as a means of assessing and priori- Critical projects include buses, track, signals, and power tizing SGR needs. Noncritical projects include stations, parking facilities. Cost-effectiveness (default weight 20%) Cost of action/ridership Yoder, S.L. and J. Delaurentis, "The Framework for a Regional Reflects customer service impacts. Transit Asset Management System," ITE Journal, Institute of Trans- portation Engineers, Washington, D.C., Sep. 2003, pp. 23. The methodology can be used to address the cost and timing of bring- ing and maintaining the system (existing assets) to a state of good This paper describes the efforts by the Regional Transportation repair. A baseline scenario is run that involves unconstrained funding Authority (RTA) to develop a framework for overseeing public transit availability. This establishes the minimum time and funds to reduce funding in the six-county Chicago area. The RTA is not a transit oper- the backlog of projects and to maintain the transit system at SGR. ator, but is legislatively responsible for fiscal planning and policy

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45 oversight. To improve its oversight ability, in 2000 it laid out the Usage (e.g., rail station boardings and alightings, connecting framework for a regional transit asset management system (RTAMS). transit lines, park-n-ride, fares, and schedules); and Capital improvement information (e.g., asset performance The RTAMS goals were to give RTA management the data and information--station ridership ranking, on time-performance, tools to support decision making on transit asset management strate- and asset demand information for prioritizing capital gies and investment tradeoffs. Five goals in particular emphasized investment including user profiles, adjacent land uses, the information base and analytical tools: station area development patterns, vicinity maps, tourist attractions, and demographics surrounding the station areas). 1. Provide multimedia retrieval on asset locations, conditions, usage, performance, capital projects, and maintenance prac- tices of the RTA system regardless of ownership. Another function was scenario simulations. This built on earlier 2. Enable RTA to comprehensively analyze, maintain, and work during the 1990s that developed decay curves based on the manage transit information. compilation and analysis of the CTA engineering assessment data 3. Enable RTA to prioritize capital investments and capital and asset purchasing information and maintenance records. The replacement needs. curves depict the relationship among asset condition, useful life, 4. Develop applications and simulation tools linking to the RTA and maintenance practices. budgetary process and financial reporting requirements. 5. Develop data mining tools capable of simulating "what if" Using the decay curves, future asset conditions can be predicted scenarios. given the asset age and maintenance practices. Therefore, the decay curves were the principal input for developing a life-cycle capital In the planning process five transit asset management system func- replacement/renewal tool. This tool permits RTA to simulate "what tions were identified. The first function is a Multimedia Integrated if" scenarios, answering questions such as: Data Warehouse, including a condition rating of each asset containing: What is the trade-off between maintenance cost and capital Asset locations (e.g., for a rail station would have physical renewal cost? description of layout, escalators, entrances, and fare collec- Is it better to replace or repair a certain asset category? tion equipment); How much capital funding is required for the next 10 years to Conditions (e.g., station age, capital project descriptions, bring all assets from poor condition to good condition? routine and preventive maintenance practices, and asset con- To what condition will an asset deteriorate if no additional dition ratings); funding is provided?