Guidance for Developing a Transit Asset Management Plan (2014)

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1 Background U.S. transit agencies have a wide variety of capital assets to maintain, including, but not limited to, buses, rail cars, guideway, stations, and other facilities and supporting systems. Transit agencies must rehabilitate and replace their existing physical assets to keep them in a state of good repair (SGR) and provide a consistent level of service to their passengers. Absent adequate investment in existing assets, a transit agency may find its equipment becoming increasingly unreliable and difficult to maintain, and in extreme cases may suffer reductions in system reliability resulting in degraded transit service. In recent years, transit ridership has increased, but funds for rehabilitating and replacing existing assets remain tightly constrained, further heightening the challenge that transit agencies face. Transit asset management provides a set of tools and approaches for helping transit agencies manage their physical assets and achieve SGR. Specifically, asset management is concerned with using quality data to support decisions that will maintain, rehabilitate, and replace exist- ing assets in a cost-effective way and minimize asset lifecycle costs. By implementing best practices in transit asset management, a transit agency can make investment decisions that reduce the costs over time of maintaining its system, freeing up funds where possible to help improve service. Developing an asset management plan encompasses many of the basic steps in implementing an asset management approach. An asset management plan describes the physical assets that a transit agency owns and/or maintains, their existing condition, the strategy used for investing in those assets, the transit agency’s plan for future asset rehabilitation and replacement, and how assets relate to levels and the quality of services that agencies provide. Preparing an asset management plan is not just good practice; with the passage of the transportation reauthorization bill MAP-21 in 2012, it is also the law for all recipients of federal transit funding. TCRP Report 157 provides a framework for transit SGR, and describes a basic set of steps in applying the framework, including development of an investment plan. Figure 1.1 illustrates the components of the framework, and the questions the framework is meant to help answer. Fundamentally, the SGR framework is intended to help transit agencies prioritize investments to rehabilitate and replace existing transit capital assets. In addition to providing the SGR framework, TCRP Report 157 details a set of analytical tools and approaches for prioritizing asset investments. The framework and tools provide a starting point for transit agencies interested in using an asset management approach. However, transit agencies require more detailed guidance and tools to develop asset management plans and prioritize their investments. Thus, following completion of TCRP Report 157, additional research was performed to further develop the framework and tools described in the report, as well as C H A P T E R 1 Introduction

2 Guidance for Developing a Transit Asset Management Plan to incorporate additional considerations resulting from the transit asset management-related requirements of MAP-21. The results of this additional research are described in this guide and in the accompanying research report, Guidance for Applying the State of Good Repair Prioritization Framework and Tools: Research Report, which can be found at http://www.trb.org/Main/Blurbs/ 171285.aspx. Purpose of the Guide This guide describes the process of developing a transit asset management plan (TAMP) and is intended for use by transit agencies as they seek to achieve SGR and comply with the require- ments of MAP-21. Also, it describes how to use the Transit Asset Prioritization Tool (TAPT), a spreadsheet tool designed to assist transit agencies in predicting the future conditions of their assets and in prioritizing asset rehabilitation and replacement. Further, this guide provides a set of tutorials illustrating the use of TAPT, and describes additional resources that may be relevant for transit agencies implementing an asset management approach. This guide is intended for use by transit agencies of all sizes and with all types of assets. Note, the complexity of the process is dependent upon the total number of assets and the number of types of assets. The TAPT tutorials illustrate use of the process and tool with two agencies; the first describes a smaller agency modeling their bus assets, and the second describes an agency using the tool to analyze needs for buses, light rail, track, and facilities. Figure 1.1. Elements of the transit SGR framework. Source: TCRP Report 157

Introduction 3 MAP-21 Requirements MAP-21 includes several definitions and provisions related to using a performance-based approach to making transportation investment decisions, and to asset management, in particular. At the time of this writing, the FTA was developing the rules for implementing the requirements of MAP-21. This section describes the basic requirements of the law, pending further clarification and details from FTA’s rulemaking. MAP-21, for the first time, provides a federal definition of the term “asset management.” Section 1103 of the bill defines the term as follows. ASSET MANAGEMENT.—The term ‘asset management’ means a strategic and systematic process of operating, maintaining, and improving physical assets, with a focus on both engineering and economic analysis based upon quality information, to identify a structured sequence of maintenance, preservation, repair, rehabilitation, and replacement actions that will achieve and sustain a desired state of good repair over the lifecycle of the assets at minimum practicable cost. The primary provisions related to transit asset management are in Section 20019 of the bill, which amends Section 5326 of Title 49 of United States Code (USC). This section begins with definitions of the terms “transit asset management system” and “transit asset management plan.” MAP-21 defines “transit asset management system” as: TRANSIT ASSET MANAGEMENT SYSTEM.—The term ‘transit asset management system’ means a strategic and systematic process of operating, maintaining, and improving public transportation capital assets effectively throughout the lifecycle of such assets. And the law includes the following definition of “transit asset management plan”: TRANSIT ASSET MANAGEMENT PLAN.—The term ‘transit asset management plan’ means a plan developed by a recipient of funding under this chapter that—(A) includes, at a minimum, capital asset inventories and condition assessments, decision support tools, and investment prioritization; and (B) the recipient certifies complies with the rule issued under this section. This section further directs the Secretary of Transportation to establish a “national transit management system” and lists the elements to be included in that system. These include: (1) a definition of the term ‘state of good repair’ that includes objective standards for measuring the condition of capital assets of recipients, including equipment, rolling stock, infrastructure, and facilities; (2) a requirement that the recipients and subrecipients of Federal financial assistance under this chapter develop a transit asset management plan; (3) a requirement that each recipient of Federal financial assistance under this chapter report on the condition of the system of the recipient and provide a description of any change in condition since the last report; (4) an analytical process or decision support tool for use by public transportation systems that—(A) allows for the estimation of capital investment needs of such systems over time; and (B) assists with asset investment prioritization by such systems; and (5) technical assistance to recipients of Federal financial assistance under this chapter. Section 20019 also requires the Secretary of Transportation, to “establish performance measures based on the state of good repair standards . . .” Finally, this section sets a timeline for the rulemaking and for recipients of federal funds to begin reporting performance and perfor- mance targets, and submitting annual transit asset management plans following completion of the rulemaking. The net effect of these provisions is that following FTA’s rulemaking, transit agencies will be required to prepare transit asset management plans that describe their inventory of capital assets and their conditions. Also, the plan will describe how they prioritize their SGR investments. Section 20028 of MAP-21, which amends USC Title 49, Section 5337, further stipulates that any projects funded through the SGR grants defined in this section should be listed in the transit agency’s asset management plan.

4 Guidance for Developing a Transit Asset Management Plan Another requirement of the law is that transit agencies will need to report on their performance on an annual basis, and set performance targets using measures that incorporate consideration of SGR. Here we have assumed that a transit agency’s asset management plan will include reporting of SGR-related performance measures, though transit agencies may be required to submit separate documents for performance reporting in addition to their TAMP. It’s quite possible that perfor- mance measures other than what are presented in the guide may be required by FTA. The guidance provided in this document is intended to aid in development of a TAMP consistent with best asset management practice and in compliance with MAP-21 requirements. However, developing a TAMP is beneficial regardless of federal requirements. Such a plan is valuable as a tool for communicating needs for investment in existing capital assets, for “making the case” for increased funding where needed to achieve SGR, and for establishing a transparent, repeatable, and effective process for making investment decisions. Likewise, the document describes the use of TAPT. This tool can assist a transit agency in developing its TAMP but the fundamental goal of the tool is to help transit agencies optimize their asset rehabilitation and replacement decisions. Asset Management Guidance Per MAP-21 requirements, transit agencies must develop a TAMP. However, there are many other aspects and elements to implementing an asset management approach. Two documents, in particular, have additional guidance pertinent to this broader topic: the FTA Transit Asset Management Guide and the ISO 55000 Standard Series. Chapter 5 of this report provides more information on these resources and the broader concepts, but the following is a summary of the guidance they provide relating to the development of a transit asset management plan. The FTA Transit Asset Management Guide offers targeted guidance for transit agencies interested in advancing the practice and implementation of transit asset management. This document is largely focused on how to implement an asset management approach. It defines an asset management plan as a plan for implementing an asset management approach, focused primarily on investments needed for a set of assets, and less on process improvements. The FTA guide also describes the development of asset class-specific lifecycle management plans, which share several of the same sections that Chapter 2 of this document recommends for transit asset management plans. FTA’s proposed sections for lifecycle management plans include: • Roles and Responsibilities—Who is responsible for this asset’s lifecycle management activities? • Asset Inventory—What assets are included in this lifecycle management plan? • Condition Assessment and Performance Monitoring—How will the asset class’ performance be measured and monitored? • Preventative Maintenance Plan—What activities can be proactively completed? • Rehabilitation and Replacement Plan—What capital investments are needed? • Asset Policy and Strategy—What are the asset management goals for this asset class? • Asset Lifecycle Management—What are the investment activities necessary for maximizing the performance of this asset? • Capital Programming and Operations and Maintenance Budgeting—How will asset manage- ment support capital programming and operations and maintenance budgeting? • Performance Modeling—How will asset condition data support scenario evaluation? • Continuous Improvement—How can we ensure we continue to get better at managing this asset? The other key resource for implementing an asset management approach is the ISO 55000 standards series. This standard includes specific requirements for establishing asset management systems. Particularly relevant to the development of asset management plans are the planning

Introduction 5 requirements in the standard (more detail is provided on these in Chapter 5). These require- ments are consistent with, but broader than, the TAMP outline presented in Chapter 2. They include important additional considerations such as criteria for decision making, responsi- bility for performing needed actions, the approach for reviewing the plan, and the risks associ- ated with managing assets. Transit agencies implementing the ISO 55000 standards may wish to supplement their MAP-21 asset management plans accordingly by incorporating the additional considerations. As meeting the ISO 55000 standards will take more work, agencies may want to implement a model where they complete the broader plan, but then opt only to update the MAP-21 required sections annually. Another agency might plan to create an ISO 55000 asset management plan every five years, and pull from that the MAP-21 related elements for the annual update. Important Concepts This section discusses key concepts used throughout the document. The final section of the document includes a list of references with more information on each of these items. Lifecycle cost is the sum of the costs of an asset over the course of its life. The calculation of lifecycle costs always includes agency costs, costs borne by the owner and operator of the asset (typically a transit agency in the context of transit assets). These costs may include, but are not limited to: the cost of the purchase or construction of an asset; costs from performing maintenance, repair, and rehabilitation work over the asset’s life; and costs incurred in the event an asset fails prematurely. The calculation may include user costs, costs associated with use of the asset. The determination of exactly what costs are included in an analysis depends in large part upon what options the decision maker is weighing. Lifecycle costs are often presented on an average annual basis to facilitate comparison between assets with different lives. Lifecycle costs are always calculated considering a discount rate, which captures the time value of money. Asset life (or service life) is the estimated useful economic life of an asset, specified in terms of time (years) or some other unit (e.g., accumulated mileage). The remaining service life (RSL) is the difference between this life and the age of the asset. Note one can continue to maintain an asset even once it has reached its service life, but it is unlikely to be cost effective to do so. Asset failure occurs when an asset unexpectedly ceases to provide its intended service. For revenue vehicles, a failure (also called road calls, in the case of buses) is defined using the National Transit Database (NTD) definition of “major mechanical failure,” which includes cases where the failure of a mechanical element of the vehicle prevents the vehicle from completing a scheduled revenue trip or starting the next scheduled revenue trip. For other assets, the term refers to the catastrophic failure of the asset requiring its replacement. An optimal policy for an asset is a description of the set of actions to be taken to best achieve transit agency objectives. Typically the transit agency’s objective, with respect to an asset, is to minimize the lifecycle cost of purchasing and maintaining the asset. Ideally, the level of maintenance should also maintain or improve service levels and meet the public’s expectations. However, a transit agency may consider other factors that are difficult to incorporate in a life- cycle cost calculation, such as aesthetics, compliance with legal requirements, environmental concerns, and other factors. Strictly speaking, the policy for an asset should address when all maintenance, repair, rehabilitation, and replacement actions should be taken and how these will at least conceptually relate to the quality of the transit agency’s services. However, this document focuses on rehabilitation and replacement actions which may be included in a transit agency’s capital program.

6 Guidance for Developing a Transit Asset Management Plan Guide Organization The remainder of this document is organized as follows: • Chapter 2 describes a step-by-step process for developing a transit asset management plan. • Chapter 3 details how to use TAPT to predict asset performance and prioritize rehabilitation and replacement actions. • Chapter 4 provides a set of tutorials illustrating the use of TAPT to help prioritize asset invest- ments and prepare an asset management plan. • Chapter 5 describes additional references valuable for transit agencies implementing a transit asset management approach and/or developing an asset management plan.