WASHINGTON, D.C. – The American Society of Civil Engineers (ASCE) today released Changing the Infrastructure Equation: Using Asset Management to Optimize Investments, a report providing best practices for asset management implementation with ‘lessons learned,’ as well as policy recommendations. The report examines the current practice of asset management as a way to prioritize maintenance and make smart infrastructure investment decisions for our nation’s roads, bridges, water systems and more while minimizing the total cost of owning and operating these assets.
Public spending on roads, bridges, water systems and more fell by 8% from 2003 to 2017, and ASCE estimates that between 2016 and 2025, we will underinvest in our infrastructure by over $2 trillion. This report found that all levels of government and the private sector can aid in closing the infrastructure gap and have been turning to asset management to set priorities.
“If we are to move the needle on our nation’s aging infrastructure—which sits at a ‘D+’— and make it fit for the 21st century, we need to start investing, better and smarter,” said ASCE Executive Director Tom Smith. “Asset management has been around for decades, but new technologies, as well as more holistic cross-sector implementation, are helping cities and states optimize investments. Using credible, centralized data, we can pinpoint maintenance needs for our aging infrastructure and get the biggest bang for our buck.”
Asset management involves creating a comprehensive infrastructure inventory, which makes prioritizing essential repairs and replacement projects, in addition to planning a long-term capital budget, efficient for policymakers and asset owners. Once the inventory is in place, the data is continuously updated as the condition of assets changes.
This report found that elected officials and leadership have enthusiastically embraced asset management as a tool to make smart investment decisions. New polling of public agency leaders conducted in conjunction with the report found that only 19% of local and state management officials felt there was little to no political support for asset management. This poll found that many respondents are confident their organization uses an asset management strategy to keep up with their public assets. Additionally, 34% of respondents identified the need for political support as key to improving asset management capabilities.
Furthermore, 24% of respondents answered that their organization primarily manages data digitally, while just 12% manage assets manually—and a significant portion combines digital and manual methods while transitioning to digital asset management.
While many asset management plans are voluntary and not required by the federal government, cities that choose to incorporate them have provided many benefits to the community in terms of funding. For example, the District of Columbia (D.C.)—home to the federal government, a thriving business community and growing population, was faced with a myriad of issues including poor building, road and sidewalk conditions, in addition to school and building conditions. Constantly responding to crises and with no replacement schedule or plan for future needs, D.C. was ready to take control of the issue and address these challenges. The D.C. Council passed legislation that charged D.C. Chief Financial Officer (CFO) with determining the costs of maintaining or replacing the assets, followed by an annual report on a maintenance and replacement schedule for capital assets that would help create a long-range capital financial plan. The CFO’s office then organized a capital budget committee to implement these tasks and created the Capital Asset Replacement Scheduling System (CARSS), which helped D.C. answer questions about its owned assets, their condition and how to prioritize capital needs and address funding.
Using CARSS data, the District developed a six-year Capital Improvement Plan (CIP) and identified nearly $11.5 billion in total capital needs during its CIP period. After extensive financial analysis, programming and legislation, D.C. will now be able to fund all its unmet capital needs by FY 2028, assuming no new capital projects are added to the CIP. This data has helped policymakers shape important funding decisions. D.C.’s innovative approach to asset management has resulted in upgrades to its General Obligation bond ratings by each of the three credit rating agencies, including to Aaa by Moody’s Investors Service and to AA+ by both Standard & Poor’s and Fitch Ratings. Other entities profiled in the report that incorporated best-practice asset management strategies across the infrastructure sectors included the government of Canada, Indiana and Michigan.
Each case study revealed valuable ‘lessons learned’ for asset owners and policymakers. Overall, themes circled around one common notion: engaging in asset management practices across infrastructure sectors can be a game-changing tool for infrastructure asset owners, and allows infrastructure owners to take a proactive approach in assessing the condition of their assets and analyzing the data needed to make appropriate long-term funding decisions.
In response to the poll results, the report offers several policy recommendations to encourage greater adoption of best-practice asset management strategies:
- States, counties and cities should create an infrastructure commission to oversee the consolidation of their infrastructure data across asset classes, acting as a one-stop-shop for a centralized database.
- Create additional grant and low-interest loan programs to assist localities and states with setting up an asset management inventory.
- Require continuous oversight and accountability for completed asset management plans to ensure strategic use.
- Expand the requirement for asset management plans as a condition to receive federal funding. This requirement exists for transportation networks but should also be applied to water systems.
The full report may be found at www.asce.org/asset-management-report.