Performance Measures and Targets for Transportation Asset Management

1. Performance Measures and Targets for Transportation Asset Management Transportation leadership you can trust. Project Summary presented toNCHRP Project 20-60 Panel presented byCambridge Systematics, Inc. withPB Consult Inc.Texas Transportation Institute

2. Presentation Contents • NCHRP Project 20-60 – Background and Objectives • Overview of Findings • Framework for Performance Measure Selection and Target Setting

3. NCHRP Project 20-60Background and Objectives

4. Context “Asset Management is a Strategic Approach…It is driven by policy goals and objectives and relies on systematic assessments of asset performance and cost in making decisions on future actions.” – AASHTO Transportation Asset Management Guide, November 2002

5. NCHRP Project 20-60 Objectives • Develop guidance to help transportation agencies • Identify measures best suited for asset management • Preservation • Operations • Expansion • Select specific measures for implementation • Establish performance targets • Complement the AASHTO Transportation Asset Management Guide

6. NCHRP 20-60 Products • Volume 1 – Formal Project Report • Review of current practices • In-depth discussion of key issues in developing and using measures in an asset management context • Several examples from state DOTs • Volume 2 – Stand-alone Implementation Guide • Identify performance measures • Integrate measures into the organization • Establish performance targets

7. Overview of Findings

8. Role of Performance Measuresin Asset Management Funding Levels Policy Goalsand Objectives Public Input Analysis of Options and Trade-offs CapacityExpansion Preservation Operations Resource Allocation Decisions Financial Staff Equipment Other Program and Service Delivery System Condition and Service Levels

9. Role of Performance Measuresin Asset Management (continued) Funding Levels Policy Goalsand Objectives Public Input Analysis of Options and Trade-offs Translate policy objectives into guidance for decision-making CapacityExpansion Preservation Operations Resource Allocation Decisions Financial Staff Equipment Other Program and Service Delivery System Condition and Service Levels

10. Role of Performance Measuresin Asset Management (continued) Funding Levels Policy Goalsand Objectives Public Input Analysis of Options and Trade-offs CapacityExpansion Preservation Operations Resource Allocation Decisions Financial Staff Equipment Other Provide framework forevaluating options to define best mix of investments within and between programs Program and Service Delivery System Condition and Service Levels

11. Role of Performance Measuresin Asset Management (continued) Funding Levels Policy Goalsand Objectives Public Input Analysis of Options and Trade-offs Help to define expectations and outcomes for budget decisions CapacityExpansion Preservation Operations Resource Allocation Decisions Financial Staff Equipment Other Program and Service Delivery System Condition and Service Levels

12. Role of Performance Measuresin Asset Management (continued) Funding Levels Policy Goalsand Objectives Public Input Analysis of Options and Trade-offs CapacityExpansion Preservation Operations Help track effectivenessof programand service project delivery Resource Allocation Decisions Financial Staff Equipment Other Program and Service Delivery System Condition and Service Levels

13. Role of Performance Measuresin Asset Management (continued) Funding Levels Policy Goals and Objectives Public Input Analysis of Options and Trade-offs CapacityExpansion Preservation Operations Resource Allocation Decisions Financial Staff Equipment Other Provide basis for monitoring system conditions Program and Service Delivery System Condition and Service Levels

14. Selecting Suitable Performance Measures • Essential requirements for a measure to support asset management • Helps agency make better decisions about whereto invest resources • Agency can take actions that change its value • Additional criteria • Linked to agency objectives • Easy to communicate • Feasible to collect • Feasible to predict

15. Getting the Most out of Performance Measures for Asset Management • Look at performance versus investment over the long-term • Integrate use of PMs within planning, budgeting, prioritization, operations, and annual reporting • Use to help make investment trade-offs across asset classes and types of work • Set targets that are achievable and monitor progress • Use a mix of output- and outcome-oriented measures • Design effective data gathering, reporting,and communication devices

16. Examples of Best Practices • Use measures as basis for establishing program allocation levels – pavement, bridge, and capacity (MT) • Provide targets and associated funding levels to districts to aide in project selection (NY) • Districts show implications of +/- 10% in funding as part of allocation process (OH) • Quarterly reviews of performance by DOT management (CO and FL) • Current performance data on Internet (VA and WS)

17. Recommended Framework

18. Guidance for Performance Measuresand Targets Identify Performance Measures Define Selection Criteria Identify Candidate Measures/Adjustments to Existing Measures Assess and Select Measures for Further Design and Implementation Inventory Existing Measures Assess Gaps Integrate Performance Measures into the Organization Tailor Measures to Decisions Design Consistent Measures Across Program Areas Identify Improvements to Data and Tools Design Communication Devices Document Definitions and Procedures Engage Stakeholders Establish Performance Targets Analyze Resource Allocation Scenariosand Trade-offs Establish Targets and Track Progress Define Contextsand Time Horizons Select Scopeof Measures for Targets Develop Long-Term Goals Consider Funding Availability Consider Policy and Public Input

19. Identifying Performance Measures Inventory Existing Measures Gap Analysis Define Criteriafor Selecting New Measures Identify Candidate Measures/ Adjustments to Existing Measures Assess and Select Measures for Further Design and Implementation

20. Identifying Performance Measures (continued) • Step 1 – Inventory Existing Measures • How are they working? • How are they being used? • Step 2 – Gap Analysis • What are the most important outcomes to be achieved? Do your existing performance measures adequately cover these outcome areas?

21. Identifying Performance Measures (continued) • Step 3 – Define Criteria for Selecting New Measures • Selection criteria should reflect the intended purpose, use, and audience for the performance measure • Suggested selection criteria include • Feasible • Policy sensitive • Supports long-term, strategic view • Useful for decision support

22. Identifying Performance Measures (continued) • Step 4 – Identify Candidate Measures • Develop a set of performance measures that could be helpful for making better resource allocation decisions • Organize measures that you select according to their intended use(s) and audience(s) • Step 5 – Assess and Select Measures • Evaluate candidate measures by applying criteria developed in Step 3 • Select performance measures to implement • Clearly document the definitions of each selected measure

23. Integrating Performance Measures intoan Organization Engage Stakeholders Tailor Measures to Decisions Design Consistent Measures Across Program Areas Identify Improvements to Data and Tools Design Communication Devices

24. Integrating Performance Measures into an Organization (continued) • Step 1 – Engage Stakeholders to Ensure Buy-in • Give stakeholders the opportunity to participate in the performance measure development process • Involve both users of PMs and producers of PMs • Step 2 – Tailor Performance Measures to Decisions • Project-, corridor-, network-level • Short-, medium-, long-term • Executive, middle management, technical

25. Integrating Performance Measures into an Organization (continued) • Step 3 – Design Consistent Measures AcrossProgram Areas • Percent good, fair, poor • Percent desirable, minimum tolerable, high-risk • Step 4 – Identify Needs for Improved Dataand Analytical Tools • Action items to implement selected measures • Ensure availability of sufficient budget and staff resources

26. Integrating Performance Measures into an Organization (continued) • Step 5 – Design Communication Devices • Match reports to needs of intended users • Design report formats to make the measures easily understandable

27. Communication DevicesVirginia DOT Dashboard

28. Communication DevicesVirginia DOT Dashboard (continued)

29. Integrating Performance Measures into an Organization (continued) • Step 6 – Document Measure Definitions and Procedures • Common understanding of definitions, calculation methods • Quality Assurance process • Basis for auditing • Update as measures evolve • Archive documentation with historical data

30. Establishing Performance Targets Define Contexts and Time Horizons for Targets Select Scope of Measuresfor Targets Develop Long-Term Goals Consider Funding Availability Analyze Resource Allocation Scenarios and Trade-offs Consider Policyand Public Input Establish Targetsand Track Progress

31. Establishing Performance Targets (continued)Considerations for Setting Performance Targets • Realistic projection of available funding • Policies and priorities • Current and forecast conditions • Economic efficiency considerations

32. Establishing Performance Targets (continued) • Step 1 – Define Target Setting Contextand Set Time Horizons • When and how will targets be used? • Watch out for inconsistent targets across measures • Step 2 – Select the Scope of Measures for Performance Targets – consider • Baseline data availability • Analytical capabilities to predict future values under different assumptions

33. Establishing Performance Targets (continued) • Step 3 – Develop Long-Term Performance Goals based on Technical and Economic Factors • Alignment with national or other goals(e.g., U.S. DOT safety goals) • Benchmarks from other agencies • Optimization models – performance levels with leastlong-term user and agency costs • “Steady-state” condition levels • Law of diminishing marginal returns • User cost curves from past research – levels of performance where user costs rise steeply • Customer surveys or feedback

34. Establishing Performance Targets (continued) • Step 4 – Consider Current and Future Funding Availability • Place performance targets in the context of futurefunding availability • Estimate future funding from past trends and available information about future funding levels • Step 5 – Analyze Resource Allocation Scenariosand Trade-offs • Analyze performance-cost relationships to use as guidesfor target-setting based on funding and resource allocation scenarios • Estimate cost to achieve long-term goals – for use in the budget process

35. Resource Allocation and Trade-off ScenariosEffects on Infrastructure Condition Pavement in Good Condition (in Percent) 100 $25M per year 80 $5M per year 60 40 Do Nothing 20 0 0 1 2 3 4 5 6 7 8 9 10 Time (Years)

36. Establishing Performance Targets (continued) • Step 6 – Consider Policy and Public Input • Exchange information and ideas with external stakeholder to establish desired performance levels and priorities • Step 7 – Establish Targets and Track Progress • Select actual target values, report these targets, and track progress towards achievement of the targets • Periodically adjust targets based on progress made, changes in policy or priorities, or emergence of information or factors not previously considered

37. Establish Targets and Track Progress Minnesota DOT Communication of Performance Targets Performance Level 20-Year Performance Level Policy-BasedPerformance Target FuturePerformanceGap Trend-BasedPerformance Projections Current Performance Level Current Performance Level 1997 2001 6-Year Target 10-Year Target 20-Year Target Baseline Performance

38. Establish Targets and Track Progress Florida DOT Communication of Performance Targets Percent 100 90 Objective 80% 80 70 60 50 40 30 20 Actual Planned 10 0 1996-1997 1997-1998 1998-1999 1999-2000 2000-2001 2001-2002 2002-2003 2003-2004 2004-2005 2005-2006 Fiscal Year