Asset Management in State and Local GovernmentThe Journey to Data Driven Asset Management

Rob Corazzola, VP Global Business Development, PowerPlanDavid Clark, Director Capital Improvements Program, District of Columbia

Introduction & Overview While we are sharing the District of Columbia’s story of

achievement around optimization and asset capital planning. The approach applies directly to any asset intensive

entity such as Utilities, Manufacturers and all Federal, State and Local government bodies that face the same challenges.

Asset Management is universal, and is not unique in principle and practice, only the assets and governing business processes may differ at a holistic level.

Movement Across Government

Asset Management is a top priority in many government

organizations.

Just Need to Get Started…

“You will never have all the Data” is one of my favourite statements that I have heard from a fairly mature AM client in the WW industry. “You use what you have, and fill in the gaps to get a better decision at the end of the day. That’s why they call it a Journey, and you will experience incremental improvement, year over year on this journey”

Short Background on the DistrictDistrict functions as a state, county, city and school districtStrong financesWe have about $13.3 billion of assets

However…Arlington Memorial Bridge that connects D.C. and Virginia is 5

years away from only allowing foot traffic The District has spent over $4 billion on schools

reconstructionMETRO - $12-$16 billion ten year capital need

What We’ll Cover Today

• The five things you should know for asset planning

• How did the District achieve their success?

• How do I begin to fill my funding gap?

• Key Points to Take Home

• Questions

Imagine a World Without Potholes

1. What assets do I have that I need to maintain?

2. What is the quality of the assets I have?3. How will I prioritize my capital needs?4. What is my plan for the treatment of asset

types?5. How much funding do I have to address

capital needs and asset maintenance?

The Five Things to Know for Quality Infrastructure

1. What assets do I have that I need to maintain?Requires a comprehensive asset inventory (or

registry)How do I start?

The Five Things to know for Quality Infrastructure

Asset Tree

1. What assets do I have2. What is the quality of the assets I have?Facility/asset condition assessmentsFleet InventoryHorizontal infrastructure condition

The Five Things to know for Quality Infrastructure

1. What assets do I have2. What is the quality of the assets I have?3. How will I prioritize my capital needs?Develop system to evaluate, rank and

prioritize asset maintenanceUse stakeholder representation for best

results

The Five Things to know for Quality Infrastructure

Project Scoring

0 3 0

0 3 0

0 3 0

0 3 0

0 3 0

0 3 0Priority Subtotal 0

0 5 00 5 00 5 00 5 0

Cost Benefit Subtotal 0

0 7 00 5 00 5 00 5 0

Project Importance (catalyst project) 0 7 0Critical Building System Improvement 0 5 0

0 5 00 5 0

PIF Evaluation Score (IT projects) 0 0.25 0Impact Subtotal 0

Total Score 0

Good Government: Develop and maintain communications infrastructure to support the District's economic development, security, education and quality of life goals, including

i d l M ' O d 2016 094

Transportation: Invest in DC's transportation network to maintain necessary service, safety and reliability levels; increase connectivity, mobility and choices; and become a more walkable and bike friendly city

Education : Provide high quality facilities and school choices that inspire excellence in learning, create a safe and healthy environment for students, strengthen the role of schools

1

23 Extends Useful Life of Existing Asset

Readiness—shovel-ready, community-ready (e.g. approved Small Area Plan)Impact on Operating Budget* Potential to Generate Revenue for the DistrictPotential for Private Economic Impact or Job Creation

Health and Safety ImprovementsFederally Required Mandate

1234

1

6

Community (Homelessness, Housing, Employment): * Produce neighborhood-based permanent, temporary and supportive housing units to support special needs and homeless populations on an equitable basis across the city;Health: Provide facilities that increase access to quality and affordable treatment and healthcare to all residents (e.g. primary and emergency care facilities, outpatient facilities, drug treatment and mental health facilities, long-term care and senior care facilities); and Public Safety: Provide updated and modern police facilities, fire stations and/or equipment to meet the public health and safety needs of current and future District residents,

9

Meets District Policy Priorities

Cost-Benefit Factors

Project-Specific Impacts

45678

Close Out Existing Project

Co-location of projects/facilitiesLeverages External Public or Private Investments

2

3

4

5

1. What assets do I have that I need to maintain?2. What is the quality of the assets I have?3. How will I prioritize my capital needs?

4. What is my plan for the treatment of asset typesReplace fleet after 7 years, 100,000 miles or, 6,000

hours of run time?Roadways: Pot hole repair annually, crack and seal

every 3 years, resurface every 5, rebuild every 20?

The Five Things to Know for Quality Infrastructure

Fleet Asset Analysis

1. What assets do I have that I need to maintain?

2. What is the quality of the assets I have?

3. How will I prioritize my capital needs?

4. What is my plan for the treatment of asset types

5. How much funding do I have to address capital needs and asset maintenanceDebt outstanding, debt limits, paygo, federal and

other sources of funding

The Five Things to Know for Quality Infrastructure

How Much Funding Do I Have?

District’s 6-Year CIP (FY2018-2023)

FY 2018 FY 2019 FY 2021 FY 2022 FY 2023FY 2020

How Do Prioritized Assets Fit My Funding?

District’s Actual 2018-2023 CIP

FY 2018 FY 2019 FY 2021 FY 2022 FY 2023FY 2020 Unfunded

$ 0

200 Million

1.6 Billion

1.4 Billion

1.2 Billion

1.0 Billion

800 Million

600 Million

400 Million

Represents total $4.2 billion unfunded needs

Funding Shortfall by Asset Type

The District’s Solution (The 6th Step)to $4.2 Billion in Unfunded Projects

New District law gradually increases paygo (cash funding) levels to equal annual depreciation.

Issuing debt up to the statutory limit, refunding existing debt and utilizing higher paygo levels will allow all deferred maintenance to be addressed by 2028.

1. How and where do I startStart small but with the best data you have -

but start – you can expand later2. How will I prioritize my capital needs?Create an objective scoring mechanism that

assesses risk3. What are the benefitsA common approach, a defined goal and, a

Return on Investment

Key Points to Take Home

BY 2028…. A District Without Potholes?

Questions?

Rob CorazzolaVP Global Business Development

PowerPlanrcorazzola@powerplan.com

Dave ClarkDirector, Capital Improvements Program

District of ColumbiaDavid.allen.clark@dc.gov

April 29 – May 2, 2018Baltimore Marriott Waterfront