Transportation leadership you can trust. presented to NCHRP Project Panel presented by Cambridge Systematics, Inc. with PB Consult Inc. Texas Transportation Institute Performance Measures and Targets for Transportation Asset Management Project Summary

1 Presentation Contents NCHRP Project – Background and Objectives Overview of Findings Framework for Performance Measure Selection and Target Setting

2 NCHRP Project Background and Objectives

3 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

4 NCHRP Project 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

5 NCHRP 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

6 Overview of Findings

7 Role of Performance Measures in Asset Management Policy Goals and Objectives Analysis of Options and Trade-offs Resource Allocation Decisions Financial Staff Equipment Other Program and Service Delivery System Condition and Service Levels Funding Levels Public Input Preservation Operations Capacity Expansion

8 Policy Goals and Objectives Analysis of Options and Trade-offs Resource Allocation Decisions Financial Staff Equipment Other Program and Service Delivery System Condition and Service Levels Funding Levels Public Input Preservation Operations Capacity Expansion Role of Performance Measures in Asset Management (continued) Translate policy objectives into guidance for decision-making

9 Policy Goals and Objectives Analysis of Options and Trade-offs Resource Allocation Decisions Financial Staff Equipment Other Program and Service Delivery System Condition and Service Levels Funding Levels Public Input Preservation Operations Capacity Expansion Role of Performance Measures in Asset Management (continued) Provide framework for evaluating options to define best mix of investments within and between programs

10 Policy Goals and Objectives Analysis of Options and Trade-offs Resource Allocation Decisions Financial Staff Equipment Other Program and Service Delivery System Condition and Service Levels Funding Levels Public Input Preservation Operations Capacity Expansion Role of Performance Measures in Asset Management (continued) Help to define expectations and outcomes for budget decisions

11 Policy Goals and Objectives Analysis of Options and Trade-offs Resource Allocation Decisions Financial Staff Equipment Other Program and Service Delivery System Condition and Service Levels Funding Levels Public Input Preservation Operations Capacity Expansion Role of Performance Measures in Asset Management (continued) Help track effectiveness of program and service project delivery

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

13 Selecting Suitable Performance Measures Essential requirements for a measure to support asset management Helps agency make better decisions about where to 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

14 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

15 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)

16 Recommended Framework

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

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

19 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?

20 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

21 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

22 Integrating Performance Measures into an Organization Engage Stakeholders Tailor Measures to Decisions Design Consistent Measures Across Program Areas Identify Improvements to Data and Tools Design Communication Devices

23 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

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

25 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

26 Communication Devices Virginia DOT Dashboard

27 Communication Devices Virginia DOT Dashboard (continued)

28 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

29 Establishing Performance Targets Define Contexts and Time Horizons for Targets Select Scope of Measures for Targets Develop Long-Term Goals Consider Funding Availability Analyze Resource Allocation Scenarios and Trade-offs Consider Policy and Public Input Establish Targets and Track Progress

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

31 Establishing Performance Targets (continued) Step 1 – Define Target Setting Context and 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

32 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 least long-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

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

34 Resource Allocation and Trade-off Scenarios Effects on Infrastructure Condition Time (Years) Pavement in Good Condition (in Percent) $25M per year $5M per year Do Nothing

35 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

36 Establish Targets and Track Progress Minnesota DOT Communication of Performance Targets Performance Level Current Performance Level Year Target Baseline Performance 20-Year Performance Level Future Performance Gap 10-Year Target 20-Year Target Trend-Based Performance Projections Current Performance Level Policy-Based Performance Target

37 Establish Targets and Track Progress Florida DOT Communication of Performance Targets ActualPlanned Fiscal Year Objective 80% Percent