GASB 34 Peer Exchange Nashville, Tennessee April 25, 2001

1. Implications and Opportunities for the Transportation Community GASB 34 Peer Exchange Nashville, Tennessee April 25, 2001

2. Agenda • Introduction • Technical Underpinnings • Implications • Agency Response • Potential Outcomes • Realizing the Benefits • Conclusion FEDERAL HIGHWAY ADMINISTRATION

3. Introduction • Comprehensive • Far-Reaching • Broad Implications FEDERAL HIGHWAY ADMINISTRATION

4. Technical Underpinnings Overview • Transportation Infrastructure included in the Asset Base • Cost of Use • Depreciation • Modified FEDERAL HIGHWAY ADMINISTRATION

5. Implications • Significance of Infrastructure Investment • Accountability FEDERAL HIGHWAY ADMINISTRATION

6. Implications Significance of Infrastructure Investment • Transportation Infrastructure in Financial Statements – for the First Time • No Longer a “Sunk” Cost FEDERAL HIGHWAY ADMINISTRATION

7. Implications Accountability The Market • Demand • Information Available FEDERAL HIGHWAY ADMINISTRATION

8. Implications Overview Stakeholders • Financial Community • Citizens • Legislators • Agency Leadership FEDERAL HIGHWAY ADMINISTRATION

9. Accountability Questions • What? • How? • When? • Why? FEDERAL HIGHWAY ADMINISTRATION

10. Agency Response Background Past • Intuition • Historical Precedent • Decisions within Asset Classes • “Worst First” • External Pressure • Budgets and Funding Categories FEDERAL HIGHWAY ADMINISTRATION

11. Agency Response Background Current • Systematic, Organized, Logical, Reproducible, Documented • Engineering and Economics • Life-Cycle Perspective • Performance Goals FEDERAL HIGHWAY ADMINISTRATION

12. Agency Response Asset Management Questions • What? • How? • When? • Why FEDERAL HIGHWAY ADMINISTRATION

13. Agency Response Asset Management Data Collection Performance Modeling Policies Development of Alternatives External Factors And Constraints Budgets Feedback Decision-Making Goals Implementation Monitoring FEDERAL HIGHWAY ADMINISTRATION

14. Potential Outcomes • Stewardship • Importance of Maintaining Assets • Increased Resources FEDERAL HIGHWAY ADMINISTRATION

15. Potential Outcomes Stewardship • Internal • External FEDERAL HIGHWAY ADMINISTRATION

16. Potential Outcomes Maintaining Assets • Highlights the Condition of the Infrastructure Assets • Demonstrates Life Cycle Considerations • Raises the Priority Level of Asset Maintenance FEDERAL HIGHWAY ADMINISTRATION

17. Potential Outcomes Increased Resources • Make Transportation More Competitive with Other Public Programs • Reduce Barriers Between Capital and Maintenance Funds • Attract Private Financing FEDERAL HIGHWAY ADMINISTRATION

18. To Realize the Benefits . . . • Cooperative Relationships will be Essential • Infrastructure Managers and Financial Managers Must Work in a Collaborative Environment FEDERAL HIGHWAY ADMINISTRATION

19. Conclusion • Bottom Line: Are transportation agencies getting the job done? • The spotlight can help FEDERAL HIGHWAY ADMINISTRATION

20. Conclusion For Further Information . . . FEDERAL HIGHWAY ADMINISTRATION

21. Conclusion For Further Information . . . Regina McElroy Leader Economic Evaluation and Investment Team Federal Highway Administration 202-366-9216 Regina.mcelroy@fhwa.dot.gov FEDERAL HIGHWAY ADMINISTRATION