**DRAFT Meeting Notes**

**Heritage Asset Partnership**

9:00 -- 11:00 a.m., Tuesday, March 7, 2006, MIB

Meeting participants and their contact information were:

BIA Emily Shillingburg Palus 703-390-6343 No email

FS Mike Kaczor (via phone) 202 205-1427 mkaczor@fs.fed.us

NPS Terry Childs 202-354-2125 Terry_Childs@nps.gov

BOR Tom Lincoln (via phone) 303-445-3311 tlincoln@do.usbr.gov

BOR Chris Pfaff (via phone) 303-445-2712 cpfaff@do.usbr.gov

DOI Ron Wilson 202-208-3438 rowilson@os.doi.gov

DOI Bob Jarcho 202-208-3329 robert_jarcho@ios.doi.gov

DOI Debbie Smith 202-208-3250 deborah_l_smith@ios.doi.gov

FWS Eugene Marino 703-358-2173 eugene_marino@fws.gov

USGS Allan Montgomery (via phone) 703-648-7321 amontgom@usgs.gov

USGS Robert Eng (via phone) 703-648-4655 reng@usgs.gov

**HAP Governance**

Early in the meeting a signed HAP charter was distributed to members.
Deborah Sonderman signed the document and added the Offices of
Acquisition and Property Management, Financial Management, and Planning
and Performance Management to the membership.

Also, HAP documents will now be available on the PAM website
(<http://www.doi.gov/pam/HeritageAssetsPartner.html>). Please check the
site often for updates.

**Guidance on Deferred Maintenance, Current Replacement Value, and
Facility Condition Index in Life-Cycle Cost Management**

Bob Jarcho next spoke about guidance he is working on through the Asset
Management Partnership that focuses on determining an FCI for assets
including Heritage Assets. Recognizing problems with FCI as it is
currently defined as being applicable to Heritage Assets, Jarcho
submitted the following Heritage Asset specific section of the guidance
for review.

[Heritage Assets]{.underline}

Heritage assets have an intrinsic value beyond the basic cost of their
replacement that distinguishes them from non-heritage assets. In most
cases, the treatment of significant heritage assets is governed by
Historic Preservation programs, either through federal law, such as the
National Historic Preservation Act (NHPA) and the Archaeological
Resources Protection Act (ARPA, or in a park's enabling legislation. For
these assets a CRV based on standard industry construction costs does
not serve a purpose and resulting data is not reliable. The Federal
Accounting Standards Advisory Board recognizes this difference between
heritage assets and non-heritage assets and recommends for auditing
purposes that, for heritage assets, "no asset dollar amount be shown"
(SSFAS #29 Par. 25 and 28). The alternate to a CRV based on industry
standards is the use of condition assessments and evaluation processes
which takes into account the intrinsic value of the heritage asset. The
condition values are determined through a consistent and qualitative
approach by professional cultural resource specialists using standards
that are updated on a regular basis. Some bureaus are considering the
use of a "Current Management Value", in addition to the traditional CRV,
for heritage assets that reflects these intrinsic values.

Using information from such an evaluation of Heritage Assets, the site
manager may base the current replacement value (CRV) on "replacement in
kind" (duplicate construction techniques and materials) as opposed to
"replacement in function" (e.g., six story office space). This approach
is much more accurate than a quantitative approach using metrics and
standards that apply to non-heritage assets. The condition values are
classified on a scale of Good, Fair, and Poor, which can be reasonably
compared with the condition values derived from the FCI.

Bob asked for comments from all bureaus and the following re-write was
generated using bureau comments.

[FCI for Heritage Assets]{.underline}

Heritage Assets have an intrinsic value beyond the basic cost of their
replacement that distinguishes them from non-heritage assets. The
Federal Accounting Standards Advisory Board recognizes this difference
between heritage and non-heritage assets (SFFAS #29 Par. 25 and 28).
Heritage assets are also generally expected to be preserved
indefinitely. In most cases, the treatment of significant heritage
assets is governed by Historic Preservation programs, either through
federal law, such as the National Historic Preservation Act (NHPA) and
the Archeological Resources Protection Act (ARPA). For these assets a
CRV based on standard industry construction costs will not accurately
reflect the cost of replacing the asset using historically accurate
construction and renovation techniques. While it is unlikely that a
heritage asset could be replaced using new construction techniques,
renovation of heritage assets does occur frequently and the use of a
replacement in kind CRV estimate---one that captures the costs
associated with using historically accurate construction techniques and
materials---allows for recognition of the increased costs associated
with historically accurate construction techniques. Recognition of these
costs, in both the numerator and denominator of the FCI, is necessary to
ensure that the calculated FCI for heritage assets is accurate and
reflective of their unique intrinsic value.

[Condition Assessment for Heritage Assets]{.underline}

The alternate to a condition assessment based on FCI is the use of
condition assessments and evaluation processes which take into account
the intrinsic value of the heritage asset. The condition values are
determined through a consistent and qualitative approach by professional
cultural resource specialists using standards that are updated on a
regular basis. Some bureaus are considering the use of a "Current
Management Value" for heritage assets that reflects these intrinsic
values. This approach is much more appropriate than a quantitative
approach using metrics and standards that apply to non-heritage assets.
The condition values are classified on a scale of Good, Fair, and Poor,
which can be reasonably compared with the condition values derived from
FCI. The Department will continue to work with Bureaus to further
develop the best approach to asset valuation for heritage assets.

**FRPP and Heritage Assets as Real Property**

The first part of our HAP meeting focused on the FRPP (Federal Real
Property Profile) and that it currently still stands as the database of
record for Real Property for DOI. Asset Management therefore is still
working from this profile. Focus on FRPP brought out some discussion on
what kinds of Heritage Assets are in the database and if they accurately
reflect the types of cultural resources that are really out there. For
example, monuments is an FRPP category, but what does it really capture?
This discussion focused on the questions:

Are all Heritage Assets, such as archaeological sites, also real
property? If so, should all heritage assets be tracked the same way as
other types of Real Property? If yes, how would they be tracked and what
information would be tracked? If not, then how would information that is
available for them be linked to other Real Property information?

It was determined that a sub-group of the HAP would address these
questions and report back to the group.

**USFS Approach to Heritage Asset Management**

Following this discussion, HAP heard from USFS FPO Mike Kaczor about how
they deal with Heritage Assets and Real Property. Currently, only what
USFS determines to be Priority Heritage Assets (those heritage assets
that receive financial investment or that provide a financial benefit to
USFS) are also considered Real Property. The focus on investment as the
trigger for this designation has worked well thus far for USFS in terms
of auditing and deferred maintenance. Archaeological sites are treated
the same way---not considered Real Property unless they are first
considered a Priority Heritage Asset.

**Dissemination of Resolution Plans for Bureau Museum Collections,
Stewardship Lands, and Deferred Maintenance**

At the end of the meeting, Debbie Smith handed out bureau Resolution
plans for Museum Collections, Stewardship Lands, and Deferred
Maintenance. Each contains several bullet comments that have suspense
date for response as early as March 31, 2006. Debbie Smith will
communicate to HAP the importance of these documents soon.

The meeting was adjourned.

The next HAP meeting is scheduled for Thursday, April 6^th^, 9:00- 11:00
a.m.