Transportation Asset Management Plans

Case Study 5 - Financial Planning and 

Investment Strategies

FHWA-HIF-20-085

FEDERAL HIGHWAY ADMINISTRATION

Office of Stewardship, Oversight and 

Management 

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Washington, DC 20590

May 2020

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Technical Report Documentation Page

1. Report No. FHWA-HIF-20-085

2. Government Accession No.

3. Recipient’s Catalog No.

4. Title and Subtitle: Financial Planning and Investment Strategies - Case Study 5

5. Report Date: May 2020

6. Performing Organization Code: None 

7. Author(s): Principal Investigators: Shobna Varma, Starisis Corporation, Gordon Proctor, Proctor 

Associates 

8. Performing Organization Report No: Case Study 5

9. Performing Organization Name and Address: Starisis Corporation, 3737 Woodstone Drive, Lewis 

Center, Ohio 43035; Gordon Proctor & Associates 7825 Wiltshire Drive, Dublin, Ohio, 43017; 

Greenman Petersen Inc.325, West Main Street, Babylon, NY 11702Greenman-Pedersen Inc. 10977 

Guilford Road Annapolis Junction, MD 20701

10. Work Unit No.: None

11. Contract or Grant No.: DTFH61-10-D-00024, Task Order No. T-11-006 

12. Sponsoring Agency Name and Address: Federal Highway Administration, Asset Management Team, 

1200 New Jersey Ave SE, Washington, DC 20590 

13. Type of Report and Period Covered: Case study covering 2019 and 2020

14. Sponsoring Agency Code: FHWA

15. Supplementary Notes: Peter Doan (COR), Nastaran Saadatmand (Technical Lead)

16. Abstract: This is one of seven case studies of practices in the 2019 transportation asset management 

plans. This case study highlights financial planning and investment practices seen in the 2019 State 

departments of transportation (DOTs). The practices show how DOTs developed long-term pavement 

and bridge funding allocations based on anticipated revenue forecasts and estimates of funding needs 

for each asset class based on the LCP processes to improve, maintain and sustain their transportation 

assets in a state of good repair.

17. Key Words: Asset management, transportation asset management plans, financial planning, 

constrained and unconstrained investment scenarios, investment strategies, revenue projections, 

expenditure estimates, long-term funding needs.

18. Distribution Statement: No restrictions.

19. Security Classification (of this report): Unclassified 

20. Security Classification (of this page): Unclassified 

21. No. of Pages: 21

22. Price: Free

Form DOT F 1700.7 (8-72) Reproduction of completed page authorized.

Case Study on Financial Planning and Investment Strategies 

Contents

Notice............................................................................................................................................................ 0

Quality Assurance Statement ....................................................................................................................... 0

Case Study Introduction................................................................................................................................ 1

Financial Plans and Investment Strategies from the TAMPs........................................................................ 2

Kentucky Transportation Cabinet’s Approach.............................................................................................. 2

Acknowledgment of Financial Risks.......................................................................................................... 3

Revenue Forecasting and Practical Approaches to Addressing Revenue Reductions and Allocations for 

TAM Activities........................................................................................................................................... 3

Financial Planning and Investment Strategies Are Aligned to Life-Cycle Planning................................... 4

Funding Allocations Address the Work Types .......................................................................................... 4

Michigan DOT Linking TAMP Investment Strategies, Five-year Transportation Program and STIP ............. 6

The Michigan DOT’s Revenue Forecasting................................................................................................ 6

Michigan DOT’s Link Between Revenue Estimation, Investment Strategy, and Projects......................... 7

Role of Life-Cycle Planning in Investment Planning and Allocations........................................................ 8

Investment Strategies for Pavements and Bridges................................................................................... 8

Pavement Investment Strategies.............................................................................................................. 9

Bridge Investment Strategies.................................................................................................................... 9

Condition Gap Resulting from Constrained Investment.........................................................................10

Washington DOT’s Financial Planning and Investment Strategies.............................................................10

WSDOT Monitors Planned Projects by Work Type.................................................................................11

New York State DOT’s Asset Sustainability Index and Funding Gaps.........................................................12

Utah DOT’s Pavement Sustainability Index ................................................................................................13

Vermont Agency of Transportation’s Investment Strategies and Measures for Tracking Useful Life of 

Assets ..........................................................................................................................................................14

VTrans Sustainability Measures..............................................................................................................15

Illinois DOT’s Use of Spreadsheet Tool for Analysis....................................................................................17

Spreadsheet Tool for Investment Strategy Analysis and Programming Funds.......................................18

Strategic Direction, Process Improvements and Simple Tools...............................................................19

Collaboration with Districts on Investment Strategy Analysis and Programming Funds.......................19

Funding Implications of Aging Infrastructure and Deferred Investment................................................20

Summary .....................................................................................................................................................21
Case Study on Financial Planning and Investment Strategies 
Case Study on Financial Planning and Investment Strategies 

Case Study Introduction 

This case study is one of seven that captures good asset management practices documented in the 2019

transportation asset management plans (TAMPs) required by 23 U.S.C. 119(e). This series distills many 

of the good practices and presents them in a convenient format for use by other transportation 

agencies. 

The seven case studies are:

Case Study 1: Asset Management Practices and Benefits

Many of the TAMPs provided comprehensive summaries of their asset management practices and the 

benefits they received from them. Several examples are highlighted in this case study. These include 

examples from the DOTs in New Jersey, Pennsylvania, Illinois, and Washington State. These examples 

illustrate how asset management plans can effectively summarize asset management processes and 

improvement strategies.

Case Study 2: Linking Asset Management to Planning and Programming

This case study examines how TAMPs documented linkages to the DOT’s long-range plan, the State 

Transportation Improvement Program (STIP), and state planning and programming practices. Examples 

are selected from the TAMPs in Missouri, Maine, Utah, Ohio, Wyoming, and Montana.

Case Study 3: Supporting Life-Cycle Planning

To develop a life cycle plan, one needs to know how assets deteriorate throughout their life cycle. 

Several TAMPs were notable in documenting how they manage assets with life cycle plans. Included in 

this case study are examples from the DOTs in Minnesota, Ohio, Tennessee, and New Jersey.

Case Study 4: Managing Risks to Assets

DOTs embrace risk management to support the long-term performance of assets, and for making riskbased investment tradeoffs. This case study summarizes some of the good risk management practices 

from Washington State, California, Kansas, South Dakota, Louisiana, Rhode Island, Pennsylvania, Texas, 

Colorado, and Michigan. 

Case Study 5: Developing Financial Plans and Investment Strategies

The financial plans and investment strategies reflect priorities for allocating scarce resources to achieve 

their highest asset management objectives. This case study examines how several TAMPs described the 

clear linkages between their asset management objectives, gaps, risks, and investment strategies. 

Examples are from Kentucky, Michigan, Washington State, New York State, Utah, Vermont, and Illinois.

Case Study 6: Communicating Asset Management Strategies

This case study summarizes examples of communicating asset management strategies with key internal 

and external stakeholders. Examples are cited from the DOTs in Vermont, California, New Jersey, 

Washington State, Michigan, Ohio, Colorado, and Nebraska. 

Case Study 7: Managing Non-Bridge-and-Pavement Assets

Several State TAMPs included additional assets beyond pavements and bridges. Examples are cited from 

Minnesota, Connecticut, Utah, and California.
Case Study on Financial Planning and Investment Strategies 

Financial Plans and Investment Strategies from the TAMPs 

Developing and implementing a 10-year transportation asset management plan that extends the useful 

life of assets is a challenging task. It entails conducting extensive analyses to develop effective 

investment strategies and a practical financial plan.

Investment strategies communicate an agency’s strategic approach to cost effectively maintain or 

preserve the assets over the short and long term and to extend their useful lives. A financial plan 

informs decision makers of funding needed to carry out the investment strategies. It also shows an 

agency’s plan to invest strategically versus adopting a “worst first” approach.

At a summary level the financial planning and investment strategies show:

• How a State’s financial plan supports asset management and achieving the DOT’s targets for 

condition and performance and state of good repair (SOGR) goals.

• How a State’s investment strategies align with its financial plan.

• How the work types are reflected in the investment strategies.

• How the strategies address high priority asset risks.

• How the investment strategies align with life-cycle planning.

This case study includes examples highlighting practices on financial planning and investment strategies 

from the TAMPs prepared by Kentucky Transportation Cabinet, Michigan DOT, Washington State DOT, 

New York State DOT, Utah DOT, Vermont Agency of Transportation, and Illinois DOT.

Kentucky Transportation Cabinet’s Approach 

The Kentucky Transportation Cabinet (KYTC) TAMP showed a methodical process that it followed in 

developing its financial plan. The KYTC’s TAMP section on financial planning and investment strategies 

included the following:

• The projected available revenue for managing the physical condition of the assets included in 

the TAMP.

• The level of funding needed to meet the bridge and pavement condition targets, to preserve

and sustain improved asset conditions, and to maintain these assets in a state of good repair.

• The investment strategies that the KYTC plans to implement, to construct, maintain, preserve, 

rehabilitate, or replace pavement and bridge assets.

• The asset condition and system performance expected based on the investment strategies 

selected and reflected in the TAMP.

• The additional resources required to address current or forecasted differences between desired 

and expected conditions.

The KYTC has a Consensus Forecasting Group (CFG) that “develops annual road fund projections before 

each upcoming biennial budget legislative session. The CFG reviews revenue sources and analyzes any 

trends.”1 The group reviews fuel consumption, vehicle registrations and trends in other revenue sources 

to develop realistic projections for revenue growth for the next two to three years. A similar approach is 
Case Study on Financial Planning and Investment Strategies 

used to project Federal revenues. The CFG continues to monitor actual receipts and compare them to 

the projections to track shortfalls and surpluses.

Acknowledgment of Financial Risks The KYTC in its TAMP addressed the financial risks to achieving the TAMP objectives. It addressed the 

financial risks due to several factors including “the uncertainty in federal and (to a lesser extent) state 

road fund revenue, which is compounded by funding uncertainties for major projects, such as the Brent 

Spence Bridge replacement, that require significant funding beyond traditional revenue streams.” The 

TAMP acknowledged the need for stakeholder support for asset management activities. It stated that 

there is a risk of “the possibility that the public and other external stakeholders will not understand and 

support the Cabinet’s increased focus on preserving existing assets.”2 The KYTC TAMP was transparent 

about potential fluctuations in revenue receipts. It included strategies that may be employed in the 

event of revenue shortfalls.

Revenue Forecasting and Practical Approaches to Addressing 

Revenue Reductions and Allocations for TAM Activities 

The KYTC TAMP acknowledged there is a likelihood for differences between the revenue projections and 

actual receipts, and showed an approach to addressing shortfalls. However, any minor revenue 

fluctuations were not expected to affect the major projects. The TAMP stated that in the fiscal year (FY) 

2016 timeframe when revenue reductions had been projected, KYTC delayed some large rehabilitation 

and reconstruction projects, and instead used available funds for maintenance and preservation 

activities that addressed safety needs and prevented further deterioration.

The KYTC TAMP stated some of the practical implications of potential revenue shortfalls. It stated that in 

the event of major shortfalls alternate strategies and/or financial scenarios would be generated 

addressing the funding gap and presented to the Cabinet leaders. It also stated that because bridge and 

pavement assets are high value assets, they are among the last to be impacted by minor reductions. 

Also, in the event of a reduction in funding the “KYTC has given priority to preservation and 

maintenance of interstate and NHS pavements and bridges,”3 reflecting the Cabinet’s commitment to 

asset management.

The KYTC TAMP also discussed other practical aspects to be considered in creating a realistic financial 

plan. For example, Federal funds come with some restrictions and can be used only for certain types of 

projects. The TAMP also discussed other financial obligations such as debt servicing and dedicated funds 

for programs such as the Surface Transportation Program (STP) and Congestion Mitigation and Air 

Quality Improvement (CMAQ). The KYTC TAMP showed the anticipated revenues along with State funds 

obligations for debt servicing, routine maintenance (snow and ice, mowing etc.), direct appropriations to 

other State agencies, and other obligations that have to be addressed in the financial planning process.

Based on the CFG’s projections, the TAMP showed approximately $5.9 billion of Federal revenues and 

$1.27 billion of State road fund revenues being available for the 10 years of the TAMP. The TAMP 

included detailed information on each of the revenue sources and the different deductions such as debt 

service, pension obligations, direct appropriations to other agencies, or funding for maintenance 

activities such as snow and ice control. The TAMP explained how substantial amounts of its revenues 

were required for such mandatory deductions and the deducted funds were not available to invest in 

the TAMP assets.

The 10-year TAMP financial plan showed that over the TAMP period, after the deductions for other 

required expenditures, a total of $7.2 billion of combined Federal and State road funds were projected 
Case Study on Financial Planning and Investment Strategies 

to be available for bridges, pavements, and other assets, such as pavement markings and culvert repair 

and maintenance.

Financial Planning and Investment Strategies Are Aligned to LifeCycle Planning 

The TAMP stated that the pavement and bridge funding allocations were developed based on an 

analysis of anticipated revenue forecasts and estimates of funding needs for each asset class based on 

the life-cycle planning (LCP) processes.

The TAMP acknowledged that KYTC is in the early stages of implementing life-cycle strategies for bridges 

and pavements. It stated that the strategies applied significantly higher priorities to maintenance and 

preservation work types than the Cabinet had done historically. The TAMP stated that though the 

Cabinet has identified preferred LCP strategies, it will require time to fully implement its preferred LCP.

Funding Allocations Address the Work Types 

KYTC has categorized and prioritized its roadway network into Interstates, Parkways, and Maintenance 

Program (MP). The Maintenance Program system is comprised of non-Interstate and Parkway State 

primary pavement, State secondary pavement, and supplemental pavement. The Parkways category has 

about 25 percent of the non-Interstate NHS lane-miles while the MP has the remaining 75 percent of the

non-Interstate NHS lane-miles. The Cabinet has internal measures to manage and sustain the bridge and 

pavement assets that it used to develop the investment strategies. The TAMP showed that based on the 

KYTC’s internal measures, the pavements had approximately 32 percent of the Interstate in Poor 

condition, 32 percent in Fair and 35 percent in Good condition.4 However, as shown in Table 1, based on 

FHWA measures the Interstate and non-Interstate NHS have 0 and less than 1 percent Poor 

respectively.5 Based on the 2017 Highway Performance Monitoring System submission, KYTC had some 

pavement segments that were unreported. After including these, the percent Poor based on the FHWA 

measures for Interstates increased to 1.1 percent. Table 1 shows the existing conditions based on FHWA 

measures. Based on the FHWA measures, the planned investments indicate that over the 10-year TAMP 

period KYTC will continue to achieve and sustain less than 5 percent of the Interstate and non-Interstate 

NHS in Poor condition. 

Sub Network Percent Good Percent Fair Percent Poor

Interstate 66.1% 33.8% 0.0%

Non-Interstate NHS 44.8% 54.6% 0.5%

Total 52.2% 47.4% 0.4%

Table 1: Summary of existing Interstate and non-Interstate NHS pavement conditions per the Federal performance measures. 

Numbers may not add up due to rounding. Source KYTC June 2019 TAMP

Based on the KYTC measures, the TAMP showed funding needed and planned allocations for the entire 

pavement network over the 10-year TAMP period as follows:

• $4.9 billion was the estimated amount needed to achieve the desired state of good repair for 

the pavement network (Interstate, Parkway and MP system) over the TAMP period. Of this, 95 

percent ($4.7 billion), 1.1 percent ($55 million), 3.6 percent ($178 million) and 0.1 percent ($6 
Case Study on Financial Planning and Investment Strategies 

million) were estimated to address investments in preservation strategies, rehabilitation, 

replacement and maintenance activities, respectively, over the 10-year TAMP period.

• A total of $3.37 billion in Federal and State funds was planned for the entire pavement network 

to achieve the KYTC condition targets. “Based on the projections the overall interstate condition 

will remain stable during the TAMP period, KYTC predicts the percent Poor Interstate Pavement 

will remain below 1 percent.”6 The TAMP showed that this level of investment would result in 

reduction in percent Poor in both Interstate and Parkway system but would result in 

approximately 10 percent decrease in Good pavements and 10 percent increase in Poor 

pavements by 2028 using the KYTC performance measures.

Years of the 

TAMP Period

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 10- Year 

Total 

Maintenance 

Needs

— — — — — — $2 $2 $1 $1 $6

Preservation 

Needs

$48 $43 $81 $86 $148 $214 $197 $223 $254 $250 $1,544

Rehabilitation 

Needs

$24 $21 — — — — — — — — $45

Replacement 

Needs

— — — — — — $16 — — — $16

Total 

Investment 

Needs

$72 $64 $81 $86 $148 $214 $215 $225 $255 $251 $1,611

Table 2: KYTC Interstate Investment Needs- All amounts are in $ million. * Source KYTC 2019 TAMP

Table 2 shows the Interstate investment needs for the 10-year TAMP period by work type. The 

investment needed for maintenance, preservation, rehabilitation and replacement are $6 million, 

$1.544 billion, $45 million and $16 million respectively to achieve the KYTC condition targets. This totals 

to $1.611 billion.

Years of the 

TAMP Period

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 10-

Year 

Total

Planned 

Maintenance 

— — — — — — $2 $2 $1 $1 $6

Planned 

Preservation

$48 $43 $81 $86 $148 $139 $97 $98 $104 $104 $948

Planned 

Rehabilitation

$24 $21 — — — — — — — — $45

Planned 

Replacement

— — — — — — $16 — — — $16

Total Planned 

Investments

$72 $64 $81 $86 $148 $139 $115 $100 $105 $105 $1,015

Table 3: KYTC Interstate Planned Investment- All amounts are in $ millions * Source KYTC 2019 TAMP
Case Study on Financial Planning and Investment Strategies 

Table 3 shows the planned investment for the KYTC Interstate to achieve the KYTC’s internal 

performance targets for the 10-year TAMP period by year and work type. Though there is a funding gap 

to achieve the target based on KYTC’s internal performance measures, the TAMP showed the total 

planned investment increasing over the TAMP period from a total planned investment of $72 million to 

$148 million in 2023 and then reducing to approximately $105 million in 2028. This is an average 

increase of $33 million per year over the 2019 investment. The TAMP showed similar detailed 

information about planned investment for the Parkway and MP System.

The TAMP also included tables showing planned investment and needed investment by year and work 

type for the 10 years of the TAMP for the bridges. It showed by year and work type the planned funding

totaling to $1.763 billion. This is less than the amount of $1.8 billion that is needed to achieve a desired 

state of good repair for all State-owned bridges. The planned investment will result in percent Poor 

decreasing from 4 to 3 percent, percent Fair decreasing from 47 to 13 percent, and percent Good 

increasing from 49 to 83 percent over the 10-year TAMP period.

The KYTC TAMP thus provided an example of the alignment between financial planning, investment in 

life-cycle planning by work types, and the resulting conditions that can be expected over a 10-year 

period for each of its three roadway networks. Such level of detail provides transparency on the 

financial planning and investment strategies considered by the Cabinet, along with the assumptions 

made and the uncertainties considered.

Michigan DOT Linking TAMP Investment Strategies, Fiveyear Transportation Program and STIP 

The Michigan DOT (MDOT) TAMP linked its goals, use of LCP, financial planning, investment strategies, 

and achieving its asset management objectives. The TAMP showed the MDOT’s process and the 

resulting 10-year financial plan. It also showed four possible pavement and two possible bridge 

investment strategies. The TAMP also showed the final pavement and final bridge investment strategies

selected by MDOT. Each included the estimated amount by year and by work type. The sections that 

follow discusses each of the investment strategies included in the MDOT TAMP.

The TAMP showed how MDOT used LCP in its investment strategy development to allocate funds by 

work type for each year of the TAMP period. It also showed the engagement of MDOT’s seven Regions 

in recommending candidate projects through the DOT’s Call for Projects (CFP) process that focuses on 

addressing preservation and maintenance of bridges and pavements. It showed the alignment between 

the CFP, the Five-Year Transportation Program that gets approved by the State Transportation 

Commission (STC), and the STIP. Overall, the MDOT TAMP showed how a DOT used LCP and risk analysis 

to develop a financial plan that aligns with a selected investment strategy and is part of the DOT’s 

routine activities.

The Michigan DOT’s Revenue Forecasting 

The MDOT TAMP explained its risks and assumptions on revenue increases and laid out the background 

to its computation of revenues for the 10-year financial plan. The TAMP showed a detailed 10-year 

financial plan that explained the current amounts, sources of revenue, and the funding amounts 

projected to be available for the TAMP period. This was based on the State gasoline tax increase from 19 

to 26.3 cents per gallon and the diesel fuel tax increase from 15 to 26.3 cents per gallon on Jan. 1, 2017. 

The TAMP financial plan stated that beginning in 2022 State fuel tax rates will be tied to inflation to help 

remedy the decline in purchasing power of the fuel tax. The plan also explained that additional revenue 
Case Study on Financial Planning and Investment Strategies 

expected from “Registration fees for most cars and trucks increased 20 percent on Jan. 1, 2017. New 

electric car fees of $100 per year, and $30 per year for plug-in hybrid cars, equalize road-user fees for 

vehicles that use little or no taxed fuel.”7

The TAMP stated that, starting in FY 2019, $150 million in income tax revenues will be appropriated for 

roads, a funding strategy not seen in most States. The State income tax revenues going to MDOT was 

expected to increase to $325 million in FY 2020, and to $600 million in FY 2021. “The forecasted revenue 

from FY 2022 to 2028 assumes that $600 million will be transferred from income tax revenues every 

year to the Michigan Transportation Fund. These revenues will be distributed to road agencies only 

under the current Act 51 formula”8 The TAMP stated that future State revenues are forecasted using a 

long-range forecasting model managed by MDOT’s Statewide Transportation Planning Division (STPD). 

This forecasting model is a multi-factor-driven process that addresses other non-income tax revenues 

that includes vehicle miles of travel, historical revenue trends, fuel prices, number of passenger and 

commercial vehicles, registration fees, fleet miles per gallon, and other factors.

The financial plan explained the methodology MDOT used for projecting Federal revenue. It stated that 

based on the past trend of modest increases through FY 2020, increases are assumed to continue 

through FY 2028, and the plan assumed a 2 percent growth rate through this period. A 1.9 percent 

inflation rate also was assumed. The inflation rate was used to convert year-of-expenditure dollars to 

constant (2019) dollars. For the trunkline, the total projected State and Federal revenues were shown in 

the TAMP based on the year of expenditure and base year (2019) dollars. Based on the projections, the 

TAMP also showed the summary of the dollar amounts by year of State and Federal funds forecasted to 

be available for the capital highway program through FY 2028. The plan showed the projected total 

annual revenues for the 10 years before deductions for other required expenditures to be $24.21 billion

and after deductions for non-capital uses, safety initiatives, and other MDOT responsibilities to be 

$14.257 billion. The deductions include legally required transfers to other agencies and debt service as 

well as deductions for maintenance, administration, and facilities. Also, deductions in Federal-aid funds 

include allocations for safety, metropolitan planning organizations (MPOs), off-system bridges and other 

eligible uses. The TAMP stated that “the revenue available for the NHS portion of the trunkline capital 

program is estimated at almost 85 percent, which is the percent of currently planned highway capital 

road and bridge program investments that were on the NHS.”9

Michigan DOT’s Link Between Revenue Estimation, Investment 

Strategy, and Projects 

The MDOT TAMP linked financial planning, investment strategies development, and the final selection of 

projects for the Five-Year Transportation Program. The process of selecting projects starts with 

estimating the revenues that are forecasted to be available, moves to developing investment strategies, 

and finally, selecting a fiscally balanced strategy that results in projects becoming part of the Five-Year 

Transportation Program. MDOT has for many years developed a Five-Year Transportation Program in 

addition to the STIP and long-range statewide transportation plan. The MDOT TAMP indicated that the 

Five-Year Transportation Program is an integral component of the department’s input to the STIP and 

the schedules for the two programs have been synchronized.

The TAMP explained that the MDOT’s regional staffers use the Bridge Condition Forecasting System 

(BCFS) and the Road Quality Forecasting System (RQFS) along with stakeholder input to develop 

improvement strategies for roads and bridges. These strategies have a mix of fixes that are short-term, 

medium-term, and long-term. The treatments range from low-cost preventive maintenance, to 

scheduled reactive maintenance, to rehabilitation and reconstruction. Following a methodical approach 
Case Study on Financial Planning and Investment Strategies 

that is the CFP, the seven Regions propose a combination of these fixes as candidate projects based on 

the DOT’s risk analysis, life-cycle costs, distress severity, amount of traffic, maintenance costs, the areas 

the roadways serve, and other factors. The investment strategies shown are aligned to the DOT’s SOGR 

targets and constrained by the funds available for project work. The final list of projects in the Five-Year 

Transportation Program and STIP reflect the selected investment strategy and shows the corresponding 

investment amounts for the five work types. 

Role of Life-Cycle Planning in Investment Planning and 

Allocations 

The link between LCP and investment strategies on the Interstate and NHS was articulated in the TAMP. 

The TAMP stated that investment strategies were developed using anticipated available funding, LCP, 

financial and performance gap analysis, and the results of the risk analysis. MDOT analyzed four

alternative pavement investment strategies and two alternative bridge investment strategies before 

selecting the preferred pavement and preferred bridge investment strategy. Based on the available 

funding, analysis of each investment strategy was completed. The TAMP stated that the financial plan, 

LCP, gap analysis, and risk mitigation strategies were considered when each potential investment 

strategy was reviewed.

The TAMP stated that, 

“Life cycle planning was completed for various investment strategies. MDOT used two networklevel pavement models and one bridge model. The life cycle planning identified the amount of 

work needed by category for each investment strategy.

Financial gap analysis is considered when various investment strategies are compared to 

determine the most realistic strategy to meet overall goals and objectives. Where funding gaps 

existed, cross-asset analysis was considered. Agency-level and program-level risks that could 

impact implementation were considered. .... To develop an investment strategy to reach each 

goal, MDOT used life cycle analysis that represented the most efficient and effective approach 

to achieving the asset management objective. A mix of fixes was developed that would produce 

the desired asset condition. The life cycle analysis constrained the amount of preservation work 

by year to balance mobility impacts. The desired level of work for this investment objective was 

compared to the available funding as identified in the 10-year financial plan forecast.”10

Investment Strategies for Pavements and Bridges 

The selected investment strategy demonstrated a mix of fixes and investment by work type needed to 

achieve MDOT’s desired asset condition. MDOT compared the projected available funding as detailed in 

its 10-year financial plan to the amount of work required for the following four scenarios that the TAMP 

call the alternative strategies before making a final selection. For each alternative strategy, the TAMP 

presented 10-year periods and the funds projected to be available each year for the NHS pavements, as 

well as the expected cost of work by year, and work type for each year of the TAMP period.

MDOT selected one preferred investment strategy from the four pavement investment strategy 

alternatives analyzed and one preferred investment strategy from the two analyzed for bridges. Both 

were “Constrained Investment” strategies that were based on LCP for the whole life of the asset. The 

TAMP stated that the selected investment strategy drives project selection for both the Five-Year 

Transportation Program and the STIP. This preferred investment strategy was implemented within the 

department through the annual integrated Highway CFP process, which provided the mechanism for 

project selection. The desired mix of fixes, investment levels, and the funding targets were developed 
Case Study on Financial Planning and Investment Strategies 

for the selected investment strategy through the CFP program. The four pavement investment strategies 

and the two bridge investment strategies included in the TAMP are discussed below.

Pavement Investment Strategies 

The TAMP showed the Constrained Investment for Pavements as the selected investment strategy. The

four pavement investment strategies analyzed were: 

1. Constrained Investment for Pavement: This alternative strategy was based on the funding 

forecasted to be available. The TAMP stated that this allowed MDOT to achieve the two-year 

(midpoint) and four-year (full performance) 23 CFR Part 490 targets for the pavement condition.

This investment strategy showed the total revenues projected to be available for NHS 

pavements, the expected cost of future work, and the expected work needed by work type each 

year for the 10-year period of the TAMP. The total investment in the constrained-investment 

strategy for pavements with no funding gap is shown to be $7.389 billion. The allocations in the 

TAMP showed $2.724 billion for rehabilitation, $3.809 billion for reconstruction, $857 million for 

preservation, and zero for initial construction. Similarly, detailed information was included in the 

TAMP for each of the other three pavement investment strategies.

2. Achieve the National Minimum Condition Level for Pavement: The TAMP showed the 

investment needed to achieve no more than 5 percent Poor for the Interstate to be $8.3 billion 

resulting in a funding gap of approximately $1.794 billion over the 10-year period. The amounts 

needed to complete expected work on the Interstate by work type as shown in the TAMP were 

$3.248 billion for rehabilitation, $4.780 billion for reconstruction, $303 million for preservation, 

and zero for initial construction.

3. Achieve the Pavement State of Good Repair: The TAMP showed a need for $17.8 billion for the 

10 years to achieve 95 percent Good/Fair on the Interstate and 85 percent Good/Fair on the 

non-Interstate NHS pavements based on Remaining Service Life (RSL). The total estimated 

funding shortfall to achieve this goal was $10.426 billion over the 10-year TAMP period. The 

TAMP showed a need of $7.597 billion for rehabilitation, $9.042 billion for reconstruction, 

$1.175 billion for preservation, and zero for initial construction.

4. Preserve Current Condition: The TAMP showed a need of approximately $15.83 billion to 

sustain the current condition on Interstate routes of 78.5 percent Good/Fair and 73.6 percent 

Good/Fair on the non-Interstate NHS pavement based on RSL. The total estimated funding 

shortfall to achieve this goal was approximately $8.441 billion over the 10-year TAMP period. 

The TAMP showed a need of $5.924 billion for rehabilitation, $8.872 billion for reconstruction, 

$1.034 billion for preservation, and zero for initial construction.

Bridge Investment Strategies 

The TAMP showed the Constrained Investment for Bridges as the selected investment strategy. It

included the analysis of the following two alternative bridge investment strategies that were considered: 

1. Constrained Investment for Bridges: The TAMP stated that there was a large project in 

construction that will influence the overall State bridge conditions. It stated that achieving the 

minimum bridge condition level of “no more than 10 percent structurally deficient (or Poor) by 

deck area on the NHS will be achieved with the completion of a project that is under 

construction that represents more than 4 percent of the NHS deck area statewide.” With the 

completion of this project and using constrained investments, the national minimum condition 
Case Study on Financial Planning and Investment Strategies 

level for NHS bridges was expected to be achieved and maintained with the planned $1.5 billion 

over the 10-year period. The total projected amount for the NHS bridges was $1.528 billion.

2. Bridge State of Good Repair: The bridge state of good repair goal is 95 percent Good/Fair by 

deck area on the NHS. The investment strategy to achieve the bridge state of good repair 

required $1.851 billion, an estimated funding shortfall of $323 million over the 10-year TAMP 

period. The TAMP showed the amounts by work typed needed to achieve a state of good repair. 

It showed a need for $735 million for reconstruction, $420 million for rehabilitation, $343 

million for preservation and $354 million for work to be done on NHS bridges by bridge 

authorities and local agencies. An option considered but not adopted was to redirect funds from 

non-NHS bridges to the NHS but that would result in unacceptable declines in the condition of 

those assets.

Condition Gap Resulting from Constrained Investment 

In addition to showing the estimated funding gap for different investment strategies, the MDOT TAMP 

included charts that showed the condition gap for each year of the 10-year TAMP financial plan period 

resulting from implementing the investment strategy to achieve the state of good repair versus the 

constrained investment strategy. It showed the condition of Interstate pavements and the percent 

Good/Fair declining over the 10-year period to approximately 60 percent by 2030 when the constrained 

investment strategy was applied. Similar charts showed the condition of the non-Interstate pavements 

also declining over the 10-year period. The MDOT TAMP also included a chart that showed a need for an 

additional $32 million of investment annually to achieve the SOGR for bridges of 95 percent Good/Fair 

based on deck area statewide.

Washington DOT’s Financial Planning and Investment 

Strategies 

The Washington DOT (WSDOT) TAMP showed detailed financial planning done in support of asset 

management practices. The WSDOT TAMP detailed in the financial plan, the revenue sources, the 

funding needs, the planned expenditures, and the approach the DOT took to prioritize preservation 

projects and communicate the importance of funding preservation and related asset management 

investments. The TAMP emphasized the importance of long-term funding for preservation and stated 

that WSDOT’s preservation investments considered three core principles for all projects: “avoiding 

future liability, asset use, and life cycle cost.”11

The TAMP stated the revenue challenges and the funding gap faced by WSDOT. It highlighted the 

challenge the DOT faced in receiving preservation funding and the potential future impacts to preserving 

existing assets. The TAMP stated that “while some of the Connecting Washington mobility projects 

address preservation needs, WSDOT continues to see a trend of underfunding preservation activities 

when large revenue packages were assembled. This trend can lead to long-term preservation deficits, 

especially as large revenue packages make future preservation funding less likely.”12 The TAMP 

highlighted concerns that if this continues, the extent of network deterioration would make its

restoration increasingly costly. The TAMP stated that though discussions around increasing taxes and 

fees for preservation activities have occurred, no such increases have passed the Legislature and the 

prospect of near-future increases were unknown. It also stated that WSDOT continued to communicate 

preservation needs as its top priority for any additional funding stream should it become available. The 

WSDOT TAMP showed the funding gaps by year and work type.
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WSDOT Monitors Planned Projects by Work Type 

The WSDOT tracked expenditures by work type, stating in the TAMP that this allowed it to monitor if 

planned levels of investments were followed. The TAMP stated that “as part of the department’s asset 

funding need process, the Bridge and Pavement offices provided estimates of the total 10-year 

investment needs, based on asset management practices.”13 These represented the amount of funding 

required to fully implement lowest life-cycle cost strategies across the statewide network. Per 23 CFR 

Part 490 performance measures, approximately 1.87 percent of the Interstate and 2.17 percent of the 

state-maintained non-Interstate NHS is in Poor condition. The 2022 pavement targets that were set 

based on the 23 CFR Part 490 are to have no more than 4 percent Poor condition for the Interstate and 

no more than 5 percent Poor condition for the non-Interstate NHS, and 30 Percent of the Interstate and 

21 percent of the non-Interstate NHS in Good condition. WSDOT’s 23 CFR Part 490 target and SOGR is to 

have less than 10 percent of NHS bridges by deck area in Poor condition over the 10-year TAMP period. 

In 2018, 7.5 percent of WSDOT’s NHS bridges by deck area were in Poor condition as per 23 CFR Part 

490. 

Years of the TAMP 

Period

2019 2020 2021 2022 2023 2024-

2028

2019-

2028

Capital Pavement 

Preservation Needs ($ 

in Millions)

$ 284 $ 284 $ 284 $ 284 $ 284 $ 1,420 $ 2,840

Total Capital Planned 

Pavement Preservation 

Spending ($ in Millions)

$ 43 $ 45 $ 58 $ 75 $ 62 $ 168 $ 450

Total Capital Planned 

Pavement 

Rehabilitation Spending 

($ in Millions)

$ 222 $ 126 $ 112 $ 120 $ 106 $ 628 $ 1,314

Total Capital Planned 

Pavement Replacement 

Spending ($ in Millions)

$ 22 $ 10 $ 11 $ 14 $ 41 $ 125 $ 224

Total Capital Planned 

Pavement Spending ($ 

in Millions)

$ 286 $ 181 $ 181 $ 209 $ 209 $ 921 $ 1,988

Investment Gap ($ in 

Millions) $ 2 $(103) $ (103) $ (75) $ (75) $ (499) $ (852)

Table 4: WSDOT 10-Year Pavement Needs and Planned Spending ($ amounts may not add up 

because of rounding), Source: WSDOT 2019 TAMP

Table 4 from the WSDOT TAMP showed an investment gap of $852 million to meet pavement needs 

over the 10-year period. This assumes an annual pavement backlog of $40 million.

The WSDOT TAMP included the following:
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• Tables with bridge information by work type similar to that shown for pavements in Table 4. The 

bridge funding needs totaled $2.806 billion. The planned spending totaled $1.954 billion 

resulting in a shortfall of $852 million for bridges also over the 10-year TAMP period.

• As levels of expenditures for bridges and pavements were less than needed to fully utilize an 

ideal lowest life-cycle cost strategy, State bridge and pavement project prioritization were 

shifted to optimal performance within the current funding environment.

• The TAMP stated that the DOT used a variety of strategies to program projects that might 

exceed appropriation levels. This approach offset the risk of having projects come in under 

budget and of leaving additional appropriation on the table. It placed the agency in a position to 

use any additional funding sources that become available. It also positioned the WSDOT to 

receive unused funds from other States and/or Federal programs.

The WSDOT TAMP also stated that for the next four years the funding needed to meet condition targets 

for bridges and pavements would be met. However, beyond that period the conditions of pavements 

and bridges would drop below targets if funding is not increased. The TAMP stated that WSDOT used 

the results from life-cycle planning, revenue and financials, and performance scenario analysis as the 

foundation for setting the direction of its investment strategies. For State-maintained pavements and 

bridges, the results from these analyses were directly incorporated as part of project prioritization. The 

investment strategies shown in the TAMP detailed the prioritization to align investment with the 

estimated funding. For bridge projects, the investments were prioritized based on the following four 

major investment areas: repairs, replacements, scour, and seismic.

The TAMP also stated that 23 percent of the NHS was locally owned and maintained. To support the 

local NHS, the WSDOT planned to allocate 41 percent of the 2019 Federal funds to local jurisdictions. 

WSDOT was working closely with the local jurisdictions that manage the NHS to estimate annual funding 

needs. The TAMP stated that the projected funding dedicated to the local NHS was not available 

because no process existed to capture data on how local projects were selected or treatments 

determined. The TAMP stated that WSDOT was leveraging the current metropolitan planning 

organization (MPO) engagement framework to obtain baseline funding estimates for the local NHS.

New York State DOT’s Asset Sustainability Index and 

Funding Gaps 

NYSDOT’s TAMP discussed the Asset Sustainability Index as a State’s measure of the economic 

sustainability of its assets. In the TAMP, NYSDOT defined the Asset Sustainability Index as “the ratio of 

actual funding to the funding level necessary to achieve a state of good repair for an asset class.”

Although not specifically required by regulations, the Asset Sustainability Index is a forward-looking 

metric used by Australia, Great Britain, New Zealand, and others, to not just meet current condition 

targets, but to sustain the asset conditions into the future. The index shows if the funds planned for 

future years are sufficient to achieve and sustain assets at their targeted conditions over the long-term.

The NYSDOT TAMP used the index to show the investment gap and the funding needed to achieve a 

state of good repair for bridges and pavements in 10 years. 

The NYSDOT TAMP discussed sustainability and the focus on asset management principles in developing 

its investment strategies. In referring to the word “sustainability” the TAMP clarified that “NYSDOT has a 

formal definition for the concept that includes considerations such as generational equity, 
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environmental impacts, and balanced transportation options.” In discussing sustainability in the context 

of addressing asset investment needs, the NYSDOT TAMP stated that it was 

“more narrowly focused on the Asset Sustainability Index defined as an index comparing a given 

level of resource investment with the underlying asset need.

A basic economic notion behind asset management is the idea that assets deteriorate from use, 

weather and age. That loss can be quantified as a ‘need’ or amount of asset value lost that 

needs to be restored so that the asset can continue to function as necessary. That loss is 

counterbalanced through investment in restoring that asset.”14

The TAMP acknowledged that NYSDOT’s assets were currently not in a state of good repair. To develop a 

set of strategies to achieve the best bridge and pavement conditions 10 years into the future, NYSDOT’s 

Comprehensive Asset Management/Capital Investment Team investigated different investment and 

treatment strategies. This effort led to a strategy to “focus on preserving as much of the overall highway 

and bridge system as possible, to minimize future costs, while also treating assets in the worst 

conditions where those conditions impact the most travelers”15 The TAMP stated that this resulted in a 

focus on preservation and a capital investment program that was made up of 60 percent preservation 

and 40 percent system renewal (rehabilitation and reconstruction). In 2012, by implementing a stricter

asset management approach, focused on preservation and pavement management principles, NYSDOT 

slowed the increase in Poor pavement in 2018 from the 2011 projected value of 40 percent to an actual 

2018 value of only 19 percent. The TAMP also stated that with current funding, even the most efficient 

investment plan resulted in a widening gap between desired and actual conditions. The TAMP stated 

that while NYSDOT was investing $875 million per year, it would require approximately $2.5 billion 

annually to bring the NHS State pavements and bridges to a state of good repair in 10 years.

The TAMP stated that when the actual funding for a given asset(s) is sufficient to achieve a state of good 

repair the Asset Sustainability Index value will be 1.0. It showed the Asset Sustainability Index for 

NYSDOT’s highways and pavements combined currently to be 0.30. The NYSDOT TAMP showed the total 

anticipated investment, the funding needed, and the Asset Sustainability Index for the 10-year TAMP 

financial plan period as follows:

• Bridges: Funding needed is $1.7 billion, anticipated investment is $575 million, resulting in an 

ASI of 0.34.

• Pavements: Funding needed is $725 million, anticipated investment is $300 million, resulting in 

an Asset Sustainability Index of 0.41.

The anticipated funding resulted in an Asset Sustainability Index for State pavements and bridges of 

0.35, indicating that the State received and had planned for approximately one-third of the funding from 

all levels of government needed to achieve a state of good repair.

Utah DOT’s Pavement Sustainability Index 

The Utah Department of Transportation (UDOT) TAMP included what UDOT called the Sustainability 

Index (SI) to gauge the adequacy of pavement investments to sustain a state of good repair. The TAMP 

stated that UDOT has been focused on managing its assets with a philosophy of “Good Roads Cost Less” 

since 1978. UDOT defines the Sustainability Index as: Surface Area Years replaced/Surface Area Years 

lost. The UDOT TAMP stated that assuming all pavements lose one year of life each year, the selected 

projects should replace an equivalent amount of pavement life.

It determines the Sustainability Index as follows:
Case Study on Financial Planning and Investment Strategies 

• The ratio of the work done (planned) to the work required – measured in units of Surface Area 

Years.

• Considering that all pavements age one year each year, a loss of pavement life can be measured 

in units of Surface Area Years.

• The different surfacing projects replace different amounts of pavement life, which can be added 

up in units of Surface Area Years.

The TAMP stated that the Sustainability Index supports UDOT’s long-term vision and pavement 

management strategy to maintain pavements in a continuous state of good repair. UDOT decision 

makers use the index as input when selecting a mix of treatments to achieve sustainable pavement 

conditions. 

The TAMP stated that the Sustainability Index enables UDOT to identify pavement life added by each 

project and make projections. A Sustainability Index value greater than 1.0 indicates improvement in 

conditions while a value of less than 1.0 indicates a decline. The TAMP stated that UDOT reviews the 

Sustainability Index annually to ensure adequate funding is allocated to maintain the systems. One of 

the three pavement investment strategies that UDOT implemented looked at the mix of treatments 

planned for its five-year pavement program to calculate if the rolling average of the Sustainability Index

is 1.0 or greater. The TAMP showed the UDOT’s planned work in future years will result in less 

“pavement benefit years.” The TAMP showed a declining index starting in 2018. It showed a 

Sustainability Index of 1.2 in 2017, 1.4 in 2018, 1.1 in 2019, 1.1 in 2020, 0.9 in 2021 and 0.9 in 2022.

The TAMP stated that the agency’s Preserve Infrastructure strategic goal was to achieve 80 percent of 

mileage in Fair or better condition per the State’s pavement performance measure. The TAMP indicated 

that UDOT tracks the system to make sure that there is adequate funding allocated to meet its State-set 

pavement condition targets. 

Vermont Agency of Transportation’s Investment 

Strategies and Measures for Tracking Useful Life of Assets 

The Vermont Agency of Transportation (VTrans) has for many years used an Asset Sustainability Index to 

measure the impact of past investments. Vermont’s Asset Sustainability Index is similar to New York’s 

and is explained below. VTrans uses an additional measure called the Asset Consumption Ratio that was 

included in the TAMP.

The TAMP stated that though Vermont started its focus on Asset Management in 1995, it made changes 

to its business model in 2006 with the adoption of the “The Road to Affordability” policy.16 This policy 

relied on the principles of asset management. It led to lower-cost preventive maintenance treatments 

that resulted in savings that accumulated over time, increasing the Agency’s financial sustainability.

The VTrans TAMP showed investment needs and planned allocations by four major work types: 

maintenance, preservation, rehabilitation, and reconstruction. For NHS pavements, preservation 

included monies spent on maintenance as well as preservation activities. The TAMP stated that in FY 

2020, VTrans had approximately 70 percent of the funding needed to maintain a state of good repair. 

The TAMP stated that in FY 2019 the funding gap was $250 million. Based on two funding scenarios the 

TAMP showed an annual funding gap ranging from $244 million to $262 million in 2021. The funding gap 

rose to between $314 million and $383 million in 2028. 17
Case Study on Financial Planning and Investment Strategies 

VTrans Sustainability Measures 

The VTrans TAMP reported four financial performance measures to evaluate the sustainability of its 

pavement and bridge assets and to evaluate the overall financial health of its infrastructure.

1. Pavement Sustainability Index: This is the ratio of the anticipated available funding for

pavements relative to the anticipated annual need to maintain pavements in a state-of-goodrepair. 

2. Bridge Sustainability Index: This is the ratio of the anticipated available funding for bridges 

relative to the anticipated annual need to maintain bridges in a state-of-good-repair. 

3. Overall Asset Sustainability Index: This is the ratio of the total anticipated available funding 

relative to the total anticipated annual operational and asset preservation needs. The Asset 

Sustainability Index can be computed for any or all assets. The Asset Sustainability Index for 

pavements only would be the same as the Pavement Sustainability Index and the Asset 

Sustainability Index for bridges only would be the same as the Bridge Sustainability Index.

4. Asset Consumption Ratio: This is a newer measure adopted by VTrans and is the ratio of the 

current value of the asset to its replacement cost. This provides a “balance sheet” perspective of 

the impact of the Agency’s investments.

The TAMP stated that VTrans also uses asset valuation to track the return on its investment. VTrans 

computes current asset value as the current bid price to replace that asset. This means the value for 

bridges is the sum of the current asset value of each bridge in its class. VTrans has categorized its 

network into five Customer Service Level (CSL) of roads. The value of each CSL class of pavements is the 

sum of all 0.1-mile segments in it.

The TAMP explained that the depreciated replacement cost is developed based on depreciable and nondepreciable costs. An example of a non-depreciable cost is the underlying earthworks. The remaining 

depreciable costs for a segment of pavement were then reduced based on the pavement condition.

A ratio of 1.0 for a Pavement Sustainability Index or a Bridge Sustainability Index indicates that the 

revenue anticipated will be sufficient to meet the needs of the pavements and bridges respectively. An 

Asset Sustainability Index of 1.0 indicates sufficiency to meet the needs of all the transportation assets 

being considered in the computation. VTrans could include other assets such as culverts, stormwater 

controls, slope stabilization assets, etc. along with bridges and pavements in computing the Asset 

Sustainability Index.

The TAMP stated that VTrans had been successful in securing funds to address a large amount of its 

surficial pavements needs. Based on a $128 million need over the last five years VTrans had a Pavement 

Sustainability Index ranging between 0.87 and 0.97. The TAMP also stated that the current VTrans Asset 

Sustainability Index is 0.7. This means that currently VTrans only has 70 percent of the funds needed to 

maintain the transportation assets in a state of good repair. The TAMP stated that for pavements the 

long-term need versus future funding levels is concerning.
Case Study on Financial Planning and Investment Strategies 

Budget 

Year

2% Budget 

Growth (million)

Anticipated 

Need (million)

Infrastructure 

Gap (million) ASI

2020 $600.9 $853.9 $253.0 0.7

2021 $611.6 $875.8 $264.2 0.7

2022 $622.4 $895.6 $273.1 0.7

2023 $640.5 $925.8 $285.3 0.69

2024 $652.0 $948.9 $297.0 0.69

2025 $663.6 $972.7 $309.0 0.68

2026 $682.5 $995.3 $312.7 0.69

2027 $694.8 $1,020.2 $325.3 0.68

2028 $707.3 $1,045.7 $338.3 0.68

2029 $727.1 $1,071.8 $344.7 0.68

2030 $740.3 $1,098.6 $358.3 0.67

Table 5: VTrans Asset Sustainability Index, Source: VTrans 2019 TAMP

Table 5 shows the projected Asset Sustainability Index trend for the 10-years of the TAMP. The VTrans 

TAMP stated that the projected annual gap in addressing bridge funding needs was approximately $52 

million. It noted that though the gap decreased due to past increased investments, the bridge needs are 

expected to climb. VTrans computations also showed that an annual revenue growth of 4.5 percent 

would be necessary to achieve an Asset Sustainability Index of 1.0 in 20 years.

VTrans identified Asset Sustainability as a way to help the agency make cost-effective pavement and 

bridge management decisions. It can be used as input to optimize and prioritize preventive maintenance 

treatment selection and coordinate with a wide range of partners. It communicates that asset 

management is important and long-term commitment is necessary to achieve the best results.

The Asset Consumption Ratio shows the aged condition of assets. It can be computed on any asset class 

and is also a measure of the remaining life of that specific asset. The TAMP stated that the Asset 

Consumption Ratio is used to demonstrate the impact of previous infrastructure investment decisions 

on the Agency’s overall asset value. It provides a “balance sheet” perspective on the impact of past 

agency investment decisions and can provide insight into where future monies may need to be spent to 

maintain a minimum asset value. It can be used to determine how balanced each asset’s investment 

plan is over the Agency’s entire asset portfolio.

Table 6 shows the Asset Consumption Ratio for Vtrans’ bridges by the five CSLs. CSL 1 includes 

Interstates and divided highways. CSL 2 includes arterial highways, including the non-Interstate NHS. CSL 

3 includes State Highway System Regional Corridors. CSL 4 includes State Highway System Local 

Connectors. CSL 5 includes Town Highways not including any NHS sections.

The TAMP showed the current value of all VTrans bridges to be $1.59 billion and the replacement value 

to be $2.874 billion, resulting in an Asset Consumption Ratio of 55.3 percent. An Asset Consumption 

Ratio of 55.3 percent indicates that more than 44 percent of the life of all bridges has been consumed.
Case Study on Financial Planning and Investment Strategies 

CSL 

Designation

Bridges 

(Numbers)

Deck Area

(sq. ft)

Replacement 

Value 

$ (in millions)

Current Value 

$ (in millions)

% 

Remaining

CSL1 372 3,295,041 $1,064 $ 620 58.2%

CSL2 132 1,116,946 $361 $ 215 59.6%

CSL3 247 1,102,132 $325 $ 182 56.1%

CSL4 330 1,062,173 $313 $ 174 55.6%

CSL5 1700 2,747,876 $811 $ 399 49.2%

Totals 2781 9,324,168 $2,874 $ 1,590 55.3%

Table 6: VTrans Bridge Asset Valuation, Source: VTrans 2019 TAMP

The TAMP stated that VTrans intends to continue to use the Asset Sustainability Index and the Asset 

Consumption Ratio to monitor bridges and pavements annually. Its primary financial goal is to increase 

or maintain current performance levels by making the “right treatment on the right asset, at the right 

time.” This strategy was expected to extend each asset’s service life for the minimum practical cost. The 

TAMP stated that if in the future resources are available, VTrans will continue to explore how to balance 

transportation investments to meet conflicting enterprise objectives while moving the needle on the 

Agency’s Asset Sustainability Index toward 1.0.

Illinois DOT’s Use of Spreadsheet Tool for Analysis 

The Illinois Department of Transportation (IDOT) TAMP provided an example of a DOT with developing 

asset management practices that conducted analysis with simple spreadsheet tools to develop a 

financial plan and investment strategies for its bridge and pavement assets. 

During the process of developing its 2019 TAMP, IDOT took steps to improve its asset management 

practices. The TAMP stated that historically IDOT had been using a “worst condition first” approach. 

However, its analysis showed that “programming appropriate treatments throughout the lives of assets 

will lead to higher performance of the highway system as a whole. As a result of this analysis, IDOT 

began programming projects in the following five categories: initial construction, maintenance, 

preservation, rehabilitation, and reconstruction/replacement.” 18

The IDOT TAMP discussed the process of collaboration between the Bureau of Programming and Office 

of Finance and Administration to develop a financial plan for the next 10 years. The TAMP stated the 

following about the alignment between the financial plan, investment strategies, LCP, and maximizing of 

bridge and pavement conditions:

“Using the financial plan, the current condition of the assets, the mix of treatments 

recommended by the life-cycle analysis, and the results of the risk analysis, an investment 

strategy was developed to maximize the condition of NHS pavements and bridges as top 

priority, and the non-NHS system as funding permits.”19

The plan stated that IDOT was in the process of selecting an Enterprise Asset Management System 

(EAMS) and used an interim spreadsheet tool in the analyses for the 2019 TAMP to satisfy the 23 CFR 

515.7 requirements. Using the interim tool, IDOT predicted the pavement conditions for three different 

funding scenarios and investment strategies. The TAMP showed a total of $10.3 billion available for 

pavements and bridges. It stated that if IDOT adopted the recommended investment strategies, the 
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targets could be met in the 10-year TAMP period. However, that would necessitate an increase of $6.0 

billion in funding from $10.3 billion to $16.3 billion over the period. 

Spreadsheet Tool for Investment Strategy Analysis and 

Programming Funds 

The TAMP discussed the impact of not just the current funding gap on the assets, but also the impact of 

delayed funding increases and the effect upon future deterioration. The TAMP stated that IDOT would 

systematically and over time allocate more funds to preservation and maintenance once the supporting 

business processes are in place. The TAMP stated that IDOT developed a spreadsheet tool that allowed 

the Office of Planning and Programming to evaluate the impacts of different investment options for 

both pavements and bridges.

The TAMP stated that the “State of Acceptable Condition for pavements represents a Condition Rating 

Survey (CRS) value of 5.5 or higher for Interstates and 5.0 for other NHS and non-NHS routes. (IDOT 

combines the sensor data (rutting, roughness, and faulting) and distress data to determine a CRS value 

ranging from 1.0 to 9.0, with 9.0 representing a new pavement and 1.0 a failed pavement.) The State of 

Acceptable Condition for Bridges is set to a minimum National Bridge Inventory (NBI) rating of 5 for all 

primary components (deck, superstructure, substructure, or culvert) for all bridges, regardless of 

system. These values were chosen as the State of Acceptable Condition because they represent the 

lowest values for which preservation activities are effective in extending the life of assets.”20

The fund allocation analysis was done iteratively to meet the State of Acceptable Condition targets. The 

TAMP included a pavement investment strategy that acknowledged existing project commitments and 

showed a transition to using LCP based on pavement classification (Interstate, other NHS, Non-NHS), 

pavement conditions, and repair needs. For other scenarios, planned allocations beyond existing project 

commitments varied to satisfy the State of Acceptable Conditions established for the network. The 

analysis based on applying the constrained funding scenario on the current pavement condition and 

backlog resulted in a final strategy to invest heavily in minor and major rehabilitation and allocate the 

remaining funds to preservation and reconstruction activities.

The TAMP included charts based on the spreadsheet tool that showed the impact of three different 

funding scenarios on pavement conditions in a 10-year TAMP period. The TAMP stated that if an 

increase in funding does not begin until after that period, the gap at that point would be $9.1 billion; in 

the interim, the condition of the highway system would continue to decline. If inflation and costs related 

to including ancillary items such as drainage and lighting were also considered, the cost would be 

between $13.5 to $15 billion. The TAMP included similar scenarios for bridges showing the impact of 

three different funding scenarios on the future condition of the bridges.

Using the spreadsheet tool, IDOT estimated investments and analyzed “investment strategies in which 

NHS bridge conditions were improved to attain 90 percent of square footage at or above the State of 

Acceptable Condition, while maintaining NHS pavements at as high a level as possible, and incrementally 

changing the historic distribution of pavement and bridge funding.”21 The bridges and pavements on the

network were prioritized based on the hierarchy with Interstate, NHS and higher volume assets being 

given higher priority.
Case Study on Financial Planning and Investment Strategies 

Strategic Direction, Process Improvements and Simple Tools 

IDOT’s EAMS implementation can take up to 36 months, so waiting for its implementation was not an 

option. Instead, IDOT used the spreadsheet tool and streamlined processes to guide the Districts and 

other agency personnel on treatment criteria for pavements and activities to perform in order to 

maximize the life of bridges. The TAMP stated that to enhance IDOT’s ability to make performance and 

data driven investment decisions and help ensure that limited resources are used wisely, it introduced 

several initiatives.

Following are three of the five initiatives that better use performance data to drive investment decisions 

and align with national initiatives to promote a transportation asset management (TAM) framework:

• Introduce a systematic process that links investments to performance objectives.

• Emphasize the use of preservation treatments that extend the life of the highway system at a 

minimum practicable cost.

• Consider agency risks or exposure in setting investment priorities.

Using available tools and introducing initiatives to provide guidance to agency personnel on how to 

these tools, IDOT developed its 2019 TAMP in accordance with Federal requirements and continued 

making improvements in asset management.

The TAMP stated that with funding constraints, cost-effectively using funds to extend the useful lives of 

assets becomes even more important. The TAMP stated that IDOT made many improvements including 

programming maintenance and preservation treatments early in the asset’s life. It also modified tracking 

procedures so that it can easily report on funds spent throughout the life cycle by initial construction, 

maintenance, preservation, rehabilitation, and reconstruction/replacement. 

Collaboration with Districts on Investment Strategy Analysis and 

Programming Funds 

IDOT worked with its Districts and Divisions and used the analysis results of the spreadsheet tools and 

streamlined processes to develop multiple investment strategies and select a fiscally constrained 

strategy to implement its asset management plan. Acknowledging the lack of necessary funding to 

achieve its State of Acceptable Condition levels, IDOT developed a system hierarchy prioritizing the 

Interstate and NHS pavements and bridges for investments. IDOT established new targets for State of 

Acceptable Condition level based on this hierarchy with emphasis on system preservation.

The TAMP stated that once investment levels are established, the Office of Planning and Programming 

works with the Districts to select projects that will enable IDOT to meet its statewide performance 

objectives. The spreadsheet facilitated the analysis of programming funds for preservation, 

rehabilitation, and reconstruction at both the State and district levels using deterioration rates and 

treatment costs. The amounts to be invested in the multi-year period for the different work types were 

agreed and the Districts selected projects following IDOT guidelines and based on bridge and pavement 

conditions to match intended investments. The final project list was incorporated into the STIP, 

presented to the General Assembly, and made public.
Case Study on Financial Planning and Investment Strategies 

Funding Implications of Aging Infrastructure and Deferred 

Investment 

Using the spreadsheet tool and conducting iterative and detailed analysis, IDOT showed the investments 

planned by work types for the 10-year period for NHS and non-NHS assets. The assumptions for 

distribution of funds between bridges and pavements were also clearly stated in the TAMP. The TAMP 

noted that the expected service life of pavements is 30 years and nearly 91 percent of the Statemaintained network is over 40 years old, and “approximately 44 percent IDOT’s bridges still in service 

are more than 48 years old, representing a significant level of deferred investment.”22 The TAMP also 

stated that the aging infrastructure typically requires “more frequent, and expensive, maintenance and 

rehabilitation in order to continue to provide acceptable levels of performance.”

In explaining the pavement investment strategy, the TAMP stated that “the final recommended 

pavement strategy invests heavily in minor and major rehabilitation with the remaining funding

allocated to preservation and reconstruction activities.”23 The investment strategies show IDOT 

achieving 88 percent State of Acceptable Condition versus its goal of 90 percent for the Interstate 

pavements. The annual investment planned by work type to achieve these goals were shown by the four 

work types for the 10-year TAMP period. Because IDOT at the time of the TAMP development did not 

have a mechanism to separate out preservation and maintenance, the TAMP showed annual planned 

investments by four work types for the 10-year period: combined preservation and maintenance, 

rehabilitation, reconstruction, and new construction The TAMP showed under the constrained budget 

scenario planned investment for the 10 years in the NHS allocated by work type in maintenance and 

preservation (combined), rehabilitation, reconstruction and new construction to total $305.4 million, 

$3.32 billion, $190.8 million and $500 million, respectively, resulting in a total of $4.316 billion.

For the State of Acceptable Condition, IDOT has goals for the non-Interstate NHS, non-NHS marked and 

unmarked pavement routes of 90 percent, 75 percent and 50 percent, respectively. Based on the 

projected funding, IDOT will only achieve a State of Acceptable Condition of 71 percent, 32 percent and 

29 percent for non-Interstate NHS, non-NHS marked and unmarked pavement routes, respectively. 

(Unmarked routes are roads over which IDOT has jurisdiction, but are not numbered as Interstates, US 

routes, or State routes). The TAMP also showed planned investments in non-NHS pavements to be 

$107.3 million, $1.177 billion and $56.7 million in maintenance and preservation, rehabilitation, and 

reconstruction respectively totaling $1.341 billion over the 10-year TAMP period. Similar investment 

information by year and work type was shown for NHS bridges and for non-NHS bridges.

The targets set for 2028 were 93 percent for Interstate and other NHS bridges by deck area and 90 

percent for the non-NHS bridges by deck area in a State of Acceptable Condition. The TAMP indicated 

that by 2028 Interstate NHS bridges will reach a level of 91 percent in acceptable condition that is close 

to the target of 93 percent. However, by 2028 the other NHS bridges will achieve 89 percent in a State of 

Acceptable Condition which is 4 percent below what IDOT has targeted. The bridges on the marked 

routes will achieve 61 percent in a State of Acceptable Condition, while bridges on unmarked routes will 

be 58 percent acceptable by 2028.

The TAMP acknowledged that based on the analysis conducted, there were performance gaps between 

actual conditions and the State’s condition targets. Based on the TAMP projections funding is not 

sufficient to achieve the acceptable conditions on all systems. The analysis showed that an additional 

$9.112 billion will be needed to close the performance gap in the 10-year period for bridges and 

pavements on the entire system.
Case Study on Financial Planning and Investment Strategies 

The IDOT TAMP showed the use of simple tools to develop detailed analysis of the investments needed, 

the planned funding, and funding gap to achieve the target condition for the entire pavement and 

bridge network.

Summary 

Practices from the TAMPs included in this case study show DOTs using simple spreadsheet tools to more 

complex management systems to develop 10-year financial plans to support their asset management 

needs. The practices showed how the DOTs developed pavement and bridge funding allocations based 

on anticipated revenue forecasts and estimates of funding needs for each asset class based on the LCP 

processes. The practices included also showed the results of the DOTs’ forecasts of funding needed 

annually by work types over the 10-year TAMP period to achieve and sustain their assets in a state of 

good repair.

The examples included also showed DOTs acknowledging uncertainties and potential shortfalls in 

projected revenues and how they planned to address asset needs during such shortfalls. For example, to 

address funding shortages KYTC prioritized and used available funds for safety, maintenance and 

preservation activities and delayed large reconstruction and rehabilitation projects. WSDOT 

programmed projects that might exceed appropriation levels, preparing the agency to take advantage of 

any unused funds from other States/or Federal programs.

The TAMPs showed the funding gaps and resulting declining asset conditions. Examples from Vermont, 

Utah, and New York showed how forward-looking measures such as asset sustainability index, and asset 

consumption ratio were used to help decision makers understand investment challenges and to convey 

to stakeholders the implications of funding gaps on future pavement and bridge conditions. These 

examples can help other peers develop detailed 10-year financial plans for their future TAMP updates 

and also serve as another opportunity to communicate to stakeholders the importance of funding asset

management.
Case Study on Financial Planning and Investment Strategies 

1 Kentucky Transportation Cabinet, June 2019 TAMP, p75

2 Kentucky Transportation Cabinet, June 2019 TAMP, Chapter 5: Risk identification and Management, p56

3 Kentucky Transportation Cabinet, June 2019 TAMP, p77

4 Kentucky Transportation Cabinet, June 2019 TAMP, p27

5 Kentucky Transportation Cabinet, June 2019 TAMP, p107

6 Kentucky Transportation Cabinet, June 2019 TAMP, p110

7 Michigan Department of Transportation, August 2019 TAMP, p37

8 Michigan Department of Transportation, August 2019 TAMP, p37

9 Michigan Department of Transportation, August 2019 TAMP, p40

10 Michigan Department of Transportation, August 2019 TAMP, p46 11 WSDOT Transportation Asset Management Plan, June 2019, p76 12 WSDOT Transportation Asset Management Plan, June 2019, p57 13 WSDOT Transportation Asset Management Plan, June 2019, p61 14 New York State Department of Transportation, June 2019, pC-1 15 New York State Department of Transportation, June 2019, p1-1 16 Vermont Agency of Transportation, Transportation Asset Management Plan, June 2019, p3. 17 Vermont Agency of Transportation June 2019 TAMP, Appendix B p21 18 Illinois Department of Transportation, June 2019 TAMP, Executive Summary, pES-3 19 Illinois Depart of Transportation, June 2019 TAMP, Executive Summary, pES-3 20 Illinois Department of Transportation, June 2019 TAMP, Executive Summary, pES-2 21 Illinois Department of Transportation, June 2019 TAMP, p79 22Illinois Department of Transportation, June 2019 TAMP, p23

23 Illinois Department of Transportation, June 2019 TAMP, p79