CAPITAL ASSET CONDITION ASSESSMENT REPORT

Transcription

1 December 2014 CAPITAL ASSET CONDITION ASSESSMENT REPORT Updated December 2014 Prepared by Department of Finance & Performance Management

2

3

4 TABLE OF CONTENTS 1. EXECUTIVE SUMMARY Background SGR Backlog and 10-Year Needs Condition Assessment Regional Funding Capacity, Reinvestment Needs and the Investment Backlog Report Organization INTRODUCTION Background Approach to Needs Estimation RTA Condition Assessment Program Service Board Asset Management Activities CTA Metra Pace MAP 21 and TAM Policy Implications CONDITION ASSESSMENT FINDINGS Chicago Transit Authority (CTA) Metra Pace CAPITAL NEEDS ASSESSMENT FINDINGS Definitions Key Assumptions Region-Wide Results for 10-Year Needs Assessment Region-Wide Results for 20-Year Needs Assessment Comparison with 2013 Report Service Board Results for 10-Year Needs Assessment Chicago Transit Authority (CTA) Metra Pace Impact of Maintaining Current Rate of Reinvestment Regional Funding Capacity, Reinvestment Needs and the Investment backlog APPENDIX A, GLOSSARY AND ABBREVIATIONS APPENDIX B, MAJOR ASSUMPTIONS B.1 Assumptions for Inflation Factors. CTA B.1 Assumptions for Inflation Factors. Metra B.1 Assumptions for Inflation Factors. Pace ii -

5 B.2 Useful Life Assumptions, CTA B.2 Useful Life Assumptions, Metra B.2 Useful Life Assumptions, Metra (Continued) B.2 Useful Life Assumptions, Metra (Continued) B.2 Useful Life Assumptions, Metra (Continued) B.2 Useful Life Assumptions, Pace APPENDIX C, ASSET INVENTORY UPDATE C.1 Inventory Structure C.2 Baseline Assessment Inventory C.3 Condition Assessment Update Inventory 2013 and 2014 Updates C.4 Linkage to Transit Economic Requirements Model (TERM) APPENDIX D, CAPITAL OPTIMIZATION SUPPORT TOOL (COST) D.1 COST Conceptual Model D.2 COST Key Features APPENDIX E, ASSET CONDITION RATING PROCESS E.1 Background E.2 Condition Rating Levels E.3 Condition Assessment Approach E.4 FTA Asset Decay Curves E.5 On-Site Condition Assessment APPENDIX F, SAMPLING RESULTS F.1 CTA F.2 Metra F.3 Pace APPENDIX G, CAPITAL PROGRAMMING COMPARISONS G.1 Regional Performance Measures: Capital Fund Expenditures Among Peer Regions G.2 Regional Performance Measures: Total Capital Expenditures per Resident G.3 Performance Highlight: Capital Investment APPENDIX H, 10-YEAR ANNUAL REINVESTMENT DETAIL iii -

6 LIST OF FIGURES Figure 1-1. Backlog and 10-Year Normal Reinvestment Needs Summary (Millions of 2013$)... 1 Figure 1-2. Distribution of Asset Conditions by Asset Category: RTA... 2 Figure 1-3. Regional Backlog Projections Assuming Historic Funding Levels ($2013 Billion)... 3 Figure 1-4. Required Annual Funding to Attain Specific Reinvestment Targets ($ Billions)... 3 Figure 2-1. Representative Service Board Resources and Transit Provided (2013)... 5 Figure 2-2. Decay Curve Relationship between Condition Rating and Useful Life... 7 Figure 2-3. Annual Updates Following Baseline Assessments... 8 Figure 2-4. Service Board Asset Types... 8 Figure 3-1. Distribution of Asset Conditions and Replacement Costs by Asset Category: RTA Figure 3-2. Distribution of Asset Conditions and Replacement Value by Asset Category - CTA Figure 3-3. Age Distribution of Assets by Category - CTA Figure 3-4. Distribution of Asset Conditions and Replacement Value by Asset Category - Metra Figure 3-5. Age Distribution of Assets by Category - Metra Figure 3-6. Distribution of Asset Conditions and Replacement Value by Asset Category - Pace Figure 3-7. Age Distribution of Assets by Category - Pace Figure 4-1. Definitions for the Types of Capital Replacement Need Figure 4-2. Definitions for the Types of Capital Replacement Need Figure 4-3. Backlog and 10-Year Normal Reinvestment Needs: Figure 4-4. Region-wide Summary 10-Year Unconstrained Needs by Year Figure 4-5. RTA Region SGR Backlog vs. Other Urbanized Areas (Over One Million in Population) Figure 4-6. Region-wide Summary 20-Year Unconstrained Needs Figure 4-7. Region-wide Summary 20-Year Needs, First Ten Years and Second Ten Years Figure 4-8. Needs Assessment Comparison 2013 and 2014 Update Reports ($Millions)* Figure 4-9. Differences Between 2013 and 2014 Reports Figure CTA Backlog and 10-Year Normal Reinvestment Needs (Millions of 2013$) Figure Summary 10-Year Unconstrained Needs by Year CTA Figure Metra Backlog and 10-Year Normal Reinvestment Needs (Millions of 2013$) Figure Summary 10-Year Unconstrained Needs by Year, METRA Figure Backlog and 10-Year Normal Reinvestment Needs (Millions of 2013$) Figure Summary 10-Year Unconstrained Needs by Year Pace Figure Regional Backlog Projections (Billions of $2013) Figure Percent of Replaceable Assets Exceeding Useful Life Figure Backlog to Replacement Value Ratio (Replaceable Assets) Figure Current and Projected Asset Age Distribution RTA Region Figure Required Funding to Attain Specific Reinvestment Targets (Millions of $2013) Figure Required Funding to Attain Specific Reinvestment Targets Figure C-1. Inventory Structure Figure C-2. Inventory Statistics Summary Figure D-2: Conceptual Model of COST Figure D-3. COST Key Features Figure E-1. Condition Rating Levels Figure E-2. Condition Approaches and Application iv -

7 Figure E-3. Asset Decay Curve Example Figure E-4. Replacement Needs Versus Asset Conditions Figure F (Year 3) Sampling Summary, CTA Figure F (Year 3) Sampling Summary, Metra Figure F (Year 3) Sampling Summary, Pace Figure H.1. CTA Detailed Asset Type Level Breakout of 10-Year Annual Reinvestment Needs ($2013 Millions) Figure H.1. CTA Detailed Asset Type Level Breakout of 10-Year Annual Reinvestment Needs ($2013 Millions), Continued Figure H.1. CTA Detailed Asset Type Level Breakout of 10-Year Annual Reinvestment Needs ($2013 Millions), Continued Figure H.2. METRA Asset Type Level Breakout of 10-Yr Annual Reinvestment Needs ($2013 Millions) Figure H-3. Pace Detailed Asset Type Level Breakout of 10-Yr Annual Reinvestment Needs ($2013 Millions) Figure H-3. Pace Detailed Asset Type Level Breakout of 10-Yr Annual Reinvestment Needs ($2013 Millions) Figure H-4. Summary for All Service Boards, 10-Yr Annual Reinvestment Needs ($2013 Millions) v -

8 1. EXECUTIVE SUMMARY 1.1 Background CAPITAL ASSET CONDITION ASSESSMENT UPDATE This report is the third annual update of the Regional Transportation Authority Capital Asset Condition Assessment (Baseline Assessment) published in As with the original Baseline Report and the first two updates, this report provides an assessment of the current physical conditions and 10-year capital reinvestment needs of the transit capital assets owned and operated by RTA and its three Service Boards, CTA, Metra and Pace. Specifically, it reflects the condition and reinvestment needs of the entire region s transit assets as of December 31, The main report findings include: State-of-Good-Repair (SGR) backlog for the region is $19.5 billion Year capital need for normal capital reinvestment is $16.6 billion 2. RTA s asset management process is consistent with the latest direction from FTA through the 2012 Transportation Legislation bill, Moving Ahead for Progress in the 21 st Century (MAP-21). Specifically, the asset management process allows for: Annual asset inventory updates Condition assessments (both observed through sampling and projected through COST) Investment prioritization (i.e., projects reflecting priorities for funding and balancing agency needs). 1.2 SGR Backlog and 10-Year Needs As of December 2013, the region s total capital reinvestment needs over 10 years are estimated to be roughly $36.1 billion (Figure 1-1). This includes $19.5 billion to address the existing investment backlog (54 percent of total needs) and an additional $16.6 billion to address normal reinvestment needs expected over the next ten years (2014 to 2023), or $1.6 billion per year. Normal reinvestment includes normal asset replacement, rehabilitation, and expenditures on minor capital repairs grouped under annual capital maintenance (ACM). As considered in more detail later in the report, a significant proportion of the region s reinvestment needs (the backlog in particular) are associated with the region s older rail assets and insufficient capital reinvestment over time. The complete Capital Needs Assessment is presented in Chapter 4. Figure 1-1. Backlog and 10-Year Normal Reinvestment Needs Summary (Millions of 2013$) Service SGR Normal Reinvestment Board Backlog Replace Rehab Capital Maint. Sub-Total Total % of Total CTA $12,939 $5,507 $3,234 $494 $9,235 $22, % Metra $6,126 $4,367 $1,109 $100 $5,576 $11, % PACE $475 $1,174 $506 $109 $1,789 $2, % Total $19,540 $11,048 $4,849 $703 $16,600 $36, % % of Total 54.1% 30.6% 13.4% 1.9% 45.9% 100.0% 1 Backlog consists of deferred reinvestment in asset rehabilitation, replacement, and annual capital maintenance. 2 Normal capital reinvestment includes normal replacement, plus scheduled rehabilitation work and annual capital maintenance

9 1.3 Condition Assessment CAPITAL ASSET CONDITION ASSESSMENT UPDATE In addition to capital needs expressed in dollar terms, this report also provides findings for the general physical condition of the region s capital assets. Condition assessments are estimated (modeled) based on the asset age, the RTA and Service Board- determined useful life and decay curves. The condition rating levels established by RTA for purposes of categorizing physical condition are numbered 5 through 1 and labeled Excellent, Good, Adequate, Fair, and Worn. This five-level numbering system is consistent with that employed by the Federal Transit Administration (FTA). Investment backlog and condition are linked. Since the backlog is comprised of deferred investment in asset replacements, rehabilitation, annual capital maintenance, worse condition assets are the most likely to make up the backlog. Figure 1-2 represents the full distribution of transit asset conditions for the region for each of the major asset types: Facilities; Guideway Elements; Stations; Systems; and Vehicles. The height of each bar represents the total value of the assets by category in billions of 2013 dollars. Figure 1-2 includes all assets, not just those needing reinvestment, so the sum of the bars has greater value than the $36.1 billion needs number. Figure 1-2. Distribution of Asset Conditions by Asset Category: RTA Billions $25 $20 $15 $10 Excellent Good Adequate Marginal Worn $5 $0 Facilities Guideway Elements Stations Systems Vehicles The figure illustrates, for instance, that Guideway Elements, Stations and Vehicles have large proportions of assets in marginal condition and may need the most attention. The complete condition assessment documentation is presented in Chapter Regional Funding Capacity, Reinvestment Needs and the Investment Backlog The needs estimates presented in Figure 1.1 indicate that a total investment of $16.6 billion would be required to address expected normal reinvestment needs over the next ten years, with an additional $19.5 billion in funding required to reduce the backlog. The range for the region s current combined rate of capital reinvestment is estimated between $563 million and $765 million annually. This is considerably less than $1.45 billion annual amount required to maintain the size of the current investment backlog or the $2.62 billion in annual funding required to eliminate that backlog over the next twenty years. This outcome implies continued growth in the region s deferred investment backlog, - 2

10 as illustrated below in Figure 1-3, and potentially increasing proportions of assets in marginal or worn condition. Figure 1-3. Regional Backlog Projections Assuming Historic Funding Levels ($2013 Billion) $40 $35 $30 Low SGR Funding ($563M Annual Avg) High SGR Funding ($765M Annual Avg) $25 $20 $15 $10 $5 $ Expected annual RTA region capital funding is currently estimated to range from $0.56 to $0.77 billion per year. Figure 1-4 presents the level of investment required to attain specific investment targets and the gap between the required and expected funding (both low and high funding estimates are shown in the graphic with the dotted lines). For example, an estimated $2.62 billion in annual reinvestment is required to attain SGR in twenty years (including full elimination of the backlog). To maintain the current size of the region s investment backlog requires an estimated $1.45 billion in annual expenditures. $4.0 $3.5 $3.45 $3.0 $2.5 $2.62 $2.0 $1.5 $1.45 $1.0 $0.5 $0.0 $0.56 $0.77 Low Funding Estimate High Funding Estimate Maintain Backlog 20 Years to Full SGR 10 Years to Full SGR Figure 1-4. Required Annual Funding to Attain Specific Reinvestment Targets ($ Billions) - 3

11 1.5 Report Organization CAPITAL ASSET CONDITION ASSESSMENT UPDATE This 2014 report has been streamlined compared to the 2013 report. The summary information is contained in the Executive Summary and in the next three chapters, as follows: Section 1, Executive Summary high level summary for 2014 analysis year. Section 2, Introduction background on the effort, MAP-21, and a high-level overview of the local transit service providers (i.e., Service Boards). Section 3, Condition Assessment Findings details on the condition of major asset categories by Service Board. Section 4, Capital Needs Assessment Findings current backlog and asset capital reinvestment needs for the next 10 and 20 years, and related discussion. Reinvestment needs are presented at the regional level and by Service Board. Supporting information is contained in eight appendices: Appendix A, Glossary and Acronyms Appendix B, Major Assumptions Appendix C, Asset Inventory Update Appendix D, Capital Optimization Support Tool (COST) Appendix E, Condition Asset Rating Process Appendix F, Sampling Results Appendix G, Capital Programming Comparisons Appendix H, 10-Year Annual Reinvestment Detail - 4

12 2. INTRODUCTION 2.1 Background CAPITAL ASSET CONDITION ASSESSMENT UPDATE The Regional Transportation Authority (RTA) performs financial oversight, public funding distribution, and regional policy planning in support of the three transit operators (also known as Service Boards) that provide transit services in northeastern Illinois: Chicago Transit Authority (CTA) The CTA operates the nation's second largest public transportation system and covers the City of Chicago and 40 surrounding communities. Through its bus and rail systems, it provides more than 80 percent of the public transit trips in the sixcounty Chicago metropolitan area either with direct service or connecting service to Metra and Pace. Metra the commuter rail agency serving Cook, DuPage, Will, Lake, Kane and McHenry counties. Metra serves more than 100 communities with 241 stations on 11 lines running from Chicago s downtown. Pace suburban bus and regional paratransit. Pace is the suburban transit provider for the Chicago area. Pace serves riders with fixed bus routes, vanpools and Dial-a-Ride programs covering 3,500 square miles spread over six counties - suburban Cook, DuPage, Kane, Lake, McHenry and Will - and 284 municipalities. Pace is also the ADA paratransit provider for the region, both for city and for suburban service. The table below highlights transit resources and the service provided by CTA, Metra and Pace by mode for calendar year 2013 (most recent data available from the Service Boards). Figure 2-1. Representative Service Board Resources and Transit Provided (2013) CTA Bus CTA Rail Metra Pace Source Revenue Vehicles 1,817 1,398 1,201 2,668* Master DB Other Vehicles Master DB Fixed Guideway Route Miles N/A SB Website Annual Revenue Miles 53.4 million 68.8 million million 36.7 million NTD Annual Revenue Hours 5.8 million 3.8 million 1.42 million 2.1 million NTD Annual Passenger Miles 729 million 1,441 million 1,665.8 million million NTD Unlinked Passenger Trips (FY) 300 million 229 million 74 million 35 million NTD Stations, Bus Stops and Transit Facilities 11,104 posted bus stops * Includes both fixed route bus and demand response/paratransit transfer centers, 9 Park-n-rides, 18 boarding/ turnaround facilities SB Website The RTA was created in 1974 by approval of a referendum by the residents of Cook, DuPage, Kane, Lake, McHenry, and Will counties. The RTA is a special purpose unit of local government and a municipal corporation of the State of Illinois. The three Service Boards - each led by a Board of Directors - individually handle their respective transit operations and fare responsibilities

13 The RTA regional system is the third largest in the country, covers approximately 7,200 route miles, and provides more than two million daily rides. Assets owned and operated by the Service Boards include approximately 6,150 passenger vehicles, 422 stations, and 70 maintenance facilities. The RTA s current Transit Asset Management (TAM) program consists of three main elements: An ongoing regional transit asset inventory/condition assessment program (the subject of this report) A State of Good Repair (SGR) needs assessment process that is based on the inventory A project screening and prioritization capital development process, which uses the goals and objectives set in the RTA Strategic Plan, and is linked to an ongoing performance measurement program. The RTA, in conjunction with the three Service Boards, is continuing to develop a more systematic and integrated approach to TAM including concurrent implementation of a Capital Asset Condition Assessment program and customization of the Capital Optimization Support Tool (COST). Why is This Important? Maintaining assets in State of Good Repair for public transportation is vitally important to the greater Chicago region and to the State of Illinois. Consider that: The cost of delay per auto commuter is fifth highest in the nation and the yearly delay per auto commuter is seventh in the nation (TTI) 28.9% of Chicago households do not own a vehicle. Access to transit ensures these residents have access to employers and retailers. Availability of transit reduces the need to provide additional roadway capacity and parking that would be required if these households purchased autos (US Census) An average household in 2012 spent $8,998 on transportation, 17.2 percent more than in If transit options were to dwindle, public transportation customers would face higher transportation expenditures (BLS) CTA keeps 360,000 cars off the road and without the service output, over 400 miles of new roads would be needed, equivalent of a single lane road from Chicago to Toronto (CTA) The economic impact to maintain the Metra system ($1.68 billion cost) versus disinvestment results in a net 11,400 jobs and $2.0 billion in net annual business output and household saving gain as of 2020 (EDR) Each dollar invested in transit SGR generates $ $1.90 in benefits such as direct labor effects, regional mobility effects, household savings from reduced auto usage, reduction in highway accidents and improved air quality. Additional benefits not included relate to factors that cannot be effectively measured, such as the benefits of induced physical activity and the role of transit in tourism and in shaping the global identity of Chicago. Transit contributes positively to property values and employment: Proximity to major transit corridors contributes 5-20% to property values in the region. Bringing transit into a state of good repair also provides an estimated $1.5 billion in annual benefits by giving employers access to a larger and more qualified workforce pool. Regional models show direct job gains upwards of 41,000 as a result of these improvements Historically, our region s transportation system has been a foundation of our success. But the system s infrastructure was built decades ago, with inadequate ongoing investment to keep it up to date. While transportation is still a significant strength of this region, we must modernize our system to compete with other U.S. and global economic centers. (CMAP) Asset management goals directly support the 2030 and 2040 Regional Transportation Plans for mobility and accessibility, congestion management, economic development, and safety. Travel by rail reduces Greenhouse Gas (GHG) emissions by roughly 20% over auto and travel by bus reduces emissions by roughly 50% over auto (U.S. EPA). Sources: Texas A&M Transportation Institute (TTI), 2012 Annual Urban Mobility Report; U.S. Census; Bureau of Labor Statistics (BLS), Economic News Release, Consumer Expenditures 2012; Chicago Metropolitan Agency for Planning (CMAP), GO TO 2040 Plan; Chicago Transit Authority, Day Without CTA, 1999; EDR Group; Chaddick Institute for Metropolitan Development (University of DePaul), 2012; U.S. Environmental Protection Agency, Inventory of U.S. Greenhouse Gas Emissions and Sinks

14 2.2 Approach to Needs Estimation CAPITAL ASSET CONDITION ASSESSMENT UPDATE This report presents estimates of the level of capital investment required to address all of the RTA region s deferred transit reinvestment needs (the investment backlog) as well as all anticipated future rehabilitation and replacement needs for the ten-year period 2014 to 2023 (Chapter 4). The needs estimates were developed using RTA s Capital Optimization Support Tool (COST), a decision support tool designed to estimate capital reinvestment needs based on the known ages, rehabilitation requirements, expected useful lives and replacement costs of the region s transit assets. Specifically, COST estimates the following types of capital reinvestment needs: Investment Backlog: The level of reinvestment required to replace all assets that currently exceed their expected useful life (e.g., the cost to replace all 40 foot buses that exceed 12 years of age, the expected service life for this vehicle type). Normal Replacement: Investments required to replace existing assets expected to reach the end of their useful life over the next ten year period (normal replacement does not include deferred replacement needs). Rehabilitation: Investments required to rehabilitate existing assets over the next ten year period. COST s estimates of rehabilitation needs do not include deferred rehabilitation needs, only those rehabilitation activities that will arise over the next ten year period. Annual Capital Maintenance: Ongoing minor capital investments as required to maintain a state of good repair over the next 10-year period. This report also provides estimates of the current physical condition of the region s transit assets (Chapter 3). As with the reinvestment needs, the condition estimates were generated by the COST model based on asset age and a set of asset decay relationships that rate asset condition on a scale of 5 (excellent) through 1 (worn). While COST s estimates of asset condition and the timing of asset replacement (useful life) are directly related, it is important to note that an asset s replacement timing within COST is entirely determined by the useful life (in years) assigned to that asset by the Service Board responsible for that asset. COST s asset decay curves are constructed such that asset condition is set to 5.0 for new assets but declines to exactly 2.5 once an asset attains it s Service Board assigned useful life (see Figure 2-2). Figure 2-2. Decay Curve Relationship between Condition Rating and Useful Life Asset Condition Rating Asset attains condition 2.5 at useful life, by definition 0.0 0% 12% 23% 35% 46% 58% 69% 81% 92% 104%115%127%138%150% Percent of Useful Life Finally, given the large magnitude of the reinvestment needs and the limitations of existing funding capacity and other factors, it should not be expected that all of these needs will or even can be addressed within the upcoming ten-year period. Rather, these estimates are intended to provide an - 7

15 understanding of the total extent of the region s reinvestment needs, to underline the value of potential funding increases to addressing that problem and to foster discussion of how to best manage the remaining investment backlog. As indicated in the Regional Transit Strategic Plan, even if a significant infusion of funding becomes available to address the backlog, having an ongoing funding commitment to maintain the transit s infrastructure is a vital element to ensuring the long term state of good repair of the transit system. It is one of RTA s goals to increase and stabilize revenue through existing and new funding sources in order to improve our system while maintaining reasonable fares. 2.3 RTA Condition Assessment Program In 2010, the RTA published the initial report on the capital asset condition assessment (herein referred to as the Baseline Assessment). The report summarized the results of an 18-month collaborative effort to identify the general condition of the region s capital assets, as well as to determine valuation, backlog, and capital needs over 10 years. The data collected reflected asset inventory and condition through December 31, In 2011 the RTA started a 5-year effort to annually update the Baseline Assessment. Figure 2-3 illustrates the update schedule with targeted dates of update efforts. The data analyzed is based on the preceding calendar year. The first report represented the 2012 Update, the Year 1 Assessment. This report represents the 2014 Update, the Year 3 Assessment. Therefore, the data collected and reported in this year update report are as of December 31, Figure 2-3. Annual Updates Following Baseline Assessments Year 1 Year 2 Year 3 Year 4 Year /11 6/12 6/13 6/14 6/15 6/16 Baseline Assessment 2013 Assessment 2015 Assessment 2012 Assessment 2014 Assessment 2016 Assessment As such, the RTA Capital Asset Condition Update process is an annual process by which the Service Boards update their inventory data with changes from the prior year, and where capital needs and condition of all main asset types present with the three Service Boards are identified (summarized below). Figure 2-4. Service Board Asset Types Asset Type CTA Metra Pace Guideway N/A Stations Facilities Vehicles Systems - 8

16 2.4 Service Board Asset Management Activities CAPITAL ASSET CONDITION ASSESSMENT UPDATE This section provides a high level overview of recent Service Board asset management efforts and asset responsibilities. It is anticipated that as federal grantees each Service Board will submit its own individual TAM plan CTA CTA Asset Management Activities and MAP-21 Plans In 2012 CTA launched an extensive assessment and inventory of its bus garages, rail maintenance warehouses, rail stations (inventory only) and bus turnarounds. Once collected and analyzed, an asset hierarchy and structure was developed and currently serves as the asset data foundation used by CTA s Enterprise Asset Management (EAM) software system Infor EAM to manage maintenance defect and work orders. This system includes asset management functionality where condition and costs can be collected at the asset level and incorporated in system structures, thus providing for data rollup at different levels - an important functionality needed for capital planning. In a similar manner, the CTA utilizes a Maintenance Management Information System (MMIS) system to manage defects; work order assignment and accounting; and both scheduled and unscheduled maintenance programs for its revenue bus and railcar fleets. CTA is actively involved in the regional Capital Asset Condition Assessment Update process by participating in regional COST meetings and by developing an output report from their Infor EAM system which maps to COST data serving to streamline the update process. CTA is actively involved in discussions with FTA on rulemaking that addresses MAP-21 requirements. CTA is in the process of assembling a team to begin developing their TAM Plan. CTA Asset Ownership and Responsibility for Rehabs/Replacement Generally speaking, all assets in CTA s inventory are 100 percent owned, operated, and maintained by CTA. CTA carries out the rehabilitations and replacements according to its maintenance and replacement practices and funding availability. CTA has some agreements with the City of Chicago for maintenance of Non-Revenue vehicles. Of special note is the new Open Standards Fare System (OSFS) Ventra fare collection system. CTA owns the new fare collection system that came into service in September The vendor, Cubic, is responsible for operation, maintenance and upgrades (capital reinvestment replacement and rehab) to keep the system operating up to contractual standards of performance for up to 10 years after the golive date. Once the DBOM Ventra contract expires, CTA will decide whether to procure a new contract or extend this one. CTA has maintenance and operations agreements with the local municipalities (City of Chicago, Village of Skokie, etc.) for stations they build. This makes CTA responsible for ongoing capital maintenance, rehab and replacement. The City of Chicago has reconstructed some downtown CTA stations using funding that otherwise would have been shared for the City of Chicago (i.e., between CTA and CDOT). Exceptions to asset ownership by CTA are listed below. The City of Chicago owns the entire downtown subway infrastructure and associated real estate. Some subway stations were built by, and are owned by, local municipalities (e.g., Chicago, Skokie). These number about

17 2.4.2 Metra CAPITAL ASSET CONDITION ASSESSMENT UPDATE Metra Asset Management Activities and MAP-21 Plans Beginning in 2012 with field inspections, Metra has undertaken a large asset management program that includes top to bottom inventory update, and condition assessments system-wide. In 2014 most of the primary data collection was complete and Metra began sharing the results with user departments for quality control. The program will conclude with training for field staff. Inventory and condition information are combined for all major asset classes. Metra collected GIS information during the Right of Way asset field inspections. Currently, Metra uses the Maximo Enterprise Asset Management System for their Mechanical Division (other divisions use Faciligence). Ultimately, Metra plans to migrate everything to Maximo. Like other Service Boards, Metra is an active member the Capital Asset Condition Assessment and the Capital Optimization Support Tool (COST) projects. Both will provide Metra with input information for the upcoming Transit Asset Management Plans (TAMP) mandated by the FTA. Metra Asset Ownership and Responsibility for Rehabs/Replacement Vehicles (locomotives, coaches, non-revenue vehicles) are fully owned by Metra except 91 coaches which are owned by West Suburban Mass Transit District. Metra owns the Milwaukee, Rock Island/Southwest Service, and Electric Lines. The other lines are owned by the UP, BNSF, and other private carriers. What Metra owns, and pays for, on those other lines is based on their Purchase of Service agreements with those other railroads. This percentage, which can vary from 5% to 95%, also may change with the business climate (i.e., depending on level of freight traffic). This applies to track, structures, and systems assets on those lines. For stations, Metra has the responsibility for capital replacement. However, community desired upgrades are paid for by the community. Other facilities are 100% Metra owned and Metra does not lease assets Pace Pace Asset Management Activities and MAP-21 Plans As an ongoing Agency commitment to quality assurance and quality control, Pace continues to refine its asset inventory and condition assessment reporting activities consistent with the regional efforts on the Capital Asset Condition Assessment Update project. Several years ago, Pace started the process of migrating asset data into the ORACLE based Enterprise Asset Management System, meant to result in a central data business intelligence warehouse which would track assets from the time of purchase to the end of their useful life cycle. Pace s extensive involvement with the Capital Asset Condition Assessment and the Capital Optimization Support Tool (COST) projects allows Pace to ensure a workable database and an individual solution for a Transit Asset Management Plan (TAMP) Program complying with the intent of MAP-21. Lastly, COST, in addition to its own Capital Criteria, is used during the Pace annual budget process to assess, evaluate, and prioritize transit capital reinvestment needs within the parameters of regional funding and long term strategic objectives

18 Pace Asset Ownership and Responsibility for Rehabs/Replacement Pace suburban assets are largely owned, operated, and maintained by Pace. Due to lack of capital funding for regional ADA services Pace contracts with private carrier service providers for the provision of required ADA equipment, facilities, and services that cannot be met with internal efforts. Pace carries out rehabilitations and replacements of its assets in accordance with transit industry standard best practices for routine and preventative maintenance schedules. Private carriers are contractually required to adhere to Pace performance standards for vehicle asset maintenance. Pace also has agreements with communities, municipalities, and the other Service Boards to use their properties to provide passenger services. In these instances, Pace has varying responsibility for asset maintenance and replacement, outlined in the agreements. Pace also has lease agreements for off-site ADA and Vanpool offices, and a Print Shop facility. Additionally, Pace, along with CTA, has entered into a contract with Cubic regarding the new Open Standards Fare System (OSFS) Ventra fare collection system. 2.5 MAP 21 and TAM Policy Implications USDOT, through the Federal Transit Administration, has passed the 2012 Transportation Legislation bill, Moving Ahead for Progress in the 21 st Century (MAP-21); which addresses asset management and safety. Specifically, the asset management process allows for: Annual asset inventory updates Condition assessments (condition both projected/modeled through COST decision tool, and observed through sampling on assets in the field) Detailed estimates of capital reinvestments over 10 and 20 years and data supporting investment prioritization. While the specific MAP-21 requirements are still uncertain (draft final rule is expected late Fall 2014, past the time of production for this report), FTA will require the submission of an annual Transit Asset Management (TAM) Plan based on analysis of asset inventories, condition assessments, investment prioritization and SGR performance targets. As FTA grantees, it is expected that CTA, Metra and Pace will each individually be responsible for submitting their individual TAM Plans to the Federal Government. It is not expected that FTA will require that RTA submit a Regional TAM Report. As the RTA provides regional policy planning in support of the three transit operators, particularly in the area of asset management through its annual capital asset condition assessment program, RTA can provide valuable support to the service boards while also benefitting the region as a whole:

19 Benefits to Service Boards Technical support (e.g., assistance in summarizing inventory data, projecting condition assessments for major asset categories, assistance with COST modeling) Policy support (e.g., understanding TAM reporting requirements, setting regional SGR measures) Funding advocate for Service Boards, both at the Regional and Federal levels. Benefits to Region Coordination and consistency in TAM Planning and regional TAM approach Economies of scale and comparable reporting performance across Service Boards Maximize SGR grant funding for region

20 3. CONDITION ASSESSMENT FINDINGS CAPITAL ASSET CONDITION ASSESSMENT UPDATE Development of the Capital Optimization Support Tool (COST), adoption of FTA s decay curves and ongoing improvements to the region s asset inventory have enhanced RTA s and each Service Board s ability to assess and monitor the condition of the region s transit assets. For a full description of the COST decision tool, refer to Appendix D. This section presents analysis results of the current physical condition and age distribution of each Service Board s transit assets based on asset inventory data as of December, The analysis uses the COST tool to derive projected (modeled) condition for all assets using a series of asset decay curves, or deterioration curves. The curves essentially predict asset physical condition as a function of age, maintenance history and other factors on a common 5 to 1 scale. RTA also conducted limited condition sampling of assets for the third year of the update. Summary results for the sampling are located in Appendix F. Figure 3-1 represents the full distribution of transit asset conditions for the entire region for each of the major asset types: Facilities; Guideway Elements; Stations; Systems; and Vehicles. This is for all assets, not just the assets needing capital reinvestment. The height of each bar represents the total estimated replacement value of the assets in billions of 2013 dollars. Figure 3-1. Distribution of Asset Conditions and Replacement Costs by Asset Category: RTA Billions $25 $20 $15 $10 Excellent Good Adequate Marginal Worn $5 $0 Facilities Guideway Elements Stations Systems Vehicles This information is based on the estimated current physical condition and age distribution of each Service Board s transit assets. The condition rating levels established by RTA for purposes of categorizing physical condition are numbered 5 through 1 and labeled Excellent, Good, Adequate, Fair, and Worn. Appendix E provides detailed background on the asset condition rating process. The figure illustrates that Guideway Elements, Stations and Vehicles have large proportions of assets in worn and marginal condition that need the most attention. This is consistent with the prior years

21 3.1 Chicago Transit Authority (CTA) CAPITAL ASSET CONDITION ASSESSMENT UPDATE Estimates of the distribution of physical conditions for CTA assets - segmented by asset category and presented based on asset replacement value - are presented in Figure 3-2 (analysis excludes subway tunnels). This is a projection produced by COST, based on age data and decay curves. Based on this analysis, roughly 43 percent of CTA s assets are estimated to be in marginal or worn condition, with most of these assets concentrated in older track and track structures, stations, and rail vehicles. Figure 3-2. Distribution of Asset Conditions and Replacement Value by Asset Category - CTA Billions $16 $14 $12 $10 $8 $6 Excellent Good Adequate Marginal Worn $4 $2 $0 Facilities Guideway Elements Stations Systems Vehicles Note the chart above represents the condition of all assets, even new assets with no reinvestment needs. The total asset value (sum of the bars) exceeds the backlog plus normal reinvestment needs

22 Figure 3-3 illustrates the age distribution of CTA s assets by asset category as of the end of 2013 (presented as a percent of useful life consumed vs. the asset s share of the total replacement value of CTA s asset holdings). This chart is helpful in assessing the span of asset ages for each asset category, the relative value of assets within each age group and specifically the types and values of asset types that currently exceed their useful life. The assets listed to the right of the 100% Useful Life Consumed represent assets in the backlog. This chart highlights initially some vehicles in the light blue color, but later the concentration of guideway elements (track and structures) and stations (red and green, respectively) among over-age assets. Figure 3-3. Age Distribution of Assets by Category - CTA 14% Share of Total Replacement Value for All CTA Assets 12% 10% 8% 6% 4% 2% 0% Replacement Backlog Vehicles Systems Stations Guideway Elements Facilities 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 110% 120% 130% 140% 150% 160% 170% 180% 190% 200% Percent of Useful Life Consumed

23 3.2 Metra CAPITAL ASSET CONDITION ASSESSMENT UPDATE As a direct result of a significant inventory improvement and condition assessment effort, Metra s asset data underwent a major change as compared to that used for the prior year s report. For example, Metra s inventory went from just under 5,000 records in the inventory to over 34,000. This is a major difference between the 2013 and 2014 reports. As a result, differences in needs by major asset type more likely reflect changes in data than in actual changes in the condition of Metra s assets, as compared to last year s report. Current estimates of the distribution of physical conditions for all Metra assets -- segmented by asset category and presented based on asset replacement value are presented in Figure 3-4. This is a projection produced by COST, based on age data and decay curves. Based on this analysis, roughly 40 percent of Metra assets are estimated to be in marginal or worn condition, with most of these assets concentrated in older track structures (especially bridges) and in vehicles. Figure 3-4. Distribution of Asset Conditions and Replacement Value by Asset Category - Metra Billions $8 $7 $6 $5 $4 $3 Excellent Good Adequate Marginal Worn $2 $1 $0 Facilities Guideway Elements Stations Systems Vehicles Asset condition distribution for Metra s rail vehicles declined significantly as compared to the prior year report. The share of vehicles in marginal or worn condition increased appreciably from 38% to 48% between 2012 and 2013 while the share of vehicles in excellent declined from 40% to 28%. This change is less the result of aging fleets than it is from a reduction in the useful life assumption used to assess Metra s rail car conditions and reinvestment needs. Specifically, while the 2013 report assumed a 50 year useful life for Metra rail cars, this report assumes a 25 year useful life for these vehicles, the minimum assume FTA useful life

24 Figure 3-5 illustrates the age distribution of Metra s assets by asset category as of the end of 2013 (presented as a share of total asset replacement value). This chart is helpful in assessing the span of asset ages for each asset category, and distribution of replacement value across asset types. In addition, the assets listed to the right of the 100% Useful Life Consumed represent assets in the backlog, marked by the arrow. Note the chart shows effective age, not actual age. To calculate the remaining asset useful life assets such as vehicles are given an effective built date based on its most recent overhaul or rebuild. This is not to be misinterpreted with the equipment s historic built date (i.e., original manufacture date). Figure 3-5 highlights the high proportion of guideway elements (bridges), and also significant amounts of vehicles, considered to be over-age. Figure 3-5. Age Distribution of Assets by Category - Metra 14% Share of Total Replacement Value for All Metra Assets 12% 10% 8% 6% 4% 2% 0% Replacement Backlog Vehicles Systems Stations Guideway Elements Facilities 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 110% 120% 130% 140% 150% 160% 170% 180% 190% 200% Percent of Useful Life Consumed

25 3.3 Pace CAPITAL ASSET CONDITION ASSESSMENT UPDATE Estimates of the distribution of physical conditions for Pace s assets - segmented by asset category and presented based on asset replacement value is presented below in Figure 3-6. This is a projection produced by COST, based on age data and decay curves. Based on this analysis, roughly 20 percent of Pace assets are estimated to be in marginal or worn condition, with most of these assets concentrated in older vehicles and, to a lesser degree, in maintenance facilities and passenger stations (i.e., transportation and transfer centers). Figure 3-6. Distribution of Asset Conditions and Replacement Value by Asset Category - Pace Millions $900 $800 $700 $600 $500 $400 $300 Excellent Good Adequate Marginal Worn $200 $100 $0 Facilities Stations Systems Vehicles Note the chart above represents the condition of all assets, even new assets with no reinvestment needs. The total asset value (sum of the bars) exceeds the backlog plus normal reinvestment needs

26 Figure 3-7 provides a graphical representation of the age distribution of Pace s assets by asset category as of the end of 2013 (presented as a share of total asset replacement value). This chart is helpful in assessing the span of asset ages for each asset category, and the relative value of assets within each age group. Also, the assets listed to the right of the 100% Useful Life Consumed represent assets in the backlog, marked by the arrow. This chart highlights some vehicle reinvestment needs and systems nearing the end of their useful life, but generally limited backlog. Figure 3-7. Age Distribution of Assets by Category - Pace 35% Share of Total Replacement Value for All Pace Assets 30% 25% 20% 15% 10% 5% 0% Replacement Backlog Vehicles Systems Stations Facilities 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 110% 120% 130% 140% 150% 160% 170% 180% 190% 200% Percent of Useful Life Consumed

27 4. CAPITAL NEEDS ASSESSMENT FINDINGS 4.1 Definitions CAPITAL ASSET CONDITION ASSESSMENT UPDATE The 10-Year capital needs assessment is based on the dollar value estimation for total backlog, normal replacement, rehabilitation, and annual capital maintenance of assets for the three Service Boards. Each of these activities is required to maintain a State of Good Repair. Definitions for each of these terms are provided in Figure 4-1. Figure 4-1. Definitions for the Types of Capital Replacement Need Backlog Investment to replace all assets that currently exceed their useful life (does not include deferred rehabilitation needs) Normal Replacement Rehabilitation Annual Capital Maintenance (ACM) Ongoing replacement of existing assets as they reach the end of their expected useful life. Normal replacement does not include deferred replacement needs, only those needs for assets that will reach the end of their useful life over the next ten year period. Ongoing rehabilitation needs for existing assets. Rehabilitation does not include deferred rehabilitation needs, only those rehabilitation activities that will arise over the next ten year period as required to maintain a state of good repair. Ongoing minor capital investments as required to maintain a state of good repair over the next 10-year period. The backlog can be thought of as the total amount of deferred reinvestment actions (such as overdue asset replacements). At the present time, backlog does not include deferred rehabilitation of replaceable assets. The reason for this is that deferred rehabilitation is not yet measured or included in the inventories. The RTA recognizes that this is significant, such as for facilities, which have a long useful life (60 years) and many have missed significant rehabs and annual capital maintenance in that time period, due to funding shortages. The remaining capital replacement needs elements include normal replacement of assets, rehabilitation ( rehab ) of assets, and annual capital maintenance (ACM) of assets. ACM typically represents a minor ongoing capital reinvestment required to maintain a SGR (for example, an annual painting or paving contract). These three elements represent ongoing needs that will arise over the 10-year analysis timeframe (from 2014 through 2023) and have been grouped together throughout this report under the name normal reinvestment needs. 3 Two other cost components are important in estimating total 3 Note that the definition of capital maintenance used here differs from that used in the Baseline Assessment. In that report, capital maintenance referred to all rehabilitation activities including smaller reinvestment actions not conducted as part of a major rehabilitation project. In the Update report, rehabilitation refers to major, planned rehabilitation activities likely involving multiple components of the asset being rehabilitated and a well-defined project budget. The term annual capital

28 capital maintenance needs - soft costs and contingency costs - which are applied to each asset type as appropriate, according to the assumptions delineated in Figure 4-2. These assumptions were also used during the Baseline Assessment. Figure 4-2. Definitions for the Types of Capital Replacement Need Soft Costs Contingency Costs The majority of soft costs are expended in the planning, engineering, and project management efforts. These services include in-house agency staff, government related support staff, and consultants. Project start-up expenses are also included in this category. Project financing cost and other expenses (reconciliation and unaccountable costs) comprise the full range of project development capital costs (FTA definition) Rail and Bus Infrastructure Components: Additional 22.7% of total base cost. Rail and Bus Rolling Stock and Equipment: Additional 15% of total base cost. Contingency costs are budgeted for unforeseen emergencies or design shortfalls typically identified after a project commences. The contingency is included in the budget so the project can proceed with minimal interruption for changes or cost overruns. Rail and Bus Infrastructure Components: Additional 20% of total base cost. Rail and Bus Rolling Stock and Equipment: Additional 15% of total base cost. 4.2 Key Assumptions The Update report is also based on several other assumptions: Unconstrained Needs. Capital reinvestment needs estimates presented in this report are financially unconstrained. That is, these estimates determine the level of investment to fully eliminate the current investment backlog (and attain SGR) and then to address all subsequent reinvestment needs (to maintain SGR) with the assumption there is unlimited funding capacity. However, the level of annual investment required to address these needs is in excess of the region s current rate of capital reinvestment. This unconstrained analysis also assumes that the backlog can be eliminated in a very short time period (this is not realistic when real world financial, service impacts and project management constraints are introduced). Constant Dollar Needs Estimates. All backlog and needs estimates are presented in constant, 2013 dollars (2013$). If an asset inventory cost is reported in 2010$ for example, the historic cost is inflated to 2013$. In-Kind Replacement. While some level of technological change can be expected over the 10- year period of analysis, the Update analysis assumes that all assets are replaced by new, identical assets. maintenance now refers to smaller, more routine capital expenditures on a broad variety of minor reinvestment actions (e.g., painting facilities, patching roofs) and covered by a general, multi-purpose budget source