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See the Present…See the Present…Know the Future…Know the Future…
Copyright Physical Planning Technologies Inc., 2002. No parts of this document may be reproduced.
RECAPP® MarketsRECAPP® Markets
TelecomTelecom FacilitiesFacilities
MunicipalitiesMunicipalities
GovernmentGovernment TransportationTransportation
Lifecycle ManagementLifecycle Management
Manage the Asset Repair & Renewal
Manage the Asset’s use
Determine the need
Manage the projectevents
0
Development
CreationUtilization
Upgrade
I
Conceptual& Detail Design
FeasibilityStudy
II
Site Work &Construction
Installation &Commissioning
III
Operationof Assets
AssetMaintenance
IV
ProductivityImprovement
Re-EngineerAssets
0
CreationUtilization
Concept
CreationUtilization
Renewal
Curve of Inevitable ConsequencesCurve of Inevitable Consequences
Capital Renewal Funding Base
Original Cost
Annual Operating Cost
Capital Renewal Costs
Asset Value
Backlog
Loss of Value
0 25Years
2,800,000
2,400,000
2,000,000
1,600,000
1,200,000
800,000
400,000
0
1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000
Are
a
Construction Year
Public Assets in North America
Age Profile
Represents current cause of backlog
Managing peak of renewal requirements
over the next 10 - 20 years
Represents historical
funding patterns
Avg
. Age
Avg
. Age
Organizations have difficulty in predicting and effectively managing their longer term renewal requirements because of:
Organizations have difficulty in predicting and effectively managing their longer term renewal requirements because of:
• Incomplete or obsolete facility condition data
• Forward planning processes that often rely on historical cost patterns
• Planning tools that are operationally, not strategically, focused
• Reliance on short term technical justification to support long term funding proposals
© PHYSICAL PLANNING TECHNOLOGIES INC., 2003
Cumulative FundingCumulative FundingCumulative CostCumulative Cost
Investment
Renewal Spending
Implications
Future Renewal Costs vs. Historical Funding (Cumulative)
Future Renewal Costs vs. Historical Funding (Cumulative)
Best strategies
Facility Condition IndicesFacility Condition Indices
Benchmarking condition of assets is one means of measuring the impacts of funding levels and the results of planned strategies.
FacilityConditionIndex (FCI)
=Renewal Requirement in a Given Year
Replacement Cost of an Asset= X %
GoodFairPoorCritical
< 5% 5 - 10%10 - 30%> 30%
See the Present...
Know the Future...
See the Present...
Know the Future...
© PHYSICAL PLANNING TECHNOLOGIES INC., 2002
Re-investment RateRe-investment Rate
Setting condition goals allows us to recommend and apply funding needs in order to stabilize, improve, or maintain the condition of the portfolio.
Re-investmentRate (RR) =
Annual Funding
Replacement Cost of Asset= X %
e.g.: RR = $3M annual funding = 3%$100M asset
Backlog Funding Model
-20
-10
0
10
20
30
40
50
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Renewal Year
Back
log
in M
illio
ns
Base Funding- $550,000
Funding Level 1- 1,050,000
Funding Level 3- 1,500,000
Funding @ 2% of Construction Cost- 2,516,000
Fair
Critical
Poor
Good
Process Summary of FCI & RRProcess Summary of FCI & RR
• Identify current asset condition (FCI)
• Calculate the current backlog & determine the short & long term renewal needs & compare to current funding
• Establish future condition goals (FCI)
• Develop new funding approaches & strategies (RR)
• Implement a consistent reporting structure
Capital Plan Development
Backlog Funding Model
-20
-10
0
10
20
30
40
50
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
Renewal Year
Backlo
g in M
illions
Base Funding- $550,000
Funding Level 1- 1,050,000
Funding Level 3- 1,500,000
Funding @ 2% of Construction Cost- 2,516,000
RECAPP’s Asset Management Model
RECAPP’s Asset Management Model
StrategicGoals
ManagementAction
Plan Implementation
goals
need
s
pri
ori
ties
See the Present…See the Present…Know the Future…Know the Future…
Copyright Physical Planning Technologies Inc., 2002. No parts of this document may be reproduced.
