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This paper addresses the emerging common movement toward proactive asset management for the nation's infrastructure. Following decades of capital investment in infrastructure, we now face a mounting financial burden to sustain that infrastructure through maintenance, repair, and replacement. Proactive management of this situation before reaching "dire-need" status is the objective of asset management. This is being called for through several vehicles: Governmental Accounting Standards Board Statement No. 34 (GASB 34); the U.S. EPA's Capacity, Management, Maintenance, and Operations (CMOM) initiative; judicial consent decrees specifying asset management as a remedy; post 9/11 security vulnerability analyses; and funding legislation specifying asset management as a qualifying condition. This paper presents the common elements of these various initiatives, the financial trade-offs and political considerations faced by public sector managers, and the effects of the national economy. The beneficiaries of information in this paper are technical services providers to the public sector in capital planning, construction, and management of infrastructure assets.
INFRASTRUCTURE DEFINED
GASB 34 defines capital assets in the public realm as "land, improvements to land, easements, buildings, equipment, works of art and historical treasures, infrastructure, and all other tangible and intangible assets that are used in operations and that have initial useful lives extending beyond a single reporting period." GASB 34 differentiates infrastructure from other capital assets as "long-lived assets that are normally stationary in nature and normally can be preserved for a significantly greater number years that most capital assets [6]." Specific examples include roads, bridges, tunnels, drainage systems, water and sewer systems, dams, and lighting systems.
THE CURRENT INFRASTRUCTURE SITUATION
Because of the relatively long expected service lives of infrastructure assets (typically measured in decades), their operational and financial management are viewed primarily in the long term. Deferral of needed maintenance and of funding to sustain these assets are common occurrences, especially under the duress of tight budgets and political pressures for spending on more visible, exciting things.
To understand the cost issues related to proactive management needs, the current financial situation of the USA's national infrastructure should be understood. This is best illustrated by looking historically at the investment in infrastructure, then looking prospectively at the financial burden to sustain that original infrastructure. Figure 1 shows the historical investment in water pipes...