1. See the Present… Know the Future…

2. RECAPP ® Markets Telecom Facilities Municipalities Government Transportation

3. Lifecycle Management Manage the Asset Repair & Renewal Manage the Asset’s use Determine the need Manage the project events 0 Development Creation Utilization Upgrade I Conceptual & Detail Design Feasibility Study II Site Work & Construction Installation & Commissioning III Operation of Assets Asset Maintenance IV Productivity Improvement Re-Engineer Assets 0 Creation Utilization Concept Creation Utilization Renewal

4. Curve of Inevitable Consequences Capital Renewal Funding Base Original Cost Annual Operating Cost Capital Renewal Costs Asset Value Backlog Loss of Value 0 25Years

5. 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 Area 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

6. 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

7. Cumulative Funding Cumulative Cost Investment Renewal Spending Implications Future Renewal Costs vs. Historical Funding (Cumulative) Future Renewal Costs vs. Historical Funding (Cumulative) Best strategies

8. Facility Condition Indices Benchmarking condition of assets is one means of measuring the impacts of funding levels and the results of planned strategies. Facility Condition Index (FCI) = Renewal Requirement in a Given Year Replacement Cost of an Asset = X % Good Fair Poor Critical < 5% 5 - 10% 10 - 30% > 30%

9. See the Present... Know the Future... See the Present... Know the Future... © PHYSICAL PLANNING TECHNOLOGIES INC., 2002

10. Re-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-investment Rate (RR) = Annual Funding Replacement Cost of Asset = X % e.g.: RR = $3M annual funding = 3% $100M asset

11. Fair Critical Poor Good

12. Process 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

13. Capital Plan Development RECAPP’s Asset Management Model Strategic Goals Management Action Plan Implementation goals needs priorities

14. See the Present… Know the Future…