C a s e S t u d y

An asset and financial management program for Veliko Turnovo's public infrastructure

Summary

The municipality of Veliko Turnovo and the city of Golden, Colorado, have worked together under the Bulgarian Technical Twinning Program to implement this project. The resulting asset and financial management program will allow Veliko Turnovo to accurately plan for short- and long-term infrastructure needs, estimate the cost of annual repairs, and determine ongoing financial requirements. The program will also show the additional costs that the municipality will incur if it fails to make the needed investments in a timely fashion.

Problem Statement

Municipalities are responsible for maintaining streets in the required condition and must find sufficient funding for annual street repairs. Repairing streets at the appropriate point in their life cycle is important and reduces long-term costs.

As a result of insufficient and irregular funding for maintenance, many of the streets are in distress. Large portions need not only surfacing but also overall repaving. Some streets need a new base and rebuilding. The project concentrated on determining how much funding is needed, and what streets should be repaired first.

Project Description

The project included two main tasks: an infrastructure inventory and identification of revenue sources for capital maintenance.

Infrastructure Inventory

First, we made an inventory of street conditions by dividing the streets in segments and assessing the condition of the streets in each segment, including the condition of the upper layer of the pavement, base condition, and drainage index/flow lines. We then entered the information into a database. We calculated an overall grade as an average of the three com ponents and prioritized the funding of repairs, so that the most deficient streets would receive the highest grade in the five-grade system and would have highest priority for repairs. The database program also calculated the ongoing investment needed to keep the streets in acceptable condition.

Second, we extended the inventory to all infrastructure of the municipality, which includes sidewalks, ditches, signage, hydrants, the water supply and distribution network, the gas and heating networks, telecommunications, and trees.

For both parts of the inventory, we used software donated by the city of Golden to record cur rent infrastructure conditions in a geographic information system (GIS), which is con nected to a map of Veliko Turnovo. The municipality of Veliko Turnovo and some local companies are currently developing a software product for infrastructure management; in the future, we will include data from this product in the inventory.

Investments/Revenue Sources

In this stage, we used the assessment information that we obtained in the first stage to prioritize the use of capital resources from privatization, grants, and targeted subsidies. We will also need to identify potential new fees and charges for long-term infrastructure management. Using the information on resources, we are working out a financial plan for infrastructure management. In addition, we are using the following pavement deterioration curve to determine the timing of needed investments:

To assist in project implementation, we provided the following information to the Golden experts:

n Paper maps that cover a significant part of the urban area of Veliko Turnovo Municipality.

n A digital map of Veliko Turnovo that corresponds to the Urban Development Plan.

n The needed cost information for building and repairs of the municipal infrastructure, as well as additional information on communi cation networks, amount of traffic, planning regula tions, terms and definitions, technical requirements, traffic calming methods, and vertical planning decisions.

In keeping with the continued efforts to strengthen the relationship between Golden and Veliko Turnovo, a delegation of Veliko Turnovo business representatives visited Golden. The delegation members had the opportunity to become well acquainted with the working model of infrastructure management in Golden.

We also presented our asset and financial management program to technical specialists from Bulgarian municipalities. Veliko Turnovo has quantified its specific investment needs, and has the software and training to assess other infrastructure for investment needs. We also have the ability to update the program that Golden provided. Our experience is replicable, which is generating growing interest in the project. In fact, 30 representatives from other munici palities have attended a three-day training class to learn how to replicate this project.

Implementation Timeline

We implemented the project over a 12-month period beginning on January 11, 2001, with the signing of an action plan for technical cooperation between the municipality of Veliko Turnovo and the city of Golden. The project incorporated the following activities, imple mented in accordance with the schedule outlined in the action plan:

n January-February 2001: Obtained digital or paper maps of Veliko Turnovo and obtained needed financial and cost information.

n April 2001: Made a complete inventory and assessment. Three technical experts from Golden expended considerable effort on the inventory of the streets in the old capital.

n May 2001: Reviewed current budget expenditures and revenues and developed an infrastructure financing plan.

n June 2001: Review current budget expenditures and revenues and develop an infrastructure financial plan to be implemented in June 2001 jointly with specialists of both municipalities.

n August - October 2001: Jointly prepared presentation material for the infrastructure management plan to be used by various funding organizations.

n December 2001: Presented the management and infrastructure plan to the municipal council, businesses, and citizens, which generated noteworthy public input and discussions. The presentation was postponed until December because of the terrorist attack in New York on September 11, 2001.

Solutions Overview and Specific Results

Using the program we determined the following needs:

n Annual replacement needs are 710,000 lev.

n The municipality needs to invest 4,000,000 lev in surfacing and repaving in the next five years.

n The current backlog of repairs to bring the entire street system up to the desired minimal standard is estimated to cost 4,730,000 lev.

n The municipality should consider changing standards for sidewalk construction in areas where vehicles will be parked on the sidewalks.

With this information, we have planned Veliko Turnovo's budget for street infrastructure to maintain the existing streets while improving the deficient streets.

Benefits

n We developed an asset and financial management program that we can enhance by including the inventory of other technical infrastructure with the option of obtaining extra data on the value of the assets and the current deficiencies.

n We created maps showing the current street conditions classified into three groups: streets in good condition, streets in need of repair, and streets that require reconstruction.

n We developed a financial plan for improving and maintaining assets.

n We now have materials available for public presentation and for the technical departments of the municipal administration, including photos and designs illustrating most of the street projects.

n We have presented guidelines for replicating the project in other Bulgarian municipalities.

n The systematic approach to the long-term financial planning of the necessary infrastructure investments will diminish expendi tures by curbing the negative trends of overdue repairs.

Conclusion

As a result of the intensive cooperation and mutual efforts of both cities, we now have a tool for improving street maintenance. The financial aspect of the project has defined the investments that we can plan and provide for in advance, decreasing the costs. The public and local business support contributed to the success of the project and defines its successful application in the future. This project can serve as a useful model for other Bulgarian municipalities.