cdms’ t&r forecast and r2020 alternative--final draft

7/31/2019 CDMS T&R Forecast and R2020 Alternative--FINAL DRAFT

1/17

A Reston 2020 Committee Alternative Forecast

Reston 2020 Committee

Reston Citizens Association

3/8/2012 1D R A F T--FOR REVIEW


2/17

It characterized theresults aspreliminary.

The full T&R reportis due by the end ofMarch.

3/8/2012D R A F T--FOR REVIEW 2


3/17

The dramatic increases over the forecastscast doubt on each ones credibility. Still,the most recent forecast is a substantialimprovement over its predecessors.



4/17

Reduces trip growth rate by25%. An implicit increase in the price

elasticity of demand.

Reduces the Value of Time

(VOT). Means people are more likely to

divert to other roadsreducesDTR transactions.

Increases gasoline prices to$5/gallon. More realistic, but dont know

pricing assumptions now or in2009.

Escalates at inflation rate.

Tied to 4% reduction in traffic, butdont know how.



5/17

Strengths: CDMS forecast is a major directional

improvement over its predecessors.

Supporting Renaissance Planning Group(RPG) socio-economic study iscomprehensive, systematic, and

.

Understand what, how, and why the study sayswhat it says.

Dont agree with all the steps or results, but

know why and can discuss rationally. Issues:

Is this a forecast or a scenario?

More realistic than predecessors, but is it now abaseline (P50) T&R forecast or merely ascenario dictated by MWAA?

Overstates population and employmentgrowth in light of recession & planned cutsin federal spending growth.

RPG generally increases growth from itsbaseline studyMWCOG 8.0which is outdated& overstates growth. (See chart on right.)

Forecast is probabilistic, but does notprovide sensitivity and risk assessments.

This point estimate has less value than aprobabilistic forecast.

WSA has done risk analyses for other clients.

3/8/2012 5

Growth forecasts change over time.

Sourcing: The 2010 GMU data is from the forecast preparedfor the Reston planning task force. The 2011 and 2012 GMUdata are the base (low) data from CRAs housing theworkforce analyses reflecting current workforce housingpolicies, adjusted in a presentation to the Reston Task Forcein January 2012.

D R A F T--FOR REVIEW


6/17

CDMS does not pinpoint whengasoline reaches $5.00/gal.

Use R2020 forecast until gasprice reaches $5.00 (2024).

Escalate at 3% inflation rate from2024.

R2020 uses & extends NY LTreal gasoline price forecast. Real price growth of 1.58%/yr

plus 3% inflation (4.58%)

R2020 extends forecast to 2050.



7/17

The RPG forecast is built around the MWCOG Round 8.0 forecast. RPGs overarching approach:

For both population and employment, we concluded that the correctivetrends reflect recessionary trends that will return to the prior MWCOGtrend line over time, with the expectation that economic slowdown existsthrough 2017 and another 10-13 years of recovery will be required toregain forecast trends.

More households and lower population than estimated in DC and innersuburbs. More population, fewer households in out suburbs; and A slightly higher proportion of office jobs and lower proportion of retail

jobs.

In short, RPG believes MWCOGs underlying growth forecast issound, subject to the recovery from the recent recession to trend

by 2030. It made a variety adjustments in MWCOGs forecast, some based

on its screening of several corporate macroeconomic forecasts,some based on its own understanding of the regional situation.



8/17

We focused on Fairfax &Loudoun counties.

RPG baselined its populationforecast on the US Census2010 data. MWCOGs forecasts were close

for Fairfax & Loudoun Counties,so adjustments were minor.

With minor adjustment, RPGused MWCOG 8.0 2010employment data. MWCOG overstates employment

in Fairfax County for 2010 by

about 46,500 jobs (7.1%)amajor error.

A 10,000 jobs overstatement inLoudoun County.


Population Employment

MWCOG 8.0 1,091.6 680.0

RPG 1,116.6 678.7

GMU/CRA 2011 1,116.6 633.5

RPG-GMU 0.0 45.2

% Difference 0.0% 7.1%

Fairfax County 2010 Population &

Employment Estimates (1000s)


9/17

Population We used county forecasts and pro rated out years by ratio of average

MWCOG & Fairfax CAGRs. RPG generally made slight upward adjustments in MWCOG CAGRs.

Employment We anchor our projection on what we believe is a more accurate count of

2010 employment in Fairfax and Loudoun provided by GMU CRA in itshousing the workforce analysis. We capture the impact of the Great Recession and likely future federal

spending cuts: MWCOGs forecast does notcapture the impact of likely reduced federal

spending on the areas economy to date. GMU CRAs 2011 base forecast captures the effects of the recession and

the planned cuts in federal spending growth. Its January 2012 update anticipates a further one-third reduction in

employment growthover the 2010-2030 spanwith indirect consequences forpopulationthat may be too extreme.

We believe GMUs 2011 forecast more accurately reflects the morelimited jobs growth potential of Fairfax and Loudoun counties.



10/173/8/2012 10D R A F T--FOR REVIEW

Fairfax County

Population Employment2010 2020 2030 2040 2050 2010 2020 2030 2040 2050

RPG 1116.6 1221.3 1318.8 1377.2 1431.8 RPG 678.7 810.9 899.0 961.6 1024.2

CAGR 0.900% 0.771% 0.434% 0.390% 1.796% 1.037% 0.675% 0.633%

MWCOG 1091.6 1188.0 1274.8 1326.1 1,379.4 MWCOG 680.0 788.5 863.8 917.5 923.1

CAGR 0.850% 0.708% 0.395% 0.395% 1.491% 0.916% 0.605% 0.605%

RPG-COG 25.0 33.3 44.0 51.1 -1.3 22.4 35.2 44.1

CAGR Diff 0.050% 0.063% 0.039% 0.304% 0.120% 0.070%

FC Govt 1116.6 1143.8 1226.9 1275.9 1,326.9 GMU 2011 633.5 733.9 802.3 851.6 903.9

CAGR 0.241% 0.703% 0.393% 0.393% CAGR 1.481% 0.896% 0.598% 0.598%

COG-FC 44.2 47.9 50.2 52.5 COG-GMU 46.5 54.6 61.5 65.9 19.1CAGR Diff 0.609% 0.068% 0.041% -0.003% CAGR Diff 0.010% 0.021% 0.007% 0.007%

Loudoun CountyPopulation Employment

2010 2020 2030 2040 2050 2010 2020 2030 2040 2050

RPG 312.3 387.5 449.1 473.3 495.4 RPG 150.9 233.5 285.2 321.4 358.8

CAGR 2.181% 1.486% 0.526% 0.457% 4.462% 2.020% 1.202% 1.107%

MWCOG 290.0 357.7 418.9 439.7 461.5 MWCOG 143.7 206.5 257.2 285.4 316.7

CAGR 2.121% 1.592% 0.486% 0.486% 3.692% 2.220% 1.046% 1.046%

RPG-COG 22.3 29.8 30.2 33.6 RPG-COG 7.2 27.0 28.0 36.0

CAGR Diff 0.060% -0.106% 0.040% CAGR Diff 0.770% -0.200% 0.156%

LOU Govt 312.3 395.3 458.7 481.8 502.7 GMU 2011 140.4 213.4 287.3 318.6 353.2

CAGR 2.385% 1.499% 0.493% 0.426% 4.276% 3.018% 1.038% 1.038%

COG-LOU -37.6 -39.8 -42.1 -41.2 COG-GMU 3.3 -6.9 -30.1 -33.2 -36.6

CAGR Diff -0.264% -0.012% 0 .034% 0.031% CAGR Diff -0.583% -0.798% 0.007% 0.007%

Highl ighted cells are data R2020 used in formulating its forecast. The 2030-2040 MWCOG population CAGR was used to

forecast growth from 2040 to 2050. Yellow colored cell s are calculated f orecasts.


11/17

With a few exceptionsmost notablyDTR is not a new toll roadthe

assumptions presented are similar to theDTR.

A WSA presentation at a TRBconference last year providedinsight into the sensitivity of trafficto changes in key parameters.

Assumptions for the toll roadlooked applicable to DTR case,except the following:

DTR is not a new toll road.

Forecasts more reliable in early years.

DTR transponder participation ismoderate, not high.

Higher usage generates moretransactions.

Specifics of road network differ, butare of similar complexity.

Believe the sensitivity factors areaccurate enough to adjust CDMSforecast, if adjusted for new vs.existing toll road.



12/17

3/8/2012 12

Factor Increase Decrease Increase Decrease

Population 2% -1% 2% -2%

Employment 3% -2% 5% -2%

Gasoline -2% 1% -1% 2%

20-Year Impact1-Year Impact

Impact of 10% Change in Toll Road Transactions

D R A F T--FOR REVIEW

A broader Smithassessment putsshort-term gasprice sensitivitya -.1 (1 yr.) andlong-term at -.3(5 yrs).


13/17



14/17

RPGs growth rates forboth counties areconsistently higher inevery decade than

MWCOG and GMU CRA. Nearly triple GMUs Fairfax

forecast CAGR this decade.

Doubles GMUs forecastCAGR in the next decade.

Slightly higher after 2030.

Only lower CAGR is forLoudoun in 2020-2030timeframe (-1%).



15/17

Reston 2020sforecast indicatestoll revenue will

grow more slowlythat CDMS forecasts.

$137MM annualdifference in 2050.

25% shortfall inforecast revenues in

2050.



16/17



17/17

We expect population and employment growth will be slower and

gasoline price escalation higher over the next 40 years than CDMS &RPG forecast.

Our results suggest the likelihood of revenue shortfalls in every yearand growing to 25% by the end of the 40-year forecast period.

The odds are two-to-one that the annual forecast revenues are not

achieved (67%) at the end of the forecast period.

Projected annual revenue shortfalls grow to more than $130MM late inthe forecast period.

The cumulative revenue shortfall is likely to be about $1.7 billion over40 yearsabout one-tenth of total forecast revenues.

All of this assumes project and financing costs do not increase afterthe preparation of the CDMS T&R forecast.


cdms’ t&r forecast and r2020 alternative--final draft

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