Questions have been raised by Voice of San Diego about the San Diego Association of Governments’ ability to continue improving our region’s transportation system, as well as the agency’s conduct in sharing information with the public about its efforts.

Before answering those specific questions, a little background is important. SANDAG – which is overseen by a board of elected officials from all of the region’s 18 cities and the county – administers our region’s voter-approved TransNet half-cent sales tax for transportation.

Commentary - in-story logoUsing this local source of revenue since 1988, SANDAG and its partner agencies have successfully attracted state and federal matching funds to complete more than 650 projects. And in the first eight years of the 40-year TransNet Extension program, the agency has finished or started construction on 40 percent of the projects promised to voters.

Nevertheless, as we continue to grow, there are increasing needs in the region. Recognizing this, the SANDAG board placed Measure A on the November ballot seeking an additional half-cent sales tax to fund transit, open space, highway, bike/pedestrian and local infrastructure improvements. Fifty-eight percent of voters supported the measure, but it fell short of the two-thirds majority needed to pass.

Starting a few weeks before the election, Voice raised a series of questions related to the TransNet program and about how much revenue Measure A would likely generate. Here, fundamentally, are the three primary questions and my responses to them:

Has SANDAG overestimated the revenue it is likely to receive from the existing TransNet program?

Maybe, but we won’t know for sure until 2048.


We Stand Up For You. Will You Stand Up For Us?

SANDAG uses a complex computer model to forecast population, jobs and housing growth. This model looks out over long periods of time and is tied to state Department of Finance estimates. The model then uses a multi-step process to forecast taxable retail sales in the future, factoring a large number of inputs into a series of equations. Small changes in any of the inputs may have little impact in the short run, but can potentially multiply into bigger effects as the model projects out over decades.

The taxable retail sales number generated by this model is one element that is used later in a budgeting process to estimate future TransNet revenue.

SANDAG staff recognized more than a year ago that the model’s taxable retail sales estimates appeared aggressive, but it was not immediately clear why. Nor was it clear what, if any, impact that might have on the TransNet revenue estimates. Staff started the initial work of updating the model. They planned to address the taxable retail sales issue as part of a larger effort to refresh the model, which is budgeted this fiscal year.

VOSD raised questions about the TransNet revenue forecast in late October as part of its election coverage of Measure A. Rather than wait, SANDAG staff dug into the issue, focusing their efforts on the taxable retail sales number that came from the computer model. After a month of work, staff concluded that the model overestimated taxable retail sales. Those overestimates will be corrected as part of the update to the model.

In the meantime, an independent methodology using a consensus of three national forecasts was developed so that it could be used in budgeting for the TransNet program while the SANDAG model is being updated. This more conservative forecast estimated that TransNet will bring in approximately $17.3 billion between now and 2048, roughly $3.3 billion less than previously forecast (in year-of-collection dollars).

This new forecast is lower than the previous one used in SANDAG’s budgeting for the TransNet program, but – by the very nature of forecasting – it is difficult to conclude that it will turn out to be more accurate in the long run. Fundamentally, the new forecast results in a 3.9 percent average annual growth rate in TransNet revenue, a half a percent lower than the previous forecast. If sales tax revenue grows annually at just one-tenth of 1 percent faster than the new forecast predicts, the region would collect an additional $250 million in revenue over the remainder of the program.

To add perspective, if we looked independently at each of the three national forecasts used to create the consensus forecast, TransNet revenue estimates would range from $16.1 billion to $20.1 billion.

Can SANDAG still complete the projects it promised to voters back in 2004 when they extended TransNet for another 40 years?

Yes, if SANDAG continues to attract federal and state matching funds at a similar rate as it has in the past.

The agency’s ability to complete projects depends on much more than just TransNet, which is a single revenue source in a very large capital improvement program. Project costs, the availability of matching funds and the state of the economy also are enormous factors.

The increasing price tags for the projects may be the biggest challenge. As planners and engineers have looked more closely at the projects, estimated costs have increased. For example, State Route 78 will cost more to widen than initially expected because we now know it will be necessary to replace the bridges that pass over the highway. As a result of these recent updates to cost estimates, the expected total to complete the projects included in the TransNet extension have increased by about $8.4 billion (from $19.4 billion to $27.8 billion).

TransNet Leverage Ratios - Historic & Future-WHITE BACKGROUND

Overall, SANDAG needs to attract approximately $3 in outside funds for every $1 generated locally by TransNet to complete the program over the coming 30 years. That ratio is similar to the track record SANDAG has with the TransNet program over the past 30 years.

To be exact, the ratio needed is 3.4-to-1. That is, it will be if all the projections we’re relying on – population, inflation, costs, revenue estimates, etc. – over the next three decades turn out to be correct. With changes to any of these factors – such as the increased federal investment in infrastructure being discussed by the incoming administration – that ratio could change significantly.

Had SANDAG concluded before the election that there were problems with its model that could have resulted in the $18 billion Measure A revenue forecast being overestimated?

No – before the election, SANDAG technical staff had not discovered how, or if, the agency’s computer model could have caused an overestimation of the Measure A revenue forecast.

SANDAG staff prepared a revenue forecast for Measure A more than a year before the election, estimating that it would bring in $18 billion over 40 years (in constant 2015 dollars).

After the revenue forecast was prepared, staff recognized in late 2015 that taxable retail sales forecasts produced by the agency’s computer model seemed aggressive. Staff decided to address the issue as part of a planned update to the model.

Over the past five years, SANDAG has been working on a program to update its computer modeling capabilities. The next model slated to be updated – the Demographic and Economic Forecasting Model, used to help forecast population, jobs, housing and economic changes – was generating the estimate of taxable retail sales. SANDAG staff did some initial work to start updating this model. And, going forward, the agency planned to continue to work on a full update, including the source code, data, and econometric equations that drive the model. As part of that larger process, staff planned to address the model’s taxable retail sales estimates.

A few weeks before the election, Voice of San Diego raised the question of whether the sales tax revenue forecasts for the existing TransNet program and for the proposed Measure A sales tax were too high. SANDAG technical staff dug into the agency’s very complex computer model sooner than planned. After a month of intensive investigation, it was discovered that the growth rates of economic output for certain employment sectors used in the model were aggregated incorrectly from the source data, causing overestimations of taxable retail sales. Those taxable retail sales figures were used in revenue forecasting for TransNet and Measure A. By this time, the general election was over.

In the wake of the election, SANDAG board members asked for a status report on the existing TransNet extension program. In December, staff presented an update, including what has been accomplished to date, as well as updated cost estimates for the projects yet to be completed, a review of the many ups and downs in sales tax revenue and a more conservative sales tax revenue forecast based on the consensus of three national forecasts.

The bottom line question: What are the next steps, and can SANDAG deliver the projects in the TransNet extension ordinance?

SANDAG intends to put into place additional quality control of its forecasting process. Even with an updated model and additional quality assurance, the agency will continue to reassess its revenue forecast every year and make adjustments for both the short-term and long-term financial outlook.

It is through this disciplined approach that SANDAG has been able to deliver projects year after year. I remain confident that many opportunities will present themselves over the remaining 32 years in the TransNet program to bring in matching funds. SANDAG has a proven track record of being able to take advantage of those opportunities and deliver on its promises to voters in the San Diego region.

San Diego County Supervisor Ron Roberts is chairman of the SANDAG Board of Directors.

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    13 comments
    Joan Lockwood
    Joan Lockwood

    As to Ron Roberts I have been calling his office for 3 weeks on another greater matter.  Last week Jeanette called and informed l me Al (his staff manager) would be calling- no call so far.  When we have elected officials that are not responsive and  who knows about SANDAG, the County pensions, 


    Hasn't San Diego had enough of this?

    Joan Lockwood
    Joan Lockwood

    Speaking of flow the historic Georgia St Bridge (which will run over budget and over completion schedule)  during the retrofit  University Ave is being lowered so trucks can pass under he Georgia Street bridge.  Large trucks (for Ralphs etc now use El Cajon Blvd.  If any of you use University ave you know one Metro bus can severely slow traffic on University-which after all is a 2 lane Street and a very old Street.

    Two buses completely tie up traffic.  Trucks and buses will constrict doubly or even more.  Who, on the planning commission thought this a good idea?  Who on the council voted for it?


    The crews are working all night at a very expensive price tag to what end?  Clog up traffic flow more?

    Walt Brewer
    Walt Brewer subscribermember

    The performance side of the coin.

    In the public interest, can SANDAG justify the funds for fixed and mobile projects in its $203 billion Plan? In the light of;

    A different Federal Administration,

    Feasible technology demonstrations that the personal on demand transportation overwhelmingly preferred, with increasingly cleaner vehicles scan be provided to all.

    Staff analyses, and history of performance, do not support major allocations to more mass transit.

    Samples:

    1), At least 90% of fuel saved toward emissions reduction come from on-road vehicles. But nearly 50% , about $40 billion, of capital is allocated to new or enhanced mass transit.

    2), Mass transit adds only about 10% projected travel need.

    3), Non conventional routings in communities, plus closer stations, intended to increase access fir more riders, produces only a 10% trip to peak work time reduction.

    4), On call autos, "Uber", etc, with "doorstep" pick up, can eliminate this expensive overlay, and provide no transfer same vehicle travel to chosen destinations.

    5), With over 30 years remaining, will a shift from more underutilized conventional mass transit to new feasible technologies and mode role allocations with public preference be implemented?

    History:

    1), instead of the now expensive SR-78 expansion discussed, "cheapy", less than $700 million "Sprinter" Diesel light rail nearby was built for SR-78 relief. Instead of bi-directional peak more than 4,000 riders per hour, Sprinter carries about 7,000 per day, compared to 11,500 pridicted. Principally previous bus riders.

    Need for bridge replacement was learned when now completed I-15 expansion was amended.

    2), During Sales tax supported, including State and Federal assistance, road use has increased nearly 40 million passenger-miles daily. Mass transit has increased 1 million.

    Comments about performance would be useful in context of elaborate funding explanations.

    Derek Hofmann
    Derek Hofmann subscribermember

    @Walt Brewer "1), At least 90% of fuel saved toward emissions reduction come from on-road vehicles."

    This is why we need to make traffic flow more smoothly without building new roads. (Smooth flowing traffic reduces aggregate fuel consumption and emissions, but more roads increases both.)

    Walt Brewer
    Walt Brewer subscribermember

    @Derek Hofmann @Walt Brewer 

    Yes. We are paying a terrible environmental price for the mid-1970s decision to count on mass transit for travel growth, and suppress road expansion.

    It didn't happen despite all the mass transit built and get out of cars litany. On road vehicles absorbed 95% of growth, despite increasing congestion.

    Annual fuel waste increased by a FACTOR of about 4, with population increased 50%


    Spilled milk crying I know.


    With Uber,etd Central Public Transportation, load on roads may be higher, I admit.

    Goals:

    Stop wasteful managed lanes.

    Very efficient small cars for Uber, etc, that use less road space.

    In very high demand, use electric narrow guideways, and existing ROW, and dual mode cars.

    Elevate in critical segments.



    Derek Hofmann
    Derek Hofmann subscribermember

    @Walt Brewer "Stop wasteful managed lanes."

    Except that managed lanes permanently eliminate traffic congestion and wasted capacity, and by making freeway traffic flow smoothly 24/7, they also reduce traffic pressure on connecting streets

    No, what's wasteful are unmanaged "dumb" lanes which have no way to manage traffic flow, and the infrastructure to separate them from the smart lanes. If all freeway lanes were managed lanes, we would save massive, massive amounts of tax money on that separating infrastructure and on building extra lanes that underperform most of the day just so they don't get so backed up during rush hour.

    But if for some reason you actually like paying more taxes than necessary and if you like sitting in gridlock, then go ahead and keep asking for the dumb lanes!

    Walt Brewer
    Walt Brewer subscribermember

    @Derek Hofmann @Walt Brewer 

    Agree we can do much better creating smooth flow in ALL lanes.

    But bus interests want exclusive lanes, with dedicated access. I-15 managed lanes expansion started as a busway that was going to carry, on buses, ~2,400 pople..hr.


    Sorry; sounds like you have been reading press releases from now well institutionized managed lane activists. The boast about free fast flow in the underused HOT lanes, and ignore the stop go they help to create in the GH lanes.


    Try to get SIMULTANEOUS lane flow data from other than Caltrans installations.


    Caltrans has very good data on most of the freeway syste.m.

    About 2 years ago I reviewed perhaps a cople dozen HOT lane equipped segments; the oft promoter SR-91 for example at max demand where best capacity is needed.

    I determined TOTAL FREEWAY FLOW< BOTH VEHICLES AND PEOPLE.

    I did not find a case where those measurements where more than the same number of lanes in smooth flow at 2,000 vehicles/hr/lane. (Caltrans believes that can be higher than 2,000.)


    Managed lanes are deficient for what counts.

    Walt Brewer
    Walt Brewer subscribermember

    @Derek Hofmann @Walt Brewer 

    Use what you like.

    The issue is achieve best total freeway flow at max demand.

    Note in MLs considerable flow in HOT lanes is 70 mph or so. According to your chart  not exactly efficient for flow.

    Isn't steady ~45 mph more satisfactory to even cowboy drivers than stop and go.


    You are captured by detail that has little relevance to the main issue being discussed.


    Walt Brewer

    Jack Shu
    Jack Shu subscriber

    Interesting that the inflated estimate for TransNet income was only corrected after the Nov. elections. Also interesting to hear SANDAG now says that our transportation projects are dependent on State and Federal funds when just before the the elections the Board Members campaigning for Measure A were making it sound like that we would not be able to complete any projects without it.  And then there is the issue of everyone in California reducing the overall number of miles driven from current levels even at a very optimistic rate of converting to non polluting cars by 3% a year. (Per Caltrans strategic plan) When will SANDAG work on a transit first plan?

    Walt Brewer
    Walt Brewer subscribermember

    @Jack Shu  $$$$ do not necessarily relate to performance.

    TransNet has always been transit first in dollars.


    At the start with no particular performance rationale, but politically to broaden the voter base, funds were decreed to be equal, transit, highways, local streets related. Strictly held over the years, although the transit share has gone higher recently.


    I have commented frequently how poorly that relates to performance. e.g., less than 2% transit travel share, including 4% at peaks. State and Federal funds added to both.


    We have to reallocate to modes the Public WNTS to use.. After 30 years trying, that's not transit in its current role and allocation.


    Blue Line success started the TransNet transit roll. But its demographics are very different from typical San Diego. Though trolley route miles have more than tripled, travel on the extension is only about 25% higher than the original Blue Line.


    We need new approaches.

    Derek Hofmann
    Derek Hofmann subscribermember

    SANDAG's growth forecasts depend on how quickly SANDAG accommodates growth, because people won't move here if there's too much traffic. So the more money SANDAG acquires from taxpayers, the more they will need from us. Is it wise to give them more money?

    John H Borja
    John H Borja subscriber

    There are two pieces of the freeway puzzle that need to be fixed. 

    One, is the need for a freeway connector from the southbound 125 to the 905. Granted the northbound connector was just completed.

    Two, while the major freeway component pieces of the 905 are now in place, big truck traffic has increased exponentially. Two competing elements are normal vehicular traffic able to flow at normal freeway speeds and tractor-trailer traffic that moves at far lower velocities. The mix is potentially lethal. Tractor-trailer traffic often, because of speed regulations, move in groups making the negotiation between each truck dicey.  New lanes of traffic need to be constructed to allow for this increase of traffic between "the Border" and the rest of the highway systems connected to the "the Border.