Financial Forecasting Update

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Financial Forecasting Update

  1. 1. Southern California Association of Governments RTP Technical Advisory Committee (TAC) Financial Forecasting Update Los Angeles, CA February 15, 2007 System Metrics Group, Inc.
  2. 2. The 2004 RTP contained baseline revenues of $120 billion (in 2002 dollars) 1 System Metrics Group, Inc.
  3. 3. We’ve been working on a new revenue forecast model that includes the primary funding sources in the region Local State Federal 1) Local Sales Tax Measures 1) State Transportation 1) Congestion Mitigation Air Quality Improvement Program (STIP) (CMAQ) 2) Transportation Development Act 1a) Regional Improvement (Local Transportation Fund) Program (RIP) 2) Regional Surface Transportation 1b) Inter-Regional Program (RSTP) 3) Gas Excise Tax Subvention Improvement Program (IIP) 3) FTA Formula (5307, 5310, 5311, 4) Farebox Revenue 2) State Highway Operation and 5309a Fixed Guideway) Protection Program (SHOPP) 5) Highway Tolls 4) FTA Discretionary (5309b New 3) State Gasoline Sales Tax Starts, 5309c Bus) 6) Mitigation Fees (TCRP, Proposition 42, & Proposition 1A) 5) Other Federal 7) Other Local (local agency funds 4) State Transit Assistance Fund and local miscellaneous) (half of Public Transportation Account) 5) Proposition 1B 6) Other State 2 System Metrics Group, Inc.
  4. 4. For each category, we forecast at the county level for the period from 2004-05 to 2035-36 EXAMPLE EXAMPLE 3 System Metrics Group, Inc.
  5. 5. We are working with the county commissions and building on their forecasts Starting with the county forecasts as given Filling in data were needed Basing our assumptions on historic data Comparing historic data to Short-Range Transit Plans and other agency documents Comparing our forecasts to the county forecasts Working with counties to modify assumptions and there forecasts as needed 4 System Metrics Group, Inc.
  6. 6. We’ve relied on a number of sources for historical data State Controller’s Annual Reports – Streets & Roads: gas tax apportionments – Transit Operators & Non-Transit Claimants: transit fares, FTA funding – Transportation Planning Agencies: developer fees, STA funding, interest Board of Equalization: retail sales tax collection, TDA and local sales tax disbursement Caltrans: MVSTAFF fuel forecast, CTC-adopted STIP, 4-year SHOPP program, CMAQ and RSTP apportionments Federal Highway Administration (FHWA): federal highway trust fund Office of Management and Budget (OMB): GDP deflator Other: TCA toll revenues 5 System Metrics Group, Inc.
  7. 7. We collected funding data at collection and disbursement levels For example… BOE Local Sales Tax Measures State Excise Tax Transportation Planning Agencies Gas Tax Cities & Subvention Counties Source: Caltrans, Division of Transportation Planning 6 System Metrics Group, Inc.
  8. 8. We are making sure that our assumptions are consistent with the counties by comparing our initial forecast with one that includes county data Local Sales Tax Comparison $4,000 $3,500 Adjust Assumptions $3,000 Revenues (in $M) $2,500 Initial Estimate $2,000 Final Estimate $1,500 $1,000 $500 $0 5 20 7 9 20 1 3 5 20 7 9 1 20 3 5 20 7 9 1 20 3 5 -0 -0 -0 -1 -1 -1 -1 -1 -2 -2 -2 -2 -2 -3 -3 -3 04 06 08 10 12 14 16 18 20 22 24 26 28 30 32 34 20 20 20 20 20 20 20 20 20 20 Fiscal Year 7 System Metrics Group, Inc.
  9. 9. Major assumptions include… Gasoline-based revenues will be kept whole, even if alternative fuels increase in use Four-year SHOPP programs reflect future expenditures, which will grow by fuel consumption STIP grows by fuel consumption 8 System Metrics Group, Inc.
  10. 10. Inflation has dropped in the last twenty years… will this trend continue for the next thirty? Historical Inflation Trends in GDP Price Index 12.0% 10.0% 8.0% Greenspan Era Annual Inflation 6.0% 4.0% 2.0% 0.0% -2.0% -4.0% 40 43 46 49 52 55 58 61 64 67 70 73 76 79 82 85 88 91 94 97 00 03 06 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 19 20 20 20 Fiscal Year Year-Over-Year Inflation Annual Inflation Factor 9 System Metrics Group, Inc.
  11. 11. The Federal Highway Trust Fund has grown by 3.4% annually, but recently, a larger share is being devoted to transit Status of the Federal Highway Trust Fund $50.0 $45.0 Net Income (in $ billions) $40.0 $35.0 $30.0 $25.0 $20.0 $15.0 $10.0 $5.0 $0.0 1950 1960 1970 1980 1990 2000 2010 Fiscal Year Highways Mass Transit Total 10 System Metrics Group, Inc.
  12. 12. The passage of local sales tax measures helped maintain the local share of regional transportation funding 2% PRELIMINARY PRELIMINARY 8% 1% 13% 48% 18% 10% Local Sales Tax TDA Gas Tax Subvention Farebox Revenue Highway Tolls Mitigation Fees Other Local 12% 16% 72% Local State Federal 11 System Metrics Group, Inc.
  13. 13. But, Los Angeles continues to comprise more than 50 percent of the local transportation funding PRELIMINARY PRELIMINARY Growing Shares 0% 2% 11% 12% 59% 16% Imperial Los Angeles Orange Riverside San Bernardino Ventura 12 System Metrics Group, Inc.
  14. 14. Where are we now? Just received the updated LACMTA forecasts and verifying that we have the latest forecasts for other counties We also need to assess the impact of the recent bond measures Our next steps are to: – Compare our revenue forecasts with the county forecasts and previous forecasts – Meet with county staff to share forecasts and compare assumptions – Develop the financial cost model 13 System Metrics Group, Inc.

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