Dulles Toll Road Traffic & Revenue Forecasts: A First Look at the New Toll Forecast

At yesterday’s MWAA Finance Committee meeting, MWAA reported on some of the results of CDMSmith’s (CDM/WSA’s) latest traffic and revenue forecast.  RCA has begun to break down that forecast based on the MWAA presentation, beginning with a look at the new forecast for future tolls.

The most important observation is that the new tolls forecast is substantially higher than Wilbur Smith Associates (WSA) forecast in 2009,  In fact, they average 45% higher for all reported future years.

We note that the new full toll rate forecast is very much in line with RCA’s April 2011 study of future Dulles Toll Road tolls.  Indeed, they have a correlation of .991—virtually identical.  That said, we would add that we repeatedly stated in that study that our forecast was conservative.   Nonetheless, we now know we made some errors in our report.

• In the process of generating that forecast, we prorated WSA's forecast inputs using MWCOG’s 8.0 population and employment forecasts to drive the changes we made.   As reported in our most recent study of WSA's forecasts, we now know that WSA overestimated 2010 Fairfax County employment by 52% while hitting its population forecast right on the nose (-0.3%).  We also now know that the 2008 MWCOG 8.0 forecast overstated 2010 Fairfax County employment by 33% and population by 2%.  We believe it is reasonable to believe that these overestimates carried through the forecast horizon. 

• We also erred some in the opposite direction by assuming—before MWAA changed its plans—that MWAA would build a mid-field underground station at Dulles rather than the above ground option it ultimately chose.  Combined with the subsequent agreement to shift some station and parking garage costs Fairfax and Loudoun counties, this led us to overestimate the currently estimated cost of the Phase 2 Metrorail construction “project” as it will need to be financed by 25%.    

On balance, we think our conservative forecasting approach and a net balance in the input and cost calculations suggest that future tolls will need to be at least as high as those CDM/WSA now forecasts, and could be significantly higher. 

The table below shows these results.  We will examine the full CDM/WSA report when it is publicly available and update these preliminary observations as needed.