Printable Version2010 APE Summary
OVERVIEWEach year, the Regional Transportation District (RTD) conducts a comprehensive
evaluation of the entire FasTracks program, called an Annual Program Evaluation. In 2009, as part of the process, the RTD Board approved a financial plan that assumed a sales tax election in 2009 or 2010 would be necessary to fill a $2.2 billion funding gap for the FasTracks program. Over the past year, RTD has worked closely with elected officials, local governments, corridor stakeholders and the public to identify how to move the FasTracks program forward.
The 2010 Annual Program Evaluation (APE) provides updated cost and revenue projections, updated program schedule information and outlines financial plan options for the RTD Board to consider. The 2010 APE reflects the impacts to the FasTracks program taking into account the most recent projected cost of materials, as well as a revised projection for the 30-year sales tax revenue horizon. In February, the RTD Board will adopt a financial plan that will provide direction to
staff for the future build-out of FasTracks and next steps regarding potential timing for a sales tax increase initiative.
2010 FASTRACKS FINANCIAL SNAPSHOT
- The cost to build FasTracks by 2017 has decreased from $6.9 billion to $6.5 billion
- The capital funding gap to build the FasTracks program by 2017 has grown from $2.2 billion to $2.4 billion
- Projected sales and use tax revenues do not change significantly among the three growth scenarios in the short term (i.e., through 2017), resulting in little change in the funding gap during this period
- An O&M funding gap also exists through 2035 and beyond for the FasTracks program absent additional revenues
- The projected revenues for FasTracks through 2035 have decreased from $9.1 billion to $7.8 billion, largely as a result of the more conservative projections.
- The full FasTracks program can be completed by:
- 2017: Assuming a successful election in 2010 that increases sales and use tax by 0.4% (under the high, medium and low sales tax growth scenarios)
- 2019: Assuming an election in 2012 that increases sales and use tax by 0.4%, resulting in at least $200 million additional costs to the FasTracks program
- 2025: Assuming a successful election in 2010 that
increases sales and use tax by 0.4%, but no federal funding for the
East and Gold Line corridors - After 2035: Assuming no additional revenues
On December 1, 2009, RTD held a workshop with a group of independent experts to review construction material inflation forecasts. All participants were in agreement that RTD's current methodology (and forecast values) for estimating construction cost inflation is well-founded and reasonable. The following recommendation was
incorporated into the 2010 APE:
- Material cost escalation in 2010 of 2%
- Material cost escalation from 2011 - 2017 of 5% per year
FasTracks program capital costs have decreased in 2010 due to:
- More advanced engineering that better defines the project requirements
- Modifications to design criteria
- Updated unit costs
- Lower cost of materials
- Seeking opportunities for early procurement of materials, reuse of track, etc.
Based on the recommendation of panel of regional economic and financial experts, RTD has lowered its long-term (30-year) revenue projections more than one percent lower than what was assumed for the 2009 program evaluation - from 4.8 percent to 3.7 percent - the mid-range estimate that resulted from the regional economic panel.
The revised revenue forecast through 2035 is: $7.8 billion.
Below is a summary of the low-to-high range revenue forecast through 2035:
| Model | Sales Tax | Use Tax |
| High | 4.3% | 4.4% |
| Medium | 3.7% | 3.7% |
| Low | 2.8% | 2.9% |
2010 FASTRACKS FUNDING GAP FORECAST
The revised projected funding gap necessary to build FasTracks by 2017 is:
$2.4 billion, an increase of $200 million from the 2009 projection.
2010 ANNUAL PROGRAM EVALUATION QUESTIONS & ANSWERS
The 2010 APE provided analysis to answer eight key questions. Following are the answers to these specific questions:
- What is the current funding gap for the FasTracks program (assuming no additional revenues)? $2.4 billion.
- How would this gap change assuming high, medium and low growth in sales tax? Assuming
a build-out by 2017, the gap doesn't change significantly, due to the
relatively short timeframe between now and 2017. The lower tax revenue
projections begin to build in the later years, following construction. - If no additional revenues are identified, when could the full program be completed? After 2035.
- What additional sales tax rate would be needed in a 2010 election to complete the full FasTracks plan by 2017? .4 percent (4 pennies on a $10 purchase)
- Assuming a maximum increase in sales tax of 0.4% in a 2010 election, when could the full program be completed? 2017.
- Assuming a maximum increase in sales tax of 0.4% in a 2010 election, but no
federal funding for the East and Gold Lines, when could the full
program be completed? 2025. - Assuming a maximum increase in sales tax of 0.4% in a 2012 election, when could the full program be completed? 2019.
- Assuming a maximum increase in sales tax of 0.4% in a 2010 election, when could the full program be completed assuming the new sales tax could only be
applied to I-225, North Metro, Northwest Rail, U.S. 36 BRT Phase 2 and
the extensions? If the existing 0.4% can be shared with the new tax, the entire FasTracks program can be built out and operated by 2017. If the new and existing taxes cannot be shared, it will result in a delay in building out the remaining corridors past 2017. The length of delay for the remaining corridors will be provided to the RTD Board on Jan. 26.
As part of the APE process, staff also examined Potential Critical Adjustments to the program - changes that the Board can consider to lower the cost of FasTracks, but that don't fundamentally change the FasTracks plan. Corridors will still go from Point A to Point B, with all the planned stations and type of vehicle. These adjustments are items that can be modified or deferred until a later date as demand and funding dictate. In developing these potential adjustments, RTD has
researched "Best Practices" from transit industry partners around the country on how they deliver service, and have also had some highly esteemed peers in the industry take a look at FasTracks with fresh sets of eyes and recommend some changes to consider.
Potential Critical Adjustments will be presented in detail for RTD Board consideration on Tuesday, Jan. 26.
NEXT STEPS
- January 26: Present more detailed information on Potential Critical Adjustments to the RTD Board
- February 2010: RTD Board adopts a Financial Plan
- Ongoing: Continue to work with Metro Mayors Caucus Task Force and Coalition for Smart Transit
- February/March 2010: Seek feedback from region's elected officials and civic leaders
- February/March 2010: Complete research/polling based on 2010 APE findings
- March 2010: Complete analysis of private-sector's capacity to support campaign
- March/April 2010: Complete analysis of likelihood a campaign would be successful
- March/April 2010: RTD Board provides direction on timing of ballot initiative
To view the complete presentation provided to the RTD Board on Tuesday, Jan. 5, please click here. To view a printable version of this summary, click here.
2010 FASTRACKS ANNUAL PROGRAM EVALUATION PRESENTATION (APE) FOLLOW UP PRESENTATION
To view the 2010 Annual Program Evaluation (APE) Follow-Up Presentation (presented to the RTD Board on Tuesday, Jan. 26) containing questions and answers concerning the 2010 Annual Program Evaluation (APE), additional analysis on Potential Critical Adjustments (PCAs) and next steps, please click here.
