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Ltr to Chairman Bulova Re WSA Forecast--021412

Ltr to Chairman Bulova Re WSA Forecast--021412

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Published by Terry Maynard

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Published by: Terry Maynard on Feb 14, 2012
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02/14/2012

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Terrill
D.
Maynard
2217
Wakerobin LaneReston,
VA
20191703-476-5376
February 14,2012Chairman Sharon BulovaFairfax County Board of Supervisors12000 Government Center ParkwaySuite 530Fairfax, VA 22035Dear Chairman Bulova,Thank you for your response to the Reston Citizens Association's (RCA's) analysis and recommendationsof Wilbur Smith Associates' (WSA's) traffic and revenue (T&R) forecasts.
1
especially appreciate that theCounty Auditor corroborated the accuracy of elements of our assessment of WSA1s 2009 study.
I
believeyou will find the balance of the assessment equally accurate and balanced.
1
am, however, concernedthat the major risks we identified of moving forward with such erroneous forecasts has not led you toreconsider your intention to push for early approval of Phase 2 construction.I believe, however, that there may be a way to bridge the gap. I have been advised by experts in thefield that a critique of the forthcoming WSA T&R forecast could be completed in as little as six weeksthat would indicate whether we should have confidence in WSA's longer term baseline forecast. Inshort,
it
could be available as soon as early April if acted on promptly. We all could use that critiqueeither as a "due diligence" basis for going ahead with Phase
2
of the Silver Line or as the basis forrequiring
a
second, .Full, independent
T&R
forecast study.My specific proposal
is
as follows:Obtain an independent second opinion on the validity of the
WSA
forecast. The Fairfax CountyBoard Auditor contract with an independent T&R consultant to critique the latest WSA forecast.Specifically, the consultant would provide a written report that reviews the WSA paper, publicforecasts of Dulles Corridor area growth, and publicly available information about Metrorailcosts, identify the strengths and weaknesses of
its
data sources and methodology. Mostimportantly, the consultant should assess whether
it
is
likely that the WSA baseline revenueforecast overestimates
is
likely to realize the risks RCA identified in
its
study of WSA forecasts.
o
This could be carried out by any of the other major T&R forecasting companies or by aconsultant specializing in critiquing forecasts.Credibility could be an issue in selecting another T&R forecasting outfit-just as
it
has become an issue in Detroit where the owner of the existing internationalbridge has hired consulting firms to document the lack of wisdom in building acompeting bridge. Moreover, the
RCA
report suggests that
all
of the T&R
 
forecasters have been guilty of overestimating toll revenues, and the reliabilityof their critique could be as questionable as the original study
=
An individual expert consultant with no axe to grind or specific advantage togain from such work (beyond the contract for the critique) might be a better fit.For example, Robert Bain, an internationally recognized toll road forecastingexpert whose research I used in the RCA study, could be appropriate. (For moreinfo on Bain, see his website at
http://www.robbain.com/index.htm.)
o
As guidelines, the critique should focus on:The period a decade or more from now. In this period, debt servicingrequirements and forecast uncertainty will both grow substantially. Majordeviations from revenue forecasts are likely be encountered for well-establishedtoll roads, such as the Dulles Toll Road.The likelihood of overestimates of a third to a half or more. Such overestimateswould mean tolls would need to increase by about half or double or more thoseforecast by WSA to meet debt servicing requirements resulting from trafficdiversion from the Dulles Toll Road. That is, forecast
$10
tolls would likelybecome
$15,
$20,
or more in reality.
Assure the transparency of the County effort.
Communications between the County and theconsultant as well as those within the County, including Board communications, concerning thiscritique and
its
process should be immediately and fully available to the public via the Countywebsite. Both the consultant and the County should be responsible for assuring thistransparency goal is achieved. To help assure public knowledge of the work, you may want toinclude a citizens group representative among those monitoring the consultant's work.
Commit to
a
second full study if a substantial overestimate is indicated in the consultant'scritique.
If the consultant's report suggests there
is
a significant risk of a substantialoverestimate of revenues in future years as suggested above, the County will accept RCA'srecommendation to delay
its
approval of Phase
2
until a second, full, independent T&R forecast
is
completed and differences between the two forecasts resolved.
o
If the results of the critique indicate that the WSA forecast is fairly accurate in itsrevenue forecasts, then the County would appear to have completed reasonable duediligence. If the toll forecast
is
not so excessive as to trigger the risks RCA has raised,then the Board could feel confident that
it
has addressed the revenue forecasting issuein proceeding to vote whether to approve Phase
2
of the Silver Line notwithstandingother issues in the financing plan.
I
believe that such an open due diligence process will assuage the concerns of Restonians and otherswho live along the Dulles Corridor that the Fairfax County Board of Supervisors is now rushing to a pre-determined judgment. With this timely, professional critique available, they will know that the Board iswell informed about this key issue in the Metrorail project before makes a decision.
I
hope that youfind
it
appropriate and achievable in meeting your priorities as well as the needs of your constituents.Thank you for your consideration of this proposal.
emb be;,
~dardf DirectorsReston Citizens Association

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