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Cost-Benefit Analysis: Seattle Link Light Rail, Initial Segment

Public Expenditure Analysis May 4, 2007. . to improve mobility within the urban areas by providing travel alternatives so they may grow comfortably while preserving rural areas

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Cost-Benefit Analysis: Seattle Link Light Rail, Initial Segment

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    1. Public Expenditure Analysis May 4, 2007 Cost-Benefit Analysis: Seattle Link Light Rail, Initial Segment Your presenters: Annie Gorman Hazel-Ann Petersen

    2. Public Expenditure Analysis May 4, 2007 “…to improve mobility within the urban areas by providing travel alternatives so they may grow comfortably while preserving rural areas for future generations."

    3. Public Expenditure Analysis May 4, 2007 Presentation Agenda Background Costs Benefits Reconciliation and Conclusions

    4. Public Expenditure Analysis May 4, 2007 Background

    5. Public Expenditure Analysis May 4, 2007 Context Regional light rail, with 40 miles of track, by 2030? Initial segment is 13.9 miles long, reaches from downtown Seattle south almost to the airport Monorail vs. light rail

    6. Public Expenditure Analysis May 4, 2007 Big Plans for Light Rail

    7. Public Expenditure Analysis May 4, 2007 Traffic in the Seattle Area WSDOT 2006: Longer travel times, slower speeds, longer congestion peaks, less reliable travel time Seattle-Tacoma 8th worst nationally for travel delays I-90 / I-5 interchange is 18th worst bottleneck nationally Regional population, especially in non-urban areas, growing over 5% per 5 years

    8. Public Expenditure Analysis May 4, 2007 Project Costs

    9. Public Expenditure Analysis May 4, 2007 Original vs. Projected Budget

    10. Public Expenditure Analysis May 4, 2007 Operating Expenses

    11. Public Expenditure Analysis May 4, 2007 National Expense Averages

    12. Public Expenditure Analysis May 4, 2007 Cost PV of Funding Sources At Various Discount Rates

    13. Public Expenditure Analysis May 4, 2007 Operating Profit for Link Lowest Across All Modes

    14. Public Expenditure Analysis May 4, 2007 Projected Funding Cost PV: Negative

    15. Public Expenditure Analysis May 4, 2007 Operating Expenses By Mode, 1996-2005 (National)

    16. Public Expenditure Analysis May 4, 2007 Nationally, Bus Remains Most Popular Transit Mode

    17. Public Expenditure Analysis May 4, 2007 Project Benefits

    18. Public Expenditure Analysis May 4, 2007 Benefits (Non-costs) Fuel costs and vehicle non-depreciation Other transportation costs (road capacity and parking) Time spent commuting Social costs: pollution, accidents, etc. And a benefit: revenue from paying riders

    19. Public Expenditure Analysis May 4, 2007 Baseline Assumptions Ridership and segment distribution Bus capacity Work days per year Gas price Commuting distance Hourly wage Parking cost Value of commuting time What social costs to include At what level to value them Fare contribution per person Rate of increase/ decrease of ridership

    20. Public Expenditure Analysis May 4, 2007 Baseline Scenario Revenue contribution $2.8 million* Total Y1 benefits $24.8 million* Total NBV $423 million* * in 2007 dollars, 6.5% interest rate

    21. Public Expenditure Analysis May 4, 2007 Sensitivity Analysis: Other Scenarios More riders Fewer riders Red Meat Granola Oil Price Spike Equal Time Value Six Miles

    22. Public Expenditure Analysis May 4, 2007 Cost/Benefit Reconciliation

    23. Public Expenditure Analysis May 4, 2007 Issues to Address Costs: 3 funding scenarios Benefits: 8 situational scenarios Costs: in 1999 dollars Benefits: in 2007 dollars

    24. Public Expenditure Analysis May 4, 2007 Full Reconciliation

    25. Public Expenditure Analysis May 4, 2007 A Hypothetical Break-Even Scenario Initial ridership = 16,000 (200% increase) Ridership growth rate = 10% (333% increase; this means 53,820 riders daily in 2030 vs. 7224) Per-gallon gas price = $9.78 (323% increase) Average hourly wage = $100 (617% increase)

    26. Public Expenditure Analysis May 4, 2007 Conclusions Likely NPV is ~ ($2.95) bn in 1999 dollars, ~ ($5.2) bn in 2007 dollars Getting to break-even requires wildly improbable new assumptions Mass transit isn't worth it on paper

    27. Public Expenditure Analysis May 4, 2007 BACKUP SLIDES

    28. Public Expenditure Analysis May 4, 2007 Change In Profitability W/r/t Discount Rate of 10%

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