Finance Committee Information Item III-B September 8, 2016 Panel Discussion: Regional Economic and Transit Ridership Trends Page 32 of 37
Washington Metropolitan Area Transit Authority Board Action/Information Summary Action Information MEAD Number: 201780 Resolution: Yes No TITLE: Regional Economic and Transit Ridership Trends PRESENTATION SUMMARY: In preparation for upcoming discussions on the FY2018 budget, the Committee will be briefed by three experts on the economic outlook for the Washington region and on ridership trends at WMATA and other peer transit agencies. PURPOSE: In preparation for upcoming discussions on the FY2018 budget, the Committee will be briefed by three experts on the economic outlook for the Washington region and on ridership trends at WMATA and other peer transit agencies.the participants include Dr. Stephen Fuller of the Center for Regional Analysis at George Mason University (GMU); Mr. Art Guzzetti, Vice President for Policy at the American Public Transportation Association (APTA); and Mr. Shyam Kannan, Managing Director of Planning for WMATA. DESCRIPTION: Key Highlights: The Finance Committee will host a panel discussion with three experts -- Dr. Stephen Fuller of GMU, Mr. Art Guzzetti of APTA, and Mr. Shyam Kannan of WMATA -- on the economic outlook for the Washington region and recent ridership trends at WMATA and other peer transit agencies, which will then be followed by a question-and-answer session with the Committee members. Background and History: After growing steadily for almost two decades and peaking in 2009, Metrorail ridership has been declining. This decline is due to both external factors (such as telecommuting, changing travel patterns, and increased competition from other modes) and internal factors, particularly customer concerns over rail reliability and quality of service. In preparation for discussions on the FY2018 budget, this panel discussion will explore short- and long-term expectations for WMATA ridership given these and other factors, including the economic outlook for the Washington region and the recent experiences at other peer transit agencies. Discussion: Page 33 of 37
Biographies for the three panel participants are provided below: Stephen Fuller Professor Fuller joined the faculty at George Mason University in 1994 as Professor of Public Policy and Regional Development. In September 2001, the GMU Board of Visitors appointed him University Professor and in July 2002 he was named to the Dwight Schar Faculty Chair and Director of the Center for Regional Analysis for which he served in this capacity until May 2015. He currently holds the position of Senior Advisor and Director of Special Projects with the Center for Regional Analysis at GMU. He has authored more than 800 articles, papers, and reports in the field of urban and regional economic development including monthly reports on the Washington metropolitan area and Fairfax County economies. Professor Fuller s recent research has focused on the structure of the Washington metropolitan area economy, how the economy changed during the Great Recession, and how it will change going forward as its federal-spending dependency diminishes. He has also undertaken research on the changing workforce requirements of the Washington area s emerging economy and the housing requirement of this future workforce. His current research involves the projected demographic changes over the next 15 years and how these will impact the Washington area s workforce, housing market, and demand for public services. Professor Fuller was appointed in June of 2014 to serve on the Joint Advisory Board of Economists by Governor McAuliffe. He served on the Governor s Advisory Board of Economists under Governors Kaine, Warner, Allen and Wilder. Art Guzzetti Art Guzzetti, a 37-year professional in public transportation at the local, state and national levels, serves as Vice President-Policy for the American Public Transportation Association (APTA), the trade group for the public transportation industry. Mr. Guzzetti is responsible for APTA s extensive policy development and research agenda, and for advancing policies favorable to public transportation with Congress, the Administration, state and local governments, with grass-roots and stakeholder organizations, and with public policy think tanks. Prior to coming to Washington in June 1997, Mr. Guzzetti had 16 years of management experience with two of the nation s leading public transportation systems: New Jersey Transit and the Port Authority of Allegheny County. Prior to that he had two years of experience with the New Jersey Department of Transportation. His duties have generally focused on transportation policy, government affairs, advocacy at all levels of government, capital programming, and grants development / management. Mr. Guzzetti has a Political Science degree from Edinboro State University, and a Master of Public Administration Degree from the University of Pittsburgh. Among other positions, he is the immediate past national president of the Transportation Research Forum. Shyam Kannan Shyam Kannan is Metro's Managing Director of Planning. Mr. Kannan brings extensive planning and transit-oriented development experience in the public and private sectors to Metro, where he directs the Authority s strategic planning efforts as well as supervises long-range planning, sustainability, WMATA's "big data" analytics, and smart growth efforts. He has a particular interest in the economic benefits of transit as well as coordinating closely with the business community in the region. Page 34 of 37
Active in the region s planning community, Mr. Kannan is a committee member of the Urban Land Institute, the Region Forward Coalition of the Metropolitan Washington Council of Governments, and is an adjunct Faculty Member of Georgetown University. Mr. Kannan has a Master s Degree in Public Policy and Urban Planning from Harvard University, and is also a graduate of the University of Virginia. FUNDING IMPACT: Information item only - no funding impact. Project Manager: Thomas J. Webster Project CFO/OMBS Department/Office: TIMELINE: Previous Actions Anticipated actions after presentation July 2016 - Benchmarking Highlights October 2016 - FY2018 Budget Prep Session November 2016 - Presentation of GM/CEO FY2018 Proposed Operating Budget December 2016 - Presentation of GM/CEO FY2018 Proposed Capital Budget and Six-Year Capital Improvement Program (CIP) RECOMMENDATION: No action required - information item only. Page 35 of 37
METRO Finance Committee Economic and Demographic Trends in the Washington Region Impacting Public Transit Ridership Stephen S. Fuller, Ph.D. Dwight Schar Faculty Chair and University Professor Senior Advisor and Director of Special Projects Center for Regional Analysis George Mason University September 8, 2016
Levels and Quality of Service: peak and off-peak, weekday and weekend; Changing Economic Structure: number, types and distribution of jobs and earnings; Changing cultural values: live close to place of work walking and bicycling to job, declining auto ownership, changing housing tenure patterns, on-line shopping, life-style patterns; Changing nature of work: self-employment, part-time, labor force participation, older workers, changing work and business spaces office and retail; and, Demographic Trends: number, age and place of residence.
% 6 4 2 U.S. GDP and Washington Area GRP 2002 2014 (Annual % Change) U.S. Washington 0-2 -4 Sources: IHS Economics and GMU Center for Regional Analysis
15 Largest Metro Areas: GRP Percent Change 2009-14 45% 40% 35% 30% 25% 20% 15% 10% 5% 0% Sources: Bureau of Economic Analysis and GMU Center for Regional Analysis
(000s) 100 80 60 40 20 0-20 -40-60 2008 2005 2002 Annual Job Change Washington MSA, 2002-2016 Annual Data Annual Month over Year 2011 2012 2013 2014 2015 Sources: Bureau of Labor Statistics (Not Seasonally Adjusted) and GMU Center for Regional Analysis
(000s) 30 25 20 15 10 5 0-5 -10-15 -20 Annual Data Federal Government Washington MSA Annual Month over Year 2010 2011 2012 2013 2014 2015 Feb Nov Aug May Feb Nov Aug May Feb Nov Aug May Feb Nov Aug May Feb Nov Aug May Feb Nov Aug May Feb 2008 2005 2002 Sources: Bureau of Labor Statistics (Not Seasonally Adjusted), GMU Center for Regional Analysis Mar-16 Total: 363.8
$ Billions 90 80 70 60 50 40 30 20 10 0 Federal Procurement in the Washington Metro Area, 1980-2015 TOTAL = $1,236.0 Billion 79.9 76.3 69.1 71.3 Sources: US Census, Consolidated Federal Funds Report and USAspending.gov
(000s) Annual Data 30 25 20 15 10 5 0-5 -10-15 -20 Professional & Business Services Washington MSA Annual Month over Year 2010 2011 2012 2013 2014 2015 Feb Nov Aug May Feb Nov Aug May Feb Nov Aug May Feb Nov Aug May Feb Nov Aug May Feb Nov Aug May Feb 2008 2005 2002 Sources: Bureau of Labor Statistics (Not Seasonally Adjusted) and GMU Center for Regional Analysis Mar-16 Total: 731.8
WMSA Payroll Job Change: Private Sector The Great Recession and Recovery Prof. & Bus. Svcs Educ & Health Svcs Retail Trade Leisure & Hosp. Construction Other Services Financial Information Manufacturing Wholesale Trade Transp. & Utilities Aug 2008-Feb 2010 Feb 2010-Feb 2016-49 -34-24 -23-10 -12-8 -10-7 -5 (000s) Total -180 Total 272 0-100 -75-50 -25 0 25 50 75 100 Sources: Bureau of Labor Statistics (Not Seasonally Adjusted) and GMU Center for Regional Analysis 1 9 18 22 34 59 63 66
(000s of 2014 $s) 74 Average Wage in the Washington Metro Area, 2001-2014 72 70 68 66.5 67.2 68.0 69.2 68.7 70.5 71.5 70.7 70.3 69.3 69.6 66 64 63.8 63.9 64.8 62 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Sources: Bureau of Labor Statistics and GMU Center for Regional Analysis
% 6 5 4 3 2 1 0-1 -2 Economic Outlook (GRP), 2007-2020 Washington Area and Sub-State Areas (Annual % Change) NV MSA SM DC Source: GMU Center for Regional Analysis, Forecast: January 2016
Employment Change in the WMSA by Sub-State Area (000s) 2013 2014 2015 2016 2017 2018 2019 2020 D.C. 12.8 5.9 14.7 14.1 9.7 10.6 8.9 8.2 Sub. MD 6.5 11.8 17.4 20.2 17.7 14.1 12.0 11.0 No. VA 8.8 0.9 27.3 25.5 23.6 15.9 13.7 12.6 REGION 28.1 18.6 59.4 59.8 51.0 40.6 34.6 31.8 Average Annual Change 1990-2010 = 36,000 Sources: BLS, IHS Economics and GMU Center for Regional Analysis (January 2016) NOTE: The regional totals do not include Jefferson, WV.
1980-2015 2015-2045 Washington Metropolitan Area: Job Change by Subregion 800 700 600 500 400 300 200 100 0 CORE BELTWAY OUTER Sources: COG Round 9 and GMU Center for Regional Analysis
1980 2015 2045 Washington Metropolitan Area: Share of Jobs by Subregion 60% 50% 40% 30% 20% 10% 0% CORE BELTWAY OUTER Sources: COG Round 9 and GMU Center for Regional Analysis
Population Trends in the Washington MSA 2010-2015 and 2015-2025 (population in thousands) Year Metro Area Urban Core* % of Total 2010 5,679.3 3,927.8 69.2 2015 6,114.7 4,189.7 68.5 Change 435.4 261.9 60.2 Percent 7.7 6.7 2025 6,783.6 4,355.1 64.2 Change 668.9 165.4 24.7 Percent 10.9 3.9 Sources: IHS Economics and Center for Regional Analysis *DC, Cities of Alexandria, Falls Church, and Fairfax and Counties of Arlington, Fairfax, Montgomery, and Prince George s
Sources: IHS Economics and Center for Regional Analysis Age Distribution of Population Change in the Washington Metropolitan Areas (percent contribution to total change) Age 2010-2015 2015-2025 0-24 19.1 22.6 25-34 24.4 8.4 35-44 5.5 18.1 45-54 - 0.3 5.1 55-64 19.1 6.6 65+ 32.2 39.2 Total 100.0 100.0
Age Distribution of Population Change in the Washington Metropolitan Areas (percent contribution to total population change) Age 2010-2015 2015-2025 0-34 34.5 31.0 34-54 5.2 23.2 55+ 51.3 45.8 Total 100.0 100.0 Sources: IHS Economics and Center for Regional Analysis
1980-2015 2015-2045 Washington Metropolitan Area: Population Change by Subregion 1,400 1,200 1,000 800 600 400 200 - CORE BELTWAY OUTER Source: COG Round 9 and GMU Center for Regional Analysis
1980 2015 2045 Washington Metropolitan Area: Share of Population by Subregion 60% 50% 40% 30% 20% 10% 0% CORE BELTWAY OUTER Source: COG Round 9 and GMU Center for Regional Analysis
Thank You & Questions cra.gmu.edu
MetroRail and Peer System Ridership Presentation to WMATA Finance Committee Mike Goldman, Chair September 8, 2016 Art Guzzetti Vice President Policy American Public Transportation Association
Ridership Growth v Population Growth 45% Transit Ridership Has Grown Faster Than Population Percent Growth from 1995 40% 35% 30% 25% 20% 15% 10% 5% 0% US Population Transit Ridership
2015 Daily Unlinked Passenger Trips New York TA 9,144,700 WMATA MetroRail 868,400 Chicago 772,900 Boston 569,200 San Francisco 452,600 Philadephia 343,800 Atlanta 231,700 Los Angeles 145,800 Marc 33,600
Factors Potentially Affecting Ridership Significantly lower gas prices Sustained low gas prices Fares / Perceived cost of the transit trip v alternatives Levels of service Reliability of service Trip generators / O&D / TOD
Thank you for your time and attention! aguzzetti@apta.com
Washington Metropolitan Area Transit Authority Metrorail Ridership in Perspective WMATA Finance Committee Sept 8, 2016
1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Average Weekday Ridership, May Rail Ridership in Retrospect 800,000 700,000 600,000 500,000 400,000 2010-2015 Down 1% to 3% per year 300,000 200,000 100,000 0 2015-2016 Down 9% 2
Another Trend Defying the Norm Jobs, Population Up People Travelling Less? 3
Context for the New Normal Lots of Theories, Some or All May be True 4
Customers Expect and Deserve Fast, Frequent, and Reliable Service 5
Metrorail Customers Face Increasingly Unpredictable Trips Time from tap-in to tap-out May-August 2015 vs. 2013, AM Peak Sample Commute Change in Median Travel Time Change in 95th Percentile Travel Time Additional Minutes Riders Must Budget Branch Ave to L'Enfant Plaza 4% 11% 3.4 Franconia-Springfield to Pentagon 3% 8% 2.5 Greenbelt to L'Enfant Plaza 2% 4% 1.5 Huntington to Pentagon 2% 6% 1.6 Largo Town Center to L'Enfant Plaza 5% 19% 6.6 New Carrollton to Farragut West 12% 22% 9.2 Vienna to Farragut West 7% 16% 6.0 Shady Grove to Farragut North 2% 7% 3.3 Silver Spring to Farragut North 2% 6% 2.0 Range of travel times (unpredictability) up 5-20% Customers must budget more time to be on-time 6 6
Market STILL Wants Metro Development-Related Ridership 100M SF TOD Underway >90% of Region s Commercial Development within ½ mile of Metrorail 150,000 new entries/day $400,000 in new farebox revenue each weekday 7 7
Average Weekday Metrorail Ridership Rail Ridership Growth Potential Contingent on Restoration of Service Quality Metrorail Ridership, 1975-2030 1,200,000 Growth Flat 1,000,000 800,000 600,000 Flat Growth Decline 400,000 Actual MWCOG Forecast 200,000 Flat 0 1975 1985 1995 2005 2015 2025 8