Blog

Forward Motion, April 2020



Mobility 21 Advisory Board Member Spotlight:
Farid Hamad
Vice President, Construction Western Region
Lane Construction Corporation

Farid has been with Lane for more than 34 years. He began his career as a Job Engineer in 1985 in Virginia and has steadily worked his way up to his current position of Vice President of Construction for the Western Region of the USA. Currently, He is responsible for Lane projects in Southern California including the Gerald Desmond Bridge in Long Beach and the I-10 Express Lanes in San Bernardino County. Also, he is responsible for projects in Seattle including the I-405 Express Lanes from Renton to Bellevue and the Ballard Ship Canal Tunnel. He also oversees the regional office in Henderson, Nevada.

Prior to this position he was President of Lane Worldwide Infrastructure, Inc. (from 2011 to 2017) which made him responsible for all of Lane’s International operations. Primarily, he was assigned to the Middle East and was responsible for all construction contracts in the Middle East region including Saudi Arabia, Qatar, and the United Arab Emirates.  Farid was the driving force behind Lane’s move to expand internationally and was responsible for establishing relationships with international owners and partners, strategic planning, and business development in the region to align with corporate goals.  Lane’s International operations was merged with Salini Impregilo’s Middle East operations once the merger with SI and Lane was completed in 2016.

Prior to his International assignment he worked most of his career with Lane in the Mid-Atlantic Region which include Virginia, Maryland and Washington, DC.  He started as a Job Engineer and was promoted to Project Engineer, Project Manager, District Manager, and ultimately to Regional Vice President of the Mid-Atlantic Region.  He was responsible for all construction contracts in the Mid-Atlantic Region. Farid held overall responsibility for the performance of the region’s Chantilly office, which yielded more than $400 million in yearly revenue. Since joining Lane, he has established long-term relationships with owners such as the Metropolitan Washington Airports Authority (MWAA), the Washington Metropolitan Area Transit Authority (WMATA), and the Virginia Department of Transportation (VDOT), and Maryland DOT. Farid’s experience and expertise for airports have helped Lane work continuously at Washington Dulles International Airport for the almost 20 years.

Farid is a graduate of Iowa State University. He received his BS in Civil Engineering in 1979 and a Masters in Transportation Engineering in 1980. He was recognized for his scholastic achievements and inducted as a member in National Mathematics Honor Society, National Engineering Honor Society, and National Civil Engineering Honor Society.  Farid is also a former Board member of George Mason Civil Engineering Institute, and a former member of American Concrete Pavement Association.


Mobility 21 Advisory Board Member Spotlight:
Vic Martinez
Southwest District Manager
WSP

Vic Martinez is the recently appointed Southwest District Manager for WSP. In addition to being a strong coach and mentor, Vic has demonstrated success in sales, operations, and financial performance to grow offices. His client and industry relationships are broad and deep from delivering significant infrastructure projects in the Southern California area and active participation in professional organizations. Throughout his career, he has successfully served in various leadership roles at the region, district, and office levels.  Vic has successfully delivered for many of our clients including OCTA, RCTC, SBCTA, LA Metro, City of LA, VCTC, Caltrans, and many others within the Southwest District.

In addition to his role as the Southwest District Manager, Vic will lead the Los Angeles office and support diversification and growth, drive strategic direction, and support the area management teams located in Orange, San Bernardino, San Diego, and Las Vegas. He will be a key member of the regional management team working closely with me to achieve the strategic direction of the region.

Vic has 39 years of transportation industry experience in California. He has managed numerous complex, high-profile transportation projects throughout the state, from highway corridors involving dozens of complex structures to significant interchange and highway widenings, which included serving as project manager for the Sixth Street Viaduct Replacement Project in Los Angeles; principal-in-charge for the Transportation Corridor Agency’s program management contract; the I-215 Reconstruction/Widening, Segments 1 and 2 for the San Bernardino County Transportation Authority and Caltrans District 8; and project manager for the I-5/SR 55 PSR for the Orange County Transportation Authority and Caltrans District 12. Prior to joining WSP, he led the California highway/bridge division of an international engineering organization.

A licensed professional engineer in California, Vic received a B.S. in civil engineering from California Polytechnic State University, Pomona. He is a member of the Women’s Transportation Seminar in the Inland Empire, Los Angeles and Orange County chapters, and a past president of the Orange County chapter of the American Council of Engineering Companies.


The SPARK-LA program enters its fourth year with the goal to create interest in STEAM-related careers among middle- and high-school girls.

Summit Platinum Sponsor Spotlight
HNTB

Sparking an Interest in STEAM-Related Careers

The Mobility 21 Board and Advisory Board are tackling one of the most significant challenges we face as an industry: developing the technical workforce required to deliver Southern California’s infrastructure. We all share in the excitement of the magnitude of opportunities available as a result of the various ballot measures that have passed in nearly every county in the region, with an added boost from SB-1 which provides $5.0B in transportation funding annually. What was thought to be the constraining factor — funding — has been replaced by lack of a diverse workforce to plan, design, build and maintain the projects that are desperately needed to improve our quality of life.

Rather than retreat, Mobility 21 has invested over $75,000 to attack the challenge. HNTB, as a long-time partner of Mobility 21, entered the fourth year of SPARK-LA, a partnership with the Girls Academic Leadership Academy to create early interest in STEAM-related subjects at the middle- and high-school level at the first all-female school facility in the history of Los Angeles United School District. Once Measure M passed, Los Angeles First Lady Amy Wakeland toured construction sites and commented on the lack of diversity she found. Working with then Los Angeles Commissioner Heather Roepenning, HNTB began a partnership with GALA to teach a semester-long program on applying STEAM coursework to engineering and construction projects. Now in its fourth year, SPARK LA has graduated over 100 students, all young women, who are nearing college age and have learned how to design airport terminals, highway bridge structures, transit projects, parks and other facilities.

Creating an interest in engineering and construction cannot start when one is in high school. We need to offer insights into the rewarding work that we all do much earlier to capture imaginations and guide younger children of diverse backgrounds to a place they might know exists, or worse yet, know exists, but they don’t see a path to reach that place. HNTB’s Laura Mohr has been supported by many government officials and speakers from LA Metro, LAWA, Caltrans, Metrolink and other agencies on SPARK-LA. The program has been recognized by the Mayor’s Office and LAUSD as a pioneering effort to solve the challenge of supplying the region with the talented engineers, construction workers, operators and maintenance talent we currently lack and desperately need to deliver the infrastructure of tomorrow for Southern California.


Summit Platinum Sponsor Spotlight
Southern California Edison

SCE’s Charge Ready Programs Pave the Way for Clean Transportation
At Southern California Edison (SCE), creating a clean energy future isn’t just a nice catchphrase. It drives everything we do, especially in the clean transportation space, with our Charge Ready programs helping to provide clean fuel for our region’s electric vehicles (EV). These programs support the expansion of EV charging at homes, workplaces, schools, and public places, as well as fleet and industrial vehicle charging.

SCE continues to develop and implement innovative programs that support our state’s greenhouse gas reduction efforts by helping more customers make the switch to clean, electric transportation. Last year, we launched Charge Ready Transport, aiming to add charging stations at more than 800 sites to support over 8,000 trucks and industrial vehicles over five years.

As SCE looks to the future, our utility continues to work with our customers, including our transit partners, to make the shift to zero emissions. Most recently, through our Charge Ready Transit Bus pilot, we installed electrical infrastructure and provided rebates for the purchase of charging stations for both Foothill Transit and Porterville Transit to support the addition of battery-electric buses to their fleets.

SCE is also continuing to modernize the electric grid to support California’s goal of achieving a clean energy future that will address the impacts of climate change and improve the air we breathe.

Learn more at www.edison.com/te.


Summit Platinum Sponsor Spotlight
WSP

From our start 135 years ago in the architecture and engineering industry to its recent work throughout Southern California, WSP strives to meet the challenges of infrastructure programs and projects with innovation and technical expertise to best serve our communities. We also know that our future world will be very different from today. Being future focused, understanding what the world might look like in the next few decades, and taking action to prepare, is essential to what we do at WSP. Our clients count on it and our communities thrive because of it. WSP is leading the industry in helping our clients deliver innovative and transformative strategies that reimagine how regions will grow and how people and goods will get around through our work on SANDAG’s Central Mobility Hub/Airport Connectivity project; the need for mobile sources to meet upcoming air quality requirements by assisting Metro, SBCTA and other transit agencies developing Zero Emission Bus systems; and providing steady and efficient project management for our clients, most notably our work with the Port of Long Beach on the Gerald Desmond Bridge Replacement Project. WSP is proud to continue our partnerships with southern California transportation agencies and our sponsorship support for the work of Mobility 21.



Metro Adjusting Bus and Rail Schedules Beginning April 19;
Plan Will Keep Metro’s Entire Workforce on the Job

On Sunday, April 19, Metro will begin running a Modified Sunday service schedule every day of the week. This schedule will provide an efficient and predictable level of service for those making essential trips. This service plan will keep Metro’s entire workforce productively employed.

On weekdays, Metro will run its usual Sunday bus service plus some Rapid, Express and Local bus lines that normally do not run on Sundays. On weekdays, most trains will run every 12 minutes between 6 a.m. and 6 p.m. and every 20 minutes at other times with last trains leaving terminal stations around midnight. On weekends, Metro will run its regular Sunday service on bus and rail lines. All Metro bus and rail timetables can be found here — please scroll down each timetable until you see the page for ‘Sunday’ service.

Metro slightly adjusted service levels in mid-March in response to local and state safer-at-home orders to help prevent spread of the Coronavirus. With ridership down about 70 percent overall, Metro is making this further service change to be more efficient, meet on-the-street reality of reduced demand, while still providing bus and rail service to all communities currently served by Metro and with as little impact to the workforce as possible.

Metro will also be exploring closing some entrances to rail stations that have multiple entrances. ADA access will be maintained at all stations. This is being done to reduce the number of “touchpoints” that must be frequently cleaned, which in turn allows Metro to concentrate on keeping the rest of the system as clean as possible.

To keep both the riding public and Metro’s workforce safe, the agency has already instituted rear-door boarding on its buses. The agency is also encouraging riders to only take essential trips, and is providing bus rides to shelters for vulnerable and unhoused populations. The agency, too, is using signage and social media to encourage all riders to practice physical distancing at stations and to wear face coverings while riding buses and trains.

With nearly 11,000 workers, Metro is one of the larger employers in Los Angeles County. The Modified Sunday service plan being implemented will reduce hours for some operations, maintain service to all currently served and will allow Metro’s workforce to remain gainfully employed and, thus, help reduce strain on our region’s economy during the pandemic.

We will provide all the line-by-line details of the new service plan next week.


OCTA CEO Darrell E. Johnson delivers his April CEO Connection to 300-plus employees virtually. Hundreds of OCTA employees continue to provide essential services by working remotely after years of planning for an emergency such as the coronavirus pandemic.
Photo courtesy of OCTA.

OCTA Planned for Years for Remote Work, Helping Employees Keep Providing Vital Services During Pandemic

A move toward cloud computing and a remote-work pilot program made the transition easier for more than 500 administrative employees during coronavirus crisis.

Darrell E. Johnson, chief executive officer at the Orange County Transportation Authority, addresses more than 300 administrative employees, referring to a PowerPoint presentation everyone can see and taking questions from the large gathering at his regular CEO Connection town hall.

The only difference is that the April CEO Connection is being held virtually from his office, while hundreds of employees watch and ask questions from their homes, connected via Microsoft Teams as if they’re in the same room.

The coronavirus (COVID-19) pandemic has left businesses and public agencies everywhere scrambling to figure out how to allow employees to work remotely, while continuing to provide efficient – and often essential – services to the customers and the communities they serve.

The effects of the pandemic emerged unexpectedly and grew exponentially in days, leaving some agencies and businesses struggling to make the transition, others saying they were doing all they could just to keep the lights on.

Fortunately for the Orange County Transportation Authority, years of crisis planning, a wide-ranging pilot program for remote work, and a years-long effort toward cloud computing has put the agency in a strong position to make an efficient transition that allows most administrative employees – more than 500 in all – to remain just as productive from home as if they were sitting at their desks in the office.

“While no organization can perfectly prepare for this kind of crisis, I’m incredibly proud of the extensive planning and implementation that has occurred in recent years across all divisions at OCTA,” said CEO Johnson. “The vision and thoughtful approach by our staff has positioned us well to withstand the challenges of today’s business environment and to continue providing vital services to the public.”

Effectively responding to this kind of event started with emergency operations, crisis communications and continuity of operations planning, which included regular exercises and drills involving all of OCTA’s operational and business units. Those involved learned how to communicate effectively in a crisis, such as a natural disaster, cyber incident or physical attack.

Participants were faced with the questions: What if the 12-story administrative headquarters in Orange was no longer available? How might the agency be able to continue to communicate and to work offsite?

Over the last several years, OCTA’s Information Services team began transitioning the agency toward cloud computing, utilizing Microsoft cloud programs so that employees could access files from work, at home, or anywhere they could log in.

That effort began around 2014, when OCTA transitioned to an internet-based phone system, allowing employees to access their phone lines through computers when not at their workstations.

OCTA also helped many employees transition from a desktop computer to working on Microsoft Surface laptops, allowing them to log in from home Wi-Fi with the same access they had while inside the office – access to email and all work files and servers.

OCTA trained employees on Microsoft Teams beginning in 2018, allowing employees to share files among coworkers, make phone calls and host virtual meetings.

Also in 2018, OCTA’s Human Resources and Organizational Development team worked to introduce an innovative remote-work pilot program. The six-month pilot allowed more than 30 employees to work from home typically one day a week.

The results of that trial run showed that employees were successful in connecting to work via home offices and remained as productive – and in some cases even more productive, with few distractions and no extended commuting time.

When the state of California issued a stay-at-home order to help curb the spread of COVID-19 in mid-March, OCTA was prepared to act.

A majority of administrative employees were able to quickly transition to working from home. That included nearly 300 employees by way of direct access on Microsoft Surfaces and OCTA desktops set up at home, and another 200-plus via the remote-work software on home computers, giving them access to all work files.

Because of advanced planning and the agency previously embracing the concept of remote work, the security systems and the primary infrastructure to support so many employees suddenly working remotely were already in place.

Within the first week of the stay-at-home order, CEO Johnson set up his first virtual conference available to all administrative employees, so he could give updates on OCTA operations. He was also joined at that online meeting by a doctor from the Orange County Health Care Agency, who answered employees’ coronavirus health questions in real time.

Now regular work meetings within and between departments, traditionally held in administrative conference rooms, have transitioned to calls using virtual meeting technology. In the month before the pandemic, 92 meetings were hosted through Microsoft Teams at OCTA. The month after, that number jumped to 1,005.

During the same time, private chat messages through Teams increased from 2,000 to 8,000.

Through the crisis-planning process, OCTA already contracted for emergency employee notifications through email, phone calls and texts, and that system was quickly expanded to ensure all employees receive important OCTA updates during the pandemic response.

All of this has allowed employees to remain productive and continue pushing forward on important transportation projects such as the $1.9-billion I-405 improvements between Costa Mesa and the Los Angeles County Line, the I-5 South County improvements between SR-73 and El Toro Road, and the OC Streetcar in Santa Ana and Garden Grove.

It has also allowed administrative employees to still support vital transit services, including OC ACCESS paratransit service and the regular OC Bus service for those who continue to rely on the bus to reach essential jobs and medical appointments.

“We started in a good position and we continue to learn as we move forward, refining and developing even better practices,” Johnson said. “I hope that OCTA can serve as an example from which other organizations can learn valuable lessons, too. We’re all in this together for the good of our community.”


Transportation Corridor Agencies’ Chief Executive Officer
Michael Kraman Announces His Retirement

Following a long career of public service and leadership, Michael A. Kraman, CEO of the Transportation Corridor Agencies (TCA), has informed the San Joaquin Hills Transportation Corridor Agency (SJHTCA) and Foothill/Eastern Transportation Corridor Agency (F/ETCA) Boards of Directors of his decision to retire from the position; he has committed to stay on board until an interim CEO can be named. As CEO, Kraman focused on the strategic planning and operations to manage and improve California’s largest network of toll roads – State Routes 73, 133, 241 and 261.

“I am grateful to have had the opportunity to lead TCA during times of success and challenges. The recent action by the F/ETCA Board to extend Los Patrones Parkway Untolled, accomplishes TCA’s efforts to complete the southern extension of the 241 Toll Road, closing a long chapter in our Agencies’ history,” said Kraman. “Having spent more than 35-years delivering major transportation infrastructure projects, this achievement, coupled with the recent 241/91 Express Connector agreement, presented a timely opportunity to transition to the next phase of my life. It’s been my honor and privilege to serve our Directors, employees, loyal customers and Orange County.”

As CEO, Kraman set several priorities for himself and the Agencies. A few highlights include:

  • Improving TCA’s long-term financial position, resulting in investment grade ratings by all three major rating agencies, to provide durability and flexibility to better meet future challenges and important objectives.
  • Completing the transition to all-electronic-tolling to allow non-stop tolling for all users of The Toll Roads.
  • Collaborating with the public, local cities and jurisdictions to take a realistic approach in developing a feasible alternative to the southern extension of the 241 Toll Road.
  • Advancing the 241/91 Express Connector Project to create a seamless connection between the 241 Toll Road and the 91 Express Lanes.
  • Improving customer service for nearly 2 million TCA accountholders by offering choices for customer’s payment options and ensuring The Toll Roads’ website and mobile app are one of the best in the industry.
  • Strengthening regional partnerships with the California Department of Transportation (Caltrans), Orange County Transportation Authority (OCTA), local cities and the business community.

“On behalf of the hundreds of thousands of people who travel to and through Orange County daily, TCA’s Boards of Directors thank Mike for his leadership and tireless efforts that have positioned TCA for future success,” said SJHTCA Chairwoman Trish Kelley. “During his tenure, he has led significant changes to improve operations and strengthen inter-agency relationships. We are grateful for his many contributions over the last eight years, and he will forever be a part of Orange County’s transportation history.”

When asked about his greatest accomplishment, Kraman cited efforts to solve the decades-old challenge of completing the Foothill South segment of the 241 Toll Road. New opportunities began with the negotiation of an environmental settlement agreement between TCA and the Save San Onofre Coalition. That agreement settled six lawsuits that had been plaguing TCA for more than 15 years, but more importantly it allowed TCA to move forward with a robust and far-reaching community and stakeholder outreach process to find creative options for transitioning the southern terminus of the 241 Toll Road into the regional highway network in South Orange County.

“Moving the Los Patrones Parkway Untolled Extension alternative forward is a great outcome from this process. Having spent more than 35 years in my career delivering major transportation infrastructure projects, I know that public input always leads to better ideas and better projects. This experience and its outcome have been no exception,” said Kraman.

TCA’s mission to enhance regional mobility in Orange County and Southern California with creativity, innovation and cutting-edge transportation technology, would not be made possible without solid finances. When Kraman took over as CEO in 2014, much of the Agencies’ debt was not rated investment grade. Moving the Agencies’ credit to investment grade ratings by all three major rating agencies, including an A- rating from S&P Global Ratings, has been achieved through the strategic leadership of CFO Amy Potter and the commitment of the SJHTCA and F/ETCA Boards of Directors.

“As I look back on the last eight years, beginning as chief engineer, then CEO in 2014, I feel a great sense of accomplishment having worked diligently with partner transportation agencies, as well as county and city representatives, the business community and environmental groups, to improve mobility throughout the region,” said Kraman. “TCA is in the strongest financial position of its 30-year history and while that will be tested with current events, we’ve successfully laid the foundation to bring new and innovative opportunities to our partners for a bright future.”

“Orange County’s transportation infrastructure benefits greatly from the value The Toll Roads provide,” said F/ETCA Chairwoman Christina Shea. “During Mike’s leadership, TCA saw six consecutive years of strong growth and finances. TCA remains an industry-leading innovator thanks to Mike’s tireless efforts.”

In his time at TCA, Kraman has been recognized with numerous awards including being named Person of the Year by the California Transportation Foundation (CTF) and most recently, Outstanding Civil Engineer in the Public Sector by the Orange County Branch of the American Society of Civil Engineers (ASCE-OC). During Kraman’s tenure, TCA’s accomplishments have been recognized by CTF; Southern California Association of Governments; Orange County Business Council; Mobility 21; International Bridge, Tunnel and Turnpike Association; Women in Transportation Seminar-Orange County; ASCE-OC, American Council of Engineering Companies-Orange County; and the Los Angeles Sustainability Coalition.

TCA is the government agency responsible for planning, financing, constructing, maintaining, managing and operating the 51-mile toll road network in Orange County.


Samuel Johnson Appointed Interim CEO of Transportation Corridor Agencies

The Transportation Corridor Agencies (TCA) today announced that its two Boards of Directors have unanimously appointed Samuel Johnson to the position of Interim Chief Executive Officer. The appointment is effective immediately.
Since joining TCA in 2015 as Chief Toll Operations Officer, Johnson has had responsibility and oversight for the Agencies’ tolling systems, customer service, revenue management, violation processing, toll compliance, customer experience communications and information technology functions.

He championed the statewide effort to adopt sticker transponders and implemented strategic contracting approaches for systems and services that have enhanced customer service and improved the Agencies’ fiscal position, saving millions of dollars per year.

Johnson serves as president of the International Bridge, Tunnel and Turnpike Association (IBTTA), the global association for the owners and operators of toll facilities and the businesses that serve them. He is immediate past president of the statewide California Toll Operators Committee (CTOC).

“As a respected leader in the transportation Industry with more than 30 years of public service, Samuel Johnson is well positioned to assume the role of Interim CEO on day one,” said Christina Shea, Chairwoman of the Foothill/Eastern Transportation Corridor Agency and Mayor of Irvine. “Having worked with him during my time as Chairwoman, I’ve been extremely impressed by his sound grasp of the issues facing the Agencies, his ability to provide a path forward in challenging times and his demonstrated capacity to serve as a leader, which is critical during a time of transition.”

“I’m confident that Samuel Johnson will approach his new role with a true sense of purpose and leadership,” said Trish Kelley, Chairwoman of the San Joaquin Hills Transportation Corridor Agency and Mayor Pro Tem of Mission Viejo. “He has a strong understanding of TCA, transportation, tolling, technology and public service. And, his focus on team building and continuous improvement are just what TCA needs in the current climate of unknown and uncertainty.”

“I am honored by the Boards’ unanimous selection and look forward to leading the talented team of staff we have at TCA,” said Johnson. “Ensuring the health and safety of our customers, our staff and their families; and aligning our efforts with the Boards’ vision and goals are key priorities and I look forward to addressing the challenges ahead of us.”

Prior to joining TCA, Johnson spent 12 years with the San Diego Association of Governments (SANDAG) overseeing countywide efforts to implement innovative transportation solutions and serving as part of the executive team responsible for the region’s tolling enterprise, including the State Route 125 toll road and the I-15 Express Lanes, the nation’s first dynamically priced toll facility.

Johnson earned a bachelor’s of science degree in business management with an emphasis in accounting from San Diego State University.

Johnson’s appointment follows the announced retirement of former TCA CEO Michael Kraman. Johnson will serve as Interim CEO until TCA’s Boards of Directors identify a permanent replacement.


Crews on RCTC’s construction projects are wearing face-coverings and following mandates for COVID-19 to ensure the safety of workers, their families, and the public.

Working Safely: Transportation Construction Crews Continue Using High Standards

Public safety continues to be the Riverside County Transportation Commission’s top priority. Our infrastructure projects are part of the supply chain that moves goods and workers across our region. We appreciate the men and women who are designing and building our projects and keeping them safe and the public safe are of critical importance.

COVID-19 cases are increasing, and Riverside County residents are experiencing layoffs and furloughs. Under the governor’s Executive Order, employees who support construction, operation, inspection, and maintenance of construction sites and projects are designated as part of California’s essential workforce and will continue working.

Construction crews for our Route 60 Truck Lanes and I-15 Express Lanes received intensive training and took part in an event today led by the Association of General Contractors to reiterate ways to minimize exposure risk to COVID-19. Safe practices include:

  • Social distancing
  • Zero-tolerance policy for working when ill
  • Minimizing exposure between crews
  • Wearing personal protective equipment, including face-coverings
  • Proper hygiene among crew members
  • Appropriate personal protective equipment
  • No sharing of tools; disinfecting work areas with approved cleaners
  • Changing clothes after leaving the job site and before arriving home and washing work clothes properly

RCTC will continue to adhere to safe workplace standards and will adjust as needed. Thank you to our staff, contractors, and subcontractors who are making our work sites safe and building the infrastructure relied upon by our economy.


COVID-19 Impact on the San Diego Regional Economy: Retail Sales and TransNet Revenue Forecasts

SANDAG is monitoring the COVID-19 pandemic and its potential impact on the San Diego economy and TransNet sales tax revenue.

As the current situation is quite fluid, rather than focusing on one possible scenario, the SANDAG Data Science and Analytics Department has developed a dynamic model to forecast 40 scenarios based on an array of assumptions.

This model will continue to be refined as new data become available. This forecast provides the most informed estimates of potential impact from specific factors, such as the length of disruption and the severity of the COVID-19 impact on the economy.

The economic impacts presented in this report are based on the latest information available to SANDAG as of April 3, 2020. This report will be updated as new data become available.

At this time, there is no way to know when the current economic disruption will end. The timeline below shows the “known” dates, which will be refined in the coming weeks as Federal, State, and local agencies provide more guidance.

Key Assumptions – As of April 3, 2020

SANDAG uses the most recent statements and information provided by Federal, State, and local authorities at the time of publication. In addition, the forecasts consider changes in legislation to support people and the economy, as well as business decisions, and behavioral changes in response to the pandemic.

  • The latest federal guidelines are that social distancing should be practiced until April 30. This will result in a two-month
  • Based on surveys of local businesses, taxable sales are anticipated to decline in aggregate by 25% in March and approximately 50% in
  • A two-month disruption aligns with a moderate V shape recession/recovery (see below); this also is consistent with most independent national forecasts for 2020 and 2021. However, a longer recovery is equally likely.
  • In the absence of specific details, the recent announcement by Governor Newsom that small businesses can defer payment of sales and use taxes of up to $50,000, for up to 12 months, is not

 

Impact to Local Businesses

SANDAG is conducting ongoing surveys of local businesses to understand the impact of the COVID-19 disruption on sales, modified hours, and reduced staff, in addition to analysis of third-party information. Table 1 is a summary of findings and represents SANDAG’s estimates as of April 3, 2020.

Table 1: Estimates of COVID-19 Impact on Sales by Sector

As new survey data and/or actual sales details are made available by the State of California, these figures will be updated. Initial estimates indicate a 47% decrease in retail sales expected in April 2020.

San Diego Region Taxable Retail Sales Forecast – As of April 3, 2020

As a point of reference, in FY 2019, the San Diego region recorded taxable retail sales of $59.6 billion.

Table 2 presents the pre-COVID-19 disruption taxable sales forecasts in both fiscal (July to June) and calendar years.

Table 2: Pre-COVID-19 Taxable Retail Sales Forecast

Table 3 shows the impact of the COVID-19 economic disruption on taxable retail sales in the San Diego region from March 2020 to the date when taxable sales return to the initial forecast path (the baseline). Five possible disruption durations are presented, ranging from two to six months. These retail sales forecast scenarios are based on the assumptions outlined on page 7 of this document and include the length, depth (severity), and recovery from the disruption. Probabilities are assigned to each scenario based on the most reliable empirical data (information that is known now as fact, and not speculation or supposition). Scenarios with grayed-out text are not considered probable at this time.

Table 3: Potential Total Loss of Taxable Retail Sales in the San Diego Region 2020 through 2030 due to COVID-19

able 4 shows the specific impact on calendar years 2020 and 2021 for each scenario and considers two- and three-month disruptions.

For each scenario/length of disruption pairs, the first line shows the loss in taxable sales compared to the pre- COVID-19 forecast. The second line shows loss as a percentage of the pre-COVID-19 forecast. For instance, in the case of scenario C and a two-month disruption, taxable sales would be $7.2 billion (11.4%) lower than expected in 2020 and $3 billion lower (or 4.5%) in 2021.

The scenarios in green are regarded as more likely to occur, followed by those in yellow. Scenarios in black text are considered possibilities if the disruption continues into the summer; however, currently no empirical data suggests that the stay-at-home order would persist for five or more months. Scenarios with grayed-out text are not considered probable at this time.

Table 4: Potential Loss of Taxable Retail Sales in the San Diego Region in the Short Term (2020 and 2021) due to COVID-19

COVID-19 impact on 2020 and 2021 San Diego Region Taxable Retail Sales – As of April 3, 2020

Figure 1 shows the impact of COVID-19 disruptions on taxable sales in the coming months:

  • The dark blue bars represent average collections for the months of January and February
  • The light blue bars represent pre-COVID-19 anticipated retail
  • The red bars show the monthly impact of a two-month disruption to taxable retail
  • The orange bars show the monthly impact of a three-month disruption taxable retail

Figure 1: Potential Loss of Taxable Retail Sales in the San Diego Region (March to July) if COVID-19 Disruptions Last Two or Three Months

TransNet Revenue Forecast – As of April 3, 2020

Table 5 shows 40 TransNet revenue forecast scenarios SANDAG produced based on assumptions outlined onpage 7 of this document. SANDAG forecasts include the length, depth (severity), and recovery from the disruption. Probabilities are assigned to each scenario based on the most reliable empirical data (information that is known now as fact, and not speculation or supposition).

The scenarios in green are regarded as more likely to occur, followed by those in yellow. Scenarios in black text are considered possibilities if the disruption continues into the summer; however, currently no empirical data suggests that the stay-at-home order, would persist for five or more months. Scenarios with grayed out text are not considered probable at this time.

Table 5: Potential Loss of TransNet Sales Tax Revenue due to COVID-19

Factors Influencing Forecast Assumptions

Length of Disruption

The first variable influencing the forecast is the length of time for the disruption caused by the COVID-19 pandemic and subsequent shutdown of major parts of the economy. Stay-at-home orders have been imposed and extended, and it is likely the orders may change again as government agencies collect more data on the spread of the virus. Since there is no reliable way to predict the length of the economic slowdown SANDAG has prepared a series of forecasts for economic disruptions ranging from two to six months. SANDAG used March 15, 2020 as the start of the disruption, with corresponding disruption end dates between May 15 and September 15, 2020. New scenarios will be added as more information becomes available.

Depth of Disruption

The second variable influencing the forecast is the depth of the disruption. A mild disruption may, for a short time, impact some discretionary spending, such as spending on gasoline, dry cleaning, or restaurants. A more severe disruption would include cuts in expenditures on durable goods, such as automobiles and appliances; forgone purchases of significant amounts of fuel; behavioral shifts in restaurant spending or leisure activities; reduction in travel expenditures; cancellation of vacations; and more.

For forecasting purposes, SANDAG models three scenarios: mild, moderate, and severe recessions:

  • The mild scenario assumes no economic recession, only a reduction in spending during the
  • The moderate scenario assumes a recession that models the 1990-1991 recession and
  • The severe scenario assumes reductions in economic activity that mimic the 2008 Great

Recovery Shape

Each economic recession has a unique recovery path. Economists use letters to represent the shape of the recovery. During the COVID-19 pandemic, experts have mentioned several shapes for the recovery including “V,” “W,” “U,” and “L.” SANDAG currently models the following recovery shapes related to this pandemic:

“V” Shape: V-shapes are the normal shape for a recession. The economy suffers a sharp but brief period of economic decline with a clearly defined trough, followed by a strong recovery returning to previous economic levels preceding the recession. The SANDAG “V” shape forecast assumes recovery occurs by July 2021.

“V-Long”: SANDAG forecasts a variation on the “V” shape recession that has the same characteristics, but the recovery is slower, with the economy recovering by July 2022.

“U” Shape: U-shaped recession is longer than a V-shaped recession and has a less-clearly defined trough. Gross Domestic Product (GDP) may shrink for several quarters and only slowly return to trend growth. If structural changes occur while social distancing impacts businesses, or significant and prolonged job losses persist, a U-shaped recovery is more likely. The economy may stay depressed for some time before finding a “new normal” and beginning its recovery. SANDAG forecasts recovery in this scenario to take a matter of years, not months, with recovery occurring mid-2026.

“U-Long”: The U-long scenario assumes a recovery modeling the 2008 Great Recession. This model translates to a 10-year recovery with the economy recovering in 2030.

The “W” or “double-dip recession” and “L,” where the economy never recovers to previous levels, are specific cases and, for the purposes of this analysis, are not currently used.

Independent National Forecasts

Each week, SANDAG reviews and compares national forecasts to our local economic forecast. The national forecast typically estimates the impact of the COVID-19 economic disruption on the U.S. GDP. SANDAG built models to translate or extrapolate the impact of changes in the U.S. GDP on local retail sales and sales tax revenue.

As of April 3, most national forecasters were expecting a “V” shape recession/recovery. However, recent indications are that forecasts will be downgraded from mild to moderate or severe in the coming weeks. As of April 3, SANDAG is using a moderate recession forecast for planning purposes. This is subject to change as new information is available.

Table 6: Independent GDP Forecast Applied to TransNet Revenues – Potential Loss of Sales Tax Revenue in FY 2021

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