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TVTC Strategic Expenditure Plan 2022 Update │ Chapter 4: Revenue Forecasting Draft Final Report │ Adopted: April 29, 2022 6 CHAPTER 4 : REVENUE FORECASTING The revenue forecast estimate for the next 10-year is calculated based on the development forecast and TVTDF rate schedule. DEVELOPMENT FORECAST To best understand the available revenue to fund the 38 projects identified in the Nexus Study, fee estimates were developed based on 10-year land use projections as provided by TVTC member agencies. The development forecast which resulted from this process is provided in Appendix C. TVTDF RATE ADJUSTMENTS The 2020 Nexus Study update determined the maximum fee to fund the improvement projects evaluated. Similar to prior efforts, it was recommended that only a percentage of the maximum fee be collected to provide a regional transportation funding source to offset development related impacts. RATE ADJUSTMENT SCENARIO ANALSYIS To determine how the TVTDF rate should be adjusted as part of the update, several potential rate adjustment scenarios were considered by the SEP subcommittee. The resultant scenario analysis included the following considerations: • Revenue should fund at least 10% of the total project costs (approximately $106,000,000) for the projects ranked 1 through 15 (Top 15). • In addition to funding the Top 15, the total revenue brought in must also account for 20% that is returned to local source, as well as a 0.8% Admin Fee. • Scenarios considered various numbers of adjustments increases, and included a two-step increase scenario similar to the previous iteration, as well as having a one-step, four-step, and annual increase variations. • Scenarios considered capping the rate between 15% and 20% of the maximum fee rate • Some of the scenarios also assumed a reduction for retail • Projects included in the prior SEP funding plan, that had yet to be funded, would be carried over to the funding plan. Based on the SEP Subcommittees review of these draft scenarios, a recommended approach to rate adjustments and allocation was identified for consideration and subsequently adopted by the TVTC Board. R ATE ADJUSTMENT The adopted rate adjustments are presented in Tables 2 and 3. As shown in Table 2, only an initial rate adjustment for funding year FY 22/23 at approximately 15% of the maximum fee rate is planned for the duration of the SEP for all uses except retail and “other” land uses. Note that in subsequent years, the rates will still be adjusted to reflect changes in the CCI. Similar to the prior SEP, it is recommended that retail continue to have a lower percentage of the maximum fee rate to help encourage retail growth, especially since local serving retail has been greatly impacted by the global pandemic. Retail is recommended to initially be established at 6% and then