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Investment grade traffic and revenue forecasting, Chesapeake
City of Chesapeake, Virginia
The City of Chesapeake, Virginia has established a toll system comprised of an existing toll road and a new project to convert an existing arterial to a limited access toll road with a new bridge crossing.
The existing toll road, the Chesapeake Expressway, is a tolled 4-lane freeway in south-eastern Virginia. The Expressway is used primarily by commuters from southern Chesapeake and North Carolina heading toward Hampton Roads and by tourists traveling to the Outer Banks of North Carolina during the summer vacation season. The new toll road/bridge project is the conversion of Dominion Boulevard, US Route 17.
There were two main focuses of our work: supporting a toll rate change and developing the traffic and revenue forecasts needed to support the financing of the Dominion Boulevard improvements.
The Chesapeake Expressway had not had a toll rate increase since opening in 2001. Steer Davies Gleave conducted a toll rate analysis to help establish a new toll structure that was implemented in 2011. The new toll rate structure includes a peak summer weekend season with higher toll rates to coincide with the highest usage period of the Chesapeake Expressway by travelers destined to North Carolina’s Outer Banks.
We are also served as the traffic consultant responsible for preparing the investment grade traffic and revenue forecasts that were used to support the issuance of toll revenue bonds in the US municipal bond market.
How we did it
Steer Davies Gleave developed travel demand models to assess traffic and revenue forecasts for the Chesapeake Expressway and Dominion Boulevard.
The travel demand models were developed using information from the regional travel demand model in conjunction with original data collected for the project, including traffic counts, travel times, and a travel survey. This survey was conducted in order to provide additional behavioral information on the markets served by the Chesapeake Expressway and Dominion Boulevard, and to establish key forecasting parameters, such as willingness to pay.
The developed models allowed Steer Davies Gleave to analyze the revenue implications of various toll rates and tolling structures, such as a discount program for commuters, toll rate differentiation by payment type, by day of week, and by season. These traffic and revenue forecasts were used to both support the Chesapeake Expressway’s toll increase, and in the development of the Dominion Boulevard Project plan of finance which included the issuance of toll revenue bonds in late 2012.