SAN DIEGO–In a unanimous vote Friday, the SANDAG Board of Directors directed agency staff to hire an outside party to initiate an independent examination of issues surrounding the agency’s sales tax revenue forecasts, and also approved a work plan developed by agency staff to improve data integrity and accuracy.

In recent months, SANDAG’s revenue forecasts for TransNet financial capacity estimates and Measure A have been called into question. TransNet is an existing regional half-cent sales tax for transportation. Measure A, which fell short of the two-thirds majority vote needed to pass last November, would have raised sales tax regionwide by another half cent to pay for transportation and other needs.

In voting for an independent examination, the SANDAG Board expressed a desire for an impartial third-party to ascertain the facts on who knew what when leading up to the election on Measure A. Board members indicated that they would like the examination to be conducted expeditiously.

The next step is for the Executive Committee of the SANDAG Board to discuss who should conduct the examination. Once the committee has identified potential outside parties who can conduct the examination, it will forward a recommendation to the Board.

In response to the fact that errors were identified in a complex computer model used to forecast taxable retail sales – a key factor used to calculate sales tax revenues – SANDAG staff developed a data accuracy and modeling work plan for the Board’s consideration. The plan was approved unanimously today.

The plan has seven elements, with the end goal of fully investigating the errors, tracking down and fixing any work products that may have been affected, and putting into place best practices, policies, and safeguards to prevent future errors and keep the Board informed.

Below are details about each of the seven components of the work plan:

  • Conduct Detailed Review: Conduct a thorough review of the nature of the error in the agency’s Demographic and Economic Forecasting Model (DEFM). Validate input data, transformations, and equations in the agency’s most recent forecast series, known as Series 13. Present this information to the Board.
  • Conduct Dependency Analysis: Identify key SANDAG reports that used data from Series 13. Evaluate the significance of the impacts from any potential forecasting errors and the potential effects on findings and policy recommendations.
  • Map Modeling Process Flow: In preparation for future forecasts, map all data flow from source through databases, models, and outputs to provide transparency and identify areas for improved quality assurance.
  • Improve Data Governance: As a first step toward formal data governance, conduct interviews and document the customer-supplier relationship between SANDAG staff and the SANDAG Technical Services Department. This goal is to better understand the type of data that agency staff request from Technical Services and how the data are requested, stored, used, and versioned. This information will be used to develop a data warehouse, standardize data extraction routines, and ensure consistency of data.
  • Review and Oversight: Convene an independent review committee, consisting of experts in economics, demographics, and land use to review the methods, data sources, and assumptions for the agency’s next forecast series (Series 14).
  • Enhance Transparency: Develop a set of methods and standards to ensure data and analytic transparency, including establishing checkpoints where full disclosure and analysis are provided to ensure that others can see how models were developed, how data was processed, and what assumptions were made along the way.
  • Develop and Formalize Processes: Understand how staff roles, work flows, and technology (e.g., models, databases, software) contribute to producing key agency deliverables. This information will be used to realign the Technical Services Department, as well as add quality assurance staff and a dedicated database administrator. This effort will reduce single points of failure, and increase accountability, visibility, and efficiency.

Going forward, SANDAG staff will present ongoing progress reports to the agency Board of Directors and the TransNet Independent Taxpayer Oversight Committee to keep them and the public informed about the implementation of the data accuracy and modeling work plan.