First Public Meeting on Bus Fare Proposal

On Tuesday afternoon, representatives of the Ann Arbor Transportation Authority were on hand at the downtown branch of the Ann Arbor District Library to meet with members of the public to talk about a proposed fare increase. The AATA board will likely consider the proposal at its March 18 meeting. If passed by the AATA board, the first phase of the two-phase plan would take effect in May 2009, raising the basic fare from $1 to $1.25.  In May 2010, it would climb another 25 cents to $1.50 [details on the proposed fare increases].

The lower level multipurpose room at the library can accommodate more than a hundred people, but in the course of the two-hour meeting, only around ten members of the public stopped by – some arriving well after the meeting started, and some leaving somewhere in the middle. In that regard, the meeting was like a public bus: it left the station at its scheduled time with some passengers, took additional riders on board along the way, and let some of them off before the route was finished. But one could ask the same question about the meeting that is frequently asked about the bus system: Why does the AATA run some buses that appear to be mostly empty?

In the course of the mostly informal conversation that unfolded Tuesday afternoon, Phil Webb, who is the controller at AATA, provided part of the answer to the empty buses question: Passengers need to be able to rely on the bus showing up every day and every time it’s scheduled to be there, even if on some days at some times the ridership is reduced. As for the public meetings, they’ve been scheduled as well, and the public relies on the AATA keeping to that schedule.

A second  meeting will be held on Tuesday, Feb. 17 from 6-8 p.m., also in the multipurpose room of the downtown Ann Arbor library, 343 S. Fifth Ave. In Ypsilanti, hearings will be held at the City of Ypsilanti Council Chambers, One S. Huron St., Ypsilanti on Thursday, Feb. 19 from 4-7 p.m. and Thursday, Feb. 26 from 1-3 p.m. [confirm dates].

If the meeting was like a public bus, then it left the station with Mary Stasiak, manager of community relations for AATA, at the wheel.  She gave some background on the proposed fare increase. Simply put, without it the AATA would face a structural deficit. That is, expenses would begin to exceed revenues. So where does the AATA get its revenue?  Stasiak explained that  79% of AATA revenue comes from a combination of federal, state, and local taxes.  Fares account for the remaining 21%. But fares for door-to-door paratransit services, which the AATA is required by the Americans with Disabilities Act to provide wherever it operates fixed-route service, cover only 12.8% of the cost of operating the service, said Stasiak.

Free Bus Rides for Seniors?

Part of the AATA paratransit service offerings includes the senior taxi program (Good as Gold), which currently offers $2 taxi rides with advance notice ($3 same day) to those 65 and older.  The current fare proposal is to make rides for seniors free on fixed-route service (the regular bus). But the idea that senior citizens could ride the bus for free was not met with support from one senior attending the meeting on Tuesday. From a woman who retired to Ann Arbor and does not own a car: “To me it seems completely outrageous that I could ride a bus all over the place and not pay anything for it! I think you’re too cheap!”

It emerged during the ensuing conversation that part of the strategy behind these free rides is an attempt to brake the demand for the senior taxi program, which has risen over the last three years, and could easily triple, said Stasiak, as the population ages. Webb said that the idea was to save money by offering free fares to seniors on the regular bus. It’s less expensive for the AATA to provide a free ride on the bus than to charge $2 for door-to-door taxi service.

For the car-free retiree, it was a question of being able to use the fares that seniors paid for their bus rides to help fund expanded service times to evenings and weekends. She said that the last bus out of downtown left at 10:18 p.m., which made it difficult to take the bus home from a typical performance at Hill Auditorium.

Fare Levels and Elasticity of Demand

Although the question of the effect of fare prices on ridership was raised at Tuesday’s meeting, it was not discussed at an economist’s level of detail. Taking his turn at the wheel of the “meeting bus,” the  gentleman who raised the question (a frequent No. 2 bus rider, along with his wife) said he recalled the notion from courses in economics he took 60 years ago. The basic idea of  elasticity of  demand is that given a certain number of people riding the bus, it’s possible to calculate a fare price that would fund the bus system operations with fares alone. And based on the current percentage of operations covered by fares (20%), that fare price for AATA would need to quintuple to $5 per ride. But at $5 it wouldn’t be reasonable to take the current level of demand for bus rides as indicative of demand when rides are priced at $5. Demand at that price could reasonably expected to drop.

But as Webb explained, it’s simply not expected that public transit like AATA’s bus system can be funded by fares alone. While reducing fares could increase ridership, possibly increasing revenues overall (more rides at a cheaper price could mean more revenue than fewer rides at a higher price), increased ridership can mean increased costs. If demand increases to a point where an additional bus needs to be added to a route, for example, the increased revenue from fares is balanced against the increased expense of adding an extra bus.

However,  the No. 2 bus rider noted that there was far more capacity in the system than was currently being used, and thus, what he wanted to know was this: What’s the capacity of the bus system, and at what relative capacity might the system be able to fund itself? Otherwise put, “If you filled every bus at every time, would you break even?” Webb clarified that in the transit industry, the notion of capacity isn’t what’s used so much as a statistic called the “passengers per service hour.”  System-wide, AATA operates at 31 passengers per service hour.

Aside: To get an idea of how the passengers per service hour relates to system capacity in layman’s terms, it’s useful to consider two scenarios that could reasonably be seen as “filling every bus at every time.”  Scenario A: A full bus departs Blake Transit Center, heads to its end destination at Ypsilanti Transit Center. Along the way, nobody gets off the bus. Nobody is standing at any of the stops along the way. At the final destination, everybody disembarks. Scenario B: A full bus departs Blake Transit Center, heads to its end destination at Ypsilanti Transit Center, and at the first stop everyone gets off the bus, and one busload of passengers who were waiting at that first bus stop board the bus. At each subsequent stop the same thing happens. In both cases, the whole time the bus is on the road, every seat is filled. Both have the system at “maximum capacity.” Yet in Scenario B, the passengers per service hour stat is much greater than in Scenario A – greater by a factor equal to the number of stops along the way.

Who Rides Free – Sponsored Fares

Tom Partridge, a name familiar to Chronicle readers as a frequent speaker at public meetings, boarded the “meeting bus” after it had left the main station. When he took his turn at the wheel, he steered it down a familiar road, focusing on the importance of  countywide transportation accessible to everyone. He also objected to the proposed fare increase for taxi rides for seniors and disabled people. (Under the proposal, both categories of taxi rides arranged with advance notice would rise from $2 to $3 by 2010; rides arranged the same day would rise from $3 to $4).  He called the fare increase for seniors and disabled people “inherently discriminatory.”

Partridge contrasted these fares for seniors and disabled people with the M-Card and go!pass programs, which allow University of Michigan staff and students, as well as employees of participating downtown businesses, to ride AATA buses at no cost to themselves. Stasiak and Webb pointed out that the fares for these people are not free but rather are “sponsored” – either by UM or by the Downtown Development Authority. In the case of the M-Card program, said Webb, the  2.1 million M-Card rides (drivers record each ride by pressing a button) are sponsored through a combination of a cash payment  of $700,000 per year made by UM to AATA, plus a federal grant to UM of $1.1 million. The $1.8 million works out to 87 cents paid per M-Card ride. System-wide, said Webb, the amount actually paid per ride averages 71 cents.

The arrangement between AATA and UM expires in August 2009. It’s currently being negotiated, with the first meeting between representatives of the organizations having already met, Webb said. Webb is helping to represent AATA in those negotiations.

The Expense Side of the Equation

The topic of negotiations was also a part of Tuesday’s meeting in connection with AATA’s expenses. While most of the conversation focused on fares and the revenue side of the structural deficit that Stasiak said AATA would face without increased fares, she also highlighted some ways that AATA had addressed the expense side. One major step was the recent successful negotiation of union contracts, which resulted in changing the health insurance carrier, and  higher co-pays for health insurance, with an overall savings of 14% on health insurance premiums.

The effective management of expenses, Stasiak said, was reflected in the 2009 budget, which kept the 2008 budget’s same level for operating expenses.

Waxing Poetic about AATA Buses

The handful of people who  came to the meeting and spoke were, by and large, quite enthusiastic about Ann Arbor’s buses. One woman, who was there with her walker at the start of the “meeting bus” ride and stayed to the finish, said, “I love Ann Arbor’s buses.” What’s that love based on?  She said she rode every route the AATA offers except for three of them (No. 14, No. 13, and No. 3). And even though she allowed that in the wintertime the bus sometimes runs behind, she said, “It does come. I know it’s going to come.”

Another passenger who boarded the “meeting bus” as it was nearing its final destination was Erica Dunham, who asked if the possibility of monetary assistance for AATA had been solicited from private corporations – energy companies and financial institutions. The only instance that Stasiak and Webb could recall was many years ago when someone had donated money to subsidize service in Scio Township to a housing development off Jackson Road. Dunham expressed her support by waxing literally poetic, reading aloud some stanzas she’d crafted, which concluded: “It all adds up to bringing our community/ Success, respect, equality and unity.”

In Ann Arbor, it would seem, there’s a poetry-bus connection.