AATA on Chelsea Bus: Cut Fares, Add Wifi

Ann Arbor Transportation Authority board meeting (March 24, 2010): The transportation news out of this month’s AATA board meeting was that the twice-daily Chelsea-Ann Arbor express bus service will continue, despite low ridership. It will be moved in-house using AATA buses. The $125 monthly fare will be reduced to $99. Up to now, the pilot program has been operated by Indian Trails.

A representative from Indian Trails addressed the board during public commentary at the start of the meeting, in part to convey disappointment, but primarily to thank board members for the opportunity to work on that private-public partnership.

Public commentary also included remarks from Ted Annis, the board’s treasurer, who signed up for a public comment slot, and used it to deliver his treasurer’s report. The report had not been given a slot on the agenda by the board’s governance committee – after reviewing it, the committee decided it did not fit the parameters of the treasurer’s report specified in the board’s bylaws.

The wrangling over the treasurer’s report thus continued from last month’s board meeting, when fellow board members expressed the view that Annis’ monthly reports, which he has submitted since taking over the treasurership last fall, do not include the material specified in their bylaws. Instead, they said, the reports are effectively the expression of an individual board member’s dissent on board policy.

The board voted to establish a bylaws committee to be chaired by David Nacht to examine the matter in more detail.

Board members also voted to change their meeting venue and day, starting in two months. In May, the board will begin meeting at the downtown Ann Arbor District Library on the third Thursday evening of the month at 6:30 p.m. The library board room location, also used by the Ann Arbor Public Schools and AADL for their board meetings, offers more space for attendees, as well as video recording facilities.

Chelsea-Ann Arbor Service

Before the board was a resolution – recommended by the performance monitoring and external relations committee – that the Chelsea-Ann Arbor commuter bus service be continued through May 2011, but switched to AATA buses from Indian Trails motor coaches.  The resolution specified that the fare would be reduced to $99/month from $125/month. The fare reduction, in concert with an intensive marketing campaign, is a move that is hoped to improve ridership numbers.

Although the service has not achieved the expected ridership, board members authorized its continuation as a useful means of gathering information, especially as the board moved forward with its contemplation of countywide service.

Chelsea-Ann Arbor: Public Comment

Jeff Deason, sales representative for Indian Trails, the motor coach operator that’s been operating the twice daily service between the city of Ann Arbor and Chelsea, appeared before the board to thank them for the opportunity to provide the service as long as they did – since May 2008. He told them that in those two years, Indian Trails had been a proud partner with the AATA, and noted that the ridership had been pleased with the quality of the equipment and the service provided by their drivers.

Deason described how Indian Trails had understood that the AATA was contemplating the move to in-house operation of the service due to concerns about reducing costs, and that Indian Hills Trails had presented an alternative plan, which had ultimately not been recommended. While Indian Trails was disappointed, he said, he thanked the board and expressed appreciation for the opportunity. He said they would continue to provide the service on the Canton-Ann Arbor express route, and that they were optimistic about other opportunities in the future.

In his turn during public commentary at the start of the meeting, Jim Mogensen pointed out that commuter service fares were being reduced from $125 per month to $99 a month even while fares for fixed-route service were set to increase. [The $0.50 increase, which was spread over two years, was approved last year. That resulted in a rise from $1 to $1.25 last year, with the second phase of the increase due in May 2010 to raise the basic fare to $1.50 per ride. See Chronicle coverage: "Bus Fares Will Increase"]

Asked Mogensen, “Where does the money [to offset the cost not covered by fares] come from? Is there a Chelsea purchase-of-service agreement?” [AATA provides service to communities outside of Ann Arbor  through purchase-of-service agreements. Ann Arbor taxpayers fund AATA through a property millage.]

Mogensen cautioned that the cushioning of a motor coach like Indian Trails had been providing was much different from riding on a regular AATA bus.

Mogensen returned to the topic of express bus service during public commentary time at the conclusion of the meeting.

He noted that part of the challenge in marketing the Canton-Ann Arbor service [which targets University of Michigan workers] is that to get to work in Ann Arbor from Canton, you get in your car, you drive down Ford Road, you park your car at the new Plymouth Road park-and-ride lot, you take bus to work – it’s free. [AATA buses do not require payment of a fare by UM workers on boarding – their fares are paid through the M-Ride agreement between UM and AATA. The M-Ride agreement is currently being re-negotiated.] It’s understandable why it’s hard to market that, Mogensen, said.

Mogensen also returned to the specific question of where the money to support the commuter service comes from. If it derives from the Ann Arbor property millage, he said, there are regulations that apply with respect to the use of the funds, which could be used in other ways.

Chelsea-Ann Arbor: Board Deliberations

David Nacht led off with a blunt question: “How much money are we going to throw into this?” Chris White, AATA’s manager of service development, put that number at $110,000. The total breaks down into thirds: 1/3 would be covered by fares, 1/3 through a state grant, and 1/3 by the AATA. [It is the 1/3 from the AATA that Mogensen focused on during his public commentary.]

Based on the numbers, Nacht tentatively floated the conclusion that ridership needed to almost double in order for the service to operate without support from AATA. Sue McCormick, an AATA board member who is also the city of Ann Arbor’s public services area administrator, asked Michael Ford, the CEO of AATA, if the staff thought that a doubling of ridership was achievable.

Ford said, “We’re going to try.”

Nacht wondered if it was possible to offer a commission for people to sell tickets. “I would urge us to use capitalist incentives,” he quipped.

Ted Annis noted that given the current ridership numbers, the Chelsea-Ann Arbor service required support if it was to continue. “On its immediate merits, it doesn’t stand up.” However, Annis argued for continuing the service, because it gives the organization useful information going forward. Part of that going forward is the AATA’s contemplation of expanding its service countywide, which Charles Griffith cited as a reason to retain the Chelsea-Ann Arbor express service at least another year.

During the board’s question time for the CEO, before it deliberated on the Chelsea-Ann Arbor resolution, Nacht had also expressed his unwillingness to see the service discontinued, with the AATA countywide initiative in the works.

During question time, Nacht also elicited from Chris White a clarification of the University of Michigan’s fare subsidy for its employees – UM pays $62.50, or 50% out of the $125 fare. With the reduction in fare, said White, UM will continue to pay $62.50, so UM riders will receive the full benefit of the reduced price.

Question time was also the occasion when Sue McCormick asked for some clarification about whether riders wanted the deluxe coaches versus standard buses. White explained that the kind of coach did not appear to be a “make or break” issue for riders. However, the availability of wireless Internet access on the bus did appear to be “make or break” for some riders.

Griffith said that Indian Trails had developed a proposal for their coach service at a reduced rate but without wifi capability. The desire to provide wireless access to the Internet was thus a crucial aspect of the decision.

During deliberations on the resolution, Griffith noted that the motor coach version of the service was tried at first, because the “luxury version” was thought to be necessary to attract ridership. Based on surveys of riders, he said, that did not appear to be essential.

Outcome: The board unanimously approved the continuation of the Chelsea-Ann Arbor express bus service through May 2011, reducing the fare, and using AATA buses instead of Indian Trails.

Board Venue Change

At its Feb. 17, 2010 meeting, the board discussed but did not vote on the idea of changing its meeting day and place, in order to improve accessibility and transparency to the public in the context of its contemplation of countywide expansion.

During her report to the board, Rebecca Burke, who chairs the AATA’s local advisory council (LAC), told them that the council had drafted a letter to CEO Michael Ford outlining a variety of issues they saw as challenges with the library location. [The LAC  provides a forum for seniors and those with disabilities to provide input to the AATA.]

Jim Mogensen, during his public commentary, noted that the library closes at 9 p.m. and arrangements should be made to make sure AATA board meetings could, if necessary, go past 9 p.m. He noted that Ann Arbor Public School board meetings met in the same location and often ran past 9 p.m. [At its most recent meeting, on March 24, the AAPS board meeting lasted well past midnight.]

Ford said the staff would look at all possibilities for making the transition as smooth as possible.

During deliberations on the resolution, Sue McCormick got clarification that the concerns raised by Burke had been taken into account. [They fall into two categories: possible issues with the library building; and the accessibility to the library building in the context of ongoing construction of the underground parking garage directly adjacent to the building.]

Nacht wanted to know if the meetings would be on TV. Jesse Bernstein, chair of the performance monitoring and external relations committee that worked on the issue, explained that coverage on Community Television Network (CTN), the local cable access television station, would not be live. However, within a couple of days after the meeting, the video will be available through online video-on-demand, in the same way that other meetings are, when CTN records them.

In addition, continued Bernstein, the meetings would be aired on CTN’s cable TV channels during a couple of slots during the week, still to be scheduled.

Sue McCormick declared that the new system would represent a substantial improvement.

At the board’s Dec. 16, 2009 meeting, during a discussion on the issue of videotaping meetings, David Nacht recalled the recent history of the board’s position on the question:

In board discussion of video recording their meetings, board member David Nacht said that he was personally in favor of video recording meetings, but noted that the board had recently voted down a proposal to video record meetings, and that lacking new information, out of respect for previous board decisions he was disinclined to support it. Responding to Nacht, Annis said that the “new information” could be that the AATA had a new CEO and was exploring an extension of its service to more areas of the county.

On Wednesday, Nacht said that he’d been a supporter of video recording meetings for six years in the interest of transparency and there had been zero interest in going that direction for 5 and a half years. Now that the board would be voting to make it happen, Nacht said he was “thrilled.”

Outcome: The board unanimously approved the resolution to change its meeting time and location to the third Thursday of the month at 6:30 p.m. at the downtown location of the Ann Arbor District Library, 343 S. Fifth Ave. The board currently meets at AATA headquarters, 2700 S. Industrial Ave., on the second-to-last Wednesday of the month.

Treasurer’s Report

Ted Annis has served on the AATA board since having his nomination confirmed by the Ann Arbor city council in February 2005. His current term ends in May of this year, but he could be re-appointed. He has told mayor John Hieftje that he would serve another term, if asked. The mayor makes nominations for appointments, which must be approved by city council.

Treasurer’s Report: Annis as Treasurer

Since election by his board colleagues as treasurer in 2009, Annis has submitted one-page treasurer’s reports:

• Treasurer’s report: Oct. 29, 2009
• Treasurer’s report: Dec. 8, 2009
• Treasurer’s report: Jan. 11, 2010

At the board’s February 2010 meeting, Annis raised his objection to the omission from the board’s agenda of the item that called for the presentation of his report. From discussion at the February meeting, it emerged that other board members were concerned that Annis was using the treasurer’s report as a vehicle for expressing a dissenting view on board policy, rather than presenting commentary on dollars-and-cents information:

That being said, cautioned Nacht, there is a reason for the treasurer’s report in the bylaws – it’s supposed to be more than just a dollars-and-cents accounting, and the treasurer should have the ability to report directly to the board. It all depended, Nacht said, on what the report includes: Is it more philosophical or is it more dollars and cents? To the extent that the content of the treasurer’s report amounted to a dissenting opinion on board policy, Nacht said, it shouldn’t come in the form of a treasurer’s report.

Treasurer’s Report: Annis as a Member of the Public

At Wednesday’s meeting, then, with the treasurer’s report item not included on the agenda, Annis signed up for public comment on the sign-in clipboard, after two other speakers.

When the first two speakers had said their piece, board chair Paul Ajegba noted that Annis was signed in. Ajegba expressed uncertainty about whether it was possible for a board member to address the board during public commentary as a member of the public. David Nacht said he thought it was a “definitional issue,” meaning that a person was a member of the board or of the staff, or of the public, but not more than one of those.

Queried by board members about the content of the bylaws, executive assistant Karen Wheeler [who keeps the minutes of the board meetings] said she didn’t think there was anything in the bylaws that disallowed it.

Annis suggested that because it would be a brief presentation, the board could debate the question of whether he should be allowed to address the body during public commentary – while he gave the report.

Ajegba offered somewhat resignedly that Annis would be “breaking new ground.”

Treasurer’s Report: The Content of the Report

Annis then read briefly from the introductory material explaining that the report was being delivered during public comment time, noting that:

[...] Board members have complained that the last three Treasurer’s Reports have ranged beyond the reporting upon the monthly financial statements and that they do not wish to be exposed to the Treasurer’s presentations. The offending reports have included an analysis of countywide millage funding, a request for transparency, a request for appropriate Board meeting accommodations, a suggestion of a budgeted operating amount to guide the outside consultant designing the countywide bus system, a computation of savings available from cost-efficient operations, and the hiring of a CFO (Chief Financial Officer).

The February report – delivered on Wednesday – contained the recommendation that the AATA’s cost per bus service hour, which is currently around $104, be placed into the CEO’s goal’s and objectives:

1. $95/bus service hour by year-end 2010

2. $85/bus service hour by June 2011

3. $75/bus service hour by year-end 2011

The report also contends that capital funds available from the federal government are typically transferred into operating revenue to produce a balanced budget on an annual basis. Over the last five years, the report contends, the net effect of the practice is that $10.773 milion has been removed from the capital funds account to cover “excessive operating expenses.”

As capital funds, the report says, those dollars would have been otherwise available for use on a new transit station or a rail station. [The city of Ann Arbor's share of the Fuller Road Station – a joint project to build a parking structure and bus station – is around $5 million, but no financing plan has yet been identified except that the mayor has indicated no general fund money would be used.]

Near the conclusion of the board meeting, Ajegba asked the senior staff to look at Annis’ report with particular attention to the $10.773 million in capital funds transfers and to compare that with other transit authorities.

Treasurer’s Report: Formation of a Bylaws Committee

At the conclusion of Annis’ public commentary remarks, Ajegba asked CEO Michael Ford to get an opinion from the AATA’s legal counsel, Jerry Lax, on the question of board members addressing the board as members of the public.

Later in the meeting, Ajegba explained that the governance committee had looked at the report and determined that it was not consistent with the description of the treasurer’s report in the bylaws. That description is as follows:

The Treasurer shall submit to the Board, and comment on monthly budget-expenditure reports prepared by management.

Ajegba also indicated that Lax had concluded Annis’ report was not consistent with the treasurer’s report, as specified in the bylaws.

Ajegba asked David Nacht to serve as chair of a bylaws committee to take a look at the issue. Nacht indicated that Ajegba had phoned earlier to ask him to serve in such a capacity and that he’d agreed. He quipped: “I am not going to change my mind at this moment,” which provoked laughs all around. He then joked, “I would like the bylaws to be written in Romanian.”

CEO’s Goals and Objectives

CEO Michael Ford was hired last year and started work in the summer of 2009. Since that time the board has asked Ford to work with its committees to come up with a mutually agreeable set of goals and objectives on which his evaluation would be based. That process has been iterative, and the board had before it a set of goals and objectives that had evolved from that process.

Sue McCormick led off discussion by describing them as “well-written and understandable.” However, she asked where the financial objectives were expressed in them. Ford pointed to a section in the second page that was meant to address that issue:

Using the findings of the audit, CEO will support and encourage continuous improvement teams and the principles of six sigma and lean processes to eliminate waste and inefficiencies thereby controlling costs while enhancing performance.

McCormick allowed that she appreciated the language but pressed: “What’s the metric?”

David Nacht concurred with McCormick’s concern, saying the language seemed “watered-down and mushy.” He said that Ford’s first year was not supposed to be “just a learning year.”

McCormick identified two basic issues that were problematic: (i) the formalized performance goals and objectives for the CEO were not aligned with the budget process [AATA's fiscal year starts in October; Ford's evaluation period started in July], and (ii) there’s not anything as simple in the goals and objectives as “perform within budget,” let alone something like improve efficiency by 1%.

The goals and objectives, said McCormick, need something that gives financial direction.

Nacht concurred, saying that financial direction was especially important, given how easy it is to use preventive maintenance dollars for temporary budget fixes.

Jesse Bernstein said he was not opposed to putting in some kind of metric, understanding that there was a short time-frame from now until the point when Ford would be evaluated on it.

McCormick then turned to Ford and asked if there were any issues as far as being within budget for this year. Ford indicated there were challenges and said that Nacht was right about the issue of preventive maintenance dollars being used to cover other parts of the budget.

Reflecting on the idea that they would vote on something in March and use it for evaluation three months later, Nacht said he supposed that as far as due process, they had flunked. “That’s ridiculous, it seems to me,” he said. Nacht wondered if it wouldn’t be a good idea to think of it as setting up the evaluation for next year, rather than doing it as a “pretend thing.”

Annis indicated agreement with what others had said and added that he didn’t see a target completion date. Ford responded by saying there was an accompanying work plan that reflected dates. Annis allowed that it might be simply a presentational issue.

Griffith didn’t concur with Nacht’s assessment that the board had flunked, saying “Let’s back off from calling it a failure.” He suggested that what they needed to do was to figure out how to get the evaluation of goals and objectives on a schedule and a routine that works as two-way communication.  He suggested that quarterly check-ins would be desirable.

Ajegba acknowledged the long process that had started before December 2009 in developing the goals and objectives. He noted that there were still some specific measurable outcomes in the goals and objectives that Ford could be evaluated on. He did not feel it made sense to put in metrics like a reduction in cost per service hour to $95/hour, which were not achievable in three months time, when the evaluation would take place. [That was a metric suggested in Annis' treasurer's report.]

Come July, Ajegba suggested, they could add specific metrics. For now, it was still a useful tool for evaluating a 1-year contract.

McCormick indicated she would support the goals and objectives for this year, but not for next year – they were too “activity oriented” as opposed to “outcome oriented,” she said.

Outcome: The board approved the set of goals and objectives for the CEO, with abstention by Annis.

Other Financial Matters

Also on the agenda were two other financial items. One related to the receipt of the audited financial statement for the year ending on Sept. 30, 2009. The other authorized the use of funds to hire additional personnel.

Audited Statements

Ted Annis summarized the audit report by saying the best part was that there was no substantial disagreement with management. Among the recommendations in the audit report were a surprise audit of on-demand service vendors to make sure billable hours are correct, tightening up of controls on payroll and who’s signing for what, and checking the vendor files to make sure that W-9 forms are in place.

Outcome: The board unanimously accepted the audited financial statements for the year ending Sept. 30, 2009.

Personnel Funding

A resolution before the board authorized the CEO to make some professional hires:

BE IT RESOLVED, that the Chief Executive Officer is authorized to utilize funds currently available within the FY2010 budget toward meeting AATA’s needs for sufficient professional personnel, [...]

Sue McCormick said she was supportive of the resolution’s intent but was concerned that it was open-ended – there were no funding limits and there was no indication of how many FTEs were to be added. Annis asked if McCormick was suggesting a friendly amendment on the fly – yes, replied McCormick.

After brief discussion, the board approved an amendment to specify “up to three FTEs.”

Outcome: The board unanimously approved the authorization to hire additional professional staff.

Other Public Commentary

In addition to the public commentary reported above, three others also spoke.

Sandra Holley said she wanted to draw the board’s attention to the new Plymouth Road park-and-ride lot and the impact it had on routes. To get from the north side of town to Domino’s Farms on a public route – which should be a 15-minute trip – took two hours. First you have to go down Pontiac Trail to downtown Ann Arbor, transfer at the Blake Transit Center, ride to the UM hospital, then take the shuttle. She also noted that A-Ride, the AATA paratransit service, does not consider Domino’s Farms to be inside Ann Arbor, so the fare was $9 each way, not the $2.50 fare inside the city .

In support of Holley’s depiction, Carolyn Grawi, of the Center for Independent Living, said it took a good hour spread over three routes to get from CIL to Domino’s. Grawi also alerted the board to the Transit Partnership Conference to be held April 1-2, 2010 at Mt. Pleasant, Mich. At the conference, attendees will work together to develop strategies to improve public transportation. Grawi called particular attention to the fact that one of the sessions will include participation from rural transit managers, which is germane to the AATA’s contemplation of a countywide expansion of its service.

Nancy Kaplan asked the board a question: How will the planned Fuller Road Station change bus service to that area? Board chair Paul Ajegba responded that he did not know if the logistics of that had been worked out. CEO Michael Ford indicated that there’s more work to be done on it, including modeling work. Jesse Bernstein said the advantage of a large enough bus terminus at that location was that it could handle a full busload of people. That meant it could perhaps bypass the downtown Blake Transit Center in bringing people to work at UM hospitals from Ypsilanti.

Kaplan followed up Bernstein’s comment by asking why it was not possible now to run a bus straight from Ypsilanti to the Fuller Road area. Bernstein explained that currently there is simply no location where passengers could get off the bus without blocking traffic. David Nacht wrapped up the public comment for the evening by appealing to board chair Ajegba to bring things to a close, saying that public commentary was not intended as a Q&A session.

Present: Charles Griffith, David Nacht, Ted Annis, Jesse Bernstein, Paul Ajegba, Sue McCormick

Absent: Rich Robben

Next regular meeting: Wednesday, April 21, 2010 at 6:30 p.m. at AATA headquarters, 2700 S. Industrial Ave., Ann Arbor [confirm date]