AATA 5-Year Program: May 2013 Tax Vote?

Also: Award of contract to CBS Outdoor Advertising is upheld

Ann Arbor Transportation Authority special board meeting (Sept. 5, 2012): At a meeting called for the purpose of ratifying and releasing the final draft of a 5-year service plan, the four members of the AATA board who attended voted unanimously to approve its release. [.pdf of final 5-year transit program] Publication of the 5-year plan is a required part of the AATA’s possible transition into a new transit authority with a broader governance and service area – to be called The Washtenaw Ride.

AATA board table Sept. 5, 2012

Several members of the unincorporated Act 196 board attended the AATA’s Sept. 5 special board meeting. Clockwise from the near left corner of the table: Bob Mester (U196 West District – trustee, Lyndon Township); David Read (U196 North Middle District – trustee, Scio Township); Peter Murdock (U196 Ypsilanti District – councilmember, city of Ypsilanti); Roger Kerson, Charles Griffith, and Jesse Bernstein (AATA board members); Michael Ford (AATA CEO), David Nacht (AATA board);  Karen Lovejoy Roe (U196 Southeast District – clerk, Ypsilanti Township); and Bill Lavery (U196 South Middle District – resident, York Township).

According to a press release announcing the 5-year service plan’s final draft, a millage to support The Washtenaw Ride could be placed on the ballot by May 2013.

The estimated cost of the service in the plan is now 0.584 mills, an increase of 0.084 mills compared to the estimated cost in a draft plan that was released in April. Compared to the draft plan, the final version also includes several additional services, which were added based on input from district advisory committees (DACs).

The 5-year service plan includes: (1) countywide demand-responsive services and feeder services; (2) express bus services and local transit hub services; (3) local community connectors and local community circulators; (4) park-and-ride intercept lots; and (5) urban bus network enhancements. For Ann Arbor, the program includes increased bus frequencies on key corridors, increased operating hours, and more services on weekends. According to the Sept. 5 press release, Ann Arbor and Ypsilanti will get a 56% increase in service hours compared to current levels.

The possible transition from the AATA to The Washtenaw Ride will take place under the framework of a four-party agreement between the city of Ypsilanti, the city of Ann Arbor, Washtenaw County and the AATA.

The other vote taken by the AATA board at its Sept. 5 meeting stemmed from a formal protest in connection with the AATA’s award of a contract for handling advertising on its buses – to CBS Outdoor Advertising of Lexington, New York. The contract previously had been held by Transit Advertising Group Ann Arbor (TAG).

TAG president Randy Oram addressed the board during public commentary at the Sept. 5 meeting. Also during the meeting, AATA CEO Michael Ford pointed the board to his written response to the protest and asked board members to uphold his decision to award the contract to CBS. The board voted in a formal resolution to support the advertising contract award to CBS.

5-Year Transit Program

The special meeting of the board had been called specifically for the purpose of releasing the final draft of a 5-year transit program. An earlier draft had been released in April of this year.

5-Year Transit Program: Background

Publication of a 5-year transit program and a plan to fund it is one requisite to incorporation of The Washtenaw Ride under Act 196 of 1986. That’s not a requirement of the state statute, but rather a stipulation in a four-party agreement, ratified between the city of Ann Arbor, the city of Ypsilanti, Washtenaw County and AATA. [The Washtenaw County board of commissioners again had the agreement on its agenda for its Sept. 5 meeting – and voted again to approve its side of the agreement. See "Washtenaw Board to Re-Vote Accord" for a preview.]

That four-party agreement establishes the legal conditions under which assets of the AATA could be transferred to The Washtenaw Ride. A key condition is a voter-approved funding source adequate to pay for the services outlined in the plan released on Sept. 5. While the draft plan issued in April stopped short of recommending a millage as the funding source, the AATA now indicates that a millage vote could take place as soon as May 2013.

The four-party agreement also calls for the cities of Ypsilanti and Ann Arbor to direct the proceeds of their current transportation millages to the new authority. If approved by voters, the 0.584 mills from a new millage would be paid by property owners in those cities in addition to the existing transit taxes. Current transit taxes are about 1 mill for Ypsilanti and about 2 mills for Ann Arbor.

Washtenaw County’s role will be to file the articles of incorporation for the new transit authority. The articles would be filed with the state of Michigan under Act 196 of 1986. But that filing would come only after a request from the AATA and only after the AATA publishes details of the service and funding plan for the authority in newspapers of general circulation in Washtenaw County. This is the current phase of the possible transition.

At the point of incorporation, jurisdictions throughout Washtenaw County would have the ability to opt out of the new transit authority. If their governing bodies don’t opt out, those jurisdictions will be included in the new authority. Residents of jurisdictions that choose to stay in the new authority – and do not decide to opt out – would participate in a vote on any millage placed on the ballot to fund The Washtenaw Ride.

5-Year Transit Program: From 0.5 mills to 0.584

The estimated gap between revenues ($184.2 million) and expenses ($223 million) for a 5-year period of the program is $38.8 million. That gap could be covered with a tax on the participating jurisdictions of 0.584 mills. A popular vote on that tax could come as soon as May 2013.

One mill is $1 for every $1,000 of taxable value on a property. So for a house worth $200,000, with a state-equalized value of $100,000, an 0.584 mill transit tax would cost that property owner about $58 per year. For an Ann Arbor resident with a $200,000 house, adding the 0.584 mill tax to the existing city transit tax of roughly 2 mills works out to a transportation tax burden of about $258 a year.

AATA expects The Washtenaw Ride to add 3.6 million rides to the existing 6 million rides that the AATA already provides.

A previous estimate of 0.5 mill as sufficient to cover the operating gap of a new authority’s 5-year plan had been generated by a financial advisory group led by McKinley Inc. CEO Albert Berriz and Bob Guenzel, retired Washtenaw County administrator. That group had worked with the AATA’s consultant on the project, Steer Davies Gleave, to generate the estimated cost.

The current revised estimate is the result of service additions to the 5-year plan made since the draft was released earlier this year. After the Sept. 5 meeting, AATA strategic planner Michael Benham, who has led the project for the AATA, responded to a question from The Chronicle by saying that the new calculations were done by AATA staff, building on the work already done by Steer Davies Gleave. Benham indicated that he hoped the financial advisory group would also be able to convene to review the revised plan and figures.

At the AATA board’s Aug. 16, 2012 meeting, Benham had sketched out in broad strokes some of the changes that had been made since the draft service plan had been released in April. For example, the urban bus network – in Ann Arbor and Ypsilanti – has been expanded compared to the draft. In the draft plan, it was based on a 16-hour day, while now it’s based on an 18-hour day for some routes. That will involve a number of select routes operating until midnight. Some routes will also operate a little bit earlier in the morning, starting at 6 a.m. instead of 6:30 a.m.

Connectors and circulators for Milan have been added. The Northfield Express has been extended to Brighton. Also at the Aug. 16 board meeting, Benham also indicated the AATA is thinking about extending service to Lincoln Consolidated Schools in August Township, using a combination of flex service and limited extensions of the already-proposed Route #46. They’re also looking at a park-and-ride proposed in Pittsfield Township – and they’re thinking about either adding an additional park-and-ride, which would be further east, or perhaps just taking the existing one and moving it.

5-Year Transit Program: Board Response

During his oral report to the board, Michael Ford – the AATA’s CEO – noted that the document reflected a lot of hard work. The AATA had begun with a 30-year vision, which had been refined to a 5-year implementation program. A lot of work had been done with the district advisory committees over the last two years, he said, taking in comments and suggestions and making sure that the AATA had heard what people had to say.

CEO of the AATA Michael Ford takes bound copies of the 5-year plan out of the box before the meeting.

CEO of the AATA Michael Ford takes bound copies of the 5-year plan out of a box before the Sept. 5 board meeting.

During the month of September, Ford said, the AATA is going out to the districts again to get full support and concurrence on the document. He emphasized that it’s a very detailed document – as it goes through a lot of layers of detail to provide people the best information to make an informed decision about whether to participate. He called it a very important document and reiterated that a lot of hard work has gone into it.

Ford took a moment to acknowledge some staff members individually – Sarah Pressprich-Gryniewicz, Mary Stasiak and Chris White. He singled out strategic planner Michael Benham as having done a yeoman’s job, which prompted a round of applause.

Board chair Jesses Bernstein then delivered some remarks, giving his personal perspective. That week marked the start of his 45th year in Ann Arbor and Washtenaw County, he said. During that period, he had worked for the county government, started two businesses, worked in a lot of other settings and volunteered in a lot of places. He had never seen a process and an outcome like the AATA had produced with this 5-year program.

The AATA has a 30-year vision and a 5-year program to implement it, Bernstein said. One of his favorite sayings, he continued, is “If you don’t know where you’re going, you’re never going to get there. … We know where we’re going.” He allowed that the road would not be straight and smooth, and there would be twists and turns and curves. Bernstein said he is very proud to have been on the board while the AATA had undertaken the effort. He added his personal thanks to the staff for their incredible work that they’ve done – including nights and weekends – saying it has been just an unbelievable effort. He concluded his remarks by saying, “And as the song says: We’ve only just begun.”

Charles Griffith appreciated that the document has evolved to the point that it has, noting that it’s the result of a lot of good work and thought. He appreciated the fact that it is still a “living document.” He ventured that it probably won’t ever be final because the AATA will always be adjusting and tweaking it and making it better – as it does currently with its existing system. The AATA changes its service plans, altering routes on an ongoing basis to make sure the AATA has the most efficient system that it can have. The new transit authority will continue to that. He stressed the fact that the AATA will continue to need to work on this.

David Nacht ventured that anybody who’s been paying attention in Michigan understands that there are communities in the state that have taken a “parochial view” of their role – such communities imagine that they are an island and can function without connection to their neighbors. These communities are either being taken over by the state government or are in danger of being taken over by the state government, Nacht said.

But Ann Arbor sees itself differently, Nacht said. Ann Arbor views itself as part of the surrounding environment, which includes different communities that are different from Ann Arbor, but are connected to it. It’s an environment where people live and work and participate in the economic life of Ann Arbor. Nacht continued by saying it is in Ann Arbor’s interest to reach out to its neighbors in an open way, to transparently say: Let’s be connected in a way that we think is reasonable and fair, that works for people no matter what part of the county they live in.

Nacht observed that he had been a part of this process for a long time – there were people on the board just talking about expanding service countywide, when he joined the AATA board nine years ago. Michael Ford, he said, has led a team to bring the AATA to this point. Nacht did not think the process was perfect, and he did not think that the outcome was perfect. But he called it an outstanding political and policy result for a public entity.

For a public entity, “This is as good as it gets,” Nacht said. He agreed with Bernstein, in that he’d been through a lot of projects at different levels of government and in the private sector, and he was very proud of the AATA’s work. The AATA is offering the community a choice to move forward to take care of those who need transportation services, to help the environment, and to prosper, Nacht said. Ultimately, Nacht said, if we move people around better, everyone will prosper.

Roger Kerson echoed what had been previously said. He added that it’s the easiest thing in the world to say, “Let’s work together,” but it’s in fact very hard to do. It’s a real testament to the staff work that so many different jurisdictions are cooperating and participating.

Kerson addressed some remarks to those board members from the as-yet-unincorporated board of The Washtenaw Ride who were at the table – thanking them for participating in an enterprise that was still not completely 100% defined. He thanked them for attending meetings where they don’t get to vote yet. And he thanked them generally for helping the AATA in the process.

Kerson felt that the existing board would be able to do its job better as a steward of the AATA’s resources, when the board gets bigger – and when it has more input and more ideas and more knowledge of the communities that the AATA is trying to connect with. Right now, the AATA is running buses to Ypsilanti and Chelsea, he pointed out – places where board members don’t live. The AATA will be able to provide service more effectively and efficiently when the team is expanded. He looked forward to a time when everyone at the table also had a voice and a vote.

Outcome: The board voted unanimously to release the 5-year plan. A series of district advisory committee meetings will be now be held in different areas of the county to go over the plan. Ann Arbor’s meeting will take place on Sept. 24, 2012 from 6:30-8:30 p.m. at the Mallets Creek branch of the Ann Arbor District Library. A complete meeting schedule is available on the MovingYouForward.org website.

Bus Advertising

At its Sept. 5 meeting, the board considered a resolution upholding a previous decision to award a contract for handling advertising on the sides of AATA buses to CBS Outdoor Advertising.

Bus Advertising: Background

At its Aug. 16, 2012 meeting, the AATA board authorized a three-year contract with CBS Outdoor Advertising of Lexington, New York, to handle placement of ads on its buses and bus stops. The contract had been held by Transit Advertising Group Ann Arbor (TAG) for the last seven years, but that contract had expired. So the AATA solicited bids for a new contract. The AATA selected CBS Outdoor Advertising from seven respondents to an RFP (request for proposals).

The AATA’s advertising program currently accounts for about $80,000 a year in a budget for fiscal year 2012 that calls for $29.4 million in total revenues. In the past, the advertising program has netted up to $169,000 a year.

When first implemented in 2005, the program was expected to generate $200,000 a year [.pdf of 2005 Ann Arbor News article: "Some AATA Buses to Be Used as 'Movable Billboards'"] Ann Arbor News coverage from that era documents some controversy associated with the decision to offer advertising on buses, as well as the initial implementation that allowed for complete wraps. [.pdf of 2007 Ann Arbor News article: "AATA to Review Bus Ads"]

An ad rejected by the AATA for placement on its buses prompted a lawsuit filed last year on Nov. 28, 2011. The text of the ad included the words “Boycott ‘Israel’” and featured an image of a scorpion-like creature. In the most recent court action connected with that lawsuit, TAG and its president Randy Oram were dropped as defendants in the case by mutual agreement of the parties. The court has not yet ruled on the substance of the case, but an evidentiary hearing was held on July 23.

The lawsuit was not related to the routine process of putting the advertising contract out for renewal.

Bus Advertising: Protest, Commentary

In his written protest about the award, TAG president Randy Oram detailed a number of objections, among them a contention that the proposal from CBS did not actually respond to the AATA’s request for proposals. TAG also points to the recent elimination of a CBS staff position for someone who’s named in the CBS proposal as a person who would be part of a team fulfilling terms of the contract.

For its part, the AATA maintains that it followed its RFP procedures, that it violated no laws, and that CBS was able and willing to meet the requirements of the RFP but that TAG, based on its proposal, was either unwilling or unable to meet those requirements. TAG felt that the contingencies it had included in its proposal – based on its experience as the vendor over the last seven years – had been held against it in the AATA’s evaluation of the proposal. [.pdf of TAG protest and AATA response]

Randy Oram, president of Transit Advertising Group Ann Arbor

Randy Oram, president of Transit Advertising Group Ann Arbor, addressed the board on Sept. 5.

Oram addressed the board during public commentary at its Sept. 5 meeting. He told the board that TAG had been proud to serve the AATA as the exclusive agent for bus advertising services since 2005. He appreciated the opportunity to partner with the AATA in that endeavor. TAG had always served the AATA and its constituents to the best of its ability and with fidelity, he said. He appreciated the efforts of the board in hearing the appeal he was making concerning the denial of the contract award to TAG and the award the contract to a different vendor.

Oram allowed that the process had required a lot of time and effort on the part of the AATA staff so far. A clear understanding of the contract requirements at the onset, he continued, will benefit the AATA and an agency in evaluating all the proposals that have been made. He felt that the board needs to understand clearly what the issues are before making a final recommendation.

In honoring its past contract in partnership with the AATA, TAG had prepared a proposal that was detailed and knowledgeable in operating a bus advertising system according to the contract, Oram said. That knowledge, he said, appeared to be the key in TAG’s failure to be recommended for the award of the contract. TAG’s proposal reflected its understanding of the contract and past operations, and that was faithfully spelled out as part of the request for proposals. TAG is not trying to create any more difficulties, he assured the board.

If the eventual awardee can comply with each and every one of the requirements in the request for proposals, with no exceptions or deviations, exactly as the RFP is written, that firm would be deserving of the contract regardless of which company it is, Oram said. It’s important for TAG that the AATA understand that TAG’s proposal was not an indication that TAG was unwilling or incapable of performing the contract. It was a proposal that reflected the application of the past performance of the contract and the forethought, recognition and planning for contingencies – which should have been seen as a strength, not a weakness, he said.

Shortly before Oram concluded his remarks – as he was pushing past the limits of the two-minute speaking time – board chair Jesse Bernstein asked Oram if he had much more to say. Oram indicated he had just two more sentences and then he would “pass out.” Board member David Nacht joked that Oram surely meant that he had a “hand out,” not that he was actually going to pass out. Nacht’s remark generated chuckles around the board and from Oram.

Oram concluded by thanking the board members and the staff for considering TAG’s appeal. He hoped that the board would consider delaying the award of the contract until all of the issues could be examined.

Bus Advertising: CEO & Board Response

Michael Ford, the AATA’s CEO, responded to Oram’s remarks at the meeting by telling board members that he had taken time to write out a detailed response. After review and consultation with the staff, Ford said he felt the AATA had responded appropriately. He asked the board for their support to uphold his decision to affirm the contract award to CBS.

He felt that the AATA’s RFP evaluation team had done its due diligence, and he felt that he had answered Oram’s questions very thoroughly. He was confident and comfortable upholding the decision. Roger Kerson sought confirmation that CBS Outdoor Advertising also had experience with handling advertising with transportation agencies. Ford indicated CBS  had such experience.

CEO of the AATA Michael Ford approaches TAG president Randy Oram after the meeting.

AATA CEO Michael Ford, right, approaches TAG president Randy Oram after the Sept. 5 board meeting.

David Nacht followed up by asking if Ford was confident that the AATA had followed all relevant procedures in the contract award process. Ford indicated he was confident. Nacht noted that the AATA’s legal counsel – Jerry Lax, of Pear Sperling Eggan & Daniels, P.C.  – was attending the meeting. Nacht asked if Lax thought there was anything else the board should be aware of. Lax did not think there was  – beyond what was in their information packet.

Nacht indicated that as a general matter, he thinks it’s healthy for a public agency to follow processes, and for the board not to take a role in selecting contractors who get public dollars. Instead, the board has a role of making sure that the process was followed, he said. The CEO and the legal counsel for the agency had assured the board that processes were followed. And Nacht said he had a chance to review what had just been handed to him, so he supported the resolution to uphold the decision.

Outcome: The board voted unanimously to uphold the decision to award the advertising contract to CBS Outdoor Advertising. 

Present: Charles Griffith, David Nacht, Jesse Bernstein, Roger Kerson.

Absent: Eli Cooper, Sue Gott, Anya Dale.

Next regular meeting: Thursday, Sept. 20, 2012 at 6:30 p.m. at the Ann Arbor District Library, 343 S. Fifth Ave., Ann Arbor [Check Chronicle event listing to confirm date]

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  1. September 7, 2012 at 4:21 pm | permalink

    I am rather irked by David Nacht’s comments. He has been a leader in the push to regionalize AATA, and this vision has its own legitimacy. But he leaps too far when characterizing this view in contrast to a “parochial view” as being the reason Ann Arbor is not in danger of being taken over by the state. When he says, “Let’s be connected in a way that we think is reasonable and fair, that works for people no matter what part of the county they live in.” , he elides the differences in tax burdens that different communities carry. Mr. Nacht lives in Scio Township, which has an operating millage of 0.4942, in contrast to the city of Ann Arbor’s operating millage of 10.1482. [link to .pdf]. In addition, Scio Township’s population enjoy a much higher median income than most neighborhoods of Ann Arbor. Indeed, while Scio Township’s median income (ACS 2010) is the fourth highest in the county ($88,947), the city of Ann Arbor’s is the third from the bottom ($52,625), greater only than the two Ypsilanti communities.

    What this regional approach means to some extent is that costs are shifted rather than shared; residents of Ann Arbor’s surrounding townships can enjoy all the advantages of amenities such as a regional transit system without paying the taxes required to maintain the metropolitan core which enables their success. Is that reasonable and fair?

  2. September 8, 2012 at 10:00 pm | permalink

    If you added up the AATA staff time for RFP evaluation, Michael Ford’s time to write out his detailed response, AATA’s legal counsel’s time (which is probably not cheap) to attend this meeting, the cost of defending the lawsuit, and all other costs associated with the advertising contract, I wonder how that would compare to the $80,000 it will bring in. It seems like a lot of time, money, and effort on something that will bring in less than a third of a percent of the operating budget while detracting from the service AATA is paid to provide and greatly annoying at least some of the ridership.

  3. September 9, 2012 at 6:25 am | permalink

    I agree, thought they should drop the advertising some time ago. It detracts from their “brand” and is not all that profitable.