Buses for Ypsi and a Budget for AATA

Theme of possible countywide millage vote woven throughout
WALLY poster on the wall of the AATA board room (Photo by the writer.)

WALLY poster on the wall of the AATA board room. (Photo by the writer.)

Ann Arbor Transportation Authority board meeting (Sept. 23, 2009): At its Wednesday afternoon meeting, the AATA board approved a recommendation from its planning and development committee to use $220,000 in  federal stimulus funds to maintain bus service to the city of Ypsilanti and Ypsilanti Township. It’s a temporary measure, with the expectation that by fall 2010, a longer-term funding mechanism will be found for Ypsi buses.

The board also approved a roughly $25 million budget for its 2010 fiscal year, which runs from Oct. 1, 2009 to Sept. 20, 2010. It was about $1 million more than board member Ted Annis wanted to see – he dissented both from the planning and development committee’s budget recommendation as well as from the board’s vote to adopt it.

The longer-term solution to funding Ypsi buses, as well as Annis’ dissent on the budget, were partly reflected in the physical surroundings of the AATA board room. Sometime in the last month, two framed posters have been hung on the wall there – one shows the proposed WALLY north-south rail route that extends through northern Washtenaw County into Livingston County, and the other is a map of Washtenaw County. Both show regions broader than the current AATA millage area.

It’s a voter-approved countywide millage that offers one possibility of funding Ypsilanti buses. And Annis contended at the board’s meeting that in order to sell voters on such a millage, the agency’s operating costs needed to be reduced from the $102 per service hour that the adopted budget reflects.

Ypsilanti Buses

The board considered a resolution brought forward out of the planning and development committee, to use $220,000 in federal stimulus funding to bridge a gap in funding for bus service to the city of Ypsilanti and Ypsilanti Townships. The arrangement goes through June 2011. [See previous Chronicle coverage: "Federal Money May Save Bus #5 for Ypsi"]

By way of background, bus service in communities outside of Ann Arbor is funded through Purchase of Service Agreements (POSAs) with AATA. In contrast, bus service in Ann Arbor is funded through a transportation property millage (tax) that is currently levied on property inside the city limits at a rate of just over 2 mills.

Board chair David Nacht led off deliberations by asking what amount of federal stimulus funds the board had initially been discussing to be used for bridging the funding gap for the Ypsilanti and Ypsilanti Township POSA agreements.  Dawn Gabay, deputy CEO of the AATA, clarified that the amount initially discussed had been lower – $101,000. But that amount, she said, included service reductions. [Those reductions had included the elimination of Route #5 and reduced hours on Routes #10 and #11.]

Nacht then declared it was unfortunate that Ypsilanti and Ypsilanti Township found themselves in their current financial situation. “Let’s be plain about it,” he said, “it’s a subsidy – a transmission of wealth to the eastern side of Washtenaw County.”

Three men sitting at a table looking at pieces of paper AATA board meeting Ann Arbor

From left: AATA board members Ted Annis, Charles Griffith and Jesse Bernstein. They're looking over the text of the resolution that extended federal funding assistance to Ypsilanti and Ypsilanti Township. (Photo by the writer.)

But then Nacht continued, “I support that subsidy.”  Noting the regional dynamic of the economy, Nacht said it was in the broader interest of Ann Arbor taxpayers to think about transportation in “a thoughtful and non-parochial way.”

Board member Ted Annis, who chairs the planning and development committee, said it was an obvious and straightforward decision to make: using $220,000 out of around $6.5 million in federal stimulus funding to bridge the POSA gap. However, he stressed – as he had done at the planning and development committee’s meeting – that the money came from the federal government. The fact that the money would be paid directly to the AATA to provide bus service was an argument in favor of the move, he said.

Board member Charles Griffith noted that it’s a short-term solution to a problem that is expected to continue. In a context where some of the service is funded through POSAs and other service is provide through a millage, he said, it’s important to find longer-term solutions and to do so in “an expeditious manner.”

Board member Paul Ajegba emphasized the fact that the stimulus funding was being authorized because of the good-faith effort Ypsilanti was making to establish a more stable funding source, saying that a letter from the city of Ypsilanti had been requested to specify that commitment. [A resolution passed by the Ypsilanti city council called for the council to put a Headlee override millage on the ballot in November 2010, which would be dedicated to fund Ypsilanti transportation – if no progress was made in putting the AATA on a countywide funding base.]

Outcome: The use of federal funds to bridge the funding gap in the POSAs for Ypsilanti and for Ypsilanti Township was unanimously approved.

AATA FY 2010 Budget


Budget Background

The city of Ann Arbor levies a transportation millage at a rate of just over 2 mills. One mill equals $1 for every $1,000 of a property’s state equalized value, or SEV. So the owner of a house with a market value of $200,000, and a corresponding SEV of $100,000, pays $200 a year towards funding bus service in Ann Arbor.

The transportation millage for Ann Arbor was passed by voters in 1973, and has no end date.

In the proposed AATA budget, revenue from the Ann Arbor transportation millage is expected to contribute $9.7 million, or 38% of AATA’s $25.4 million budget:

Ann Arbor Transportation Authority Proposed Operating Budget
Fiscal Year October 1, 2009 to Sept. 30, 2010   


$ 9,699,574 Local Tax Revenues
  1,141,278 Purchase of Service Agreements
  4,334,150 Passenger Revenue
  6,753,976 State Operating Assistance
  3,169,840 Federal Operating Assistance
    361,200 Interest and Other

$25,460,018 TOTAL REVENUES


$ 5,825,945 Operations Wages
  1,255,055 Maintenance Wages
  2,650,112 Management Wages
  4,178,738 Fringe Benefits

$14,100,801 SUBTOTAL 

  1,662,820 Purchased Services
  1,686,200 Diesel Fuel and Gasoline
  1,273,292 Materials & Supplies
    419,237 Utilities
    485,000 Casualty & Liability Costs
  5,125,083 Purchased Transportation
    410,435 Other Expenses
    260,000 Local Depreciation

$25,422,868 TOTAL EXPENSES



Public Commentary on the Budget

Thomas Partridge spoke at the start of the meeting during time allotted to the public for comment on agenda items. Partridge criticized the budget as proposed for continuing the discriminatory policies of the AATA in all parts of Washtenaw County, including the area where the transportation millage is levied, namely the city of Ann Arbor. Partridge said that the board had neglected its responsibility to put forward as a part of its budget a plan for countywide transportation that was equitable and just for the most vulnerable among us.

Later, at the end of the meeting, Partridge would follow up on a similar theme by pointing out that there had been a candidate for the 7th Congressional District election of 2008 who had still not managed to achieve the restoration of paratransit service in the area he had wanted to represent. [Partridge named the Lakestone Apartments (formerly Eagle Pointe) off Jackson Road as a specific example.] As Partridge drew out the description, board chair Nacht recognized himself, so that when Partridge named that 2008 candidate, Nacht was already smiling in acknowledgment.

Deliberations on the Budget

As a part of opening deliberations on the budget, board chair David Nacht drew out the fact that the proposed budget had not enjoyed unanimous support of the planning and development committee. It had been a 2-1 vote of the three-member committee. The committee’s chair, Ted Annis, had been outvoted by his colleagues, Paul Ajegba and Rich Robben.

So Nacht asked Ajegba to give a statement of support, to be followed by an explanation from Annis.

Ajegba commended AATA staff as well as Annis for their work on the budget. Staff had identified around $900,000 worth of cuts to achieve the budget that’s being proposed, he said. The difference in opinion had to do with whether to implement an additional $1 million in cuts, which had been advocated by Annis. Ajegba said he was in agreement with many of the cuts proposed by Annis, but he felt that they needed a more gradual implementation. He expressed concern that the quality of service could drop if they were implemented too rapidly.

Annis clarified that the cuts he’d identified were designed to achieve a goal of $96 per bus service hour. In terms of dollars per bus service hour, the proposed budget translates to $102. He cited an analysis done by Dick Porter, a professor emeritus of economics at the University of Michigan, which concluded that the AATA is $4.4 million less efficient than average, when compared to 20 comparable-sized agencies.

As one example, Annis cited the Bay City transportation system: Bay Metro, which serves Bay County. [The  110,000 population of Bay County, the millage area for Bay Metro, is roughly parallel to the population of Ann Arbor. Bay Metro is organized under Michigan's Act 196, and levies a countywide millage at a .75 mill rate. The period of the millage is five years.] Annis noted that Bay Metro operates at a rate of $85 per bus service hour.

Annis said that he wanted to stress that AATA staff had agreed to look at the University of Michigan bus system, which operates at the rate of $55 per bus service hour.

The AATA, Annis said, was “too fat.” The agency needed to “go on a diet,” he concluded.

Michael Ford, CEO of the AATA, responded to Annis by saying that he had discussed some of the findings of Porter’s study with Porter and that closer examination might reveal that in some cases the comparisons were not “apples to apples.”

For his part, Nacht was curious to know how many employees were covered by the $1.5 million line item for health insurance – he wanted to know how much the AATA was spending per person. The answer from Ed Robertson, head of human resources, was 190 employees plus 15 retirees. Doing a quick calculation in his head for the dental portion of the coverage, Nacht concluded, “$1,000 – that’s a lot of money for teeth.”

Robertson explained that beginning in FY 2011, hourly employees will begin to pay towards their own health coverage, which was something that management personnel had already been doing for a number of years. This prompted Annis to wonder what the potential impact of the possible national health care reform would be on AATA’s health coverage costs.

Paul Ajegba took care to emphasize that he and Rich Robben had not opposed the additional cuts per se that had been proposed by Annis, but that they felt that implementing them more gradually was important as far as assuring continued quality of service.

Annis reiterated the connection of the budget to the likelihood that voters would approve a countywide millage: “If we want to get to a countywide millage, we need to get costs in line.” He noted that in Bay County, voters approved the millage every five years by a wide margin. [According to the Bay County clerk's office, for the Nov. 2, 2004 vote, which authorized the .75 mill levy through 2010, there were 32,606 yes votes and 20,509 no votes.]

Board member Charles Griffith drew out the importance of evaluating cost efficiencies on an ongoing basis, as opposed to the end of the year when the budget was being prepared. In response to Griffith, Annis pointed to the process improvement teams that Rich Robben had introduced, based on Robben’s experience as the executive director of plant operations at the University of Michigan. Noting some cost reductions for telephones, Nacht said that when he saw things like that in the budget, it was clear to him that someone had been looking for “how to save a nickel” on an ongoing basis.

This prompted Annis to tick off some costs he thought could be reduced. He asked Nacht if he knew that there were four full-time people who answered phones at the AATA. There were also 2.5 full-time positions dedicated to mowing grass and keeping bus shelters clean, Annis said.

Nacht allowed that there were cheaper ways of getting information to people than having them call a person and ask, but that he’d on occasion found it useful to call up the AATA from a bus stop to ask when the bus was coming. Ford pointed out that technology was being explored to provide bus arrival information. [A pilot program for real-time tracking can be found here.]

Outcome: The 2011 budget was approved, with dissent from Annis.

Additional Cuts Proposed by Annis

When Annis said he’d identified an additional $1 million in cuts that would bring the AATA’s bus service hour cost down close to $96, what was he talking about?

Here’s his list of ideas:

  • $20,000 Eliminate Michigan Public Transit Association (MPTA) membership
  • $24,000 Change the American Public Transportation Association (APTA) membership from Corporate ($26,000/year) to Individual ($2,000/year or so)
  • $225,000 Cut overtime of $455,000/year by 50%
  • $250,000 Reduce executive headcount by two FTEs net
  • $125,000 Reduce mid-level executive headcount by two FTEs
  • $100,000 Reduce “ExtraBoard” [This is the daily job bank. A dozen or so extra people report in the morning to cover unscheduled absences. The idea is to cover absent bus drivers.]
  • $85,500 Bring the go!pass programs in-house (without adding headcount) and eliminate the payment for the getDowntown program
  • $112,200 Redesign the Ypsilanti Transit Center so that private security is no longer needed
  • $65,000 Redesign the Blake Transit Center in Ann Arbor so that contracted security is no longer needed. [This does not necessarily entail converting to a canopy with no inside warm area or bathrooms. The BTC is currently being reviewed by an architectural firm for remodeling or reconstruction, and this would be incorporated as a design objective.]
  • $100,000+ Outsource the facility maintenance and vehicle cleaning, currently $485,000/year
  • $60,000 Remove one FTE from vehicle service and maintenance
  • $30,000 Reduce custodial services for dry areas from daily to MWF
  • $100,000 Eliminate external media advertising of $102,000 and use the advertising on buses themselves

Countywide Millage

The theme of a countywide millage vote was woven throughout the meeting. It came up specifically as a reality during question time for the CEO when Ted Annis asked to see a copy of a survey questionnaire that was being prepared to gauge support for a possible millage. The survey is part of an overall marketing plan.

Later, during deliberations on the budget, it was mentioned that on Oct. 3 an on-board rider satisfaction survey would begin. Annis asked if a “taxpayer satisfaction survey” was being planned.

Board Officer Elections

The board elected its officers for the next year by acclamation. Paul Ajegba will be the board chair, Ted Annis will be its treasurer, and Charles Griffith will serve as secretary.

In the nomination process during the last month – which Jesse Bernstein had been appointed to administer at the board’s previous meeting – both Ajegba and Nacht had expressed their interest in serving as chair, which was a repeat of last year’s scenario. Whereas last year it was Ajegba who stepped aside, this year Nacht bowed out before the election took place.

In electing the new chair, a moment of levity resulted when Nacht misspoke in asking for any other nominations for “the new CEO.” Annis joked that Michael Ford, who’s been the AATA’s CEO a little over two months, was “visibly shaken” at Nacht’s miscue.

Bank of Ann Arbor

Representatives of the Bank of Ann Arbor, where the AATA parks some of its money, were on hand to give the board a presentation on the Certificate of Deposit Account Registry Service. CDARS is a way for local banks to offer the higher interest of a CD – as compared to a Treasury bill, for example – while at the same time covering an entire investment under FDIC insurance, even though the amount of that investment might exceed the FDIC limit on an individual CD.

This is accomplished under reciprocal agreements among banks within the CDARS network, which allows a bank to break down the amount of an investment into smaller CDs that meet FDIC insurance limits.

A concrete example provided at the meeting was for a 90-day investment of $5 million, invested with CDARS, which would yield $10,000 in interest, compared with the $1,000 it would earn if invested in a U.S. Treasury bill.

Public Comment

At the end of the meeting, several people spoke on various issues.

Carolyn Grawi: Grawi works with the Ann Arbor Center for Independent Living. She encouraged the board to move forward with regional transit. She expressed her support for the board’s decision to help Ypsilanti bridge its funding gap, saying,”it’s important that we support our neighbors.”

Tim Hull: Hull is a University of Michigan student. He thanked the board for their support of Ypsilanti. He called the board’s attention to the situation at Arborland, where the relocation of the bus stops to Washtenaw Avenue, from inside the shopping plaza, had resulted in sometimes hazardous situations when bus riders tried to make connections. People wound up trying to run across the busy street trying to make their transfers. He suggested that it might be better not to offer and advertise transfers at all, if they could not be done safely.

Rebecca Burke: Burke is chair of the AATA’s local advisory council and she asked CEO Michael Ford to reappoint Joanne Weintraub and Karen Wanza to the council. They both had more than 25 years of experience with the AATA, she said, and she supported their re-appointment. She also asked that a representative of the AATA board attend the meetings of the LAC.

Sandra Holley: Holley expressed concern about an article in the Eastern Echo, the Eastern Michigan University student newspaper, that she said highlighted cuts to bus service to Ypsilanti that had caused unfounded rumors. She said someone needed to talk to EMU to get it straightened out.

LuAnne Bullington: Bullington thanked David Nacht for his service as board chair. She also thanked the board for their support of Ypsilanti. She suggested to Ted Annis that Kalamazoo and East Lansing would make better comparisons than Bay City, when evaluating the performance of the AATA. She also discouraged a comparison to the University of Michigan bus system, because they used student bus drivers. She did not want to see students driving AATA buses, she said.

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

Absent: Sue McCormick, Rich Robben

Next regular meeting: Wednesday, Oct. 21, 2009 at 6:30 p.m. at AATA headquarters, 2700 S. Industrial Ave., Ann Arbor [confirm date]


  1. September 25, 2009 at 9:54 am | permalink

    Annis has looked at a lot of the numbers, but I don’t think he has looked at a lot of the buses. I’ve ridden both the AATA and the UM busses. The UM busses are lower-quality, with limited hours, and over-crowded. Also they have non-union drivers and they have a very limited service area. I really don’t think there’s much comparison.

    I have not ridden the Bay City buses, but I would like to see how the service works before we say we should be like Bay City.

    Also, does the service hour rate that Annis reports cover just bus service, or does it also include the A-Ride service?

  2. By Pete Murdock
    September 25, 2009 at 12:12 pm | permalink

    Here is the some more of the details of the funding agreement with AATA and the City of Ypsilanti.


    Pete Murdock – City Councilmember – Ward Three

    With the action of the AATA board on September 23rd, the Ypsilanti City Council has secured an expanded contract for public transportation with no service reductions through June 30, 2011. The details of this agreement are as follows.


    For the first time, the City and AATA will be entering into a service contact that is longer than one year. The contract will run twenty-one (21) months from October 1, 2009 through June 30, 2011. This secures and stabilizes the public transportation services in the City of Ypsilanti while a more permanent funding solution is pursued.


    There are no service reductions in the new extended contract.


    The City Council has pledged an amount of $218,000 for the AATA contract for FY 2010-11 – an increase of $ 60,000 over this year’s allocation. The City’s commitment for the two year cycle is now $ 376,000.


    AATA received $6.4 million dollars in stimulus money of which 10% can be used for operations. Stimulus money was awarded on a formula that contained Ypsilanti’s population and ridership. The AATA Board agreed to provide up to $ 202,000 to cover the shortfall for this contract period while a regional authority or other permanent funding mechanisms are pursued.


    A secure dedicated source of funding for public transportation is necessary for the long term. This contract gives us a little breathing room to develop such a program. A regional system – either County wide or consisting of the Urban communities, with a dedicated millage would provide the best service at the lowest overall cost. City Council, cannot by itself make that happen, but is committed to pursuing that goal with those that can – AATA, the City of Ann Arbor and Washtenaw County.


    AATA’s decision to use Stimulus money to fill the shortfall was clearly based on the City’s commitment to the two year funding cycle as well as the City Council’s commitment, in the event that no regional system emerges, to place on the November 2010 ballot, a Headlee override – City Charter Amendment (.9 mil) designated for the sole purpose of funding public transportation. Without the commitment to securing dedicated funding in the long term and the two year funding in the near term, it was unlikely that the AATA would have authorized the use of the stimulus funds for Ypsilanti.

  3. October 5, 2009 at 3:22 pm | permalink

    It is sort of frightening to see that we need federal stimulus money to keep the Ypsilanti bus services the link disappears this season and probably the next to come. What would happened if they decide to shrink back in runs once an hour could we stretch the budget into 4 years?