Ann Arbor Delays 4-Way Transit Accord

City council may want another seat on countywide transit board

At its Jan. 9, 2012 meeting, the Ann Arbor city council voted to postpone a decision – until Jan. 23 – on a four-way accord between the city of Ann Arbor, the Ann Arbor Transportation Authority (AATA), the city of Ypsilanti and Washtenaw County. The agreement among the four parties would set up a framework for, and contingencies on, the transition of the AATA to a countywide transit authority, incorporated under Michigan’s Act 196 of 1986. AATA currently operates under Act 55 of 1963.

One expected move did not materialize at the council’s Jan. 9 meeting but was mentioned during deliberations as a possibility: To change the proposed balance of representation on the board of a new countywide transit authority. The idea would be to add another seat representing Ann Arbor on the board.

The proposed balance of 7 Ann Arbor seats on a 15-member board has been publicly discussed as early as April 2011. When presented to the Washtenaw County board of commissioners on April 7, 2011, the 7/15 Ann Arbor representation was met with objection from some commissioners as too-heavily weighted with Ann Arbor appointees.

In conjunction with postponement of the decision on the four-party agreement, council set a public hearing on the agreement for its next meeting on Jan. 23.

If approved, the four-way agreement would assign specific conditions and responsibilities to each of the parties as part of the transition to a countywide transit authority. The role of approving, signing and filing the articles of incorporation for the new transit authority would fall to Washtenaw County. [.pdf of draft articles of incorporation]

The transition to a countywide funding base is intended to (1) ensure stability of funding for transit connections outside of the city of Ann Arbor, which has up to now depended on purchase-of-service agreements; (2) provide a higher level of transit service inside the city of Ann Arbor; and (3) expand the area where transit service is provided. The service plan is laid out in two volumes of the transit master plan. [.pdf of draft "Volume 1: A Transit Vision for Washtenaw County"] [.pdf of draft "Volume 2: Transit Master Plan Implementation Strategy"]

A two-volume document on funding options forms the third part of the transit master plan. [.pdf of Part 1 of Vol. 3 Transit Master Plan Funding Options] [.pdf of Part 2 of Vol. 3 Transit Master Plan Funding Options]. A financial advisory group, led by McKinley Inc. CEO Albert Berriz and retired Washtenaw County administrator Bob Guenzel, has met since late 2011 to analyze those funding options.

The role of the two cities – Ann Arbor and Ypsilanti – would be to pledge their current transit millages to the new authority, contingent on identifying a countywide funding source. The two cities currently levy millages that are designated for public transit and are passed through to the AATA. For Ann Arbor, that’s currently just over 2 mills. For Ypsilanti, which uses the proceeds of the tax (approved in November 2010) to fund its purchase-of-service agreement with the AATA, the levy is just under 1 mill. [One mill is $1 for each $1,000 of a property's taxable value.]

As part of the four-party agreement, Ypsilanti and Ann Arbor would agree that AATA’s existing assets would be assumed by the new Act 196 transit authority, and they’d also agree to assign their existing millages to the new Act 196 authority. But the asset transfer and the millage assignment would be contingent on identifying a countywide funding source for the new Act 196 authority.

A draft four-party agreement was circulated around the time of the Dec. 12 Ann Arbor city council working session on that topic. One difference between the Dec. 12 version and the Jan. 9 version is the explicit contemplation in the more recent document of a countywide funding source that would not necessarily take the form of a millage. But the result was a document that appears to contain an internal tension. In one paragraph of the Jan. 9 version, the alternative to a millage is described as funds “which do not require voter approval.” But in a different paragraph, the funding source (not necessarily a millage) is described as having “countywide voter approval.”

The modification to the agreement since Dec. 12 is driven in part by discussions at the state level that have explored the idea of creating enabling legislation for a regional transit authority that could be funded in part by vehicle registration fees. Depending on how that legislation is crafted, local units might be able to impose vehicle registration fees to fund transit without a voter referendum.

Under scenarios currently being discussed, if voters countywide – including Ann Arbor voters – are asked to support a millage, Ann Arbor’s current transit tax would also remain in place. That’s led to questions from some councilmembers about a guarantee of increased city service to ensure equitable burden and benefits of city residents and those outside the city. The timeframe specified in the draft four-party agreement means that there are three opportunities in a general election to ask voters to support countywide transit by agreeing to a new countywide tax: in 2012, 2013 and 2014.

At the Dec. 12 working session, Christopher Taylor (Ward 3) asked that the four-party agreement stipulate that Ann Arbor’s transit tax only be transferred to the new Act 196 authority if a millage were to gain a plurality of votes within the city of Ann Arbor. And at the Jan. 9 council meeting, he was successful in persuading his colleagues to amend the document to that effect.

What would a possible path to a decision on countywide service look like? The first step has been taken with the creation of an unincorporated Act 196 board (U196), which started meeting in late 2011. Assuming that the authority’s articles of incorporation are approved by the county board of commissioners and that the four-party agreement is also approved by all parties, the U196 board will finish a report on a five-year transit improvement program sometime in 2012. At that point the U196 board would request that the county clerk file articles of incorporation for a countywide transit authority.

The articles of incorporation would establish the authority with boundaries of Washtenaw County. Certified letters, required by law, would be sent to each municipality announcing incorporation of the authority. Any municipality could opt-out, and those communities would not be taxed – or receive transit service. A millage request would then come from the Act 196 authority directly to voters. If voters rejected it, the request could be put on the ballot again, once a year until the end of 2014. But according to the four-way agreement, the incorporated Act 196 board would be dissolved if no countywide funding source were identified by then.

The Ann Arbor city council is now expected to vote on the four-party agreement at its Jan. 23 meeting after a public hearing on the issue.

[For general background on a variety of transportation issues, see recent Chronicle coverage: "Washtenaw Transit Talk in Flux" and "AATA Preps Stage for Future Transit Choice"]

This report was filed from the city council’s chambers on the second floor of city hall, located at 301 E. Huron. A more detailed article will follow.