AATA Projected FY 2013 Budget Takes Dip

While the Ann Arbor Transportation Authority’s draft budget had shown a small surplus for the upcoming 2013 fiscal year, the budget that the AATA board will be asked to approve at its upcoming Sept. 27 meeting will now show a $300,000 deficit.

The draft AATA budget provided on Sept. 12 to the city council as a communication item for its Sept. 17 meeting showed a surplus of $22,692 over the budgeted expenses of $33,344,048. However, on Sept. 14 the AATA was notified by the Michigan Dept. of Transportation (MDOT) that a new interpretation of the state’s operating assistance formula would reduce AATA’s assistance by $803,500. The AATA financial staff responded by reducing expenses, but left about $300,000 to be covered by the fund balance reserve.

So the resolution included in the AATA board’s information packet provides a budget resolution worded as follows: “It is resolved, that AATA shall utilize approximately $300,000 of its Unrestricted Net Assets for the purpose of balancing the FY2013 Operating Budget of $32,700,181, that such budget is hereby approved to become effective October 1, 2012, and that the budget is assigned to the Performance Monitoring and External Relations Committee (PMER) for appropriate monitoring.”

The possibility of the reduction in funding was known previously. At the board’s Aug. 16, 2012 meeting, Charles Griffith had reported from the performance monitoring and external relations committee on the topic. From The Chronicle’s report: “An issue of concern, Griffith said, is the possibility of state operating assistance decreasing for fiscal year 2013, due to a change in the formula the state has been using to distribute money to transit agencies around the state. It could result in a loss of $800,000 in next year’s budget. Griffith said that ‘we have folks working on that,’ and the AATA is working with some of the other transit agencies in the state, and will be attempting to address that going forward.”

About half the reductions in expenses in the now proposed budget, compared to the draft, were made in wage reductions – a total of $294,473. Percentage-wise, the budget for management wages was reduced by 2.79% compared to a 1.24% decrease in non-management wages. [Google Spreadsheet compiled by The Chronicle showing contrast by category between draft and final budget.]

The AATA board’s Sept. 27 meeting starts at 6:30 p.m. in the fourth-floor conference room at the Ann Arbor District Library, 343 S. Fifth Ave.