AATA Keeps Rolling Toward Countywide

Articles of incorporation for new transit authority are filed with state

Ann Arbor Transportation Authority special board meeting (Oct. 2, 2012): As expected, the AATA board voted unanimously, with all seven members present, to request that the Washtenaw County clerk file articles of incorporation for a new transit authority, established under Act 196 of 1986 and called The Washtenaw Ride.

From left: Jesse Bernstein, AATA CEO Michael Ford, Charles Griffith and Roger Kerson.

From left: Jesse Bernstein, AATA CEO Michael Ford, Charles Griffith and Roger Kerson. Bernstein, Griffith and Kerson are AATA board members. (Photos by the writer.)

Based on discussion at the board’s Sept. 27 meeting, it was the AATA’s expectation that the articles would be filed as soon as Oct. 3, and the wording of the AATA’s resolution indicated that the filing should take place “immediately.”

And according to Washtenaw County clerk staff, that’s what happened. Representatives of the AATA were authorized as couriers by the clerk, and they conveyed the physical documents to Lansing.

Letters that included a notice of intent to file had been sent on Sept. 27 to every jurisdiction, and to every elected official in the county.

At the Oct. 2 meeting, board chair Charles Griffith and former chair Jesse Bernstein expressed thanks to staff and community members who’ve worked over the last two years to get the process to this point. The basic theme of most of the remarks was in the spirit of the long journey ahead.

The long journey begins with the entity that’s created by the filing – which will initially have no assets, staff, or ability to operate transportation service in the county. A 15-member board composition for the new authority is already reflected in the membership of the board of the pre-incorporated board (called the U196 board), which has been meeting already for a year. Some of those board members attended the Oct. 2 meeting – David Read (North Middle District), Bob Mester (West District), Bill Lavery (South Middle District) and David Phillips (Northeast District).

Districts that include multiple jurisdictions appoint their representatives under inter-local agreements made under Act 7. In the case of the city of Ann Arbor, the appointments to the new transit authority need to be made through the city council’s confirmation of mayoral nominations.

To make the transition from the AATA to The Washtenaw Ride, under terms of a four-party agreement, voters would need to approve a funding source adequate to pay for the proposed expanded service plan. The four-party agreement is between the AATA, the cities of Ann Arbor and Ypsilanti, and Washtenaw County.

The five-year service plan for expanded service 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 a Sept. 5 press release from the AATA, Ann Arbor and Ypsilanti will get a 56% increase in service hours compared to current levels.

The AATA has indicated that a possible funding scenario is to ask voters in Washtenaw County to fund the new transit authority with a property tax of 0.584 mills – in an election that could come as early as May 2013. 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.

Also under the four-party agreement, the two cities’ transit taxes would become part of The Washtenaw Ride’s funding.

The transition would potentially not take place at all, if a majority of voters don’t approve it. Under the terms of the four-party agreement, a voter-approved funding source for the expanded services must be identified by the end of 2014.

Washtenaw County’s role is limited to the filing of the articles of incorporation for the new transit authority. The act of incorporation will include by default all jurisdictions in Washtenaw County. However, filing of the articles opens a 30-day window for jurisdictions to opt out of the arrangement. That can be accomplished through a vote of a jurisdiction’s governing body.

Michael Ford, AATA’s CEO, said at the Oct. 2 meeting that he hoped to schedule the first meeting of The Washtenaw Ride’s board for Oct. 11.  Although it’s a fair assumption that the current AATA board members will be nominated by mayor John Hieftje to serve as Ann Arbor’s representatives to the new transit authority, there’s no council meeting scheduled between now and Oct. 11 when the council could vote to make those appointments official. 

Requesting Act 196 Incorporation

The only business transacted at the AATA board’s special meeting related to the resolution on incorporating the new transit authority. [.pdf of board resolution]

Charles Griffith presided over the meeting in his first session as board chair, having been elected at the board’s previous meeting. With no staff reports and no one from the public who wanted to address the board, he began the discussion by saying “We’ll just get on to the item at hand.”

Griffith said the reason for the meeting was to discuss moving forward on the AATA’s transit master plan. It reflected a lot of hard work by many staff, those who’ve been working with the staff, board members, and district representatives, he said. Griffith singled out former board chair Jesse Bernstein for his leadership on the issue. [Bernstein had served the last two years as chair.] Griffith indicated that Bernstein had told him he wouldn’t stop, but would just be sitting at a different spot at the table.

Griffith also thanked members of the broader community for their cooperation, saying he felt that it really shows how much can be accomplished when people sit down and work together. Good transit builds strong communities, he said. It provides more mobility, with less traffic. There’s less pollution. “Everybody wins in this deal,” Griffith said.

He concluded his opening remarks by asking for a motion. That was delivered by Bernstein, who then read the complete text of the resolution aloud. The motion was seconded by David Nacht, who had preceded Bernstein as board chair.

By way of background, the possibility of transitioning to a countywide authority is an idea with a long history. By 2008 there was active discussion, but with little substance behind it, at the AATA board table about the possibility of putting a millage on the ballot. But without a chief executive officer – former AATA CEO Greg Cook had resigned in early 2007 – and without a specific service plan to offer, the AATA essentially paused that kind of talk.

In 2009, the AATA board hired Michael Ford as CEO and tasked him with leading a transition to an authority with a broader governance and service area. The approach was to develop a transit master plan that reflected a 30-year vision and then to set about implementing that vision. In early 2010, then-board chair Bernstein characterized it as a “ready, aim, fire” approach. It was Bernstein who made the motion on the resolution at the Oct. 2 meeting.

“It’s time,” Bernstein began. The AATA had spent two years talking to lots of folks, he said. A structure had been set up to include everybody in the county and to start having people seated at the table with the current board [an allusion to the U196 board and the district representatives who attended the Oct. 2 meeting]. Bernstein characterized the incorporation of the Act 196 authority as formalizing the Act 196 board so that everyone can sit together and discuss the policy issues. There are a lot of options that need to be discussed openly and clearly, Bernstein said.

Bernstein hoped that a first meeting of the incorporated board could be scheduled for sometime in October. He noted that the incorporation also says to local units of government: “It’s serious; and it’s time.” He was glad there is a 30-day opt-out period. But given the timing, Bernstein felt, there would be several more months during which discussion could continue about the possibility of opting back in. “I think this is the right time to do it. I think it’s time to move forward, and I’m very honored to have made this motion.”

Roger Kerson noted the success of the process of bringing all the jurisdictions together. He joined Bernstein in looking forward to expanded discussion with a “voice and vote for everybody at the table.” At a lot of levels of government, he said, there’s gridlock. And people don’t seem to be able to get anything done, or solve problems. The communities of Washtenaw County are different from that, he said, with different populations and different constituencies, needs and interests. The cooperation that’s been achieved so far, he said, attests to a lot of hard work by a lot of people. There’s a lot of work yet to do, and he was looking forward to increasing mobility for all.

Griffith addressed the possibility of opt outs, by saying that everyone knew that some jurisdictions will not feel ready at this time to join in this effort – but that’s okay, he said. What’s important is that we give it our best shot to provide an opportunity to everyone. He said the AATA had come up with the best that it could to meet the needs that had been identified and expressed through communities across the county. “If, for whatever reason, we didn’t get that right, we can keep working at it,” he said. He characterized this step as the beginning of the journey, not the end. He hoped that as many jurisdictions would cooperate as possible.

Eli Cooper characterized it as “quite a journey.” He recalled in 2005 when he first arrived in the Ann Arbor metropolitan area, he found a “wonderful world-class transit operator that served the city of Ann Arbor and its immediate environs.” However, in the Seattle area – similar to other metropolitan areas where he’s lived in the course of his life – a seven-county regional transportation network connected things. He realized that although there was excellent local service, Ann Arbor was not connected adequately to the surrounding communities.

Cooper described a “marathon” effort dating back several years to overcome some of the barriers associated with various governance structures. But over the last two to three years, he said, with an increasing emphasis and effort and a collaborative “can do” attitude, the AATA’s organization and staff – by reaching out and responding to the communities around Ann Arbor – have fashioned what he thinks is a “winning proposition.” People who need to get to the doctor, or to the store, or have a visit with friend won’t be required to have an automobile to have to meet those most basic needs.

Cooper said he would fully support this important step. He hoped people understand there’s a lot of work ahead of us. It’s another step in the journey, and it’s been a long time in coming, he said.

Outcome: The board voted unanimously to approve the resolution requesting the filing of the articles of incorporation of The Washtenaw Ride.

After the vote, Michael Ford – CEO of the AATA – indicated that the goal was to schedule a first meeting of the Act 196 board for Oct. 11.

Ford thanked everyone for their help and support – the countless meetings, late nights, weekends, holidays. He also thanked the district representatives for their help, support and participation, saying he wanted to continue that relationship going forward. He also thanked the current board of the AATA.

Kerson drew out the fact that the existing AATA board would continue to meet, because it would continue to have business to conduct. Two separate structures would persist for some period of time.

Nacht noted that the current AATA board would still need to vote in order to do anything involving funds. Only the AATA board can vote on those funds, so the AATA board [incorporated under Act 55] would need to continue to meet.

Public Comment

Carolyn Grawi of the Ann Arbor Center for Independent Living introduced herself as a Washtenaw County resident. She described herself as excited to be moving down the road of countywide transportation. She looked forward to working with the existing board and the future Act 196 board. The community needs to get involved, she said, by reading the material that’s available on the website and attending meetings of the district advisory committees and participating in the future of transportation in the county.

Vivienne Armentrout urged the board to achieve some clarity on how they’ll manage the transition of governance. She was uncertain about what she was hearing, but she said it sounded like the entire Act 196 board would be seated, even if some communities opt out. She thought that in order for the Ann Arbor public to have faith in what the board was doing, the public needed to have a sense that “true representation” is being provided.

Composition of the New Authority’s Board

Armentrout’s remarks during public commentary were an allusion to a resolution discussed, but ultimately withdrawn, at the board’s Sept. 27, 2012 meeting the previous week.

The articles of incorporation, now filed with the state, provide for a 15-member board structure in eight districts. Some of the districts include a single jurisdiction – like the city of Ann Arbor (7 representatives), the city of Ypsilanti (1 rep) and Pittsfield Township (1 rep). Those jurisdictions are almost certain not to opt out of the Act 196 authority. But other districts include multiple jurisdictions. For example, the Northeast District includes four townships: Northfield, Superior, Salem and Ann Arbor. Some, or even all, of those townships could theoretically opt out.

The intent of the AATA board’s Sept. 27 resolution was to give reassurance that a first response by current AATA board members to the opting out of other jurisdictions would not be to reconfigure the new authority’s board structure. They discussed how such a reconfiguration would become important at the point when a millage question is put before voters – because they did not think a situation of “representation without taxation” would be reasonable.

The extreme case of opting out would occur if every jurisdiction in a board district decided to opt out. The articles of incorporation spell out what’s supposed to happen when every jurisdiction in a district opts out:

The directors shall revisit the Board make-up if
(a) either Ann Arbor or Ypsilanti City reduces or fails to contribute its charter millage to the Authority;
(b) if another community levies a millage and contributes it to the Authority; or
(c) if all communities within one of the Act 7 districts withdraw from the Authority.
The Board make-up shall also be reviewed and be subject to change by two-thirds of the directors after each census to assure appropriate attention to population distribution.

The composition of the informal, unincorporated board isn’t automatically transferred to the incorporated Act 196 board through the act of filing the articles of incorporation. In a reply to an emailed query, assistant city attorney Mary Fales wrote to The Chronicle that:

The NEW TA Board under the Articles of Incorporation has 7 City of Ann Arbor members which must be appointed by City Council on recommendation by the Mayor. At the time the respective individuals are appointed their appointment terms will be established as well pursuant to Section 4.03 of the Articles. There is no provision for any other method of appointment.

The specific language of the four-party agreement – which governs the process of possible transition from the AATA to the new authority – describes the contractual consideration in terms of the city of Ann Arbor explicitly making appointments to the new transit authority’s board: “In exchange for the mayor’s nomination with council confirmation, of seven directors of New TA’s board, …”

The section on terms of appointment, to which Fales referred in her email, sets up initial terms that are staggered for the Ann Arbor representatives – from one through four years – which is a fairly common approach for the establishment of a new board. After the initial terms are served, all subsequent terms are for four years. The idea is to prevent wholesale board turnover all in one year.

The Ann Arbor city council’s regular nomination/confirmation process requires two meetings – one at which the nominations are put before the council, and a second meeting at which a vote is taken on confirmation. Three current councilmembers will not be continuing on council through November, either by choice because they didn’t run for re-election (Carsten Hohnke in Ward 5 and Sandi Smith in Ward 1) or due to defeat in the August primary (Tony Derezinski in Ward 2).

Before the change in the city council’s composition, the only opportunity to apply the regular process to the new Act 196 board appointments would be for the nominations to come at the next meeting of the council, on Oct. 15. The confirmation vote then could be taken at the council’s Nov. 8 meeting – held on the Thursday following the Nov. 6 election. The first meeting for new councilmembers is Nov. 19. Another possibility is to compress the appointment process to a single meeting, which the council sometimes does. But that requires an eight-vote majority on the 11-member body.

There’s a possibility that the new edition of the Ann Arbor city council would make a choice to appoint a set of seven members to the new authority’s board that is different from the current seven AATA board members. But if that happened, the current AATA board members would serve out the remainder of their terms as members of the AATA board. And they’d continue to be part of the governance of the only transit authority for Ann Arbor that currently has the ability to operate a transportation service.

Timing of the Filing

The AATA board’s Oct. 2 resolution was consistent with expectations about timing that had been expressed at the board’s regular monthly meeting on Sept. 27 – that the articles would be filed Oct. 3. About the articles, the resolution included “the request that they be filed immediately.”

A Washtenaw County board of commissioners’ resolution related to the filing, passed on Aug. 1, 2012, raised the possibility of a slightly delayed timing sequence. The resolution more generally ratified the four-party agreement between the county, the city of Ann Arbor, the city of Ypsilanti and the AATA. As conditions to the filing, the board of commissioners’ resolution stipulated that the county administrator had to ensure several conditions were met, including the following notifications:

2. Letters of notice will be sent to each city, village and township elected official in the county at their address of record alerting them to the County’s intention to file the Articles of Incorporation on a date certain. Those letters shall indicate
a. Whether or not the jurisdiction represented by that official is included in the boundary of the New TA;
b. The process by which that jurisdiction may either withdraw or join the New TA; and
c. The date on which the Articles of Incorporation will be filed and, if relevant, the date by which the New TA must receive official notice from the jurisdiction if that jurisdiction votes to opt-out of the New TA.

Responding to a phone query, Washtenaw County clerk staff told The Chronicle that certified letters had already been sent on Sept. 27 to the clerks of all jurisdictions in the county of an intent to file the articles of incorporation on Oct. 3. Letters were also sent to all elected officials in the county. Information included in that communication was the last day to opt out of inclusion – Nov. 2 – as well as sample resolutions that could be used by a jurisdiction’s governing body to decide the opt-out question. [.pdf of sample letter] [.pdf of sample resolutions] Included in the information packet was a set of FAQs about transit and a set of FAQs about Act 196 incorporation. [.pdf of FAQ about transit] [.pdf of FAQ about the Act 196 filing]

After the vote by the AATA board on Oct. 2, Washtenaw County administrator Verna McDaniel determined that the county board of commissioners’ resolution requiring publication of the service plan and notification of intent had been satisfied, and then notified the county clerk of that. Then on Oct. 3, representatives of the AATA were authorized as couriers by the county clerk to physically convey the paperwork to Lansing.

Present: Charles Griffith, David Nacht, Jesse Bernstein, Eli Cooper, Sue Gott, Roger Kerson, Anya Dale.

Next regular meeting: Thursday, Oct. 18, 2012 at 6:30 p.m. at the Ann Arbor District Library, 343 S. Fifth Ave., Ann Arbor. [Check Chronicle event listings to confirm date]

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  1. October 4, 2012 at 10:28 pm | permalink

    Thank you so much for this complete account and clarification of many details.

    One thing I don’t see discussed here is the requirement that a service plan and financial plan be published in a newspaper of countywide circulation. The Chronicle had a brief notice. I haven’t seen one elsewhere. The BOC altered that requirement to require publication in media for local areas as well. Is there any information on when that requirement will be fulfilled?

  2. October 4, 2012 at 11:40 pm | permalink

    The BOC resolution stipulated that a request to file the articles of incorporation be preceded by publication of service and funding plan in specific publications:

    AATA will publish details of the service and funding plan in newspaper(s) of general circulation in the Washtenaw County, including but not limited to AnnArbor.com, the Ann Arbor Chronicle, the Washtenaw Legal News, and the Heritage Newspapers serving portions of Washtenaw County;

    To fulfill that requirement, the AATA purchased an ad on The Chronicle that links to this static page: [link]. I also found the notice in the WLN. I didn’t go through and check the others. But the resolution charged the county administrator with the responsibility for making sure that the conditions were met before filing.

  3. October 5, 2012 at 8:30 am | permalink

    Dave, you mention that “it’s a fair assumption that the current AATA board members will be nominated by mayor John Hieftje to serve as Ann Arbor’s representatives to the new transit authority . . .” Has anyone questioned whether simultaneous service on both boards would violate Michigan’s Incompatible Offices Act, MCL 15.181?

    Generally, a person may not hold offices on two boards or commissions where there may be contractual agreements between the two entities. The content of the act and the question of its application to these boards is discussed here: [link] The section 3(11) exception for PA 196 authorities does not appear to apply to the AATA and New TA because of the different composition of the two authorities.

    If the transfer of assets or authority from AATA to the New TA will involve any contractual arrangements between the two transit authorities, those arrangements raise significant questions regarding the compatibility of offices.

  4. October 5, 2012 at 11:25 am | permalink

    Re (2), I found the notice (including the Articles of Incorporation) in the print edition of the Washtenaw County Legal News dated September 27, 2012.

    Re (3), there are a number of questions related to the seating of the current u196 board as the formal 196 board as early as October 11. It seems to me that they are bypassing some procedural steps. As indicated in the article, Ann Arbor’s representatives should be named by mayoral appointment and council confirmation. I’m wondering whether the other communities would be expected to make some formal selection of their representatives to the actual board as well.

    It also seems strange to convene this board before the opt-out period is over. If the entire u196 board is involved in this early meeting, theoretically they could elect officers from communities that have opted out.

    The Article 7 agreements signed by the different communities specifically indicate that opted-out communities are not entitled to representation. (Here is an example, the Southeast District agreement [link] ) Similar agreements were signed by the other Act 7 districts.

    “If the representative is a resident of a community that opts out of the countywide transit authority, the remaining communities may select another representative and the opt out shall be considered a for-cause removal.”

    “Any community that opts out of the countywide transit authority shall be provided no rights or participation in the Transit Selection Committee or countywide transit authority board representative election nor transit service or included in the county ballot funding proposal.”

    Thus, there are several questions about the legitimacy of the 196 board if constituted so as to include representatives from opted-out jurisdictions. I understand the wish to keep those communities “at the table” but it seems to me that a more informal means of maintaining communication should be employed.

  5. By PeteM
    October 7, 2012 at 2:07 pm | permalink

    I like the idea of a county-wide system (in fact, I wish this happen generally — a county library etc.). I wonder if the intent is to equalize the tax burden over time.