Conan Smith (D-District 9) advocated for expanding the road commission board from three members to five. (Photos by the writer.)

The road commission board is a three-member entity, and is run independently from county operations. The county board, an elected body that appoints the road commissioners, is enabled under state law to expand the road commission board to five members. The possibility of expansion has been discussed periodically for years, but was always met with resistance – most notably from some of the road commissioners themselves.

Although there have been tensions in the past, several county commissioners commented on the current positive relationship between the county and the road commission, and noted that two of the three road commissioners – Barb Fuller and Bill McFarlane – are new. The third road commissioner, Doug Fuller, has served in that role since 2008, and is the current chair. [Barb and Doug Fuller are not related.]

Commissioners who argued against expansion at this time cited the need for the relatively new road commission board to gain more experience before any changes are made.

Arguing in favor of expansion, Conan Smith (D-District 9) scoffed at the idea that the road commission was “some magical institution that needs special treatment.” The only result of leaving the road commission board at three members instead of five is that it will consolidate political power among the three current road commissioners, he said. “Those people who are there longer get to build stronger relationships, get deeper knowledge, and they have that ability then to leverage that knowledge and political authority to their own ends.” Adding two more road commissioners will bring more diversity to the governance of that organization, he argued, saying it’s something that should have been done years ago.

Smith said it’s crucial to bring more voices to bear on one of the most contentious, critical issues that the county will face in a long time – the management of the local transportation network. Over the past decade, he said, the people who’ve served as road commissioners haven’t “had the wherewithal to tackle this issue in a way that presents a comprehensive solution.” Given the changing nature of transportation, the economy and economic development, the most important thing that’s needed is a greater diversity of voices at the table, Smith concluded.

Smith, Yousef Rabhi (D-District 8) and Felicia Brabec (D-District 4) indicated that they support expansion. Dan Smith (R-District 2) and Alicia Ping (R-District 3) were inclined to keep a three-member road commission board at this time, while two other commissioners – Kent Martinez-Kratz (D-District 1) and Andy LaBarre (D-District 7) – seemed on the fence, or leaning toward picking up the issue at a later date. Commissioners Ronnie Peterson (D-District 6) and Rolland Sizemore Jr. (D-District 5) did not attend the May 8 working session.

The meeting was attended by one of the three current road commissioners, Barb Fuller. She did not formally address the board.

The issue of possible expansion comes in the broader context of discussions about whether to change the structure of the road commission – by absorbing the commission into county operations. At their Oct. 2, 2013 meeting, county commissioners created a seven-member subcommittee to “explore partnerships and organizational interactions with the Washtenaw County Road Commission.” The subcommittee made recommendations to the board earlier this year that called for leaving the road commission as an independent entity. The subcommittee did not make a recommendation about expanding the road commission from three to five members, calling it a political decision that the county commissioners should make.

The board accepted the subcommittee’s recommendations at their May 7, 2014 meeting, but have not yet made a decision about expansion.

Following the working session discussion, it’s still unclear what action, if any, will be taken regarding the possible expansion of the road commission board. Any of the county commissioners have the option of bringing forward a resolution on the issue.

Road Commission: Background

The issue of expanding the road commission board has been discussed for years, pre-dating The Chronicle’s coverage of the county board, which started in September 2008.

At that time, Democrat Jeff Irwin of Ann Arbor – who now serves as state representative for District 53 – was chair of the county board. At an Oct. 8, 2008 caucus, county commissioners discussed the pending appointment of Doug Fuller to the road commission board, and touched on issues that are still being discussed today. From Chronicle coverage:

[Jessica] Ping first pressed for details about why Irwin had met with only five of the 15 applicants. The process followed here, said Ping, is not specified in the rules and regulations. Irwin explained that those conversations were in addition to the process – that’s how you make appointments, you talk to people, it doesn’t need to be enshrined in the rules in order to undertake that kind of outreach. [Conan] Smith expressed his view that it should be enshrined.

Ping said to protect the board of commissioners, that process should be specified in the rules and regulations, possibly through an amendment. [Mark] Ouimet said that the process should be laid out explicitly (steps one, two and three, and then the chair of the board of commissioners makes a recommendation) especially now as the possibility is explored of expanding the road commission from a 3-member body to a 5-member body. Irwin said that this kind of specification of the process within the rules and regulations could be undertaken at the beginning of the year when the new board of commissioners is in place or it could be undertaken sooner if there was a consensus to do that. Irwin said that it made most sense to consider an explicit process for road commission and the parks commission, as it was these two bodies that are responsible for oversight over expenditure of significant amounts of taxpayer money.

Ping underscored her concern that the board be protected by a rigorously spelled-out process, saying, “We all get blamed for the road commission.” Ouimet weighed in for the revision to rules and regulations by the new board next year versus some of the current commissioners who may or may not be here then. [Leah] Gunn stressed that the current rules don’t preclude anyone from talking to any of the applicants and that other commissioners had been free to undertake such conversations as well. Irwin said he was trying to make the process as robust as possible and as visible as possible, stating that pursuing interviews with five applicants “doesn’t impeach the process we engaged for this.”

[Karen] Lovejoy Roe said that in her estimation, another engineer (like Fuller) is not what we need on the road commission. She said she’d heard he was the candidate of choice for the controlling faction of the board before any applications came in, but said, “That’s okay, that’s the reality. Whatever process the chair wants to use is fine.” Lovejoy Roe expressed the view that every applicant would be interviewed unless it didn’t matter what was said in those interviews.

Responding to Lovejoy Roe’s concerns about lack of diversity in professional background, Irwin offered that diversity on the road commission is of interest with respect to not just experience, but also with respect to gender, geography and ideology. Irwin continued by pointing out that the term for Fred Veigel [who at that time served on the road commission along with David Rutledge] expires at the end of 2008, and that it is no secret that there have been discussions of expanding the commission from a 3-member to a 5-member body, thus there were additional opportunities in the near term to achieve additional diversity. [Ken] Schwartz said that the board needed to nail down the process for the appointments.

The appointment process mentioned at that caucus was not implemented.

Four years ago – at the board’s April 21, 2010 meeting – Conan Smith brought forward a resolution to set a public hearing on possible expansion of the road commission board. His resolution was tabled until the May 19, 2010 meeting, when the board set a public hearing for possible expansion, after vigorous debate. The hearing was held on July 7, 2010. After another lengthy and sometimes heated discussion, the board majority voted to end the process, over dissent from Irwin and Smith.

In 2011, county commissioners debated the possibility of levying a tax for road repairs, but did not pursue that option. Discussions about the tax proposal at that time were not tied to possible expansion of the road commission board. [See Chronicle coverage from 2011: "County Road Proposal Gets More Scrutiny" and "County Board Looks to the Future."]

The following year, in 2012, Conan Smith was serving as board chair. Late in the year, he had considered holding off on a reappointment of Doug Fuller to the road commission, saying he wanted to give the new county board – who would take office in January 2013 – some flexibility in discussing the future of the road commission, including a possible consolidation with county operations. However, in an email to the board on the morning of Dec. 5, 2012, Smith stated: “Although I am hopeful that the board next year will discuss the structure of our road commission, I’m convinced by leveler heads to make our appointment decisions based on current reality rather than the potential of that change.” Fuller was subsequently reappointed by the board for a six-year term ending on Dec. 31, 2018.

The discussion Smith hoped for eventually occurred. At their Oct. 2, 2013 meeting, Washtenaw County commissioners created a seven-member subcommittee to “explore partnerships and organizational interactions with the Washtenaw County Road Commission.” Chaired by commissioner Alicia Ping (R-District 3), the subcommittee met in late 2013 and early 2014, and made recommendations to the board that called for leaving the road commission as an independent entity. The subcommittee did not make a recommendation about expanding the road commission from three to five members, calling it a political decision that the county commissioners should make.

The board accepted the subcommittee’s recommendations at their May 7, 2014 meeting, but have not yet made a decision about expansion.

For additional background on this 2013-2014 process, see Chronicle coverage: “County Board Sets Hearing on Road Tax,” “County Considers Road Funding Options,” “No Major Change Likely for Road Commission” and “Group Explores Road Commission’s Future.”

Board Discussion

Dan Smith (R-District 2) began the discussion at the May 8 working session by saying he wouldn’t want to disregard the potential for Open Meetings Act violations. However, he added, “at the end of the day, it’s a merely technical reason” for expansion. That reason alone wouldn’t be enough for him to support expanding the road commission board. He’d be more in favor of expansion if there was a way to “cast into stone” various things like making appointments based on regions of the county, or other ways of making sure there would be guaranteed broad representation. Given that there isn’t any way to do that, Smith said, he was leaning against expansion, though he was interested in what other commissioners thought.

From left: Commissioners Dan Smith (R-District 2) and Kent Martinez-Kratz (D-District 1).

Yousef Rabhi (D-District 8) noted that this discussion had been prompted by past dialogues at the board table. The board has made some good appointments to the road commission, he said, and based on that track record, Rabhi thought they’d be able to appoint two new road commissioners who would be great representatives of county residents.

While the county board has created a partnership with the road commission that’s better than it’s been in a long time, “it shouldn’t be about the people who are there now,” Rabhi said. “It should be about do we have a system that works for the future, to mitigate the conflict that has existed in the past.”

One issue is that in the past, the road commission appointments have been one of the most political appointments that the county board makes, Rabhi said. While he thought that the recent appointments had stayed away from that, he didn’t know if that would remain the case in the future.

[By way of example, the county board appointed Wes Prater to the road commission board after Prater lost the election for his county commissioner seat in 2006. He subsequently resigned from the road commission during his 2008 campaign for the county board – an election he won. Similarly, Ken Schwartz was appointed to the road commission board in December 2010, after he lost a November 2010 county board re-election bid in District 2 to Republican Dan Smith. Schwartz resigned from the road commission in 2013 when the Superior Township board appointed him as supervisor, after Bill McFarlane retired. The county board appointed McFarlane to the road commission board earlier this year.]

Rabhi wanted to explore how to make the appointment process more thoughtful, deliberate and planful. How do county commissioners ensure that the appointments are representative of different parts of the community – not just geographically, but also in terms of diversity, experience, background and other aspects? These considerations need to be built into the road commissioner appointment process, he said.

Rabhi noted that for many other boards and commissions that the county board appoints, the positions have designated characteristics that the appointment must satisfy. It builds that diversity of representation into the process, he said. Such an approach would help to distance the county board from the incredible pressure and politics that comes from the road commissioner appointments, Rabhi said. The process shouldn’t be about “who has the most connections,” he said.

Felicia Brabec (D-District 4) also said she’d like to see an expanded road commission board, in order to have a broader representation among road commissioners.

Alicia Ping (R-District 3).

Alicia Ping (R-District 3), who chaired the board’s road commission subcommittee, asked about the possible timing of an expansion. She noted that there are two relatively new road commissioners – Barb Fuller and Bill McFarlane – and she thought it would be good for them to get some experience before any changes are made. The composition of the county board won’t change until the end of this year, she said, so there’s still time to wait and do something later in 2014, if that’s what the board decides. [She was referring to the fact that terms for current county commissioners run through Dec. 31, 2014. All commissioners serve two-year terms, with seats on the ballot in the August primaries and November general election this year.]

Unlike other issues related to the structure of the road commission, an expansion of the road commission board could take place whenever the county board wants, Ping noted. So at this point, she’s in favor of leaving the road commission board at three members, then addressing expansion later in the year.

Andy LaBarre (D-District 7) observed that at the last working session – on April 17, 2014 – he’d said he was in favor of expansion, for reasons of increasing diversity. Since then, he’s talked with two of the road commissioners – Doug Fuller and Barb Fuller. [They are not related.] His takeaway from those conversations is that there’s a dynamic that exists on a three-person board, “and we don’t know if the changes that we make to that dynamic are going to be, on the whole, net positives to the county and the people we serve.” LaBarre said he’s genuinely conflicted, and he’s now inclined to support delaying any expansion, though he’d like to revisit it in the future.

LaBarre said that Ping’s point was a critical one. Since October of 2013, two of the three commissioners – two-thirds of the road commission board – have been switched out, he said. The county board is asking those road commissioners to do their job while the board is having substantive discussions about the road commission and road funding. There’s also uncertainty about what the state will do regarding road funding, LaBarre said.

So LaBarre favored waiting, in part not to upset the dynamics of the current road commission and staff – a staff that’s been operating on roughly the same pay scale since 2007, he noted.

Andy LaBarre (D-District 7) chairs the county board’s working sessions.

Dan Smith agreed with Rabhi about the statement that recent appointments to the road commission had been much more deliberative – and Rabhi is to be congratulated for that, Smith said. He noted that in addition to the two recent appointments, later this year the county board will be making another appointment to the road commission.

By way of background, former Superior Township supervisor Bill McFarlane was appointed at the county board’s March 19, 2014 meeting to fill the seat left vacant by the death of long-time road commissioner Fred Veigel. That term ends Dec. 31, 2014, so the county board will be making an appointment – or reappointment – later this year. Barb Fuller was appointed to the road commission on Oct. 16, 2013 to fill a seat vacated by Ken Schwartz when he took over as supervisor for Superior Township on Oct. 1. The position is for the remainder of a six-year term, through Dec. 31, 2016. And the third road commissioner, Doug Fuller, is serving a term that ends on Dec. 31, 2018.

So within a span of 15 months, three appointments will have been made. D. Smith called that “rather unprecedented.”

D. Smith also noted that unlike the issue of the county absorbing the duties and responsibilities of the road commission, there is no deadline regarding expansion. Under current law, the county board could decide to expand the road commission board from three to five members at any time. “So we can take this up at some point in the future,” he said. Smith agreed with Ping about letting the fairly new road commissioners settle in. He noted that unlike in the past, the current working relationship with the road commission is good. With expansion, he said he was “quite fearful of the pressure that might be exerted to make appointments,” especially if there’s turnover on the county board. He thought there would be more opportunities to exert that political pressure with a larger road commission board.

Conan Smith (D-District 9) weighed in, saying that the road commission “isn’t really some magical institution that needs special treatment.” It’s a political body, that serves a governmental purpose, he said, “and really nothing more than that.” The concern over whether new, diverse voices on the road commission board “is somehow going to be tragically disruptive” doesn’t bear out in any context, he said. In fact, if it were true that two-thirds of a board changing in six years were so disruptive, then that meant that he, Ronnie Peterson and Rolland Sizemore Jr. should be running the county board, Smith joked. [Those three commissioners have the longest tenure on the county board.]

“We’ve seen that kind of turnover,” C. Smith continued. “We know that it doesn’t end the world.” The reason that it’s not disruptive is that the county government and road commission have professional staff, who make sure there’s continuity and stability “despite the ramifications of the political process,” Smith said. If the road commission board were expanded, he added, “I don’t think you’re going to see some sort of crisis of politics emerge.”

Conan Smith (D-District 9).

C. Smith praised Rabhi’s process of vetting road commission appointments, calling it incredibly deliberate. He expected any process for future appointments under Rabhi’s leadership would be the same. “I’m sure we would get excellent people who would not be a disruptive force on the road commission in an expanded function.”

In fact, C. Smith argued, the only purpose that’s truly served by constraining the road commission to three people instead of five “is to consolidate political power amongst the three people who are already there.” A delay in expansion serves the same purpose, he said. “Those people who are there longer get to build stronger relationships, get deeper knowledge, and they have that ability then to leverage that knowledge and political authority to their own ends.”

Putting new people on the road commission board and adding diversity is a good thing, he said. It’s important to bring more voices to bear on one of the most contentious, critical issues that the county will face in a long time – the management of the local transportation network. It’s something that should be done quickly, he said – it should have been done 10 years ago. “We knew this was coming, this crisis in funding, this challenge of management. And we’ve really taken no steps toward that.”

C. Smith said he was excited about the new road commissioners, but over the past decade, the people who’ve served haven’t “had the wherewithal to tackle this issue in a way that presents a comprehensive solution,” he said. Given the changing nature of transportation, the economy and economic development, the most important thing that’s needed is a greater diversity of voices at the table, he concluded.

Kent Martinez-Kratz (D-District 1).

Kent Martinez-Kratz (D-District 1) responded, saying he’d been inclined to support expansion of the road commission board. But what makes him hesitant now is hearing commissioners talk about the need for a new, diverse board. Two-thirds of the road commission board already is new, he noted, and county commissioners have recently had the opportunity to appoint a new, diverse board. Road commissioners are geographically diverse and gender diverse, he said. So it makes him uncomfortable that some county commissioners already want another new, diverse board. Conan Smith’s comments have made him skeptical, Martinez-Kratz said. “I almost think it’s, like, politically motivated – the notion of this expansion.”

Dan Smith said he wanted to play devil’s advocate. If the county board wants to expand the road commission from three to five members, then why not from five to seven members – or even nine? A nine-member board would be possible if the county board absorbed the duties and responsibilities of the road commission – a decision that the county commissioners are not pursuing. D. Smith noted that if they did pursue that option, then the county board could conceivable appoint a road commission board that would have nine members – one representing each district of the county. He said he wasn’t suggesting this as an alternative, but it would be possible to do.

Taking it one step further, D. Smith said, he noted that the road commission works very closely with the townships. He pointed out that the road commission was initially created when the county had a board of supervisors, with representatives from each municipality. So that would be another model for a road commission board, appointing 29 members – one for each township, two from each city, and 1 for Milan. [Only part of the city of Milan is within Washtenaw County.] At first glance, that seems totally unworkable, he said, but the Oakland County board of commissioners has 21 members “and they manage to conduct business.”

D. Smith said he wasn’t advocating for a 29-member road commission board, but what’s the right number?

Yousef Rabhi (D-District 8) and county administrator Verna McDaniel.

Conan Smith replied, saying that he appreciated D. Smith’s point. But C. Smith noted that the county board had just voted the previous night to accept a recommendation that the road commission not be absorbed into the county operations. “So all other options are off the table at this point,” he said. “You all made it very clear that the only thing you are conceivably interested in, with regards to road commission reform, is possibly expanding” from three to five members. [C. Smith had voted against accepting the recommendation.]

C. Smith said he also wanted to respond to allegations made by Martinez-Kratz about the politicization of the road commission. He noted that every current road commissioner has been appointed by a county board chair from an Ann Arbor district. “If this were a politicized process, certainly we could have done things that worked out differently in that regard.” He pointed out that he had been one of those chairs. [Jeff Irwin, a former Ann Arbor commissioner who's now the state representative for District 53, was chair when Doug Fuller was first appointed to the road commission in 2008, to fill the remainder of Wes Prater's term through 2012. C. Smith was chair when Doug Fuller was re-appointed in 2012 for a full six-year term. Another Ann Arbor commissioner, Yousef Rabhi, is the current board chair and nominated the other two sitting road commissioners – Barb Fuller and Bill McFarlane.]

“It’s not a political process,” C. Smith contended. He said it’s also not something new. “I’ve sat at this table for a decade and advocated for the exact same thing, every year.” It’s a matter of trying to get better, broader representation, he concluded, “given the systemic changes that we have to face in our transportation network.”

Rabhi also responded to Martinez-Kratz. Rabhi said he wanted to de-politicize the process, but he wasn’t sure that he’d made himself clear about that. In the past, it’s been a political process, he said, and now he’s trying to make the process more rational and deliberate. He noted that it’s true there will be another appointment made to the road commission at the end of this year, but he expects it will be a reappointment of the same person [Bill McFarlane].

However, if there are more positions on the road commission board, that would allow for more diversity, Rabhi said. He noted that diversity might mean more conservative voices. “I’m a liberal Democrat, but I think diversity of opinion is important.” Or maybe there could be more representation from the county’s north side, he said, which isn’t directly represented right now.

Road commissioner Barb Fuller.

Rabhi said the argument that a bigger board would be more burdensome to staff “just doesn’t pan out, in my opinion.” He also argued that the Open Meetings Act issue is an important one. He reported that before that night’s working session, he and Conan Smith had met and had a conversation about “the issues of the day.” They were able to do that because it’s not a violation of the OMA for two commissioners to meet, given the size of the nine-member county board. “The road commissioners are not legally allowed to do that,” Rabhi added. Road commissioners can’t deliberate toward a decision if there’s a quorum of commissioners present, unless the meeting is posted and open to the public, he noted. With a three-member road commission board, two members constitute a quorum.

Rabhi stressed that the issue isn’t a problem with the current road commissioners. Rather, it’s about setting up a better approach for the future. For the most recent appointment, 10 people applied, Rabhi noted. People are out there who want to serve and who are qualified and can bring a lot to the table. “Just as someone can say, ‘Why do it?’” Rabhi said, “I would say ‘Why not?’” Change is difficult, he added, but necessary.

LaBarre noted that some commissioners have argued it’s not a political process, but he disagreed. “I think it is, and that’s just fine. Politics, to me, is the tool by which we do things without having to fight each other, and it’s ok.”

LaBarre said he didn’t doubt that current road commissioners and staff had the capacity to change. But he thought they needed some time to adapt to the changes that have already occurred. What’s more, expansion of the road commission board isn’t the paramount issue they need to address right now, he said.

Dan Smith agreed that it’s not the most pressing issue. He suggested that when it’s time to make an appointment later this year, it would be possible for someone to bring forward a proposal for expanding the road commission board from three to five members. That decision might be influenced by things that happen in the next six months, he said, including what the county board does regarding road funding.

LaBarre noted that by his count, it sounded like the board was split on this issue 4-4. Ronnie Peterson had previously indicated support for expansion, LaBarre said, but he didn’t know how Rolland Sizemore Jr. was leaning. [Peterson and Sizemore were absent from the working session.]

At this point it’s unclear what action, if any, will be taken regarding the possible expansion of the road commission board. Any of the commissioners have the option of bringing forward a resolution on the issue at any time.

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York Township supervisor John Stanowski, center, talks with Washtenaw County commissioner Conan Smith, who represents District 9 in Ann Arbor. They are members of a subcommittee appointed by the county board to explore the future of the road commission. (Photos by the writer.)

The subcommittee was created by the county board of commissioners, which has the authority to appoint the three road commissioners but does not oversee the road commission’s budget or allocation of funds. State legislation enacted last year opened the possibility of absorbing the road commission into county operations, which would give county commissioners direct control over funding and operations now administered by the road commission.

According to the County Road Association of Michigan, five of the state’s 83 counties have merged their road commissions into the county government. Of those, the closest parallel to Washtenaw County in size and demographics is Ingham County, home to Lansing and East Lansing – where Michigan State University is located.

At the Dec. 4 meeting, there appeared to be universal agreement that more road funding is needed, but no clear consensus about the best way to achieve that goal. Conan Smith, a county commissioner representing District 9 in Ann Arbor, noted that there are more options to explore than just leaving the road commission unchanged, or absorbing it as a county department. He said he could almost guarantee that it wouldn’t be the best option to have the county board become the road commission.

However, he argued that there are likely structural and procedural changes that can improve the coordination of countywide transportation planning and land use planning, and to ease the burden on rural townships for funding the maintenance of roads that are used by people throughout the county.

A variety of funding mechanisms were discussed on Dec. 4, including the possibility of the county board levying a countywide road millage under Act 283 of 1909 – which at this point seems unlikely – or putting a millage question on the ballot for voters to decide.

The Dec. 4 meeting drew more than two dozen observers, including two of the three current road commissioners, several township elected officials, and many road commission employees. The subcommittee plans to schedule another meeting for early January 2014, and is expected to complete its recommendations by the end of March.

Subcommittee Background

At their Oct. 2, 2013 meeting, Washtenaw County commissioners created a new seven-member subcommittee to “explore partnerships and organizational interactions with the Washtenaw County Road Commission.” Members appointed at that time included four county commissioners: Alicia Ping of Saline (R-District 3), Conan Smith of Ann Arbor (D-District 9), Dan Smith of Northfield Township (R-District 2) and Rolland Sizemore Jr. of Ypsilanti Township (D-District 5). Also appointed were three township supervisors: Mandy Grewal of Pittsfield Township, Ken Schwartz of Superior Township and Pat Kelly of Dexter Township. The Oct. 2 resolution stated that the subcommittee would be chaired by the county board’s vice chair. That position is currently held by Ping.

Also on Oct. 2, the county board had approved an amendment to that resolution – proposed by Conan Smith – to give the subcommittee a $10,000 budget for possible research or travel costs to bring in experts on the issue. The action came late in the evening, over objections from Andy LaBarre (D-District 7), who said the budget wasn’t needed and didn’t look good being amended into the resolution so late.

The resolution was also amended to put a timeframe on the work, directing the subcommittee to report back to the board no later than March 31, 2014. The final vote on the overall resolution, as amended, passed over dissent from LaBarre and Kent Martinez-Kratz (D-District 1).

Grewal resigned from the subcommittee in mid-November, and on Nov. 20, 2013 the county board appointed York Township supervisor John Stanowski to the subcommittee.

Doug Fuller, who chairs the road commission, had been asked to join the subcommittee, but declined. He agreed to act as a liaison from the road commission to the subcommittee, however, and has attended both subcommittee meetings to date.

In the past, county commissioners have discussed the possibility of expanding the three-member road commission, in part because of how its small size causes potential for violating the state’s Open Meetings Act. And some commissioners have floated the possibility of consolidating the road commission with overall county operations.

Currently, the road commission is a semi-autonomous entity that oversees the maintenance of about 1,650 miles of roads in the county that are outside of cities and villages, including about 770 miles of gravel roads. The organization employs 115 full-time staff, down from 156 in 2004.

The three road commissioners are appointed by the county board of commissioners, but decisions made by the road commission board do not require authorization by the elected county board of commissioners.

Current road commissioners are Doug Fuller, Barb Fuller – who was appointed on Oct. 16, 2013, to fill the remainder of a term following the resignation of Ken Schwartz – and Fred Veigel, who also is a member of the county’s parks & recreation commission. Barb Fuller and Doug Fuller are not related. The salary for road commissioners, which is set by the county board, is $10,500 annually.

Public Commentary

The Dec. 4 subcommittee meeting was attended by more than two dozen observers, including a few township officials and many employees of the road commission. The meeting began with public commentary.

An employee of the road commission asked whether there would be hard facts about the money that would be saved by making the road commission a county department. Alicia Ping responded, saying that’s the purpose of the subcommittee – to evaluate the pros and cons, and make a recommendation to the county board of commissioners. She felt there was good representation on the subcommittee, with four commissioners representing different parts of the county, plus three township supervisors. The subcommittee is gathering information and will be analyzing that information to make its recommendation, she said.

Another employee urged the subcommittee to look at the issue from both sides. From the county’s perspective, the pros and cons might be different than from the perspective of the townships, for example.

Ron Smith, Bridgewater Township supervisor, said he was there because Doug Fuller – chair of the road commission board – had sent him an email asking him to attend. [Fuller, as chair of the road commission, had emailed all township supervisors to inform them of the meeting.] Smith said he’s interested in this exploration process, as a relatively new supervisor. He gets a lot of comments from people about roads and the road commission, and the township has a problem getting support for road millages, he said.

Part of the problem is the interface between citizens and “the orange trucks,” he said. “They see [road commission workers] doing things they don’t understand and don’t think is correct.” Smith said Doug Fuller had been kind enough to drive around the township with him for a couple of hours, explaining some of the work that residents had asked about. “So I’d like to see this exploration,” Smith said. “I think good things can come out of it.”

Smith noted that when he had worked in private industry, “I was the guy that went into broken companies and turned them around, or didn’t” – because not each project was a success, he said. He came to this area to work for Guardian Industries, to help fix issues at the Carleton plant. Some of the issues are the same at the road commission, he added. “I watch the orange trucks drive by and I say, ‘What are they doing? Why are they doing that?’” For example, in Bridgewater Township, which is primarily rural, a worker with a shovel would be more effective than a grater in many cases, he said. So he’d like to explore the road commission’s management, and how it manages work in some of the county’s rural townships.

Subcommittee Discussion

Pat Kelly, Dexter Township’s supervisor, pointed out that the pros and cons of potentially absorbing the road commission into the county operations involve much more than money. Obviously, money is always a part of it, she said, but it’s not the only factor.

Washtenaw County commissioner Rolland Sizemore Jr.

Dan Smith, who represents District 2 on the county board, agreed that money is a consideration. “But it’s certainly for me not a motivating factor.” The road commission is already a very efficient organization, he said, and they run a very tight ship. At any large organization, there is always money that can be saved and efficiencies to be gained, he added. But he didn’t think there was a lot of money to be saved in this case.

Conan Smith, a county commissioner representing District 9 in Ann Arbor, said there are more than two options to explore. There are more options than just leaving the road commission unchanged, or absorbing it into the county operations. He said he could almost guarantee that it wouldn’t be the best option to have the county board become the road commission.

Rolland Sizemore Jr. – who represents District 5, which includes Ypsilanti Township – said his only problem with the road commission is “I think your PR is terrible.” But now that Roy Townsend is managing director, Sizemore added, “It’s changed 100%.” The road commission hasn’t done a very good job letting people know what they do, he said. Certain employees don’t answer their emails, Sizemore complained – perhaps because “they’ve got the Ann Arbor attitude, that they don’t have to,” he added.

Sizemore said he’s not willing to take over the road commission. He agreed with Dan Smith, that he didn’t think it would save a lot of money to do that. “I think we need to work closer together on some items,” he said, and the PR needs to be improved. He reported that he’s talked with other road commissions in Michigan. “They all tell me the same thing,” he said. “If it’s political, the county will take them over. If it’s economical, the county leaves them alone.” The road commission and county board both need to do a better job of PR, because now residents look at government as the enemy, Sizemore said. He thinks it’s getting better under Townsend’s leadership.

Sizemore added that he might be willing to increase the size of the road commission’s board from three members to five, but he hadn’t yet decided about that.

Subcommittee Discussion – Membership Change

Alicia Ping, who chairs the subcommittee, noted that Mandy Grewal, Pittsfield Township supervisor, had submitted a letter of resignation from the subcommittee. Grewal’s letter, dated Nov. 12, was included in the meeting packet of materials, and stated:

I am writing to recuse myself from the Committee established by the Washtenaw County Board of Commissioners to review the operations of the Washtenaw County Road Commission.

I appreciate the opportunity to serve and hope to be able to volunteer my services for the continued improvement of our community another time in the future.

Based on minutes from the subcommittee’s first meeting on Oct. 29, Grewal did not attend.

By way of background, Pittsfield Township is currently embarking on a major project to upgrade South State Street. The township has created a corridor improvement authority (CIA) that will use tax increment financing (TIF) to help pay for it, as a local match to secure federal funds. On Nov. 6, 2013, the county board approved a tax-sharing agreement that outlines the county’s participation in that project. Township officials have indicated that one reason they pursued a CIA approach was that the road commission had decided not to provide funding for the project.

At the Dec. 4 subcommittee meeting, Ping also noted that the county board had made an appointment on Nov. 20, 2013 to replace Grewal with York Township supervisor John Stanowski. Ping offered the opportunity for Stanowski and other subcommittee members to introduce themselves.

County commissioner Alicia Ping, who chairs the county board’s exploratory subcommittee on the road commission.

Stanowski said that most of his career had been spent as a prosecutor. It’s his first term as supervisor of York Township, which is located in the southern part of the county, southeast of Saline. [He was elected in November 2012.] He described York Township as a conservative community. “I tend to be a curmudgeon when it comes to spending money. I have basically conservative views on most things, and I tend to be outspoken when I feel that something’s not right.”

Regarding the road commission, Stanowski said he had no preconceived notions, but he did have some ideas. “I’ve got a tabula rasa – a clean mind.”

Other subcommittee members introduced themselves. County commissioner Dan Smith – whose district covers a portion of northern Ann Arbor, as well as the townships of Ann Arbor, Northfield, Salem, Superior and Webster – noted that he previously served on the Northfield Township board of trustees, “so I’m familiar with the townships and their view on roads as well.”

Dexter Township supervisor Pat Kelly noted that the subcommittee has only met once before, and that first meeting had been a short one – so Stanowski hadn’t missed a lot, she said. The subcommittee doesn’t have a clear direction yet, she said. “That’s one of the first things we need to do.”

Referring to Ron Smith’s public commentary, Kelly said she didn’t view the subcommittee’s role as trying to figure out what the road commission’s orange trucks are doing or not doing. The subcommittee needs to identify the best process to get those answers. “I don’t think we’re here to run the road commission or even to figure out why people don’t answer their emails,” she quipped, referring to Rolland Sizemore Jr.’s complaint.

Ping said she felt the subcommittee had a good balance of perspectives, and she thought that members would bring history, expertise, and representation on the question of what’s best for the county residents. Nothing is preconceived, Ping said.

Ping, whose district covers most of southern and southwestern Washtenaw County, also noted that the county is not currently running the road commission. That’s still the job of managing director Roy Townsend, overseen by the three-member road commission board, she said. [Two of those three members – the chair, Doug Fuller, and the newest member, Barb Fuller, attended the Dec. 4 subcommittee meeting. The third road commissioner is Fred Veigel.] A previous road commissioner, Ken Schwartz, was recently was appointed as Superior Township supervisor and serves on the subcommittee.

Other elected officials at the meeting to observe included Ron Smith, Bridgewater Township supervisor; Scio Township supervisor Spaulding Clark; and Webster Township supervisor John Kingsley.

Ann Arbor Township supervisor Mike Moran did not attend the Dec. 4 meeting, but had sent an email to Ping outlining the township’s position. From the email, dated Nov. 13:

Ann Arbor Charter Township has discussed the proposal that the Washtenaw County Road Commission be dissolved and its functions be folded into the Washtenaw County Board of Commissioners in some fashion. No member of the Board of Trustees supports that proposal and the Board has asked me to convey that opinion to you and the County Board of Commissioners. Thank you for all of your work on behalf of Washtenaw County.

Subcommittee Discussion – Information Gathering

Alicia Ping reported that she has asked Diane Heidt, the county’s human resources and labor relations director, to look at whether there are duplications in employee positions at the road commission and the county. That might be one area that could provide cost savings, Ping said. She asked subcommittee members whether there is other information that they’d like to collect.

John Stanowski asked whether it’s the opinion of the county board that there’s a problem with the road commission. Is the problem with the structure or administration? he asked. Or are cost savings the main concern? He wanted to know what the problem was, so that the subcommittee could work toward a solution.

Pat Kelly, Dexter Township supervisor.

Ping replied that this process was undertaken as a result of state legislation that aims to eliminate duplication and encourage consolidation of government units. The legislation – Public Act 15 of 2012 – gave county boards the authority to absorb independent road commissions. Previously, that wasn’t allowed. The law sunsets at the end of 2014, however, so the subcommittee was created to evaluate whether that’s a good move for Washtenaw County.

Conan Smith framed the question not as what problem needs to be resolved, but rather what opportunities are possible, and how can the structure be improved. When he was county board chair, he said, there was discussion about expanding the number of road commissioners so that there was more representation there. It evolved into a discussion of whether that representation should be geographic, he recalled – guaranteeing that there are spots for rural or urban townships on the road commission, for example.

[By way of background, over three years ago – at its July 7, 2010 meeting – the county board held a public hearing on the issue of expanding the road commission board. Conan Smith was chair of the board's ways & means committee that year. Jeff Irwin, who was a county commissioner at the time, had indicated an intent to make a formal resolution on the issue, but the expansion effort did not move forward. About a year later, when Smith was board chair, the issue arose again, this time related to a possible countywide millage under Act 283. The county board did not ultimately act on that, either. For additional background, see Chronicle coverage: "Commissioners Discuss County Road Tax,"  "County Postpones Action on Road Millage," and "County Road Proposal Gets More Scrutiny."]

At the Dec. 4 meeting, Conan Smith posed this question: If the road commission were designed for 2010 instead of 1910, “how would we do it differently today?” The state legislature has offered the opportunity to think about that, and maybe the answer is that it’s perfect the way it is, he said. “I for one would argue that there are things that we can be doing better.” Some of that is related to structure and processes, he said.

Stanowski said it’s his opinion that if some things aren’t broken, don’t try to fix them – “because you’ll only make it worse.” If the subcommittee can come up with economic efficiencies, he said, perhaps that can be achieved under that existing governance structure.

Ping agreed, noting that there are options other than the two extremes of leaving things unchanged or absorbing the road commission into the county. “It’s not black or white – there’s a whole gray spectrum.” She described the subcommittee’s work as a “three-month SWOT analysis.” [SWOT refers to a planning method used to evaluate strengths, weaknesses, opportunities, and threats.] Based on that, the subcommittee will write its recommendation, she said.

Stanowski said he’s looking at the issue from the township’s point of view. York Township has about 36 miles of roads. His concern is whether big government should take over and relinquish townships to a minor position. “We may not have the population, but we have the roads,” he said. It wouldn’t be fair to have three road commissioners from the city and just two from the townships, he added. Stanowski said he wouldn’t be comfortable expanding the road commission membership unless the townships could have the majority of positions.

Pat Kelly, Dexter Township supervisor, said the subcommittee also needs to explore whether they need the new state law in order to expand the membership of the road commission. Her personal view, she said, was that expansion could be done without the new state legislation. Conan Smith agreed that if the road commission board were expanded to five members, the county board wouldn’t need the new state law to do that. But if they wanted to expand membership to seven members, it would require that new legislation.

Dan Smith pointed out that the subcommittee had been charged at recommending one of three things. One possibility is to recommend no changes, he said. It might be that after the subcommittee analyzes the information it gathers, it decides that any changes would make things worse, on balance. Another possibility is to expand the number of road commissioners from three to five, under the law that’s existed for many years. The third option, which is only available through 2014, is for the county government to absorb the duties and responsibilities of the road commission, he noted.

If the subcommittee recommends absorbing the road commission, then the next question is: “What does a road department look like as part of county government?” Dan Smith said. In that context, there are many scenarios that could take place. But he said the feedback he’s getting from township officials and residents is that the road commission is generally working pretty well, and he’s not interested in fixing something if it’s not broken.

Rolland Sizemore Jr. said his goal is to figure out how the road commission and the county can work together better. There are things that the county can do to improve, too. He again encouraged more PR and education about the road commission’s work.

Subcommittee Discussion – Funding Sources

Alicia Ping told subcommittee members that at some point, she wanted to talk about the road commission’s capital improvement plan (CIP), and what the commission would do if it had adequate funding. She noted that the county board is the only entity that could levy a countywide millage for roads, or put a countywide millage on the ballot. Or it might be the county board’s role to help townships understand how they could levy their own local road millage, she said. There are some communities that currently provide their own funding for roads, she added. Ypsilanti Township decided to use bonds for road repair. Scio Township is funding road improvements through a special assessment district. Pat Kelly said that Dexter Township is looking into that possibility as well.

Roy Townsend, managing director of the Washtenaw County road commission.

Ping wanted to see how the county could be a resource to help communities get additional road funding, or to help them generate funding for themselves.

At the end of the day, Dan Smith said, it’s about fixing the roads, and finding mechanisms to do that. For the vast majority of people in the county, what happens to the road commission’s organization and structure is “insider baseball,” he said. Everyone in the room and on the subcommittee cares about the organization and structure, he added, but most people would say they just want the roads fixed.

So that raises the question about financing, Dan Smith said. The county board has the authority to levy an Act 283 tax, he noted, and townships have the authority to seek a levy under Act 51 or a special assessment district. The townships could get upset and decide not to turn over their Act 51 money to the county, if the county absorbs the road commission, he said. The underlying issue for anything that the subcommittee recommends should address how it helps fix the roads, Smith concluded.

Kelly responded, saying that so far, she didn’t see any way that the county could help the townships regarding the roads. The road commission helps the townships get things done, she said, noting that she has many of the phone numbers for road commission employees on her speed dial.

Kelly reported that the township gets Act 51 funding that in turn the road commission uses on roads. But it’s not sufficient to cover everything, she said, so Dexter Township has made a decision to spend its Act 51 funding only on its main roads. And that’s why the township is considering a special assessment district to pay for other roads.

Conan Smith asked whether a township is the unit of government that should bear the responsibility for the maintenance of all roads in its jurisdiction. Should taxpayers in Dexter Township, for example, be the only ones to pay to maintain those roads? People across the county all should share in the burden of making sure the whole county’s transportation network is robust and well-maintained, he said.

But there’s a structural problem that exists between the road commission and the county board of commissioners, and how transportation decision-making is made, Conan Smith noted. The city of Ann Arbor, which he represents, gets Act 51 money and also has a street millage, so the city takes care of its own roads. “Where’s the argument for a citizen of Ann Arbor to vote for a countywide road millage?” he asked. Kelly replied: “There isn’t one.”

That’s right, C. Smith said. But if people start rethinking that structure, “we can start to deconstruct that mentality and find ways that we can collectively invest.” He noted that he’s in Dexter Township a lot – he drives on those roads, and wants them to be well-maintained. As another example, Smith said his Ann Arbor constituents who are recreational bicyclists and cycle out to the county’s rural areas complain about the chip seal that’s used on roads. “But they’re not motivated right now to put additional money into making that a better system, because they don’t see a way to influence it effectively,” he said. Those are the kinds of opportunities to explore, he added, that might deliver more money into the system overall.

Roy Townsend, the road commission’s managing director, reported that the commission had recently passed its final 2013 budget as well as the 2014 budget, which he said he could provide to subcommittee members for their next meeting. [.pdf of Dec. 3, 2013 road commission board packet, which includes 2013 budget analysis and 2014 draft budget.]

There’s also a list of projects planned for the next five years, Townsend said, as well as a list of projects that aren’t being done because funding isn’t available. That unfunded list is a lot larger, he added. [.xls file of 2014-2018 CIP with funded projects] [.pdf of unfunded projects 2014-2018]

Townsend and Doug Fuller had presented some of this information to the county board, as part of the road commission’s annual plan, at a Nov. 21, 2013 working session. Subcommittee members had also been provided with additional financial material, to help in their analysis. [.pdf of 2013 road and bridge projects] [.pdf of 2014 projects] [.pdf of 2013 2Q budget update] [.pdf of 2012 WCRC audit] [.pdf of WCRC property appraisal] [.pdf of township contributions to roads 2011-2013] [.pdf of 2012 retiree health care valuation report] [.pdf of 2012 actuarial valuation report Municipal Employees' Retirement System (MERS)]

Barb Fuller, one of three Washtenaw County road commissioners.

Townsend noted that two year ago, he and Ken Schwartz – who served as a road commissioner at the time – came to the county board with a plan for road projects that needed funding. The county board had the option, under Act 283 of 1909, of levying a millage without voter approval to pay for specific projects. Although the board didn’t act at the time, it’s another potential funding tool, he noted.

Dan Smith pointed to North Territorial Road as an example of a road that runs the entire length of the county, crossing many jurisdictions. Salem Township put considerable resources into North Territorial, he said, and Northfield Township had invested in it too. Webster Township has put some money into the road, although there are still some bad spots there, he said.

His point, Smith said, is that North Territorial Road is a major county thoroughfare. Is it really right that these individual townships are investing in that road, given that the townships have no responsibility to spend a single penny of township tax dollars on roads? But in fact, township officials do choose to spend money on roads like this because they hear from citizens about the bad roads, he said. There are other examples beyond North Territorial, he noted, like Jackson Road, Zeeb Road, Dexter-Ann Arbor Road and Dexter-Pinckney Road.

Scio Township has taken an approach of doing a special assessment district, Dan Smith noted, and strategies like that make sense. The question is whether to fund these major roads in a different way, so that the burden isn’t put on the local community to come up with funding. If so, how do the townships fit in with that? Would changing the structure of the road commission help with that, or simply make it even worse? “I haven’t yet seen anything that makes it better,” D. Smith added, “but I’m willing to explore the alternatives and make a decision on this, one way or another, and not just let the clock run out [on the state legislation].”

Conan Smith added that right now, there’s a disconnected land use and transportation system in the county. Over the last decade, he said, the road commission has done a good job at starting to integrate its planning processes with land use planning. But as an example of the disconnect, Smith pointed to Webster Township, which he said has done a good job at maintaining the township’s rural character. That means the land values there will be predominantly based on agricultural values, which are lower than land that can be developed, he explained.

In turn, C. Smith added, that means the township’s ability to raise money through taxes is more difficult than in the city of Ann Arbor, for example. And although it benefits the entire county that the township remains rural, the township is being asked to take care of the roads in its jurisdiction, without asking anyone else to contribute, Smith said. “That’s part of the system that’s broken, in my mind, that we have the opportunity to try and fix.”

Kelly disagreed that the system is broken. Two years ago, the county board was presented with a “perfect” proposal that was well-researched. [She was referring to the possibility of levying a countywide millage under Act 283.] Conan Smith noted that the proposal had been presented without the involvement of any city representatives, “so how can I support a proposal like that and go back to my constituents?” he asked.

Superior Township supervisor Ken Schwartz, who previously served as a Washtenaw County road commissioner. He also is a former elected county commissioner.

Kelly told Smith that he would need to educate city residents about why it’s important. It’s like a drain project, she noted – only a few people might be affected, but it’s seen as a necessary project and is funded by a much broader tax base. “You’re never going to make that political case,” she said. “You’re going to have to sit up … and be counted, and say this is the right thing to do – and just do it! Why didn’t you pass that millage? I don’t understand it.”

Alicia Ping agreed with Kelly that the Act 283 proposal had been a good one. But the way that the current governance structure is set up, county commissioners were concerned that they’d be making constituents in their districts pay a tax but the county board had no control over how the money would be spent – it would be allocated by the road commission, Ping said. “There’s a disconnect between the people who collect the money and the people spend the money,” Ping said, adding that there’s no accountability between those two entities. “That’s where the problem is.”

By way of background, Act 283 of 1909 does appear to outline a process by which the county board could exert some control over how the tax dollars are spent. It directs the road commission to present an annual plan to the county board for road projects, with an estimate of how much it would cost to fund those projects. From Act 283 (Note: the county board of commissioners was previously called the county board of supervisors, and was composed of supervisors from each township):

If the determination of the board of county road commissioners shall not meet with the approval of a majority of the board of supervisors, then the said board of supervisors shall proceed to decide upon the amount of tax to be raised for such year in such county for the purposes aforesaid, and may allow or reject in whole or in part any or all of the items for the sections of roads thus submitted for its consideration; and it shall not be lawful for such county road commissioners without the consent of such board of supervisors to spend any such moneys upon any other roads than as thus specified. [.pdf of Act 283 excerpt, with an analysis prepared for the county board in 2011 by Lew Kidder of Scio Township]

Ken Schwartz – the new Superior Township supervisor who previously served as a county road commissioner – also spoke about the fact that the road commission had approached the county board in 2011 about a proposal under Act 283. He noted that Act 283 was written in 1909, and described the law as “really flawed.”

Funding should really come from the state, Schwartz said. There really are only two viable funding options for roads, he added – the state, and the local units of government. He thought the road commission had done a good job of advising the local units of government about their options.

Schwartz thought it would be very difficult for the county to figure out a different mechanism that really works. Just like Conan Smith wouldn’t feel comfortable voting for a millage that would be spent outside Ann Arbor, Schwartz said, a lot of township officials might not feel comfortable about the county board allocating Act 51 money that’s now administered by the road commission. The issue relates to taxation without representation, he said.

Schwartz felt that the local units of government will need to step up until state officials provide more funding.

John Stanowski asked Schwartz whether he thought that the populace “just didn’t trust government.” Schwartz replied that he didn’t encounter that attitude at all. “It just seemed like Act 283 was unworkable in modern times,” Schwartz added. In order to make levying a millage fair, it would require that the taxes collected in Ann Arbor and other cities would have to be handed back to the city government. “I don’t think we could dictate how [the city] would spend that money,” he said.

Dan Smith said he agreed with some of Schwartz’s comments – Act 283 is awkward and difficult to administer. One option would be to put a millage on the ballot that would clearly indicate how funds would be distributed. In Ann Arbor, for example, if voters approved a countywide road millage, perhaps the city council would agree to reduce the city’s charter tax levy by the same amount as that road millage – so that overall, there would be no tax increase on Ann Arbor taxpayers, he ventured.

D. Smith agreed that there’s a big disconnect in the current system, because the road commission is a separate legal entity from the county government. After road commissioners are appointed by the county board, “it’s their game,” he noted. “They’re the ones that run things, and yet we’re the ones who take the [political] hit for the tax. And that’s a struggle.” D. Smith then returned to his point that residents don’t really care about this kind of insider baseball – they just want the roads fixed.

Next Steps

As she wrapped up the Dec. 4 meeting, Alicia Ping reminded subcommittee members that Diane Heidt, the county’s human resources and labor relations director, will be preparing an analysis of any duplications in employee positions at the road commission and the county. Greg Dill, the county’s infrastructure management director, will be doing a similar analysis on overlapping facilities and assets. Roy Townsend, the road commission’s managing director, will be providing budget information and a list of funded and unfunded projects.

Ping asked subcommittee members to think about any other information that they’d like to collect, and to do their own SWOT analysis from the perspective of their jurisdictions. At the next meeting, they could review this material and see where there might be tangible or non-tangible benefits to taking any particular action.

Subcommittee members discussed the possibility of inviting representatives from other counties that had merged their road commissions with the county government, as well as from counties that had considered but rejected that approach. The consensus appeared to be that it would be a benefit to find a county with a similar demographic – like Ingham County, where Lansing and East Lansing are located. Ingham County did decide to absorb the road commission. Pat Kelly, Dexter Township supervisor, joked it would be good to look at a similar county that has a “900-pound gorilla in the middle” – a reference to Ann Arbor, with the University of Michigan, and East Lansing, home to Michigan State University.

Ken Swartz, Superior Township supervisor, cautioned that it’s important to understand the context for decisions made in other counties. In some cases, decisions are “overtly political, because people didn’t like each other.” And Macomb County, which is significantly bigger than Washtenaw County, went through a process to become a charter county, and absorbed the road commission through that charter process, he said. “I’m leery of comparing others that did it for purposes that weren’t strictly speaking what we’re trying to look at,” Schwartz said.

Ping estimated that their next meeting would be scheduled sometime in early January.

Despite some strong political pressure from supporters of the road commission to abandon this process, Ping told The Chronicle in a follow-up phone conversation that she intends to continue the subcommittee’s work and deliver a set of recommendations by March.

County board chair Yousef Rabhi, who attended a meeting of township supervisors held on Dec. 5, told The Chronicle in a follow-up phone conversation that he discussed the subcommittee’s mission and process at that meeting. A majority of supervisors who attended the Dec. 5 meeting were against absorbing the road commission into the county government, he reported, but he estimated that only about half of the township supervisors were there. Rabhi indicated that he expects the subcommittee to continue its work and provide recommendations to the county board by the end of March.

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At the Nov. 8, 2012 council meeting, when the Ann Arbor opt-out vote took place, Jane Lumm (Ward 2) described the effort that had gone into planning for The Washtenaw Ride as a colossal waste of time and money. Carsten Hohnke (Ward 5) countered that it had been valuable and appropriate to engage in that effort. And mayor John Hieftje pointed out that a criticism of the recently failed library bond proposal was that there was no specific plan for the new library building – and that the AATA’s approach had relied on first developing a plan, which required an investment of money.

The decision by the Ann Arbor city council ends this particular approach to expanding transportation services in the area by terminating a four-party agreement – between Washtenaw County, the cities of Ann Arbor and Ypsilanti, and the AATA – that would have governed a transition from the AATA to a countywide authority.

The language of the council’s resolution offered some optimism that expanded transportation services might be pursued with some other mechanism than a countywide Act 196 incorporation: “… AATA is encouraged to continue to discuss regional transportation options among Ann Arbor, Ypsilanti, Ypsilanti township, Ann Arbor township, Scio township and Pittsfield township, leading to a better understanding and process for improving local transit options …”

During public commentary, members of Partners for Transit described disappointment at the withdrawal, but urged the council to take the initiative to work toward a new accord on expanded transit, saying they were encouraged by the language of the resolution calling for continued dialogue.

AATA strategic planner Michael Benham was allowed to answer questions from the podium – over dissent from Stephen Kunselman (Ward 3) and Marcia Higgins (Ward 4). Benham indicated he was heartened by the language in the resolution that essentially says “keep going.” He indicated optimism that the community could arrive at a vision of expanded transit for those who need it the most. During questioning, Higgins made clear to Benham that she and other councilmembers had heard repeatedly that basic transportation among neighborhoods was a need that currently isn’t being met.

Kunselman sketched out a possibility of maintaining incorporation under Act 55, which would allow Ann Arbor to maintain control over the AATA, but also mooted the possibility of expanding the AATA board membership to include representatives of communities that have “skin in the game” through purchase-of-service agreements.

The Ann Arbor city council’s decision came in the context of opt-out decisions by most of the other 28 municipalities in the county. Until Ann Arbor’s decision, those jurisdictions still participating in the new authority included more than half the county’s population, and included the county’s largest population centers: Ann Arbor, Ypsilanti, Ypsilanti Township, and Saline.

Ann Arbor had been expected to help lead the initiative, and had been the first of the four parties to ratify the agreement, on March 5, 2012. Since incorporation on Oct. 3, more than one glitch was encountered in the technical implementation. Those included the unclarity about the start of a 30-day opt-out period, and the eligibility of current AATA board members to serve on the board of the new authority.

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

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:

SECTION 4.02: BOARD MAKE UP REVIEW
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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The creation of the new authority will be made official when the Washtenaw County clerk files the paperwork with the state, likely on Oct. 3. [Added shortly after initial publication: Although the Oct. 3 date was the expectation expressed at the AATA board's Sept. 27 meeting, the wording of a Washtenaw County board of commissioners resolution on the topic indicates that a step of alerting jurisdictions of the intent to file would need to take place beforehand.] However, that entity 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 yet-to-be-incorporated board (called the U196 board), which has been meeting for a year.

In order for make a 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. That four-party agreement was ratified by the city of Ann Arbor, the city of Ypsilanti, Washtenaw County and the AATA.

The AATA has indicated that a possible 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. But incorporation of the new transit authority will include by default all the 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.

Updated at 3 p.m. Oct. 3, 2012: According to Washtenaw County clerk staff, certified letters were 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. After the vote by the AATA board on Oct. 2, county administrator Verna McDaniel determined that the Washtenaw board of commissioners’ resolution requiring publication of the service plan and notification of intent to file 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.

This brief was filed from the downtown location of the Ann Arbor District Library, where the AATA board holds its meetings. A more detailed report will follow: [link]

Charles Griffith looks at a budget spreadsheet during the Sept. 27, 2012 meeting of the Ann Arbor Transportation Authority board. (Photos by the writer.)

Compared to an earlier draft budget, the one approved by the board was diminished on the revenue side by $800,000 in less-than-expected state operating assistance. Subsequent reductions in expenses still resulted in the need to use $300,000 in reserves to cover the gap. The reduction in state operating assistance for the AATA is related to a dramatic budget decrease by a Detroit transit agency – the state’s formula for making its allocations is sensitive to that.

The meeting’s budget discussion overlapped with conversation about the new transit authority, which is likely to be incorporated next week on Oct. 3. That’s the day after the AATA board is scheduled to meet in a special session, when it’s expected to request formally that the Washtenaw County clerk file articles of incorporation with the state. The new transit authority is to be called The Washtenaw Ride. Before any assets could be transferred from the AATA to The Washtenaw Ride, voters would need to approve a funding mechanism, likely through a millage to be placed on the ballot as soon as May 2013.

AATA board members made a point to stress that the planned operating deficits for the year that’s now ending (about $1 million) and the upcoming year ($300,000) are not sustainable. Instead, those budgets reflect an early implementation of some expanded services – like increased frequency on Route #4 between Ann Arbor and Ypsilanti – which the AATA would like to implement more permanently in the context of the broader governance and service area of a new transit authority. Some currently expanded services might need to be scaled back if the new authority winds up being dissolved at the end of 2014 – a possibility if voters do not authorize the necessary funding.

The incorporation of the new authority has statutory implications. Because the incorporation of a new transit authority will include by default all the jurisdictions in Washtenaw County, the filing of the articles opens a 30-day window for jurisdictions to opt out of participation. That can be accomplished through a vote by a jurisdiction’s governing body.

The possibility of several jurisdictions opting out prompted the introduction of a resolution at the Sept. 27 meeting that was not originally on the agenda. That resolution was meant to clarify that the AATA board is keen to allow all the constituencies to be represented on the new authority that have been represented for about a year on the as-yet-unincorporated board – up to the point when a millage is placed on the ballot. That is, the current AATA board members – who will also serve on the new board – do not intend that their first response to opt-outs would be to alter the new board’s composition.

The articles of incorporation for the new authority specify an initial board membership of 15 members in eight districts. Altering that membership would, by the articles of incorporation, require a 4/5 majority (12 votes). So the resolution floated at the Sept. 27 meeting was intended to give assurance that the seven AATA board members – as future members of the 15-member board – would not want to alter the composition of the new board until a decision is made about putting a transit millage on the ballot. At that point, a change likely would be made to avoid the possibility of “representation without taxation.”

Representatives of three of the seven non-Ann Arbor districts in the new authority attended the AATA’s Sept. 27 meeting and participated in the discussion: Karen Lovejoy Roe (Southeast District); Bill Lavery (South Middle District); and David Read (North Middle District). Lovejoy and Read reacted to the uncertainty that the resolution was meant to address by questioning the timing of the planned incorporation.

Another significant business item transacted at the meeting was the contingent approval of a contract with URS Corp. to continue studying a possible transportation connector between the northeast and south sides of Ann Arbor. The authorization of the contract is conditional on additional local funding – in the amount of $60,000. The $60,000 would be part of a total $300,000 local match for a $1.2 million federal grant. The Ann Arbor city council had voted initially to reject a request that it provide the $60,000, but then reconsidered and postponed the question until Oct. 15. In the meantime, the board of the Ann Arbor Downtown Development Authority has indicated some willingness to make a contribution – $30,000 of the requested $60,000.

The AATA board’s Sept. 27 meeting marked Jesse Bernstein’s final meeting as chair. He’s led the board for the last two years. At the meeting, Bernstein alluded to the tradition of rotating the chairship of the board, a tradition he wanted to continue. The board elected Charles Griffith as chair.

FY 2013 Budget

On the board’s agenda was approval of the FY 2013 budget and work plan. The AATA’s fiscal year runs from October through September.

FY 2013 Budget: Background

The draft AATA budget provided on Sept. 12 to the Ann Arbor city council as a communication item for the council’s Sept. 17 meeting showed a surplus of $22,692 over the budgeted expenses of $33,344,048. The need for the AATA to use $300,000 of unrestricted net assets – to cover the difference between expenditures and revenues – was prompted by notification on Sept. 14 by the Michigan Dept. of Transportation (MDOT) that the formula determining the state’s operating assistance would reduce AATA’s assistance by $803,500.

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.

About half the reductions in expenses in the final 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. That reflects a wage freeze for non-union employees. According to CEO Michael Ford, no reduction in service was required in order to balance this year’s budget. [Google Spreadsheet compiled by The Chronicle showing contrast by category between draft and final budget.]

Last year, the AATA adopted a budget with a deficit of close to $1 million. At the time, AATA board members characterized the strategy as making investments in service expansion in advance of the transition of the AATA to a new authority incorporated under Act 196 of 1986. The AATA has called a special meeting of the board for Oct. 2, 2012 to make a formal request of Washtenaw County to file the articles of incorporation for the new authority under Act 196.

Based on the draft budget projections for the draft FY 2013 budget – which used the first nine months of actual expenses and revenues with seasonal adjustments – the AATA expected to finish FY 2012 with a much smaller deficit of $296,378. That’s about one-third of what was budgeted at the start of last year. But figures through the first 11 months of the year, included in the Sept. 27 board meeting information packet, show that the AATA has thus far incurred a deficit of $1,077,250.

The AATA’s fund balance policy requires it to maintain reserves equal to at least three months’ worth of operating expenses.

Also at its Sept. 27 meeting, the board was asked to approve its work plan for the upcoming year. Key goals include the implementation of the transit master plan (including new governance under Act 196 and securing voter-approved funding), negotiating a new labor contract, building a replacement for the Blake Transit Center in downtown Ann Arbor, and developing a new model for paratransit services.

The work plan also calls for continued cooperation with the Ann Arbor Public Schools to expand student transportation options.

FY 2013 Budget: The MDOT Formula

What AATA board members described as a “change” in MDOT’s formula appears not to be so much a change in the allocation formula as it is a case of the formula’s peculiar sensitivity to the financial situation in other transit authorities in the state.

In slightly more detail, which still glosses over much of the formula’s complexity, the amount of funding MDOT had available to allocate to transit agencies statewide this year was the same as last year – $166.6 million.

Transit agencies are divided into two groups based on population: (1) urban areas with populations over 100,000; and (2) urbanized areas with populations under 100,000 and non-urbanized areas. The first split of the $166.6 million was a proportionate allocation between those two groups. That proportion is based on the total of eligible expenses in each agency’s submitted operating budget.

Ann Arbor falls into the first of those groups – along with the transit authorities in cites like Kalamazoo, Grand Rapids, Lansing, and Detroit. This year, the FY 2013 budget for the Detroit Dept. of Transportation (DDOT) dropped from $159 million to $124 million – a reduction of $35 million. That meant a proportionate drop for DDOT’s group – to which Ann Arbor belongs.

Consequently, instead of last year’s $122.2 million allocation, the group that includes Ann Arbor received about $4 million less – $118.5 million.

In a phone interview with The Chronicle, Jean Ruestman – manager of the program administration section in MDOT’s office of passenger transportation – described that first split as the one that had the most impact on the AATA’s allocation of state operating assistance. That initial reduction – for the group of transit agencies to which the AATA belongs – was further amplified by another provision in the formula.

The formula provides a “floor” that guarantees a transit agency at least the amount of state operating assistance it received in 1997. Because of the drop in its budget, DDOT’s strictly proportionate share within its group this year would have been less than the 1997 “floor” – by $8 million. So the formula required that DDOT be made whole with respect to that floor. If the “floor” provision did not exist, that would have resulted in $8 million more for non-DDOT members of the group to split up. [.pdf of briefing memo on MDOT allocations]

FY 2013 Budget: Ford’s Report

Michael Ford, the AATA’s CEO, reviewed the timeline for the evolution of the budget. At the September planning and development committee meeting, a balanced budget had been reviewed with a small surplus. Later on that week, the AATA had received official notice from MDOT about the reduction in state funding of around $803,000. That possibility had been mentioned at the previous month’s committee and board meetings, he noted. The AATA had reached out to legislators and the MDOT staff to try to convince them to alter the formula. Ford characterized the MDOT’s actions as unexpected, given that the legislature had approved the same amount of operating money in the last several years. So the AATA had expected the state’s allocation to the AATA would be similar to what it had been in the last years.

However, Ford said, MDOT had acted in a way that had resulted in a significant reduction in funding to the AATA. The balanced budget presented to the board that evening reflected spending cuts, a wage freeze for AATA non-union employees, and the use of some federal funds now available for day-to-day operations. No reduction in service is planned, he stressed. The ability to use federal funds in this way, he said, was made possible through a recent transportation bill approved by the U.S. Congress – called Moving Ahead for Progress in the 21st century (MAP-21).

Another key part of the plan to balance the budget in the face of the reduction in state operating assistance is the use of $300,000 of reserve funds – funds that are intended to be used to address unforeseen financial setbacks. AATA will continue to work with its peer transit authorities, Ford said, to lobby the legislature.

Legislation was introduced last week that could restore that funding. Ford said he would keep the board updated on the progress of those efforts. In the meantime, he was asking the board for their support of the balanced budget that night.

Later during board deliberations, Eli Cooper was keen to see the legislative effort maintained. Cooper appreciated the fact that the staff was shouldering the burden of the $800,000 in reduced funding. But he ventured that the AATA is not alone in Michigan, so he wondered what the AATA and the Michigan Public Transit Association are doing to coordinate to make sure that the state continues to be a good partner in providing transportation for all the citizens of the state.

Ford reiterated that legislation has been introduced in the last week. Lansing, Grand Rapids, Kalamazoo and about 10 other urban systems are “in the soup” with the AATA with respect to the reduced funding. Cooper wanted those efforts to be redoubled to make sure that legislators understand the difficulty that it’s creating for transit organizations across the state.

FY 2013 Budget: Board Deliberations

Charles Griffith wanted to hear more details about how the budget had been balanced to respond to the reduction in state operating assistance.

AATA board members David Nacht and Sue Gott.

Ford described the staff as actively involved – having met at least three times to go through the budget with a fine-toothed comb. He characterized it as a team effort. Each department gave up something, he said. Some of it related to staffing, consulting, IT, or communications. It was a matter of looking through every department and asking them what they could give up to help balance the budget.

Ford described a phase of organizational analysis that would be put off, and noted that wages as well as bonuses had been affected. “That’s not always a great topic to talk about,” he said. Bus parts, electrical use, water use, postage – every nook and cranny of the budget had been examined to see what could be given up to “stem the tide” for right now, Ford said.

Nacht characterized the current phase of the organization as an “investment phase.” The AATA is taking federal dollars – not local Ann Arbor transit tax dollars – and using those to invest in some services that provide opportunities to demonstrate what can be accomplished in the direction of countywide service, he said. That works in the short term and in a fiscally sound manner, but it’s not a long-term sustainable approach, he allowed.

The long-term use of those federal dollars, Nacht said, will need to be allocated in other areas to maintain “our bread-and-butter operations for the taxpayers of Ann Arbor” and for the other jurisdictions with whom the AATA has purchase-of-service agreements (POSAs). He felt the staff had done an admirable job in dealing with the situation – which had not been a complete surprise, but was nonetheless a bit of a shock, he said – to maintain the investment in the countywide initiative, to honor the investment of the Ann Arbor taxpayers, and to keep the budget in a fiscally sound prudent manner.

Chris White, AATA manager of service development, offers some clarification. In the foreground is board member Sue Gott.

Asked to clarify some remarks made by Jesse Bernstein, Chris White, manager of service development at the AATA, stressed that the AATA is not deferring any capital replacement – and that the AATA’s capital replacement program is intact. The federal money that has been redirected for operating expenses would have gone to implementation of the transportation master plan, White said.

Nacht stressed that it’s important for the public to understand what will happen if the AATA does not receive additional funding to support countywide service. If that happens, the steps the AATA has taken to provide additional services outside of the Ann Arbor service area – steps that are moving in the direction of countywide service – might need to be curtailed. As an example, he gave the more frequent service now offered from Ypsilanti to Ann Arbor along Washtenaw Avenue, which is not an inexpensive service, he said. But that service can be offered now, Nacht said, as an investment to demonstrate to the broader community that the AATA can readily handle that service and perform it admirably, and hopefully persuade a significant number of people to become riders.

But Nacht said without additional funding, the AATA is not in a position to sustain into the indefinite future the projected level of service that it’s going to be offering the public outside of Ann Arbor in this next fiscal year. At some point, Nacht cautioned, the AATA will have to curtail its operations in order to preserve its ability to provide operations for the Ann Arbor taxpayers.

Bernstein pointed out that the AATA does get millage funding from the city of Ypsilanti, and receives money from Pittsfield Township and Ypsilanti Township through purchase-of-service agreements. But he allowed that right now, the name of the authority is the Ann Arbor Transportation Authority, and currently that is the AATA’s core responsibility.

Nacht responded to Bernstein’s point by saying that the contributions that the AATA gets from its POSA partners are not sufficient to cover the current level of investments that the AATA is making in services that go in a countywide direction. He noted that there had been some discussion at the Ann Arbor city council table about commuter service from Chelsea and Canton into Ann Arbor. For the upcoming budget, he noted that the AATA is not using one cent of Ann Arbor taxpayer dollars to provide that service. [Up to now, the AATA has in part used local tax dollars to subsidize that service.] Federal dollars are being used to subsidize that service. But that allocation of federal dollars to those countywide services can only be done responsibly for a limited amount of time, he allowed. At some point, the AATA will have to scale back – if the community decides not to support those endeavors.

Nacht also said that in spite of the cutbacks in funding, he was proud of the fact that the AATA is not ignoring what’s going on in its core area. AATA staff are working on an expansion of service in the southeastern part of Ann Arbor – the Packard and Platt area, he said. And the FY 2013 budget contains funding for expanded operations for fixed route bus service in the Packard and Platt area.

FY 2013 Budget: Board Deliberations – Reserve

In the context of using $300,000 of the fund balance reserve, David Nacht said that in his capacity as treasurer he’d been very concerned about the reserve situation. He had kept an eye on it as the talks continued. He had received confirmation from Phil Webb, the AATA’s controller, that Webb expects there will be reserves to cover three months’ worth of operating expenses at the end of the coming fiscal year. Nacht felt comfortable that the amount of reserves is a reasonable and appropriate number, saying he felt that by historical standards, it was a very conservative number.

AATA board member Roger Kerson.

Roger Kerson wanted to know how much three months of operating reserves is, measured in dollars. The answer he got from Webb was about $8 million. Webb noted that even if the state operating assistance went to zero, it would not mean that all of the AATA’s revenue sources would disappear. So the question of how long the AATA could run if all revenue were to be eliminated was not easy to answer.

Eli Cooper also inquired in more detail about the reserve balance. Looking at the budget sheets for the last couple of years, the expenses had exceeded revenue – $400,000 in 2011, $1 million in 2012, and now another $300,000 in 2013. He asked for additional clarification on the projected balance at the end of 2013.

Nacht characterized the AATA as an organization with a $32-million-a-year operating budget. Historically, the organization has run balanced budgets or budgets that had slight surpluses, he said. The fiscal management by staff has been terrific, he said. The board has been willing to make cuts as necessary in order to keep things fiscally sound, he said. The last couple of years, the organization has been moving explicitly in the direction of dipping a little bit into the reserves in order to invest in the direction of the countywide program. And there’s still no question that it’s reasonable to expect the organization will have three months of cash and reserve at the end of fiscal 2013, Nacht concluded.

However, he felt that a more serious conversation would be necessary if there is not additional funding at the end of the year, in order to plan for fiscal year 2014. The organization would need to look at things more programmatically, and would have to look at contributions by other partners. Nacht did not feel that the AATA needed to have that conversation right now. Past prudence is benefiting the community now, he contended, because the AATA is able to have a sustained period of investments.

Cooper came back to the initial draft budget with its $20,000 surplus as contrasted with the $300,000 deficit in the now-proposed budget. He sought confirmation from Nacht that the AATA could maintain its policy position on the minimum reserve balance, and continue to provide the service it’s currently providing, and still meet all of the organization’s financial responsibilities. Nacht’s answer to Cooper: “Absolutely.”

Nacht noted he had served on the board for nine years. It’s a predictable cash flow – because the AATA knows when it receives big chunks of money from the city, and the AATA knows what its expenses are like. And the organization has a fair amount of control over the timing of big-ticket items, he said.

The $800,000 drop was a shock, but in the context of a $32 million budget, it’s not an enormous piece, Nacht felt. Bernstein agreed with Nacht that the AATA staff is doing an excellent job in managing the money. But he felt that the AATA is now at the end of its ability to fund anything else beyond the regular service. Further, said Bernstein, if the AATA gets hit with more surprises like the $800,000 reduction from the state, the AATA might have to look at cutting back on some of those investments that have already been made. Bernstein noted that the board has a policy of not providing service for which it could not pay.

Nacht’s response to Bernstein was somewhat more optimistic in tone. Nacht felt there would be serious conversations about the core status of some new offerings. But he felt it might be realistic to bring other partners on board to contribute. The AATA already partners with other organizations like governmental entities. Other transit systems have had success partnering with nonprofits, he said – hospitals and educational institutions, for example.

As the AATA demonstrates the value of its services and as it attracts more riders, fares could be adjusted for particular kinds of services, Nacht ventured. He allowed that there are federal regulations, as well as market forces that apply to all of that, and there is due process involved. He wasn’t suggesting that fare increases would just be sprung on people. But he stressed his hope that rather than simply cut back on a service, the AATA would take a more flexible approach – which included generating more revenue and controlling expenses so that the organization can continue to do what it’s trying to do.

Nacht did not want to just say, “We ran out of energy and we swam into the ocean and now are just going to drown. We’re not going to do that.” The AATA is also looking to see which investments will bear fruit, Nacht said. The transportation service between downtown Ann Arbor and Detroit Metro Airport – AirRide – is bearing some initial fruit, Nacht said. If that changes, and people stopped riding AirRide, then that’s not something the organization should keep. But right now AirRide seems like it’s a good success, he said.

FY 2013 Budget: Board Deliberations – What Got Cut?

Roger Kerson wanted to know what the biggest ticket items were for the reduction to the budget. Michael Ford told him that wages and consulting were among the big bigger items. Jesse Bernstein asked for a listing out of all the cuts.

Sue Gott wanted to know some examples that might have been on the board to cut, but had instead not been cut. She wanted to know what items would have been cut if reserves had not been available to use. Ford and Bernstein initially indicated a somewhat unclear understanding of Gott’s query. Ford eventually pointed to the desire not to cut any service from existing levels. So it appears that if no reserves had been available, the AATA would have opted to reduce service levels.

FY 2013 Budget: Board Deliberations – Work Plan

Nacht characterized the work plan as very sound, but felt that if there are additional fiscal shocks, then the board would need to look at adjusting the work plan in order to continue to run the organization in a fiscally sound manner consistent with its fiduciary duty to the larger community.

Outcome: On separate votes, the board approved the FY 2013 budget and work plan.

Future of the Board(s)

Two items considered by the AATA board related directly or indirectly to the planned formal request next week – at a special meeting of the AATA board scheduled for Oct. 2, 2012 – that the Washtenaw County clerk file articles of incorporation under Act 196 of 1986 for a new transit authority to be called The Washtenaw Ride.

Not on the agenda that was included in the board’s information packet was a resolution meant to give reassurance that representation on the new board would continue to be as inclusive as possible, even if some jurisdictions opt out of the new transit authority.

The second related item was the board’s meeting schedule.

Future of the Board(s): Background

The incorporation of the new authority under Act 196 of 1986 has statutory as well as contractual implications.

On the statutory side – because the incorporation by Washtenaw County of a new transit authority will include by default all the jurisdictions in Washtenaw County – the 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 – a township board or city council, for example.

The contractual side is already reflected in the filing of the articles. That is, the request made by AATA to Washtenaw County to file the articles of incorporation would be handled under a four-party agreement – which was ratified earlier this year by the AATA, Washtenaw County, the city of Ann Arbor, and the city of Ypsilanti. That same contractual agreement would then govern the transition from the current AATA to The Washtenaw Ride.

The transition would potentially not take place at all, unless a voter-approved funding source for the expanded services were identified by the end of 2014.

The drafted resolution considered by the AATA board at its Sept. 27 meeting was meant in part to address possible concerns about what might happen if a large number of local governments in Washtenaw County opt out of the new transit authority.

The membership of the new authority’s board can be altered only with a 4/5 vote on the 15-member board – based on the articles of incorporation. So the resolution discussed by the AATA board at its Sept. 27 meeting would have, in some sense, expressed the position of current AATA board members as follows: When they become Act 196 board members, they would not go along with a restructuring of the Act 196 board, even if several jurisdictions opt out during the 30-day period – until the point of asking voters to approve a millage.

According to its articles of incorporation, the new authority will have a 15-member board, representing eight different districts in Washtenaw County. The Ann Arbor and Ypsilanti districts include just their respective cities – each city a single jurisdiction. Those two cities are not expected to opt out. Another single-jurisdiction district – Pittsfield Township – is not expected to opt out. 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 articles of incorporation spell out what’s supposed to happen when every jurisdiction in a district opts out:

SECTION 4.02: BOARD MAKE UP REVIEW
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. [Note: The articles were amended in all other references to changes in membership to require a 4/5 majority vote. It's not clear if this instance was intentionally left intact or if it reflects an oversight.]

It’s essentially the Section 4.02(c) condition that the AATA board’s Sept. 27 resolution was meant to address.

Once incorporated, the Washtenaw Ride would still not have any assets or be able to offer any service. That transition would depend on voter approval of the funding source. The AATA has indicated that a possible scenario for funding is to ask voters in Washtenaw County to pay for the new transit authority with a property tax of 0.584 mills – in an election that could come as early as May 2013.

Based on discussion at a Sept. 25 meeting of Ann Arbor’s district advisory committee (DAC) – which helps advise the as-yet-unincorporated authority – a transition to a new authority could take several months. Even if a millage vote were to be held in May 2013 and approved by voters, it would still likely take until Sept. 30, 2013 – the end of the AATA’s fiscal year – to complete the transition.

So the AATA board will need to continue to meet in its current guise through the end of a meeting schedule approved on Sept. 27. The general pattern is to meet on the third Thursday of the month, with a starting time of 6:30 p.m. The meetings are held in the fourth-floor boardroom of the downtown Ann Arbor District Library, located at 343 N. Fifth Avenue. So possibly the last-ever meeting of the AATA board is scheduled for Sept. 19, 2013. [.pdf of AATA FY 2013 meeting schedule]

Future of the Board(s): Meeting Schedule

Jesse Bernstein noted that the board is looking at some potential changes in governance in the coming year. He wanted to underscore the fact that the meeting schedule is the current AATA board’s commitment to continue its work.

At such time that there is a transition to a new board, it will set up its own schedule and agenda, Bernstein said. The AATA board is also committed to having district representatives from the new authorities sit with it during its meetings.

Outcome: The board unanimously approved the FY 2013 meeting schedule.

Future of the Board(s): Public Commentary

Jim Mogensen told the board during public commentary that he did not think it was a good idea to incorporate a new Act 196 authority next week. He cited cultural as well as structural reasons. He explained the cultural side of things by telling the board what he had told the University of Michigan board of regents on a previous occasion: “One of the roles of senior staff is to allow the regents to believe that they are making the decisions, without allowing them to screw things up too much.”

The University Michigan is such a large organization that decisions of the regents become a technical thing, Mogensen said. In the same way, he said, the AATA has a very technical culture and has approached the transition in a technical way. On the other side, Mogensen said, if you look at the Ann Arbor city council or the Washtenaw County board of commissioners, they have a different culture that governs how things operate. The entire transition process of the AATA reflects a clashing of those two kinds of culture, he contended.

Mogensen felt it had taken the last 4-5 months to get things sorted out, and that things were still, in fact, being sorted out. People haven’t entirely processed what is going on, he said. So he did not think it was a good idea to proceed with incorporation of a new authority next week – which was not to say that he felt it would never be a good time to do that.

On the structural side, Mogensen felt it’s important to think carefully about purchase-of-service agreements. If a jurisdiction has such an agreement, he said, that did not mean it was in fact purchasing transportation. If board members didn’t understand what he was talking about, he advised, they could look at the operating statement and looked under the “fixed route” column: The expenses listed under purchased transportation show zero dollars. They are purchasing other kinds of transportation, but not fixed route transportation.

So he asked board members to consider a scenario where Ann Arbor Township decided to opt out of the Act 196 authority. Would we still have service to Washtenaw Community College? What’s happening with the purchase-of-service agreements, he said, is more like “opting in” than not. He felt like that had not been entirely sorted out.

Future of the Board(s): Act 196 Incorporation – CEO’s Perspective

On the topic of incorporation, AATA CEO Michael Ford said in his oral report to the board that he felt the time is right. The five-year transit program, guided by the 30-year master plan, envisioned clear benefits for all local governments and citizens in the county, he said. Ford wanted to be clear that the AATA would continue its relationship with each local government in the county – whether it participates in the Act 196 process or not. To get to the point where the process is today, he said, the AATA has conducted extensive outreach over the last year and a half or longer – listening and responding to questions, concerns and requests. Deletions and adjustments have been made to the plan, he said, in light of that input.

The “big ask,” Ford said, is for the whole team – the AATA board and the district representatives – to make a request of the county clerk next Tuesday, at the Oct. 2 special meeting, to incorporate. Ford indicated that the request would be for the Washtenaw County clerk to start the incorporation process on Oct. 3.

Future of the Board(s): Act 196 Incorporation – Resolution of Reassurance

In the latest round of district advisory committee (DAC) meetings, Bernstein reported, uncertainty had been expressed by many people about what might happen under different scenarios where different jurisdictions might opt out. Bernstein was keen to emphasize throughout the ensuing discussion that he was optimistic about the level of participation.

The resolved clause of the resolution read:

Now therefore be it resolved, the Act 55 [current AATA ] board members and the district representatives agree and commit to maintain the current representation of the new Act 196 board until such time as we have to present a service plan to the committee and request a millage.

Bernstein felt it was important to pass such a resolution because it was important to say to new partners: We’ll be with you as long as we can; and we’re not going to just arbitrarily and quickly make decisions.

Left to right: David Read and David Nacht.

The AATA wants to keep the district representatives at the table as long as it possibly can – to continue having their input and their linkages to their communities – even those that might have initially opted out.

Bernstein hoped that even if some communities initially opted out, that by the time the newly-incorporated authority decided to put a millage on the ballot, the full participation of the county could be achieved. Bernstein reported that Ypsilanti mayor Paul Schreiber, who serves as the city of Ypsilanti district representative on the as-yet-incorporated Act 196 board, had indicated his support of the resolution.

Representatives of three of the seven non-Ann Arbor districts in the new authority attended the AATA’s Sept. 27 meeting and participated in the discussion – Karen Lovejoy Roe (Southeast District); Bill Lavery (South Middle District); and David Read (North Middle District).

Read contemplated the possibility that a district representative “loses its constituency” because all of the municipalities in the district opt out. Do we actually have to dismiss that member from the board? he wondered. Is it written into the Act 196 statute or Act 7 or the articles of incorporation?

Bernstein told Read that he hoped that situation would not arise. What the resolution is trying to convey is that the current AATA board wants to keep everybody at the table as long as possible. If there were a situation that led by law to a required membership change, the change would have to be made. But if that change could be avoided or delayed, that’s what the resolution would do, Bernstein said.

Lavery said it sounded like a positive action, and one that would help in the educational effort. Lovejoy Roe indicated a generally positive attitude toward the resolution.

Karen Lovejoy Roe expressed some concerns about the representation on the future board of the new transit authority. Looking on is AATA board member Anya Dale.

Sue Gott wondered if input from the AATA’s legal counsel might be needed to understand clearly if the resolution works in the spirit of Act 196. Bernstein felt it was important to state what the board would like to see happen – and if there are legal issues that arise, those can be dealt with. As long as there is one jurisdiction that has not opted out of the district, then the representative of that district could represent the district, Bernstein said – at least that was Bernstein’s understanding from the AATA’s attorney.

Like Read, Charles Griffith felt there was not actually any requirement that representation be removed from any districts as a consequence of jurisdictions opting out. The new board would have the ability, he observed, to change the membership, which would require a 4/5 majority vote. So there are already protections, he noted. Bernstein allowed that the resolution might amount to “belt and suspenders.” Still, he felt it was important to make the statement now.

Eli Cooper was not comfortable with the wording of the resolved clause, saying that he didn’t feel he could resolve something on the behalf of others. So he wanted references to the district representatives. David Nacht expressed concern about making a resolution that might not be legally enforceable. He felt it would be better for the board to say exactly what it wants to do. He suggested replacing the existing resolved clause by the following: “We support the concept of representation of those communities on the 196 board that are currently represented.”

Nacht was concerned that the entire resolution might be legally void. Still, he wanted to make a record that is supportive of what Bernstein wanted to accomplish. Bernstein responded to Nacht by saying he felt the issue was about timing – when the board felt it was appropriate to take action on adjusting the Act 196 board membership. He wanted to go on record as saying that they would wait as long as possible before making those adjustments.

The conversation at the table continued at some length. Roger Kerson felt it made sense to let everybody keep coming to the meetings rather than cutting people off at some early stage. Lovejoy Roe expressed concern that representatives of districts that had opted out would be making decisions about levels of service and the timing of a millage.

Read wondered if it made sense to pursue incorporation as early as next week. He said he was concerned about a possible “rush to incorporate,” but allowed that for many people it’s not a rush to incorporate, but rather more a feeling that “finally we’re getting it done.” He felt there needs to be a way of figuring out how to keep the board balanced based on population.

Nacht drew an analogy to the first Constitutional convention, where no one had any idea that there would be political parties and that such political parties would dominate political life. The Constitutional convention has been held on the issue of transit, he said.

Outcome: Eventually the resolution was withdrawn, with the possibility that it would return on Oct. 2 when the board will meet in a special session to formally request that the Washtenaw County clerk file articles of incorporation for the new transit authority.

Connector Study

At its Sept. 27 meeting, the AATA was asked to give conditional authorization for a $1.5 million contract for further study of a transportation connector between the northeast and south sides of Ann Arbor.

Connector Study: Background

The authorization is conditional on additional local funding – in the amount of $60,000. The $60,000 would be part of a total $300,000 local match for a $1.2 million federal grant.

The corridor runs from US-23 and Plymouth southward along Plymouth to State Street and farther south to I-94. This alternatives analysis phase of the study is to result in identifying a preferred choice of technology (e.g., bus rapid transit, light rail, etc.) and the location of stations and stops.

The Ann Arbor city council voted on Sept. 4, 2012 to reject the $60,000 request, but reconsidered that vote two weeks later on Sept. 17, 2012. On reconsideration of the vote, the council decided to postpone a decision until Oct. 15.

In the meantime, some of the requested $60,000 might actually be provided by the Ann Arbor Downtown Development Authority. Initial indications to the AATA were that the DDA’s budget constraints would not allow a contribution to the local match. But at a Sept. 26 meeting of the DDA’s operations committee, it was decided that the full DDA board would be asked to consider a connector study funding resolution at its Oct. 3 meeting. The DDA resolution would specify a $30,000 total contribution by the DDA, in two $15,000 payments to be made in each of the next two years. Members of the DDA’s operations committee wanted to make the $30,000 contingent on the city of Ann Arbor providing the other $30,000.

So the original resolution included in the Sept. 27 AATA board information packet specified the city of Ann Arbor as the source of that $60,000. However, the resolution was altered to specify more generally some other local funding – to accommodate the possibility that the Ann Arbor DDA might make a contribution as well.

The $60,000 is a portion of $300,000 in local funding that has been identified to provide the required match for a $1.2 million federal grant awarded last year to the AATA for the alternatives analysis phase. The breakdown of local support was originally intended to be: $60,000 from the city of Ann Arbor; $150,000 from the University of Michigan; and $90,000 from the AATA.

The timeline for completion of the study, which would be done by URS Corp., would be about a year and a half. Part of the AATA board’s rationale for moving ahead with the contingent authorization of the contract relates to the time that has elapsed since receiving a bid from URS to do the second phase of the study. According to an AATA staff memo, URS has held the price for the work at the original bid price – for now.

A feasibility study for the corridor costing $640,000 has already been completed by URS. That initial study concluded that some type of improved high-capacity transit system would be feasible – which could take the form of bus rapid transit, light rail transit, or elevated automated guideway transit. That study had been funded through a partnership with the city of Ann Arbor, the Ann Arbor DDA, University of Michigan and the AATA. Chronicle coverage of that feasibility study includes: “Transit Connector Study: Initial Analysis“; “AATA: Transit Study, Planning Updates“; and “Washtenaw Transit Talks in Flux.”

Connector Study: Board Deliberations

Reporting from the planning and development committee, Anya Dale reviewed the history and status of the project. She noted that to some extent it’s important to get the project moving – because even though the contractors held the original bid price, costs have been increasing. She hoped that it would go back to the city council and there would be more discussion about it.

Jesse Bernstein said he thinks there is a “movement afoot” to see if the Ann Arbor DDA might contribute to the funding of the study. So the language had been simplified to refer just to a local share instead of the city of Ann Arbor specifically, he said. He noted that $150,000 is coming from the University of Michigan and $90,000 from the AATA, with the remaining $60,000 from a local share. That total of $300,000 is the local match for a $1.2 million federal grant to conduct the analysis, he said. It would run from northeast Ann Arbor through the university and downtown Ann Arbor to Briarwood Mall and possibly beyond, he said. He characterized it as a very major corridor. He reminded his board colleagues that the feasibility analysis had shown that the utilization in the middle section of the corridor would justify a fixed-rail type technology.

David Nacht makes a point during the Sept. 27 AATA board meeting.

Eli Cooper asked for an amendment to one of the whereas clauses to mirror the same consideration as the amendment to the resolved clause – to refer more generally to a local share.

David Nacht described it as “rather unfortunate” that the project has become the subject of politicization at the Ann Arbor city council. It’s not inappropriate for the city council to consider the issue in a serious way, he allowed. Consideration of transit in Ann Arbor is an appropriate thing for the city council to consider, he continued. But the city council had actually done that in the past, he contended. The AATA, University Michigan, the Ann Arbor Downtown Development Authority and the city of Ann Arbor – those four partners – had been working for “not months, but years” in a direction to try to figure the project out collaboratively, he said.

If you’re a taxpayer, Nacht said, you want the government, whoever they are, to do something with that money they’re collecting. He called it a “wonderful thing” that different units of government – the AATA, which gets a lot of federal money; the University Michigan, which is a “separate beast”; the DDA, which is a creature of the city with its own tax base; and the city – are working together with a coherent vision of figuring out what is the best bang for the taxpayer buck. How can we move people around efficiently in order to help get people to and from work, to and from school? What is rational and efficient? he asked.

The connector project study uses federal dollars with a small amount of local dollars, he pointed out. That’s because the feds say: If you really want to improve transit, let us know you care – by putting in some local money to study it. And so up to this point, a lot of work had been done to do that. “This is not controversial, it shouldn’t be controversial,” Nacht concluded.

Nacht asked Eli Cooper to put on the public record some comments about why the study is so important. Cooper responded to Nacht by noting that the connector project was one of several strategies that was included in the transportation master plan update adopted by the city council in 2009. The process for updating the plan had included consideration of what Cooper called the “do nothing” alternative. It would be possible to allow the community to continue to grow without making investments in enhanced transportation, he ventured. And the decision not to fund the study amounts to a decision not to invest, he said.

The analysis of the “do nothing” alternative that went into the city’s 2009 transportation master plan update showed that there would be an erosion in the quality of life – congestion on many, if not all, of the radial corridors serving the downtown. That erosion of the quality of life was deemed to be unacceptable in the course of the planning process, so a variety of different alternatives were studied – connector-type service, enhance local transit, or ideas for bringing commuters in from greater distances – all to relieve the stress and strain on local streets. All those kinds of elements were woven into the fabric of the city’s transportation master plan.

Now is an opportunity to recall the importance of these investments, Cooper said. He noted that questions had been asked by Ann Arbor city councilmembers who were not familiar with that background, so he would be providing that to them on Oct. 15 when the council reconsiders the connector study funding. Cooper said it’s important for city councilmembers to understand the relationship between the various initiatives, the investments, the timing of those investments, and the anticipated benefit of making those investments. So he will be presenting to the council a scenario for what might happen if the city council decides not to make those investments.

Questions also been asked about how the connector relates to commuter rail and how that relates to the transportation master plan. Cooper noted that the 2009 transportation master plan lays out a long-term strategy that describes how all of the various initiatives fit together to result in the maintenance or enhancement of the city’s current quality of life. He characterized the various initiatives as “the lubrication that keeps the transportation system moving.” And by the “transportation system,” he stressed, he did not mean simply buses, but rather pedestrians, bicyclists, automobiles, buses and trains. As a city staff member, he felt he needed to do a better job in making sure that the policy leaders, who are worrying mightily about the investment, can understand what the costs are of failing to act. He needs to make sure they also understand what the benefits are of moving forward. He couldn’t predict where the council might decide, but the information would be framed for them at their Oct. 15 meeting, Cooper concluded.

Outcome: The board unanimously approved the conditional contract for the connector study.

Routine MDOT Processes

In front of the board for its consideration was a resolution to authorize the AATA’s chief executive officer to sign and execute contracts with the Michigan Dept. of Transportation (MDOT) without seeking a separate board resolution – as long as the contracts are less than $1 million.

According to the staff memo accompanying the resolution, there are 10-15 separate agreements between MDOT and AATA. A staff analysis of the resolution allows that there’s a risk to the practice – that the board might not be aware of the contracts that the CEO is executing. That risk is meant to be mitigated by a new practice of reporting all such contracts to the board’s performance monitoring and external relations committee.

Also on the agenda for the board’s consideration was a grant agreement with MDOT for a contract of over $1 million. MDOT is providing the local match – which totals $2.414 million – for AATA’s FY 2012 federal Section 5307 grant. [.pdf of FY 2012 expenditures for Section 5307 program]

At the meeting, the two items were summarized as part of the performance monitoring and external relations committee report. The report was given by Roger Kerson, who had been the only board attendee at the committee meeting that month. There was not a lot of debate on any of the resolutions, he quipped: “Most days I agree with myself, but not every day.”

On the blanket authority given to the CEO for contracts under $1 million, Kerson noted that this authorization is done on an annual basis. It turns out to be a more efficient way to run the routine business – given that in the course of the year there are up to a dozen or so such agreements. The board gets a report of each agreement that is executed, he noted.

Outcome: Both votes related to MDOT contracts were unanimous.

CEO Severance Clause

Not originally on the board’s agenda was an item related to CEO Michael Ford’s compensation agreement. David Nacht reported that a committee of the board, consisting of Roger Kerson and Sue Gott, is negotiating with CEO Michael Ford on his new compensation agreement.

Left to right: Eli Cooper and Michael Ford.

There is no new agreement yet, Nacht reported. The compensation agreement contains a severance clause, and Nacht said that Ford was willing to work without a written compensation agreement, but wants to make sure that his severance clause stays in effect even though there is no new compensation agreement. So Ford had asked that the board vote on that – and Nacht felt that it was a reasonable position for Ford to take.

The resolution the board considered extended the severance clause in the compensation agreement for the next year, or until such time as a new compensation agreement was made, which would supersede the resolution.

Eli Cooper indicated that he couldn’t support the resolution – because he was not familiar with the contract or with the compensation agreement and their terms. He explained that he was appointed after those agreements were made, he did not feel he had enough information to make a decision.

Outcome: The board voted, with dissent from Cooper, to extend the severance clause in the CEO’s compensation agreement.

Election of Officers

The AATA elects board officers to one-year terms in sync with the fiscal year, which runs from October through September. Jesse Bernstein has served as board chair for the last two years and will continue to serve on the board. The board was asked to consider a nomination of Charles Griffith as chair.

Griffith is climate & energy program director for the Ecology Center. He has already served for six years on the board, and his current appointment lasts another four years. He was re-appointed to the board on May 2, 2011 to a five-year term after first being appointed on Sept. 19, 2006.

Election of Officers: Board Deliberations

As is typically the case, David Nacht reported, an elections committee was established – consisting of himself and Charles Griffith. The first thing that happened, he said, was that Jesse Bernstein had indicated to the committee that he was not interested in continuing as chair of the board. A “strenuous effort was made” to get Bernstein to reconsider, but Bernstein had “stuck to his guns,” Nacht said.

Nacht explained that it wasn’t the case that Griffith was being nominated because Griffith had been on the elections committee. It was due to the fact that Griffith is a senior member of the organization, Nacht said. Griffith has served as an active board member for many years, but has not served as chair, Nacht observed. He noted that he himself had served a stint as chair of the board. And Griffith is willing to serve as chair, Nacht continued.

Nacht said he had spoken outside of Griffith’s presence with various people on the board, e-mailed with various people, and heard comments from a variety of people. And it’s the committee’s recommendation that the board put forward Griffith as the chair, Nacht said. But Nacht felt it was important to take nominations from the floor in case anyone else wanted to offer to serve.

No one else made a different nomination, so Bernstein offered some explanation for his decision not to continue as chair. He has served for two years as chair, and he believed the position needs to be rotated: “My feeling is we really need to rotate that and give everybody a chance at the joy and happiness of being in that role.” That was his rationale for not wanting to serve a third term as chair. It was organizational and procedural and had nothing to do with anything else, he said.

The vote for Griffith as chair was unanimous, with Griffith abstaining.

Nacht went on to describe the two other board officer positions – treasurer and secretary. He noted that he himself had been serving as treasurer for the last few months at the chair’s request – and he was willing to continue to do that, though he had no tremendous to desire to do so. “If anyone else likes to spend a lot of time looking at numbers, I would absolutely be honored to cede….” Nacht continued: “Are there any nominations from the floor. Please?” About entertaining nominations, Bernstein quipped, “David, that’s my job.” Nacht was then elected as board treasurer by unanimous vote.

Nacht described the office of secretary as largely ceremonial – but allowed that theoretically it might not be ceremonial because the signature on a document might prove to be important for some reason. Nacht said that for the position of secretary he had sent an e-mail asking for interest in serving in that capacity. The first response he received that he saw was from Anya Dale. Nacht also noted that a willingness to serve as secretary had been indicated by Eli Cooper. However, Nacht reported that Cooper had deferred to Dale. Based on that, the elections committee recommendation was for Dale as secretary. Dale was elected unanimously as board secretary.

Outcome: The board elected Charles Griffith as chair, David Nacht as treasurer, and Anya Dale as secretary.

The AATA board has two working committees: the planning and development committee, and the performance monitoring and external relations committee. Membership was not decided at the Sept. 27 meeting. Griffith said he knew he was going to be nominated as chair, but he did not want to be presumptuous – so he had wanted first to talk to board members individually about their interest in serving on the two different committees of the AATA board. But he wanted to make the committee appointments as soon as possible. He thanked everyone for their support. He said he was humbled but also reassured, because he would be serving with two former chairs – Nacht and Bernstein. He felt he would get plenty of guidance and corrective action if he strayed off course: “We’ll have an exciting year, I think.”

Communications, Committees, CEO, Commentary

At its Sept 27 meeting, the board entertained various communications, including its usual reports from the performance monitoring and external relations committee, the planning and development committee, as well as from CEO Michael Ford. The board also heard commentary from the public. Here are some highlights.

Comm/Comm: Ridership

In his report from the performance monitoring and external relations committee, Roger Kerson said that even though the news about the budget had not been good, that had been counterbalanced by news about ridership. It’s increasing in every area, he reported. Part of that is due to a national trend of increasing use in transit.

Comm/Comm: New Website

The new AATA website is getting close to completion and would be ready to be unveiled soon, Roger Kerson reported from the performance monitoring and external relations committee. He felt that timed well in terms of the implementation of the transit master plan – because riders would have more and better ways to access information about bus arrivals, departures and scheduling.

Comm/Comm: LAC

The local advisory council (LAC) is a group that provides input and feedback to AATA on disability and senior issues. Cheryl Weber noted that there had been some continued discussion at the last meeting about the ability of riders to bring groceries onto vehicles. The group had received a visit from a representative of the University of Michigan Health System in response to concerns that LAC has expressed about access to the hospital. The driver appreciation program has yet to be implemented, but Weber hoped that it would be put in place in some form in the near future.

Comm/Comm: Advocacy for Most Vulnerable

During public commentary at the start of the Sept. 27 meeting, Thomas Partridge advocated for the rights of the most vulnerable residents of Ann Arbor, Washtenaw County, and the state of Michigan. They should have access to affordable public transportation, including accommodations for disabled people and senior citizens, he said.

During public commentary at the conclusion of the meeting, Partridge said he was an advocate for those who need public services the most – middle-class residents, senior citizens, and disabled people. Because the meeting had run long, and was pushing towards the nine o’clock closing time of the Ann Arbor District Library, Jesse Bernstein limited closing public commentary turns to one minute instead of the usual two minutes. Partridge objected to that, as did Carolyn Grawi, who followed Partridge to the podium at the conclusion of the meeting.

Grawi is director for advocacy and education at the Center for Independent Living. She congratulated Charles Griffith on his election as chair and thanked Jesse Bernstein for his service as chair for the past two years. She also thanked members of the community who had attended the district advisory committee meetings representing the disability community.

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

Next special meeting: Tuesday, Oct. 2, 2012 at 6:30 p.m. at the Ann Arbor District Library, 343 S. Fifth Ave., Ann Arbor.

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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Once incorporated, the new transit authority will include by default all the jurisdictions in Washtenaw County. The articles of incorporation for the new authority – to be called The Washtenaw Ride – would be filed by Washtenaw County under Act 196 of 1986 after getting a formal request from the AATA board. Filing the articles of incorporation for the new authority opens a 30-day window for jurisdictions to opt out of inclusion. That can be accomplished through a vote of a jurisdiction’s governing body.

Ultimately, the resolution on Act 196 board representation was withdrawn at the Sept. 27 meeting, when AATA board members could not get a clear understanding of the impact the resolution would have, and whether it amounted to “belt and suspenders” on outcomes that would follow naturally from the legal requirements of Act 196 of 1986. That’s the statute under which the new transit authority would be incorporated.

The drafted resolution was meant in part to address possible concerns about what might happen if a large number of local governments in Washtenaw County opt out of the new transit authority. Some non-Ann Arbor members of the as-yet unincorporated Act 196 board attended the Sept. 27 meeting and participated in deliberations (though they could not vote). Some expressed concern that the AATA’s planned Oct. 2 request for incorporation could be a “rush to incorporate.”

The membership of the new authority’s board can be altered only with a 4/5 vote on the 15-member board – based on the articles of incorporation. So the resolution discussed by the AATA board at its Sept. 27 meeting would have, in some sense, expressed the position of current AATA board members as follows: When they become Act 196 board members, they would not go along with a restructuring of the Act 196 board, even if several jurisdictions opt out during the 30-day period – until the point of asking voters to approve a millage.

The AATA board has called a special meeting for Oct. 2 to make a request that the Washtenaw County clerk file the articles of incorporation the following day. It’s possible that the withdrawn AATA board resolution will be re-worded and brought back for the Oct. 2 meeting.

The new authority will have a 15-member board, representing eight different districts in Washtenaw County. The Ann Arbor and Ypsilanti districts include just their respective cities – each city a single jurisdiction. Those two cities are not expected to opt out. Another single-jurisdiction district – Pittsfield Township – is not expected to opt out. But other districts include multiple jurisdictions. For example, the Northeast District includes four townships: Northfield, Superior, Salem and Ann Arbor.

The conversation at the AATA board meeting did not achieve clarity on the issue of what legal constraints would apply if every jurisdiction in a district were to opt out. And that was a consideration that led to the resolution’s withdrawal, with possible consideration at the Oct. 2 meeting.

The contractual agreement governing the transition from the current AATA to The Washtenaw Ride is a four-party agreement that was ratified by the AATA, Washtenaw County, the city of Ann Arbor, and the city of Ypsilanti. The transition would essentially not take place at all, unless a voter-approved funding source for the expanded services is identified by the end of 2014.

The AATA has indicated that a possible 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. Once incorporated, the Washtenaw Ride would still not have any assets or be able to offer any service. That transition would depend on voter approval of the funding source.

Based on discussion at a Sept. 25 meeting of Ann Arbor’s district advisory committee (DAC) – which helps advise the as-yet-unincorporated authority – a transition to a new authority could take several months. Even if a millage vote were to be held in May 2013 and approved by voters, it would still likely take until Sept. 30, 2013 – the end of the AATA’s fiscal year – to complete the transition.

So the AATA board will need to continue to meet in its current guise through the end of a meeting schedule approved on Sept. 27, 2012. The general pattern is to meet on the third Thursday of the month, with a starting time of 6:30 p.m. The meetings are held in the fourth-floor boardroom of the downtown Ann Arbor District Library, located at 343 N. Fifth Avenue. So possibly the last-ever meeting of the AATA board is scheduled for Sept. 19, 2013. [.pdf of AATA FY 2013 meeting schedule]

This brief was filed from the downtown location of the Ann Arbor District Library, where the AATA board holds its meetings. A more detailed report will follow: [link]

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 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, 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.

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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The ratification of the articles of incorporation did not incorporate a new transit authority. Rather, it established the document that will be used to incorporate a new authority – by Washtenaw County, when the AATA requests that it do so. After incorporation, the new authority – to be called The Washtenaw Ride – would not receive transfer of AATA assets until a voter-approved funding mechanism has been approved.

The re-approval of the articles of incorporation by the board on Sept. 5 was prompted indirectly by the board’s action on Aug. 1, when it voted to amend the the document that had already been approved by three other parties in a four-party transit agreement. Those other parties include the cities of Ann Arbor and Ypsilanti, and the Ann Arbor Transportation Authority. Because  of the amendment, the articles of incorporation had to be re-authorized by the other three parties.

The county board’s Aug. 1 amendment made a change to the size of the majority needed, in order for the new transit authority’s board to change the articles of incorporation – from 2/3 to 4/5 of the 15 board members. When the amended document was sent back to the Ann Arbor city council, the city’s legal staff made additional changes that were driven by a desire to harmonize the county board’s amendment with the rest of the document, as well as with Act 196 of 1986 – the act under which the new transit authority will be incorporated. For example, the 4/5 majority requirement for changes to the articles of incorporation is at apparent odds with one kind of change to the articles specifically mentioned in Act 196 – a change in jurisdictions that are part of the authority. Act 196 explicitly indicates that a 2/3 vote is required. So an administrative change undertaken after the board’s Aug. 1 meeting was to add the clause: “… unless another vote of Board is required under the terms of these Articles or provided for in Act 196.”

Although it wasn’t clear whether the changes required a re-vote by the county board of commissioners, some commissioners were concerned that the changes might be construed as substantive and contrary to the intent of the county board, which could become an unnecessary point of contention down the road. For more details on this series of changes, see Chronicle coverage: “Washtenaw Board to Re-Vote on Transit Accord.”

Earlier in the day on Sept. 5, the AATA board released a final draft of a 5-year service plan as part of a possible transition to a new transit authority, to be called The Washtenaw Ride. An 0.584 mill tax to support expanded service could be placed on the ballot by May 2013. [See Chronicle coverage: "Revised 5-Year Transit Plan: More Service, Cost."]

This brief was filed from the boardroom of the county administration building, 220 N. Main St. in Ann Arbor. A more detailed report will follow: [link]

The service plan and the AATA’s position on the plan were released at a special meeting of the board on Sept. 5 and through a press release embargoed until the start of that meeting at 10:30 a.m.

The estimated cost of the service in the plan is 0.584 mills, which is an increase of 0.084 mills compared to the estimated cost in a draft plan, released earlier this year 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 five-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 geographic areas of the district committees would be represented on a proposed 15-member board for a new transit authority, which would be incorporated under Act 196 of 1986. That incorporation would take place under the framework of 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 will have the agreement on its agenda for its Sept. 5 meeting – but that's intended only to affirm some administrative changes to the document. See "Washtenaw Board to Re-Vote Accord."]

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 released in April of this year 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 a new transit authority – The Washtenaw Ride. 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.

At the AATA board’s Aug. 16, 2012 meeting, AATA strategic planner Michael Benham had sketched out in broad strokes some of the changes that had been made since the draft service plan had been released earlier this year in April. For example, the urban bus network [Ann Arbor and Ypsilanti] has been expanded compared to the draft. In the draft plan, it was based on a 16-hour day and 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. 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.

A digital version of the service plan will be available later in the day on Sept. 5. Updated:  [.pdf of Final 5-Year Transit Program]

This brief was filed from AATA headquarters at 2700 S. Industrial Highway, where the board’s Sept. 5 meeting was held. A more detailed report will follow: [link]