Topsy-Turvy Transit: Where Do We Go From Here? III

Continuing a retrospective of AATA’s countywide transit authority efforts, with a look ahead.

In the first post of this series, we described AATA’s decision to “catapult” the authority into its hoped-for transition to a countywide service by advance implementation of several services.   This meant that AATA passed a deficit budget for FY 2012 (which began in October 2011).  At the time, it was clearly expected that this bold leap would be for one year only.  As we reported at the time, it was evident that the intention was to ask voters to approve a property tax millage in the November 2012 election.  Assuming that was approved, there would have been a funding gap between September 2012 (the last month of that fiscal year) and July 2013 (when taxes for the next year would be collected).  We commented,

But the AATA, which uses the Federal tax year (October-October), would have to pass a new budget in September 2012 in advance of the millage vote.  So not only will the AATA have to pass a new year’s budget without a certainty that a countywide millage will pass, but three-quarters of a year will pass before revenue will be realized from a successful millage vote.

And indeed, September 2012 rolled around and a new budget was passed.   As the Ann Arbor Chronicle reported,  the AATA finished the year with a deficit of over $1 million.  (Note: the deficit is the difference between revenues and expenses; this does not reflect a negative fund balance overall.)

And so the AATA began another fiscal year with a deficit budget (this time the projected deficit is about $300,000).  That was partly because of a reduction in state formula support, as detailed in an expanded report by the Ann Arbor Chronicle.  But they had a bigger problem: the possibility of new revenue had been pushed much farther out toward the horizon than anticipated.  Instead of a November millage vote, they were instead only now preparing to incorporate the Washtenaw Ride (that request to Washtenaw County would take place October 2) and after an opt-out window, would ask countywide voters to pass a property tax millage, perhaps in a May 2013 election.

From the Chronicle’s first brief account:

At the board’s Sept. 27 meeting, board treasurer David Nacht was keen to stress that various initiatives in which the AATA has invested in the past year and in this next year’s budget could not be sustained without the kind of additional funding that could come from a countywide authority.

Of course, just the next month, as we have described, most communities in the county opted out, and the “countywide authority” vanished into a puff of smoke.

What could go wrong?

Reprinted with permission by S. Harris.  Copyright by ScienceCartoonsPlus.com

Reprinted with permission by S. Harris. Copyright by ScienceCartoonsPlus.com

From the beginning, the AATA’s quest for a countywide (Act 196) authority has been powered by magical thinking.  A number of assumptions were made, one of which is that no obstacle was insurmountable. But really, if only one of these assumptions was in error, they were in trouble.  The other items of faith:

Local governments will opt in (didn’t happen).

Voters will support a new millage (irrelevant at this point).

Required documents (4-party, Articles of Incorporation) passed by City of Ann Arbor and Washtenaw County, along with the City of Ypsilanti quickly, for a November 2012 millage vote (final sign-off by the BOC in September, much too late).

Changes in Federal transit funding would not affect them negatively (see the memo by Chris White; loss of discretionary funds; still some uncertainly with the Federal budget sequestration).

But if not the greatest miscalculation, certainly a major one was the mis-estimation of the effect of Washtenaw County’s inclusion in the Regional Transit Authority for SE Michigan.  As explained here, a package of bills passed in the lame-duck session of the Michigan Legislature and has been signed into law by Governor Snyder.  This is a succinct summary of the main package.    (The detailed discussion of the effects of Washtenaw County’s inclusion will be in a later post.)   We speculated a year ago that then-Board Chair Jesse Bernstein expected that a vehicle license fee associated with this package might serve instead of a millage to fund the AATA’s expanded authority.  He had made some cryptic remarks, like this one at the October 2011 u196 meeting:

“Everyone talks about a millage, but I’m hoping that the Governor will light a candle over the weekend.”

Earlier, there was this exchange at the September 2011 Planning and Development Committee meeting (discussing the deficit budget later voted in by the Board):

Rich Robben: We won’t be able to follow this mechanism (dipping into reserves) next year.  We’d better pull some rabbits out of a hat.

Michael Ford: I’m looking at finding some rabbits.

How SB 910 would have allowed a county vehicle fee (from illustration by Richard Murphy)

How SB 910 would have allowed a county vehicle fee (from illustration by Richard Murphy)

All this became clear once the package of bills was revealed in January 2012.   SB 910 provided for any county to assess a vehicle license fee, upon passage of a measure by the county BOC and approval by the voters.  The bill provides for up to $1.80 per $1,000 vehicle list price to be assessed in addition to all other vehicle license fees, and paid to the county treasurer for transportation purposes.  However, if the county were in the RTA, the amount of the fee would be reduced by the fees paid to the RTA.

Right up to the issuance of the final 5-year plan, AATA staff apparently had hoped that this source of revenue might replace the need for a millage.  But the plan acknowledges that the millage appears to be the only option.

From the September 2012 final 5 year plan

From the September 2012 final 5 year plan

Proposed BRT routes into Detroit. Graphic by Dave Askins of the Ann Arbor Chronicle, used with permission.  Pointer is Detroit Metro Airport.

Proposed BRT routes into Detroit. Graphic by Dave Askins of the Ann Arbor Chronicle, used with permission. Pointer is Detroit Metro Airport.

The RTA package was delayed past the initiation of Washtenaw Ride, so the vehicle license fee did not materialize in time–or ever.  When the RTA package was finally passed in the last days of the 2012 lame-duck session, SB 910 was not included.  The only vehicle license fee included in the final package is that which will support the RTA itself, most likely to initiate Governor Snyder’s dream of Bus Rapid Transit connector routes.

So – after 18 months of intense effort, the AATA finds itself highly leveraged, over-extended, and with no immediate source of new revenue.  And in addition, it has an extra layer of complication introduced with the inclusion of Washtenaw County in SB 909, establishing the SE Michigan Regional Authority.

Next: What now?

 

Explore posts in the same categories: civic finance, politics, Transportation

2 Comments on “Topsy-Turvy Transit: Where Do We Go From Here? III”

  1. Friday Adams Says:

    Topsy-Turvy Transit: Where Do We Go From Here?

    The answer is most difficult to imagine. Why? Some view transit leadership to date, as represented by cliché of cart before horse. Even worse than the cliché suggests: the horse is walking backwards. Vision, progress, and successful passage are almost impossible in this scenario.

    The process of the failed transit agreement began with a grand vision from a central location in the heart of Ann Arbor, with grand assumptions of value for the entire county. From the ivory (steel-panel) tower this transit vision still prevails.

    Value is based on revenue collected: City taxes. Township taxes. State dollars. Federal dollars. Value is viewed solely as revenue received (as opposed to value provided by excellent service provision for residents).

    The grand vision, mostly unstated, includes trains, busses, trolleys, gondolas, trams, or bicycles. Mass transit is the goal, at any cost. Economy of scale is irrelevant.

    The vision discriminates against automobile travel by: 1) Shrinking transit arteries to create traffic congestion and motorist frustration. 2) Reducing maintenance and replacement of road infrastructure, with the goal of frustrating motorists and damaging their automobiles. 3) Traffic management goals of snarling traffic and creating gridlock at stoplight intersections through extensive use of poor light timing. 4) Penalizing city resident auto owners that walk, bicycle, or bus, by towing cars parked in front of their homes, if not moved for 48 hours.

    Disagree with any or all of the above? Examine how transit process could have worked in our county, in a simple needs-based analysis:

    1) Examine transit needs in city, by polling ridership and adjusting routes. 2) Examine transit needs in neighboring cities. 3) Examine transit needs in townships. This would have entailed having detailed conversations with all parties, acting on user preference and need, with no planned agenda to shade outcomes and results.

    Then, a transit plan could have been crafted, based on need, scale, and economy. Value would have been examined from the perspective of service provided, and user satisfaction. Busses, vans, and taxis could have been part of the solution. Car pools and van pools could have been incentivized with parking amenities that include premium location or free cost. Possibilities are enormous due to software application and social networking.

    Trusting relationships of designing parties, representing needs of residents, could have been forged. A unique and effective transit plan could have been crafted for our county.

    Instead, we have a very different process, represented by a giant bill for a not-so grand design that is a huge failure. One size did not fit all. It was the wrong size that fit few.

    Where do we go from here? The answer is not difficult to imagine. We will scapegoat the new RTA, bedeviling anyone that participates in its formation, or supports it. We will work to withdraw from its association. We will do anything we can to get the old plan “back on track.” In this case, past performance is indicative of future action, as the “leadership” mechanism is fully focusses on its “vision of value.”

    • varmentrout Says:

      An interesting analysis, not all of which I follow. It is certainly accurate that the City of Ann Arbor is seeking to remove Washtenaw County from the RTA. As I’ll indicate in the next post, the AATA is also trying to resurrect their own regional plan on a reduced scale.


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