Archive for the ‘Transportation’ category

Moving Us Forward: The Urban Core Expansion Plan

October 26, 2013
Click on the thumbnail to see both sides of flyer. Similar flyers for other wards.

Click on the thumbnail to see both sides of flyer. Similar flyers for other wards.

The Ann Arbor Area Transportation Authority is moving forward with a new Five-Year Plan for expanded services.  They describe this plan on their recently remodeled website and have been conducting public meetings all over Ann Arbor and Ypsilanti. In the meeting I attended, emphasis was given to local (5th ward) routes and enhancements in detail.  The flyer at the right lists many specific route changes.  (There was a surprisingly vigorous discussion, with one current bus user objecting to some of the “enhancements”.)  Clearly, much planning and fine-tuning has gone into the proposal.

The map below shows detail about enhancements in the Ann Arbor area.  (Similar maps are available on the website for the Ypsilanti and Pittsfield areas.)  Here are a few quick points about the changes:

  • New routes are shown in blue, old ones green.  Express Routes purple.
  • Note that most of the new routes are on the west side of Ann Arbor.  (These have letter designations instead of numbers, but this is temporary.)
  • Routes “leak” outside the borders of the City of Ann Arbor, with excursions into Scio and Pittsfield Townships. Scio Township is not participating in the Urban Core plan but a bus would run along Jackson Avenue to Zeeb Road.
  • There is no expanded service into Ann Arbor Township on the northeast side, despite the complex of medical services and offices at Domino’s Farms in that area.
  • There are several Express Routes shown, including the present ones to Chelsea and Canton, and new ones to Belleville and the Walmart/Saline complex on Michigan Avenue.
Proposed enhancements for Ann Arbor area. Click for larger image.

Proposed enhancements for Ann Arbor area. Click for larger image.

In my judgment, there are many reasons to say this is a lovely plan on functional grounds.  For example, the plan allows people from Ann Arbor to seek employment at Meijer and presumably makes all the commercial and nonprofit  (like the family shelter) opportunities accessible.  Some of the commercial spots in Pittsfield, like Costco and Walmart, plus the Pittsfield library branch, are also made accessible.  It is rather concerning, however, that the northeast side of Ann Arbor and the WCC/St. Joe’s area appear to be receiving no enhancements.

So, as is always the question: how will this expanded system be paid for?  As we indicated in our previous post, the City of Ypsilanti has joined the authority and Ypsilanti Township has requested to join.  Pittsfield Township and Superior Township will apparently just maintain their current POSA contracts, while Scio Township and Ann Arbor Township have declined to play.  The City of Saline is also a nonparticipant.

As was explained at the meeting, a major cost of implementing the plan will be buying new buses.  Most of the buses in the existing fleet were purchased with Federal funds, but for a variety of technical reasons those won’t be available to expand service. improve and expandAll this will not happen without a major infusion of cash.  As we reported earlier, there was an informal consensus at the “Urban Core Meetings” that the “Improve & Expand” option was to be selected.  According to the description offered, that option will require an annual additional revenue of $5.4 million by 2019 (the last year of the Five-Year Plan). (Since Pittsfield and Saline are not participating, the actual figure is not clear.)  Much money is needed to start up. The planner, Michael Benham, stated, “We’re using every cent we’ve got right now.”   So where will the cash come from?

It is an open secret that AAATA hopes the answer will be a new authority-wide millage.  (The authority is expected to include Ypsilanti Township, along with Ann Arbor and the City of Ypsilanti, the two current members of AAATA.)  The number mentioned is 0.7 mills, to be approved by voters in May 2014.

So as explained in the public meeting, Year One of the Five-Year Plan will begin in August 2014, assuming that a millage passes through the entire authority in May 2014.  This was not obvious, since the assessment and tax cycle has various milestones.  A November millage vote would not provide revenue until the succeeding year.  However, since taxes are paid every July, the May vote will deliver the needed revenue in the same year as the ballot.

AAATA is currently on a charm offensive, with many meetings with local officials and the public meetings.  Although officials have been careful to say that the AAATA board has not yet authorized a millage vote, it is clear that that is in our future.  But the outcome is not certain.  Will voters endorse the plan with their dollars?

UPDATE: AAATA has now released electronic versions of flyers for all Ann Arbor wards.  Here they are.Ward 1 Ward 2  Ward 3  Ward 4  Ward 5

NOTE: A list of previous posts on this topic can be found on the Transportation Page.

The Reach for The Ride: Local Governments and Funding

October 20, 2013

As we have noted before, transportation is one of those governmental functions that is almost necessarily delivered on a regional basis.  Yet two local concerns inevitably appear almost immediately in any discussion of a regional transportation system.

  • Governance: what power does any one locality have over what services are provided?
  • Equity: who pays, and who benefits?

In Michigan, as again we have noted, these concerns are made especially vivid by the strong tradition of home rule. Regional transit is a vision gladly embraced by many, and it is rightly described as having many potential benefits in providing connectivity across borders and economic benefits.  (For an excellent overview of recent regional transit efforts, see this recent article from the Ann Arbor Chronicle.)

Our previous post suggested rather harshly that the Ann Arbor Area Transportation Authority was “exceeding its reach”.  That judgment was based on the expectation that the AAATA will run up against those same two obstacles in its effort to achieve a somewhat more limited version of its county-wide 5-year plan.

Here is the blunt truth: Township officials are conditioned by tradition and possibly legal constraints to spend money only to the extent that it buys a direct service.  They will not easily contribute to a regional approach in which monetary contribution and location of service delivery are disconnected.  But the very essence of a regional system is that resources must be made available to the entire system without regard to the source of the funds.

Another blunt truth is that even when the money to be spent is not coming from township coffers, officials will be very cautious about subjecting their residents to taxation via a regional tax.  One argument often made is that even though a “vote of the people” may be required for a new tax (such as a transportation millage), the relatively low-population townships and small cities can be “swamped” by votes from larger urban areas.  One reason people choose to live in townships is the lower tax rate, and placing them in hazard of a new tax is politically unpopular.

best for usFor these reasons, a broad vision of improved connectivity and access across the “urban core” will always be trumped by a careful accounting of the precise benefits to each unit.  This quote from MLive coverage of Pittsfield Township deliberations makes the point: “(Mandy) Grewal (Supervisor) noted that Pittsfield Township opted out of joining a proposed countywide busing authority last year because the township was unclear on service levels it would receive and didn’t have a good cost-benefit analysis.”   Even more illustrative, from MLive coverage of Ypsilanti Township deliberations, (Trustee Stan Eldridge) “I’m in favor of the AAATA expanding transportation, I’m just a little uncomfortable with some things … and I want to make sure we’re doing what’s best for our residents first and the rest of the county and region second.”

A limited result

The limits of the expanded authority. Pittsfield retains its POSA, Saline does not participate

The limits of the expanded authority. Pittsfield retains its POSA, Saline does not participate. Ypsilanti Township not finalized.

What is unfolding is that AAATA will not succeed in their broader plan.  However, they will manage to bring in both Ypsilanti communities, on unequal terms.

The final steps have now been taken (admirably summarized by the Ann Arbor Chronicle) to incorporate the City of Ypsilanti into the Ann Arbor Transportation Authority.  It is now the Ann Arbor Area Transportation Authority, with one seat on the board designated to the City of Ypsilanti. (The Ypsilanti City Council must still approve the Transportation Funding Agreement , scheduled for November 5, but it appears unlikely that they will fail to do so.)  By the agreement, the City will transfer its transit millage to the AAATA, less an administrative fee of 1%.

This expansion of the AAATA to include the City of Ypsilanti solves the problem that they had run up against their ability to tax themselves adequately to pay the POSA charges required not only for their previous routes, but for the expanded #4 service and additional Night Ride service that were provided as part of the “advance implementation” of the countywide transit plan.  On practical terms, it means that Ann Arbor taxes are now supplementing Ypsilanti’s millage to provide transit to Ypsilanti.  My own view is that this is a good bargain.  Ypsilanti is our sister city and our success depends on their success, in community terms.  The two cities together really are our “urban core”.

AAATA officials have reached out to the other three main communities in the plan with a proposal that they, too, should consider joining the Authority or at least step up their POSA service.  Most of the proposals for additional service date from the proposed countywide plan improvements, with some refinements.  There have been three different outcomes:

Pittsfield Township heard the proposal from the AAATA on September 11.  They politely declined any expansion of service at this time, but left the door open for later.  Supervisor Mandy Grewal, who has always been supportive of expanded regional transit on an abstract level, commented that “she thought the board needed to look for ways to cut the final cost”.  I predict that they will never join the AAATA, since it would expose their residents to a future millage.  They will maintain their current POSA and likely add service on a carefully metered basis as it seems needed, but the broad expansion envisioned by AAATA is unlikely in the near term. (A chart showing proposed increases over 5 years is here; also refer to service plans in pages illustrating the Urban Core concept.)

The City of Saline was very supportive of the countywide plan and was one of the last to opt out.  However, they do not currently receive service from AAATA; instead, they have a contract with WAVE.    Evidently AAATA made a presentation to their City Council on July 1, and were turned down even for limited POSA service ($175,000/year).   An informal newspaper poll showed a small sample were about even on the proposal (37 for, 41 against, 19 wanted a smaller proposal).  The single commenter on the poll probably spoke for many others, “The City just raised taxes stating that there where no more places to cut. And here they go finding new places to spend the money that they confiscated from their own citizens.”   It appears that Saline will not be a joiner in the near future.

Ypsilanti Township voted to join the AAATA on September 9, 2013.  An account of that meeting, reported by MLive, indicates that there was extensive discussion about proposed future expansion of services, though there is currently no funding source for them.   In their resolution asking to join AAATA, the single “Resolved” clause reads

the Charter Township of Ypsilanti Board of Trustees requests membership in the Ann Arbor Area Transportation
Authority in accordance with the State of Michigan Public Act 55 of 1963 and asks the AAATA Board of Directors to approve the request.

At the request of the AAATA PMER committee, they also included a Whereas:

WHEREAS, the Charter Township of Ypsilanti wishes to join AAATA in return for continuing to contribute general fund dollars equal to the cost of providing services represented by Purchase-of-Service Agreement costs to AAATA;

What AAATA board members apparently failed to understand (odd, since some of them have been on other boards) is that Whereas clauses have no force of law.  When a unit of government passes a resolution, the Resolved clauses are binding until revoked.  But Whereas clauses are often used as a summary of known facts or statement of principle.  In this case, another Whereas indicated Ypsilanti Township’s expectations for this arrangement:

WHEREAS, bus service in the Charter Township of Ypsilanti can be improved to more efficiently meet the transportation needs of Township residents by increasing frequency and hours of current operations, as demonstrated by a 30 percent ridership increase on AATA Route 4 and further expanded urban core bus service improvements such as an additional route to service the Ypsilanti District Library and residents in the southern part of Ypsilanti Township, increased frequency and hours on routes in the north, west and east parts of Ypsilanti Township, a new Park and Ride lot and the institution of Ypsilanti Township-wide Dial-a-Ride Service for all Ypsilanti Township seniors and disabled are needed and identified as a part of the future Urban Core transit expansion plan…

As reported by the Ann Arbor Chronicle, the AAATA board approved the addition of Ypsilanti Township to the AAATA on September 26, 2013, despite urgings (mine) to examine the fine print more closely.

My interpretation is that both parties have been proceeding from good intent but misleading impressions.  This is essentially a “handshake” arrangement in which Ypsilanti Township, unlike the City of Ypsilanti, brings no fixed financial contribution to the table.  All along, the Township has evidently been persuaded that they can better the services offered to their residents without any real cash on the table.  In fact, Karen Lovejoy Roe suggested as much at an early urban core meeting – that if the authority-wide millage passed, they could remove the burden from the general fund.

AAATA depiction of relative millage contributions (dollars are not shown)

AAATA depiction of relative millage contributions (dollars are not shown)

The material provided by AAATA staff reinforces that intent. As the figure indicates, the promised POSA contribution from the general fund will be omitted if an authoritywide millage is passed.  The new millage (paid by Ypsilanti Township residents as well as the other two communities) will also pay for expanded service in the Township.

AAATA published a concept paper with many questions and answers.

Here are a couple of points about the millage and the POSA. (Added emphasis is mine.)

  • Question: If Ypsi Township becomes part of the AAATA organization, will they no longer have to pay for services under a POS contract? Answer: Only if Ypsi Twp becomes a member AND there is a successful millage, would Ypsi Twp stop paying for service from their general fund and start paying the full cost of service through their millage contribution.
  • Question: Is there a backup plan in case new funding through a millage is not approved? Answer: If millage funding is not feasible for any reason, the AAATA will continue running the services already being provided, funded through existing mechanisms, including the POSA mechanisms that have existed for over thirty years. As property values continue to rise in Ann Arbor, AAATA revenues may increase sufficiently to add new services. We can also increase service to the nearby communities if they are willing to increase their POSA payments.

If no millage, what?

So AAATA is running up against its limits.  Although its administration has demurred on the plans for a millage, it is clear from all their planning documents that they are depending on the passage of one, perhaps in May 2014.  They have brought no new revenue in through their expansion efforts, and have only succeeded in expanding the authority to include the two Ypsilanti communities.  This will doubtless lead to more expectations (and probably needs) for increased service.  (Note that the concept paper hinted that increased services would be available via Ann Arbor tax proceeds.) But to pass the millage, they will have to persuade the Ann Arbor public that they will vote in an additional 0.7 mills in taxation in order to accomplish this truncated expansion of transit services.

UPDATE:  The Ann Arbor City Council voted to postpone the resolution approving the addition of Ypsilanti Township to AAATA.  See coverage by the Ann Arbor Chronicle .  It will be taken up again on November 18, when the new Council is seated.

SECOND UPDATE:  Regarding the obligations of township governments to spend for the benefits of their residents: I have been provided with this article with a summary of lawful expenditures for township governments.  Clearly any township trustee would feel quite constrained in making broad commitments.

THIRD UPDATE: The Ann Arbor-Ypsilanti Chamber of Commerce evidently intends to make a recommendation to the Ann Arbor City Council regarding the Ypsilanti Township addition to the AAATA.  They invited me to present my views at a committee meeting on November 12.  Here is the position paper I prepared for them.  As you will see, it also includes an overview of tax equity issues for a future millage.

FOURTH UPDATE: The Ann Arbor City Council voted to include Ypsilanti Township in the AAATA, but not without some debate.  Here is the account by the Ann Arbor Chronicle.

Once Again, AAATA Exceeds Its Reach

October 19, 2013
The urban core authority concept

The urban core authority concept

It seems we’ve seen this movie before.  Elaborate plans.  An extravagant marketing effort.  High-level diplomacy. And an utter lack of understanding of how local government works.  It’s the county-wide transit plan, compacted and trimmed.

Just a little over a year ago, the countywide transit plan, based on an Act 196 authority with a complex structure, was soundly rejected.  As we reported over a number of months, the ungainly plan simply had a number of fatal flaws and most Washtenaw County units of government couldn’t opt out fast enough.  This left the AATA in a precarious situation because of the “advance implementation” of the countywide plan (they simply assumed that the money would be coming from a countywide millage and spent in anticipation).

As reported by the Ann Arbor Chronicle, Ann Arbor’s City Council passed a resolution to withdraw from the Act 196 authority and terminate the “4-party plan” that had been so painfully negotiated.  The opt out resolution passed on November 8, 2012 contained an additional phrase:

Resolved, That AATA is encouraged to continue to discuss regional transportation options among Ann Arbor, Ypsilanti, Ypsilanti Township, Ann Arbor Township, Pittsfield Township, and Scio Township, leading to a better understanding and process for improving local transit options

Say no more!  AATA took that to be a directive and launched a new initiative, the Urban Core.  At their November 15, 2012 meeting, a subdued AATA Board heard their CEO pledge to start afresh, saying “doing nothing is not an option”.   Michael Ford’s statement was a defiant and confident outline of a new course of action.  He said in part,

We respect the opinions of our elected officials who have chosen to withdraw their participation in the proposed transit authority in favor of moving forward with a different process and a more compact authority…Washtenaw County’s urban core communities…have indicated a strong interest in developing an expanded transit network despite Ann Arbor City Council’s actions to withdraw from the new transit authority. These communities include the cities of Ann Arbor, Ypsilanti, Saline and the townships of Pittsfield, Ypsilanti and the Village of Dexter.

Staff (especially Michael Benham, the chief planner for expanded transit) began working immediately and had some drafts for a committee to review by December 2012.  The first “urban core” meeting was held on March 28, 2013 at the Pittsfield Township Hall. The meeting included officials representing different communities, including four Ann Arbor councilmembers. A large-format book with pages illustrating the Urban Core concept was provided.

    Urban Core meeting of March 22, 2013. L to R: Daniel Cherrin & colleague from Dispute Resolution center; Shawn Keough, Dexter; Peter Murdock, City of Ypsilanti; Paul Schreiber, Mayor of Ypsilanti; Mandy Grewal, Supervisor, Pittsfield Township; Spaulding Clark, Supervisor, Scio Township

Urban Core meeting of March 28, 2013. L to R: Daniel Cherrin & Brian Pappus; Shawn Keough, Dexter; Peter Murdock, City of Ypsilanti; Paul Schreiber, Mayor of Ypsilanti; Mandy Grewal, Supervisor, Pittsfield Township; Spaulding Clark, Supervisor, Scio Township; Charles Griffiths, AATA chair in foreground.

Two more meetings were held on April 23, 2013 and June 27, 2013 (packets are linked). The meetings were facilitated by Daniel Cherrin and Brian Pappus, who were working as dispute resolution volunteers (an odd note, since this was not exactly a dispute).  They brought a fresh approach to the process, as they had no particular knowledge of transit and had not been associated with the long earlier process.

An early draft of the concept (presented at an AATA meeting in December) had included Scio, Ann Arbor and Superior Townships.  However, Superior Township was not represented at all at the March meeting, and some others were just along for the ride.  Supervisors Spaulding Clark of Scio Township and Mike Moran of Ann Arbor Township pretty much indicated that, while Shawn Keough of Dexter joked that he was there to explore “getting on the map”.  It was clear that the two Ypsilanti communities and Pittsfield Township were the major likely players in an expanded authority, possibly along with the City of Saline.  Brian Marl, the Mayor of Saline City, was very positive but it became evident that they wouldn’t play much of a role (Saline is currently served by People’s Express and does not currently have a relationship with AATA.) .   The outline map has continued to include Saline.

One of the tasks was to decide on which of four options would be pursued.  These were either to keep the current service levels, improve service in Ann Arbor, expand service elsewhere, or to “Improve & Expand”, the full package.

Proposals for "beyond the urban core" services, perhaps at net service cost

Proposals for “beyond the urban core” services, perhaps at net service cost

But in addition, a tinge of the ambition for the county-wide plan persisted.  (AAATA has not disavowed the 5-year plan from the TMP, but has instead said that much of that is still valid.)  A slide, “Beyond the Urban Core” proposed that an expanded authority might still engage many entities outside its borders.

Process at the first meeting was a bit wobbly, with the officials present taking some time to meet up with the earnest efforts of the moderators to organize a real working structure.  The objective, to form two working groups on governance and finance, was never met.  But the group did more or less accept the idea of the “Improve & Expand” option, in the sense of a “consensus” (no one actually objected).

Moving You Forward

An obstacle to this process was that no one at the meeting actually had the authority to commit their respective communities to anything.  Local governments have processes and requirements of their own.  Leaders may lead, but they still must obtain a resolution from their elected councils or boards of trustees. AATA has had some trouble with understanding this in the past.  With the countywide plan, they seemed to think that having gathered some good people around a table and having made numerous presentations without strong objections being voiced, they were good to go.  But after a year’s laborious effort to achieve an Act 196 countywide authority, Washtenaw County communities couldn’t opt out fast enough.

Local officials present at urban core meetings (most likely participants)

Local officials present at urban core meetings (most likely participants)

In this case, the people at the table were significant elected officials who could evaluate and discuss the concepts being presented, but who were necessarily circumspect about making commitments.

An exception: the City of Ypsilanti officials present, especially their Mayor, were passionate about the need for a new authority that they could join.  The reason: though the city’s voters approved a charter millage to pay for bus service, they were limited in the amount that they could levy by state law (they are at their 20-mill constitutional limit).   At the April meeting, where a number of different governance models were reviewed, there was a burst of discussion which resulted in the addition of the City of Ypsilanti into AATA, thereby cementing the Act 55 authority as the likely vehicle for an “urban core” authority.  That move has been completed, with the addition of two new board members, one representing the City of Ypsilanti, one appointed by Ann Arbor.  The Act 55 authority is now called “Ann Arbor Area Transportation Authority” (AAATA), though the marketing staff prefers simply “The Ride”.  The final paperwork has now been executed that will commit Ypsilanti’s millage to the AAATA.

So by the third meeting, the situation was that we had a two-unit authority with possible participation by three others, perhaps by use of expanded Purchase of Service Agreements (POSAs).  This “Improve & Expand” model, which received approval not by any vote but because no one objected and all seemed to agree in principle was a nice idea, was said to have a $5.4 M annual price tag (additional funding needed) by 2019.   The financial model provided at the June meeting supposes that much of that will be met by additional POSA spending by Pittsfield, Superior and Ypsilanti Townships, and the City of Saline.  In addition, the cities of Ann Arbor and Ypsilanti would agree to pay a new millage levied by AAATA, now supposed to be 0.7 mills.  Note that more funding is needed just to make up the shortfall in Ypsilanti’s current millage payment.  AAATA is still paying for their earlier advance implementation of the countywide plan.

From the June 27 packet. (Click for larger view.)

From the June 27 packet. (Click for larger view.)

But will the respective governmental bodies actually approve funding for this expansion?  And will voters approve a new millage?  Plans are being made.  Once again, AATA (now AAATA) is moving us forward with a broad expansionary vision, but is dependent on local politics.

Transit, Transportation, and the Money Question IV

April 12, 2013

Funding Transit

The Comprehensive Transportation Fund is critical to any discussion of transit in Michigan. It is the major, if not the only, source for transit funding in the state.  As explained in this guide to Act 51transit funding is constitutionally limited to 10% of transportation tax revenue.  This memo summarizes the features of the fund.  In addition to the MTF allocation (explained in our previous post), the CTF also receives money from auto-related sales tax.  For FY 2012-2013, estimated revenue from the MTF was $158.155 M and $88 M from the auto-related sales tax.  As the memo (from the excellent House Fiscal Agency) notes, this fund is the source of local bus operating assistance and the total allocated to that purpose has not been increased since FY 2006-2007.  This has created a “zero sum game” for local transit agencies, since they must compete for a limited pot of money.  A complicated funding formula distributes funds in part based on the total operating expenditure for each agency, but there is also a floor created by a 1997 bill.

…the state operating assistance formula rewards local cost participation.  Agencies that pass local transit millages can expand service and effectively use local funding to leverage additional state funding.  Since state funding is capped at the appropriated amount, every additional dollar of state assistance a transit agency can capture comes at the expense of other transit agencies.  Under this formula, agencies in relatively affluent areas…have tended to capture and increasing share of state assistance.

AATA has benefited from this, since our local millage has allowed an expansion of service.   However, DDOT (supported by the Detroit city general fund) received a disproportionate amount of the funding this year (although less in previous years) because of the floor.  (See the report by the Ann Arbor Chronicle and the truly head-spinning explanation of how the formula worked.)  AATA fell short of their expected state assistance by about $800,000; they are hoping that the legislature will make them whole in a placeholder bill that currently contains no provisions but is evidently intended to fill in various budgetary holes around the state.

For the FY2013 budget year (through September), AATA expects to receive $8,301,880 in state assistance out of a total of $32,403,360 in revenue, or about 25.6% of its revenue.

proposed flow of fundsA critical point for the future is that the SE Michigan Regional Transit Authority will now receive the entire CTF allocation for the region, and will distribute that to the different public transit providers under its authority.  This begins on October 1, 2013.  Public transit providers are required to submit applications to the RTA for their allocations.  The RTA will also receive all Federal operating assistance under MAP-21 and distribute that.

In FY2013, AATA expects to receive $5,795,268 from Federal formula funds, about 17.9% of operating revenue.

The Regional Transit Authority

As we just indicated, the emergence of the Regional Transit Authority has brought about a profound alteration in the way AATA will receive operating funds from state and Federal sources.

Here is a guide to the package of bills passed in the last days of the December House session that established the RTA. They have now been assigned Public Act numbers.  (All are “Public Act…of 2012.)  The most authoritative overview of the effect of this package of bills is from the House Fiscal Agency.  Click on the links to individual bills to read their text.

Senate Bill Public Act Immediate effect Summary
909 P.A. 387 Yes 12/19/12 Creates Regional Transit Authority (the RTA act)
911 P.A. 388 No 3/28/13 Vehicle License Fee ($1.20/$1000) with approval of voters in region
912 P.A. 389 No 3/28/13 Makes zoning ordinance subject to the RTA act (subordinate)
967 P.A. 390 No 3/28/13 May operate dedicated public transit lanes on highways
445 P.A. 391 Yes 12/19/12 Directs CTF monies to RTA; RTA would distribute.

Despite the passage of a resolution by the Ann Arbor City Council on December 10, 2012 and what has reportedly been some vigorous lobbying in Lansing by our Mayor, it appears that Washtenaw County is firmly included in the RTA.  (The urgency shown by the Mayor is presumably related to this item in the RTA act):

Section 6 (3) (b) A board shall provide in its bylaws that the following actions require the unanimous approval of all voting members of the board: (i) A determination to acquire, construct, operate or maintain any form of rail passenger service within a public transit region.

The new board (see the temporary SEMCOG site for pictures) had its first meeting on April 10.  Local (Detroit area) transit advocates were wildly ecstatic.  Here is a live blog account. There is money. The RTA bill appropriated $250,000 which does not expire with the end of the fiscal year but can be carried over.

This may have a number of effects that we can only guess at for the moment. In addition to the routing of state and Federal operating funds through the RTA,  all grant requests for capital projects must also go through the RTA.  AATA has been particularly effective at obtaining Federal grants for capital purchases and special programs.

Among the many questions which we might ask: how does Detroit’s desperate situation play into this?  It is now under an emergency manager and its bus system is supported by general funds.  Will the rest of the region be, in essence, taxed to make DDOT a viable system?  Will the RTA board try to rearrange Washtenaw’s transit plan?  Will it continue to allow UM’s ridership to count toward the state formula requirements for AATA?  But above all, what will be the new funds source for this new layer of transit administration?  Much depends on how much more of Governor Snyder’s transportation proposals are accepted by the state Legislature.  And that is not going too well.

UPDATE: The House Fiscal Agency has issued updated discussions of the CTF and the overall transportation funding structure.

SECOND UPDATE: A discussion at the recent AAATA board meeting (July 23, 2013) of the RTA’s funding problems also reviewed its possible effect on funding of local transit agencies.  The Ann Arbor Chronicle’s account has the details.

Transit, Transportation, and the Money Question III

April 9, 2013

An overview of state funding for transportation.

The poor condition of Michigan’s roads and bridges is almost legendary.  I remember my puzzlement on arriving here in 1986 and wondering if I had landed in a third-world country.  This Pure Michigan parody on potholes expresses what many of us have felt at one time.  Legislators have raised alarms.  As a result of P.A. 221 of 2007, a Transportation Funding Task Force (nicknamed “TF2”) was formed and issued a report in late 2008  detailing the many problems.  The task force declared, “Michigan is moving from underinvesting in transportation, to disinvesting in transportation.”  It stated that Michigan was falling short even of enough revenue to provide matching funds to obtain available Federal funds.  (We have not attempted to discover whether this happened.)  UPDATE: There is indeed a shortfall, which was made up by a general fund appropriation in the current budget. However, despite the report’s call for more revenue to be raised via several possibilities including vehicle registration fee increases, no new initiatives were taken.

Governor Rick Snyder, who was elected in 2010, has made transportation one of his key issues.  He issued a special message on transportation in October 2011.  He then followed up with his budget message for FY 2014 and FY 2015, which states:

The plan addresses the lack of appropriate road funding by creating a new funding model based on a gasoline and diesel tax of 33 cents a gallon; and increasing registration taxes for vehicles and heavy trucks. This will cost a typical Michigan family an estimated $120 per vehicle each year.

Additionally, the governor recommends a local option that would allow Michigan’s 83 counties to raise additional revenue for local transportation needs. Subject to local voters, a local vehicle registration tax of 0.18 percent of a vehicle’s list price would generate $280 million that counties could use to fix local roads or invest in public transportation.

The Governor’s budget (which is his proposal to the Michigan Legislature) thus proposes new revenue. In addition, it proposes a redirection of priorities in transportation.  Here is an excellent summary of the transportation budget recommendations and the changes from prior years.   As it states:

The Transportation budget supports state and local highway programs, public transportation programs, aeronautics programs, and administration of the Michigan Department of Transportation (MDOT). Approximately two-thirds of the revenue in this budget comes from state restricted revenue, with approximately one-third from federal sources. Almost all the state-restricted revenue in this budget is constitutionally restricted – from motor fuel taxes and vehicle registration taxes. (emphasis added)

A Long Tradition of Dividing Between Constituencies

Transportation funding is mostly directed by Public Act 51 of 1951, , which dictates how revenue collected from transportation users (including gasoline taxes and vehicle registration fees) are allocated. These are gathered into the Michigan Transportation Fund and then reallocated according to formula.  The MTF is a “restricted” fund that is limited to the uses dictated by P.A. 51.

After several transfers to some specific programs and departments, the balance of the MTF is divided up.  First,  10%  of the balance (approximately 8.5% of the MTF) is transferred to the Comprehensive Transportation Fund (CTF).  (The CTF funds public transit and other non-auto transportation.) Article IX, Section 9 of the Michigan Constitution specifies that  “Not less than 90 per cent. . . . shall be used exclusively for . . . roads, streets, and bridges . . .”  The remainder is divided up as follows:

State Trunkline Fund (STF):     39.1%

County Road Commissions:     39.1%

Cities and Villages:                       21.8%

The portion going to county road commissions is used for county roads and roads in rural and urbanized townships.   It is generally agreed that there is never enough money to do the job.  The Washtenaw County Road Commission  (WCRC) has been the subject of constant complaint ever since I became acquainted with the County.  It has a separate board of three commissioners, who serve for 6-year terms.  The road commissioners are appointed by the county Board of Commissioners, and that is the sole influence the BOC has over them.  (Another constant has been the complaints about Road Commissioner Fred Veigel, who has been reappointed constantly for nearly two decades. He is powerful politically because of his position as the Huron Valley Labor Council head.) Generally, every locality considers that it is being treated unfairly on attention to its roads.  County commissioners are powerless to address the complaints of their constituents.

Thus, Governor Snyder got their attention last year when he signed a pair of bills that empower county boards of commissioners to absorb the road commission within their own shop. The bills, now P.A. 14 and P.A. 15,  set a deadline of January 1, 2015 for this action to take place within a county.  The Washtenaw County BOC has been having a conversation about absorbing the WCRC, according to this report from AnnArbor.com.  Conan Smith, who has expressed interest in doing away with the road commission in the past, is encouraging discussion of a county transportation reorganization.  Some of the themes mentioned, such as a conflation of roads with other means of transportation and a new local tax, are likely to raise hackles, especially in the townships.  From the AnnArbor.com story:

Yousef Rabhi:  “The funding aspect should take a holistic view to transportation”,  mentioning bike lanes, pedestrian access and alternative modes of transportation.

Conan Smith:  “Our transportation system needs to change to meet the needs of a different kind of user.  We’ve focused on transportation too long as roads as primary and public transit as secondary.”

Smith and Rabhi have both been big supporters of the Southeast Michigan Regional Transit Authority, which is meeting for the first time on April 10.   Smith has really pushed the envelope with his maneuvers on the RTA, including using his position as the Executive Director of the Michigan Suburbs Alliance and his marriage to Senator Rebekah Warren to shepherd it through the Legislature with Washtenaw County appended to this metropolitan Detroit transit authority.  He also managed to appoint the two RTA board members from Washtenaw just before ending his term as Chair of the BOC.  It is not clear how his notion of having the BOC take on more authority over transportation in the county would integrate with that thrust.

Meanwhile, the talk of more state revenue has caused some excitement at the WCRC itself.  Its managing director, Roy Townsend, is quoted in another AnnArbor.com report as having plenty of ideas on how to spend additional road funds raised by the Governor.  A quick look at the map included in the article seems to indicate that most of the projects are on rural roads.

Clearly, there are very different visions of how additional transportation funds should be spent  – fixing roads? Or more transit?  One complication not always mentioned is that the 10% constitutional limit for transit applies across the board for governmental expenditures on transportation, not just to the MTF.

Next: special aspects of funding for transit.

UPDATE: The House Fiscal Agency has just released an excellent overview of transportation funding, which includes a discussion of  many of the concerns and issues with the gap between funding and needs.

SECOND UPDATE:   As of May 29, 2013, the transportation budget has not been finalized, in that the Legislature has not adopted it.  However, a conference committee has resolved differences between the House and Senate transportation budgets.  Here is a summary.

THIRD UPDATE:   This commentary in Bridge Magazine points out that the Legislature missed a deadline (June 1) to put new funding measures on “an upcoming” statewide ballot.  Instead, the budget contains short-term fixes.

FOURTH UPDATE: Here is a recent (June 10, 2013)  update from Transportation for Michigan on Michigan legislative action regarding transportation funding.

FIFTH UPDATE:  Another update (February 10, 2014) from Transportation for Michigan on the Governor’s budget for state transportation funding.  Not much good news.

Transit, Transportation, and the Money Question II

March 31, 2013

One of the peculiarities of transportation funding is that the true cost of transportation is almost never borne by the actual users.  There is a superstructure of taxes and fees that make up most of the costs, while the actual users do not pay proportionately, even those using roads and bridges.  In the case of public transit, fares may seem significant to the riders but generally do not pay for more than a fraction of the service.  Further, fares have to be kept relatively low or ridership declines.  (The most recent statement of cost per passenger for AATA buses is $3.16, while the full fare is $1.50.  How many people would ride the bus at a cost of $6 per round trip?)

Local taxes and fees that are paid for transportation often are perceived by those paying to be really burdensome, and the related service is considered inadequate. (Key the complaints about the Road Commission and Ann Arbor potholes.) Yet, those are usually only a small fraction of the cost.  The main cost is borne by the Federal Government, and the State of Michigan.

Federal Funding

The Federal transportation bills which provide for transportation are always contentious and provide Congress with some good old-fashioned wrangling, as legislators try to get the best for their own regions.  In spite of this, Congress managed to pass a new surface transportation bill, known as MAP-21, in the summer of 2012.  It expires at the end of FY 2014 (September 30, 2014).  Here is SEMCOG’s page on MAP-21.  MAP-21, or the surface transportation act, is basically what we think of as the “gas tax”.  The formal name is the Highway Trust Fund, and the money available has been shrinking as (believe it or not) total gas consumption has been declining.  There are efforts to recast the funding mechanism but this will be contentious. Much of MAP-21 relates to roads and bridges, but it is crucial to transit systems because this is where Federal formula funds for day-to-day operation, and also capital funds for transit purposes, are allocated.  See a helpful memo by AATA’s Chris White about the effects of MAP-21 on AATA’s finances.

General note: it is helpful to remember that all transportation agencies have fiscal years consistent with the Federal fiscal year, which begins October 1 each year.  Many municipalities in Michigan use either a calendar year FY (January) or a mid-year FY (July).  This can cause some coordination issues.

There are many other Federal transportation funds. This has become very significant because of the Federal funds sequester, which has affected most funds EXCEPT MAP-21.  For a pdf of this chart showing the effects of sequestration on Federal transportation funding,  see here. (Click on the picture to see a larger version.)

sequestration chart

Note that most MAP-21 funds were not reduced by the sequester, but others were. Also, a couple of funds that AATA has benefited from in the past did not survive the last Congress at all.  They are the Sustainable Communities grants (which funded ReImagine Washtenaw; see our post) and the High Speed Rail, also known as HSIPR, program.  These were both “zeroed out”.  The grant for design of the Fuller Road Station was from HSIPR.  TIGER grants, which have been used for many capital projects involving transit, have been cut, as was New Starts.  (New Starts is the program that would usually pay for a new rail line or other new transit line.)

In a recent audit of infrastructure by the American Society of Civil Engineers, the country’s roads and transit systems each got a grade of D.  Bridges and rail were upgraded to C+, two of the brightest spots in the overall audit, which is not saying much.  For most observers, the state of the nation’s roads and bridges is a higher concern than transit systems, and most of MAP-21 is directed to roads.

In addition to these funds, transportation projects got a big boost from President Obama’s stimulus program, the American Reinvestment and Recovery Act of 2009, commonly called ARRA.  This was quite a bonanza for local governments.  AATA received $6,474,089 (some of this was spent on Park and Ride improvements, some on the UM transit center, and new buses were purchased; ARRA also helped with some operating funds).  (For an overview of AATA grant proceeds through FY 2011, see AATA Grant History 2007 to 2011.)  It is important to remember that ARRA expired at the end of 2010 and Congress seems unlikely ever to renew it.  Some funds may still be disbursed within separate grant awards, though Congress did withdraw some unexpended funds as part of the budget cuts of 2011.

With MAP-21 scheduled to expire in 2014, and with Federal budget talks continuing, it seems most prudent to assume that current funding may not continue forever.  Here is a provocative article that discusses Federal vs. state and local funding.

Rail Funding

Rail transportation (including passenger rail) is not included in MAP-21.  That has two immediate consequences: one is that rail is more vulnerable to Congressional cuts, and the other is that it is not treated as part of a comprehensive transportation system. (A recent analysis calls it a “blow to multimodalism”.) The Passenger Rail Investment and Improvement Act of 2008 (PRIIA) governs funding for passenger rail systems, especially Amtrak.  (PRIIA expires at the end of this fiscal year – that is September 2013.)  The biggest shot in the arm for capital projects relating to rail was ARRA (the HSIPR was part of the stimulus.)

PRIIA funding
Note the distinction between “appropriated” and “authorized”.  Congress appropriates funds within budget bills, but the agency must authorize their use through grants.  As can be seen from this graph from a report of DOT’s Inspector General, the big injection of capital grants ($8 billion) was during the 2009 stimulus, but little has been made available since then.

As shown in the table, Amtrak funding has been cut. PRIIA has changed the rules on funding shorter lines, which include the Wolverine (the line that goes through Ann Arbor between Detroit and Chicago).  Beginning this year, Michigan is obligated to make up the difference between revenue and operation of the Wolverine (the operating deficit).  According to this summary, that is $17 million. (Ridership on the Wolverine has increased 15% since 1997, but that does not erase the operating deficit.)  This is significant to us locally, because though the Governor’s budget calls for rail funding, the revenue to pay for it has not yet been identified.  More on that when we discuss State of Michigan funding.

For a history of passenger rail and much useful data, see the recent Brookings Institution study.

Making Local Borrowing Easy

With the availability of grant funds limited, the Obama administration has been shifting emphasis to loan programs.  These make it easy for local governments to obtain low-interest loans for big projects.  Of course, it also means that these governments can commit to projects that will put them into long-term debt without assurance of success in the final operational mode.  (Even after all the construction is done, there is still a cost of operation – as with Amtrak.)  The best-known program is TIFIA, which “provides improved access to capital markets, flexible repayment terms, and potentially more favorable interest rates than can be found in private capital markets for similar instruments”. As noted, “TIFIA can help advance qualified, large-scale projects that otherwise might be delayed or deferred because of size, complexity, or uncertainty over the timing of revenues.”

President Obama has recently proposed a more expansive approach to offering credit for transportation projects.  “Among other things, new “America Fast Forward Bonds” would help state and local governments borrow money for projects, while foreign pension and retirement funds would have a tax penalty eliminated so they could invest in infrastructure in the United States on a similar basis as American funds.”

AATA has traditionally not used credit (floating bonds, etc.) for projects, but has relied on Federal grants for capital projects.  Those traditional grants required a 20% “local match” but were otherwise found money.  If they began to take on debt (which was proposed in the implementation plan for the TMP), they could encumber fares and tax revenues to pay off that debt.  That could potentially change the landscape quite a bit.

Still to come: State of Michigan transportation funding, still unknown territory.

UPDATE: TIGER Grants

The Transportation Investment Generating Economic Recovery (TIGER) grants have been an important source of capital investment for transportation projects, and were originally part of ARRA.  However, they have survived, though with reduced amounts, into the present day.

TIGER I FY 2010

$1,500 M

TIGER II FY 2010

$600 M

TIGER discretionary FY 2011

$527 M

TIGER discretionary FY 2012

$500 M

TIGER discretionary FY 2013

$475 M

As indicated in the comment, Ann Arbor received $13.9 million in FY 2010 for the Stadium Bridges.  That was very nice, since these grants are highly competitive.  In the FY 2012 round, DOT received 703 applications requesting a total of $10.2 billion.  They awarded 47 applicants grants of a total of $500 million.  In other words, about 1 in 15 applicants received grants.

According to Transportation Issues Daily, 16% of the funding went to transit projects, and 13% to passenger rail projects.  Roads and bridges got 35%, with the rest divided between ports, multimodal (includiing bicycle and pedestrian) projects, freight rail, and special set-asides for rural areas and tribal governments.

The FY 2013 TIGER projects will evidently be advertised in May.  Look for an avalanche of applications.

SECOND UPDATE: Here is an article from the Atlantic with a brief discussion of President Obama’s transportation budget.  Keep in mind that his budget probably bears very little congruence to anything finally approved by Congress.

THIRD UPDATE: MAP-21, the Federal Highway Trust Fund enabling legislation, is due to expire at the end of September 2014.  The DOT has published a chart showing the decline of funding both for highway projects and for mass transit to zero by then.

Transit, Transportation, and the Money Question

March 28, 2013

If Ann Arbor had a Time Magazine cover for Topic of the Year, the winner would surely be Transportation.  Or, more specifically Transit.  This last year has seen a tumult of transit proposals.  In our post of almost exactly six months ago, we referred to the Ball of Confusion that is local transit proposals.  It hasn’t gotten better. We still have proposals for regional transit (read, mostly bus) organizations, connectors, corridor studies, train stations, and most especially commuter trains tumbling around and bumping into each other, leaving most everyone scratching their heads and trying to figure out where things fit.  Transportation in the sense of infrastructure (roads and bridges) is an issue too, and it affects transit discussions because the two compete with each other for an increasing scarce commodity: MONEY, or as we wonks refer to it, funding.

Any process so intensive as our current tangle of transit proposals must have an energy source behind it, and a mechanism.  In the case of Ann Arbor, it is not that difficult to see that our Mayor, John Hieftje, is the man behind the curtain.  He first laid out his plan, the Mayor’s Model for Mobility, in 2006.  Since then, he has consistently and methodically used every tool at hand (and that is a lot, being the Mayor) to move toward implementing it (we discussed this earlier).  He has seated the entire AATA Board, hired a transportation specialist whose job description is essentially to execute the model, and has pulled every possible political string, including that connected to our sitting Congressman, John Dingell.  The result has been plenty of energy directed at transit.  But most specifically, it appears to be directed at Hieftje’s dream of establishing two commuter railroads.

We have previously discussed the compelling image of trains in our posts, Train of Dreams and Train of Dreams II.

Trains occupy a singular place in our culture’s mind’s eye.  There is a romance, a jumbled set of personal and relayed memories that combine to make just the idea of a train the cause of an emotional rush.

Partly because of this, many of the general public have responded to Hiefje’s vision without much critical attention to practicalities, or to the question of how two new rail systems can be paid for.  And this vision is still driving much planning in the city (only recently, stories have come out about a downtown station for WALLY in which we may demolish a building at 415 W. Washington for a possible station, and the continued existence in the budget of additional funds to plan for the Fuller Road Station).

MyOtherCar 9in

But how realistic is this apparent obsession? We will attempt to examine factors affecting our current transit proposals, including the trains, in future posts. First, the next post will examine the current state of transportation funding.

UPDATE:  For a review of AATA’s explanation of transit funding, see pages 33-35  of this draft package for a panel discussion on “Urban Core Transit”, held March 28, 2013. Some pages of the draft package were replaced by final text in the package actually handed out at the meeting.

SECOND UPDATE:  If these comments about Mayor Hieftje seem a little hyperbolic, read this account of a speech he gave on June 14, 2014.  It is amazing how he and many other public officials seem to believe that somehow just wishing will make it so.

 

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

January 1, 2013

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?

 

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

January 1, 2013

In our previous post, we listed five assumptions that AATA was operating under in its quest for a countywide transit authority.

  1. The elected officials of all the units of government in Washtenaw County would assent to being included in a new scheme that included a likely new tax and a governance model that left Ann Arbor mostly in charge.
  2. Ann Arbor, the city of Ypsilanti, and Washtenaw County would all sign off on a couple of fairly substantial legal documents.
  3. The Regional Transit Authority for SE Michigan either would not materialize or would not affect them significantly.
  4. The voters across the county would vote in a new property tax, including in both tax-adverse rural townships and the voters of Ann Arbor and Ypsilanti, who were expected to add this millage to one already existing.
  5. Changes in Federal transportation funding would not affect them negatively.

From AATA’s perspective, assumption #1 seemed pretty reasonable to begin with.  From the beginning, staff spent many hours meeting with local officials and holding local public meetings.  They were  assisted by the Executive Director of the Washtenaw Area Transit Study (WATS), Terri Blackmore.  (Blackmore is more or less the godmother of the countywide transit plan and knew many of these officials through her professional activity.)  They received generally a good reception.  A number of local officials allowed the use of their faces in promotional materials and ultimately signed on to serve on the “u196 board”.  The u196 board, who were recruited via the district governance scheme, were all either local officials or very solid citizens who were accustomed to accepting civic responsibility.  Meetings began in November 2011 and the u196 appointees sat solemnly through a number of excellent staff overviews of various topics concerning transit.

u196 BOD
(Note that the list circulated at the second meeting does not include any representatives from Ann Arbor.  According to the governance scheme, the u196 board was to have 15 members, 7 of whom would be the current AATA board, representing Ann Arbor.  However, it was decided by leadership that the entire AATA board could not sit on the u196 board, since that would make meetings essentially a meeting of the AATA board and thus come under all the legal requirements of the Open Meetings Act.  Therefore, three AATA board members (the actual individuals who served changed) sat on the u196 board.)

But the acquiescence of u196 board members to discussion was not a promise that the political environment at home in the township would be favorable to an agreement on new taxes.  As we detailed in this post about county politics, many townships have a long tradition of very low property tax millages, and a 1-mill tax would have been doubling tax rates for some townships, a very hard sell.  And AATA leadership ignored the results of their own survey data (results from March 2012).

Results by region: Would you vote for a 1 mill transit tax?

Results by region: Would you vote for a 1 mill transit tax?

Note that while 68% of respondents in the City of Ann Arbor said they would be likely to vote for a transit tax of 1 mill, and 56% of the urban core communities in Ypsilanti and Pittsfield were positive (combining “definitely” and “probably”), only 48% of those in the City of Saline and eastern townships, and 42% in Chelsea and western townships were positive.  Of those, the greatest proportion were only “probably”.  The overall percentages of respondents in 2011 who said they would be “definitely” vote for a tax was 18%, and 36% said “probably”, for a total of 54% positive responses.  But that overall positive number did not take willingness to participate on a regional basis into account. Further, was this really a very strong positive result, even overall?  Survey respondents are known to tailor responses to what they think the questioner wants to hear.  Who knows what that 36% of  “probable” voters would have done in the privacy of the ballot box?

Somewhat disastrously, AATA appeared to take the position that any negative implications were to be ignored or explained, and positive ones the only to be considered.  When six rural townships withdrew very early even from the planning exercises, AATA leaders like Jesse Bernstein began talking of population numbers and taxable value, in effect arguing that those townships didn’t matter.  But these withdrawals undercut the premise of a countywide authority and set a precedent for non-participation.

One move that AATA did make in the face of these negative indications was to reduce the target millage in an attempt to make a vote for a new tax more palatable.  As mentioned in the last post, the Financial Task Force was able to reduce the proposed millage amount to 0.5 mills by excluding a number of projects from the cost of the plan (though AATA kept them in the plan and continued to spend money on them).  But there was again a political miscalculation here.  It was not a matter of the amount of the millage.  It was the question of any new tax at all for the benefit being offered.

Remaining (green) and opted-out (red screen) communities in Washtenaw County as of October 30, 2012.  Dexter Village had not voted.

Remaining (green) and opted-out (red screen) communities in Washtenaw County as of October 30, 2012. Dexter Village had not voted.

Ultimately, AATA simply failed to make the sale.  As we attempted to explain in an earlier post, for most sections of the county, the plan didn’t pencil out.  Once AATA sent out letters to municipalities offering a 30-day window from October 3 for opting out (the date was later extended to December 10), there was a rush to the exits.  By October 30, all but four governmental units had formally opted out.

Faced with the likelihood that the new authority was likely to consist of Ann Arbor subsidizing transit for a couple of other nearby communities, the Ann Arbor City Council voted on November 8 to opt out of the Washtenaw Ride and also to cancel the city’s participation in the 4-party agreement.

With Ann Arbor out, remaining communities followed suit.  Dexter Village finally opted out, and Ypsilanti Township and the City of Saline reversed their earlier “opt-ins”.  (See our post,  Washtenaw County Transit – More Outs than Ins for a blow-by-blow account.)

Opt-outs as of December 5. Only Ypsilanti City remains.

Opt-outs as of December 5. Only Ypsilanti City remains.

By the deadline of December 10, only the City of Ypsilanti remained in the Washtenaw Ride.  As reported by the Ann Arbor Chronicle, the November 18 AATA Board meeting sought to put the best face on what was, in fact, a devastating rejection of their efforts to put together a countywide transit organization.

Next: It’s all about the money.

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

December 27, 2012

This has been a tough year for AATA.  What was supposed to be a walk in the park has turned into something more like a ride on Space Mountain.  And The Ride hasn’t finished with the possible surprises and upsets.

As we documented early on, the AATA board settled on a plan to launch a countywide transit authority at a retreat in June 2011, and released its first version of the Transit Master Plan in August 2011.  The process laid out was complex. It required participation of all units of government in Washtenaw County to appoint a 15-member board that would serve as an “unincorporated 196 board” (u196), execution of a very complicated legal document that would result in the city of Ann Arbor dedicating its charter transit millage to the new authority, and approval by the voters countywide of a new transit millage.

Roadmap presented to Ann Arbor City Council, December 2011

Roadmap presented to Ann Arbor City Council, December 2011

In September the AATA board approved a deficit budget for the next year (FY2012 started in October 2011).  As the Ann Arbor Chronicle reported, Planning and Development committee chair Rich Robben

“led off deliberations by saying it’s not a sustainable budget. But he said it would catapult the AATA towards a transition to countywide service.”

The “catapult” consisted of advance implementation of a number of new services that were presented as part of the countywide plan.  The choice of term was perhaps unfortunate, since it did indeed “catapult” AATA into its first acceleration to the top of the mountain.

The first jolt was felt in October 2011, with Governor Snyder’s announcement of his new transportation initiative, which included a Regional Transit Authority for SE Michigan.  It would include Washtenaw County.  We reported on this in detail in a post that described the reaction of Albert Berriz, the chair of the Financial Task Force.   The FTF had been appointed by the AATA to come up with a financial plan for financing the TMP.  It had its first meeting on October 28.  Snyder had given his talk on October 26.  Berriz was clearly stunned by the implications of the RTA (especially its control of state and Federal funds) and rather summarily canceled most business of the FTF, postponing the next meeting for a couple of months.

But AATA staff and board seemed sanguine and pressed ahead with their plan despite this large dose of uncertainty delivered by the Governor. They came up with a reassuring interpretation of the effects of the RTA on Washtenaw County’s transit plans as being minimal. Apparently these were based on conversations (the text of the legislation was not yet public). Many details are now clearly understood to be mistaken.  And they pressed on with their original plan.

From a presentation to the Ann Arbor City Council, December 2011

From a presentation to the Ann Arbor City Council, December 2011

The FTF appointed a subcommittee of very knowledgeable people who did a very high-level job of analyzing finances needed for the TMP.  By considerable fudging (they simply omitted many facets of the plan from the financial estimates) and raising fares, they were able to recommend a county-wide millage of only 0.5 mills (this was later recalculated to 0.584). But just as they were poised to present this to the full FTF, Governor Snyder’s package of bills were made public and the roll-out was again postponed.   Finally, the FTF met on February 29 and released their recommendations.  A complete set of these reports and recommendations is available on our Transportation Page.   The chair, Albert Berriz, wrote a letter to the committee that was telling.

…we don’t know what the Governor’s plan will look like in its final form, and without that information it’s difficult to say that pursuing the track of a countywide millage is the right thing to do at this time.  Therefore, in my opinion, it’s premature to pursue any millage option at this time…as there are too many parts of the current economic model that we have been asked to review that may and likely will change once the final legislation comes into play.

Meanwhile, in the background, serious discussion was going on in Washington D.C. about the fate of Federal transportation funding.  The then-current transportation bill was on life support after many short-term renewals.  Finally, on July 6, 2012, MAP-21, the new transportation bill, was signed into law.  Regulations and funding schedules have been generated on an ongoing basis.  (For excellent coverage, see Transportation Issues Daily’s MAP-21 Learning Center.)  During much of 2012, AATA did not know how Federal funding (a very important component of their overall financial plan) was going to settle out.

So, let’s summarize.  The AATA was proceeding on a number of assumptions.

  1. The elected officials of all the units of government in Washtenaw County would assent to being included in a new scheme that included a likely new tax and a governance model that left Ann Arbor mostly in charge.
  2. Ann Arbor, the city of Ypsilanti, and Washtenaw County would all sign off on a couple of fairly substantial legal documents.
  3. The RTA either would not materialize or would not affect them significantly.
  4. The voters across the county would vote in a new property tax, including in both tax-adverse rural townships and the voters of Ann Arbor and Ypsilanti, who were expected to add this millage to one already existing.
  5. Changes in Federal transportation funding would not affect them negatively.

To all of these challenges, the response was to press ahead.  After all, what could go wrong?

In order to pursue the county-wide vision, the AATA invested big.  Over a three-year period, they spent $463,499.66 of Ann Arbor millage money.  The rest of the $1,418,890.15 cost for consultants, survey research, promotional materials and “outreach” was borne by Federal and state funds. See spreadsheet from AATA here.

The effort to get the cities of Ann Arbor and Ypsilanti and Washtenaw County Board of Commissioners to sign off on both the four-party agreement and the Articles of Incorporation was longer and much more tedious than hoped.  But finally, on September 5, the BOC approved the AOI (account by the Ann Arbor Chronicle).  The AATA immediately (September 7) approved their 5-year plan and launched the countywide plan.  This would presumably lead to starting a 30-day clock for local units to opt out, after which the 196 board could be seated.

File directory of toolkit presented to AATA board on a flash drive

File directory of toolkit presented to AATA board on a flash drive

A very thorough campaign was conducted through the u196 members and their associated District Advisory Committees (staffed by u196 members and AATA staff) to convince communities to support the countywide effort.  It included postcards to be sent to elected officials and drafts of emails, letters to the editor, Facebook posts, and letters to officials.

The objective was to build a public pressure to get local governments to sign onto the countywide plan.

Postcards provided in a promotional packet handed to AATA board members and u196 members

Postcards provided in a promotional packet handed to AATA board members and u196 members

Next: So how did that work out?

Note: Posts on this subject and much reference material is on our Transportation Page.