AATA board approves balanced 2010 budget, uses $220,000 in stimulus funds to bridge Ypsilanti shortfall
The Ann Arbor Transportation Authority board of directors today approved a balanced budget for 2010 and decided to use $220,000 in federal stimulus money to cover bus service agreements to bridge gaps in Ypsilanti and Ypsilanti Township.
The board decided unanimously to make the emergency move to assist the two communities, keeping transit services going for the next year without cuts to services.
Ypsilanti city and township officials had informed AATA that, as a result of adverse economic conditions, the amount billed for their services next year was more than they could afford to pay."I think it's unfortunate that Yspilanti and Ypsilanti Township find themselves in this position. I think, frankly, it's understandable," said board chairman David Nacht. "Let's be absolutely plain about it, this is a subsidy. It is a transmission of wealth from this agency, which has the ability to spend these funds, to the eastern side of Washtenaw County."
Nacht said even though the AATA is a creation of the Ann Arbor City Council and primarily funded by Ann Arbor taxpayers, the Ann Arbor community and economy depends on the labor that comes from Ypsilanti. For that reason, he said it makes sense to use AATA stimulus money for Ypsilanti.
AATA board member Charles Griffith said the use of stimulus funds is only a short-term solution to a financial problem that is expected to continue. He said it points to a deficiency in the current way AATA services are structured, forcing municipalities outside Ann Arbor to use limited general operating funds to contract for services when Ann Arbor has a long-term millage to pay for its share of services.
AATA board members said they expect Ypsilanti city and township officials to spend the next year exploring longer-term funding solutions. AATA also is gauging interest in a countywide millage.
The 4-1 vote to approve the 2010 fiscal year budget was less easily reached by AATA's board today. AATA officials were able to cut $828,000 from the budget, but that wasn't enough for board member Ted Annis, who wanted to see another $1 million in costs trimmed.
"I can't support the budget. I think the budget is too fat," Annis said. "If we want to get to a countywide bus system with a countywide millage, we're going to have to show a very good efficiency."
Annis said AATA is operating with more than $4 million in inefficiencies. He said the current cost per bus service hour is $102, and he'd prefer to bring that down to $96.
The budget for the fiscal year starting Oct. 1 totals $25.5 million, about $9.7 million of which comes from local tax revenues. Another $1.1 million comes from purchase of service agreements, $4.3 million from passenger revenues, $6.8 million in state assistance, $3.2 million in federal assistance and $361,200 in interest.
Other board members commended the work of AATA CEO Michael Ford and his staff for working to identify cost reduction strategies. AATA officials said both management and union personnel worked together to study all aspects of AATA's operations.
Among the measures implemented are the conversion of AATA's phone service to Voice Over Internet Protocol in partnership with the city of Ann Arbor, the recycling of old bus signs, increased efficiencies in the use of personnel and the sale of waste oil to refineries for reprocessing instead of paying vendors to dispose of it.
The new budget includes payments of $320,000 for a local connector study and $200,000 for the commuter express route from Canton, which is funded through a federal grant and passenger fares.
Ford said AATA expects to come in under budget for the fiscal year ending this month.
Ryan Stanton covers government for AnnArbor.com. Reach him at firstname.lastname@example.org or 734-623-2529.