Ypsilanti bus service in jeopardy again as Ann Arbor Transportation Authority rates rise

The 2010 charter amendment levies 0.9879 mills, or $292,000 in fiscal year 2012, but the AATA is charging $321,000 for full service in federal fiscal year 2012 — a difference of $29,000.

Next year, the millage is only expected to generate $272,000.

City Council tabled a service agreement with AATA at its Oct. 18 meeting, and Council Member Peter Murdock says council will have to discuss whether or not it can afford the new rates.

“We’re pulling our hair out to provide any service whether it’s buses or police; this is not fun stuff,” he said.

The AATA is on a federal fiscal year that ends on Sept. 30 each year, while Ypsilanti’s fiscal year ends on June 30. Murdock wants to negotiate a nine-month agreement with the AATA to bring the city’s revenue stream in line with the contract, and several other council members said they had questions about the cost increases.

A nine-month contract would mean council would pay only $262,000 for service this fiscal year. Regardless, a year of service now costs more than the transportation millage generates.

The city is discussing how to close a $10.69 million budget deficit projected for 2017, and council will have to make a decision whether or not to use general fund dollars for bus service in the next budget.

The cost of bus service for Ypsilanti has been partially offset in recent years by $200,000 in federal stimulus money.

The AATA’s cost of providing service in the city rose from $253,000 to $321,000 from 2008 to 2012. But with relief from stimulus funds, the city paid $133,000 and $66,000 less than what it would have without the funds the last two years.

The service agreement rate is based on a cost per hour of bus service in Ypsilanti. That cost went up from $81.29 per hour in fiscal year 2008 to $112.43 per hour in fiscal year 2012.

But the real cost of providing service in Ypsilanti during that time fluctuated between $99.30 and $112.43, according to the AATA. The difference was covered by Ann Arbor taxpayers, but the AATA is moving away from having Ann Arbor residents pay for service provided to other communities.

Chris White, manager of service development for the AATA, said the formula for figuring the cost per hour of bus service includes drivers’ salaries, fuel, maintenance, administration’s salary, upkeep of the Ypsilanti Transit Center and other operating costs. White said he didn’t have a breakdown of the costs.

Some council members are upset that the AATA is spending significant money promoting its new countywide transit plan. The AATA is pushing an extensive new master transit plan that would expand service countywide and require voters to support a countywide tax millage to fund it.

In April 2010, the agency entered into a $399,805 contract with international consultants Steer Davies Gleave to help develop the plan and authorized CEO Michael Ford to spend $350,000 over three years to market the plan.

White said money dedicated for the transit plan is for “planning and not included in the fixed-route cost per service hour.”

Council Member Mike Bodary said White is only “shuffling money” when saying that cash spent on consulting and marketing the plan doesn’t affect municipalities’ hourly service rate.

Bodary said he felt the city can only give the AATA what the millage generates and questioned how the AATA could cut service while spending heavily on developing and promoting its countywide transit plan.

He also asserted that the agency has done little to cut costs in recent years.

“The fact is, they’re not efficient,” Bodary said. “It’s time for everyone to share in the cost-saving efforts and we don’t need to be funding their advertising, promotions, TV commercials, studies and consultants.”

Council Member Brian Robb said the council is cutting in all areas and busing is not “sacrosanct.”

“The AATA has to come back to us with service we can afford,” he said. “They need to evaluate their routes and develop a more efficient service that meets our needs.”

Mayor Paul Schreiber had a different view. He said he expected council would be able to work out a solution with the AATA.

“It’s certainly better to be putting in the difference than the full amount,” he said. “To me, the voters said overwhelmingly that transportation is important.”