Transit, Transportation, and the Money Question IV

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 51, transit 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.

A 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.

Next: so how is the “hopey changey” thing working out for Governor Snyder on transportation?

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

Transit, Transportation, and the Money Question III

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.) 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.

Transit, Transportation, and the Money Question II

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.)

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.)

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.

Transit, Transportation, and the Money Question

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).

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.

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

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)

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

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

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.

(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?

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.

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.

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?

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

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

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

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

Next: So how did that work out?

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

The SE Michigan Regional Transit Authority in Progress

On November 27, 2012, the Michigan Senate passed a bundle of bills aimed at setting up a Southeast Michigan Regional Transit Authority.  We previously reviewed this initiative.  The most recent discussion was Regional Transit in Ann Arbor and Beyond: A Matter of Governance.  The bill package languished through the summer, as was somewhat anticipated. As early as last January,  transportation consultants told the AATA Board that these bills were not likely to be taken up before the lame-duck session.  (See account by the Ann Arbor Chronicle.)

Before we get into any discussion about the political and functional implications of the passage of this package, let’s summarize the bills.  Note that serious study would be aided by consulting this authoritative overview of the major bills (SB 909, 911, 912, 967) and the analysis of SB 445 by the Senate Fiscal Agency.

Senate Bill	House equivalent	Link to text	Summary
909	5309	SB 909	Creates a Regional Transit Authority with 4 counties, described by population.
911	5311	SB 911	Provides for Vehicle License Fee ($1.20/$1000)
912	5310	SB 912	Apparently overrides local zoning for transit purposes.  Little detail.
445	not known	SB 445	Direct Comprehensive Transportation Funds to RTA; RTA would distribute. (Incl Federal funds)
967	not known	SB 967	Operate dedicated public transit lanes on highways

Conspicuously missing from the bill package passed by the Senate was a bill introduced by Senator Rebekah Warren.  Senate Bill 910 and its House counterpart HB 5312 would have allowed counties to levy a vehicle license fee of $1.80 per $1000 of the vehicle’s list price. So, for example, the owner of a vehicle valued at $20,000 would pay an additional $36 a year. Oddly, this money would be paid to the county treasurer, not to a transit authority or any transportation agency.  The fee would be in addition to existing vehicle license fees and in addition to the vehicle license fee assessed on behalf of the RTA.  (That fee would be $1.20 per $1000 valuation, so our hypothetical vehicle owner would pay $24 for the RTA plus the county fee, a total of $60 in new vehicle license fees.)  There would have to be a majority vote on a countywide ballot before the fee could be enacted.

December 5, 2012:  The House Transportation Committee reported the entire package out to the House floor without amendment.

Preliminary reports indicate that the House adjourned without final action on the RTA (December 5).

Here is the story in the Detroit News in which the measure failed to gain enough votes and was withdrawn without a final vote.  Presumably it will be reintroduced.

AnnArbor.com interviews Ann Arbor officials on the status of the RTA package and its likely effects on Ann Arbor.

December 6, 2012: The House of Representatives voted in two of the five-bill RTA package.  These can now go to the Governor for signing.

The two bills, SB 909 and SB 445, passed with bare majorities. There are 110 members, so 56 votes are required. The vote for SB 909 was 57 in favor, 50 opposed, and 3 not voting;  56 – 52 – 2 for SB 445.)  The other three bills appeared to have between 45-50 votes on the board before leadership cleared the board and suspended voting on them.   The two bills were also declared by voice vote to have immediate effect, meaning they will be law after the Governor signs them, rather than in the next legislative session.

Here are comments sent out today (Dec. 6) by Representative Rick Olson, who is retiring from the House at the end of the term.  (Emphasis added.)

If we had amended the Senate bills, they would need to go back to the Senate for concurrence with the amendments, and there are not enough Republican votes in the Senate to do so. So rather than risk losing the RTA opportunity once again, the committee approved the Senate bills as they had passed the Senate. As I am writing this, the main RTA bill (Senate Bill 909) has passed the House.  We are continuing to work on changes to some of the accompanying bills. 

As the bills stand, the bills only enable an RTA to be formed, they don’t form one. The region will need to put a plan together and then pass by a vote of the people of the region the funding mechanism. If the region cannot get its act together, there will not be a regional transit plan. If it can, then the region will be able to join the rest of the major cities in the US in providing convenient transportation to its non-motorized residents.

The Ann Arbor City Council has scheduled a special meeting to discuss the impact of the RTA bills.  Here is the Ann Arbor Chronicle’s description.

December 6, 2012: SB 911 has now been passed with 57 votes.  SB 912 was delayed again. According to MIRS, the House adjourned without action on SB 912 and SB 967. The chair of the Transportation Committee, Rep. Paul Opsommer of DeWitt, seemed to indicate that they will be brought back again.

December 7, 2012: The House is evidently not in session today, as no webcasts are scheduled.  Staff are keeping up with the action on bills.  See for example the page on SB 912, where actions are recorded in the box at the end.

December 10, 2012: The House is not in session until tomorrow.

Murph (aka Richard Murphy) has posted an analysis of why Ann Arborites should not be concerned about the RTA on his blog Common Monkeyflower.  Note that Murph is employed by the Michigan Suburbs Alliance.

The Ann Arbor City Council’s special session today at 4 p.m. has been moved to the City Council chambers from the Jury Room after a question raised about public access and also use of electronic devices (prohibited in the Justice Center).  CTN coverage still TBD.   This session is to consider a resolution asking Governor Snyder to veto the RTA package, or at least SB 909 which causes Washtenaw to be included in the RTA.

Conan Smith’s letter to the Ann Arbor City Council: Hours before the Council meets to consider a resolution calling for the Governor’s veto, Conan Smith, the mover behind Washtenaw County’s inclusion, has sent a letter imploring the Council to step back from the brink.  It had an attached document that explained aspects of the RTA at length.  Conan Smith letter to Ann Arbor City Council

The scope of Smith’s ambition with this measure can be guessed from this sentence:

Ending the balkanization of our transit systems is a fundamental reform if we are to create a system that serves the broadest set of the population and competes successfully against places like Boston, Chicago and San Francisco for federal investments.

Ann Arbor City Council, December 10, 2012 voted to pass the resolution, slightly amended. Discussion was somewhat subdued. According to the Ann Arbor Chronicle, the vote was unanimous. Ann Arbor Chronicle account of the special meeting

The story in AnnArbor.com quotes some officials who have a mixed view of the RTA.

December 11, 2012:

The Ann Arbor City Council’s final resolution regarding the RTA package is now available. DC-1 Protest SB 909 Certified Copy    The resolution removes the issue from the frenetic press of last-minute legislation and pushes it into next term.  It no longer calls on the Governor to veto the existing package.

December 12, 2012: The Ann Arbor Chronicle has now published an article detailing the discussion at the December 10 City Council meeting.  According to the article, as of noon on December 12, Governor Snyder had not signed any of the RTA bills.

December 13, 2012: The final two bills, SB 0967 and SB 0912, have still not passed the House.  (By clicking on the links to the bills, it is possible to see their status.  According to the status update, neither bill has yet been taken up again since December 6.)

Today the Detroit News published an article that quotes Secretary of Transportation Ray LaHood as saying that these two bills must pass in order for Detroit and Michigan to receive the $25 million hoped for the M-1 streetcar project on Woodward Avenue. “The legislation ‘is really one of the last pieces that has to be put in place in order for us to give the green light,’ LaHood said.”

What did we tell you?  (Regional Transit in Ann Arbor and Beyond: A Matter of Governance)  It is really all about that M-1 project.

December 14, 2012: SB 912 and SB 967 passed the House “early Friday morning”. According to MIRS, the vote was 57-48 and 56-49, respectively.

The entire package has thus been passed and is expected to be signed by the Governor, since it was his package of bills at the outset.  This completes the program for a Regional Transit Authority that he laid out in his transportation talk on October 26, 2011.  (See our summary with links here.)

There are many questions to be answered, especially for us in Ann Arbor and Washtenaw County who depend primarily on the AATA for our transit service.  See our early discussion of this.  Future posts will examine the effects on the AATA and its plans for a modestly expanded regional coverage in Washtenaw County.  Meanwhile, we’ll wait to see whether the plea from Ann Arbor’s City Council to remove Washtenaw from the RTA is effective (my best prediction is that it will be fruitless) and who is appointed to the RTA board, and when.

Some of the bills were passed with immediate impact.  However, Megan Owens of Transportation Riders United predicts that the RTA will take shape 90 days after signing, in March 2013. It will have fiscal authority as of October 2013 (the start of the Federal fiscal year).

Conan Smith to appoint Washtenaw County Board Members

Smith has informed the Board of Commissioners that he intends to move ahead with appointments to the Regional Transit Authority Board as soon as the RTA bills are signed.   Here is the text of his message:

Members of the Board(s) . . . next week the governor will sign SB 909 creating the Regional Transit Authority, which includes Washtenaw County.  The legislation authorizes the chair of our commission (sic) to make two appointments to the board.  I’ve discussed options with Curt and the incoming leadership team and with their support will be making these appointment before the end of the year.  The general terms are three years, but one of the initial appointment is for a single year, so that one will expire within the purview of the incoming board who can review and reappoint or replace my selection.

I’ve invited a small group of community leaders to serve as an advisory board in this process:

• Rolland (Sizemore, Jr.) as the immediate past chair and Yousef (Rabhi) as the (presumed) incoming chair;
• Michael Ford, CEO at AATA, to ensure our transit agency’s perspective is represented;
• Bill Milliken, Jr., to represent the business community; Bill served as the chair of the Washtenaw Development Council for many years and continues on the SPARK board; and
• Carolyn Grawi, Director of Advocacy and Education at the Ann Arbor Center for Independent Living, to represent the interests of transit users.

We will post notice today that applications will be accepted through the end of next week.  The advisory committee and I will review those applications and create a short list.  From that list I will select two preferred candidates and one or two alternates.  The advisory committee will interview those individuals on December 27 at a public meeting at LLRC, present their responses to me and I will make the final appointments at that point.

It is rare that statute specifically empowers the chair to make an appointment (typically it is the “commission [sic]“), so I recognize that appointing without board approval steps outside of our standard operating procedures — hence the engagement of the advisory board and a public interview process.   I will happily ensure that you all have as much information as you desire in this process as it moves forward.

I’ll be sending a press release out this afternoon and would greatly appreciate your support in distributing it and alerting community members to this opportunity to represent the county.

NB: The body that Smith chairs is the Board of Commissioners. It is often informally called the County Commission, but no such body exists in Michigan law. The RTA legislation correctly identifies the Chair of the BOC as the responsible party in this instance.

Governor Snyder signs RTA package of bills

Governor Snyder signed the RTA package and several other bills on December 19, 2012.  Here is a picture.

Note: Subjects in this category are listed on the Transportation Page.

Regional Transit in Ann Arbor and Beyond: A Matter of Governance II

David Nacht at a March 2012 AATA Board meeting

A long road to countywide transit comes to an abrupt end.  Why?

Just as governance has been a critical issue for the proposed Southeast Michigan Regional Transit Authority (discussed in our previous post), it has also been a key factor in the development of a Washtenaw County regional (county-wide) authority.  Under the leadership of David Nacht, the previous Chair of the Ann Arbor Transportation Authority, AATA has been working toward this goal since the board took a straw vote in May 2008 to become a regional authority.  We described some of those early efforts in our December 2009 post, AATA’s Uncertain Future.  Nacht led the AATA to consider several models of governance for a regional authority,  including one in which the City of Ann Arbor (supported by its perpetual transit millage) would remain separate, but cooperating, with the rest of the county, while the “out-county” would enact its own millage for the regional service.  This “donut hole” model was set aside for the “layer cake” model in which the City of Ann Arbor’s millage forms the foundation for the entire regional system, with just a little assist from the rest of the county’s municipalities via a new millage.  The many twists and turns in the evolution of this proposed system have been discussed in posts on our Transportation Page.

There is an enduring conflict in our country between two firmly held concepts.  One is the principle that a local community should be able to determine its own fate (self-determination).  The other is the ideal of a regional governance for the common good across the region.   As we described in an earlier post, Is Regionalism Really a Good Thing?,  this inherent conflict is playing out right here in Washtenaw County.  Michigan has a stubbornly vital tradition of local rule.  In fact, it’s in our state constitution. The township system of government makes every issue intensely local, with citizens of each township deciding on the level of services and taxation they prefer, while viewing the efforts of other governments (especially, in this county, Ann Arbor) to dictate their activities with suspicion and mistrust.  Yet putting a regional authority into place requires, roughly paraphrasing Pittsfield Township Mandy Grewal, that “we all join hands and jump”.  The makers of the Washtenaw County regional authority sought to address this conflict by using a blended system of representation.  As described in a presentation by Washtenaw Area Transportation Study (WATS) director Terri Blackmore,  a combination of population (less-populated townships were combined into larger districts) and financial contribution were taken into account to award seats at the table. (Blackmore was strongly instrumental in developing this scheme.)

District map as presented in December 2011

The thinly populated western townships, along with the city of Chelsea and village of Manchester, were awarded just one seat on a board of 15.  Pittsfield Township, with a large partly urbanized population, got one full seat.  The tiny population of the city of Ypsilanti earned itself a full seat by voting in a charter millage (about 1 mill) to pay for its service contract (POSA) with AATA.  And Ann Arbor, with its fat perpetual millage (now almost 2 mills, down from 2.5 mills), got just under a majority of seats (7 of 15), despite having only about a third of the county’s population.

Contrast this with the system proposed for the SE Michigan RTA in which each participating county was tentatively given the same number of seats.  As we discussed in the previous post, awarding seats on the basis of  either population or financial contribution has a potential effect of sowing mistrust and doubt.  Smaller communities may fear domination by the larger ones, and larger contributors may fear the redistributive effect.  Yet awarding seats on the basis of monetary share highlights any perceived inequities in the way those funds are distributed.  While the regional approach is presented as cost sharing, it is also inevitably cost shifting.  When differential weight is given to monetary contribution, the question then becomes, “Am I getting MY money’s worth?”.

Nevertheless, AATA assembled a “u196″ (unincorporated 196) board along those lines.  It has been meeting since December 2011.  Many of the members are actually township officials, and there seemed to be a fair amount of enthusiasm and support for the idea.  They were presented with what appeared to be a carefully thought-out process. AATA staff endured many sessions before the Ann Arbor City Council and the Board of Commissioners, and finally got their Articles of Incorporation approved.  They requested that the County file the AOI, which was on October 3, 2012.  (See the report by the Ann Arbor Chronicle explaining that moment) Letters were sent to all affected jurisdictions in early October that specified how each one could opt out – or choose to stay in.  This should have launched a 30-day window for opting out, but because of some confusion about the legal requirements (summarized by the Ann Arbor Chronicle), Washtenaw County administration sent out a second set of letters, so that the opt-out window was “reset” to December 10.

But even before that final moment, there were indications of trouble with a universal buy-in.  Six townships simply refused to participate even at the most preliminary stage.  Then, as early as September, AATA board members began referring to the possibility that some communities might opt out and then opt back in later.  Comments were made indicating that opted-out communities might be able to retain a seat at the table for the interim, in hopes that they would decide to opt back in.  This possibility and some of the legal tangles involved were reviewed by the Ann Arbor Chronicle.  According to that account and to comments made by staff on venues such as WEMU radio programs, opted-out communities might come back in up until the (presumably) May millage vote.

At the October 2, 2012 meeting where the AATA board voted to submit the AOI, the new chair of the board Charles Griffiths gave voice to that approach, as quoted by the Ann Arbor Chronicle:

Griffith addressed the possibility of opt outs, by saying that everyone knew that some jurisdictions will not feel ready at this time to join in this effort – but that’s okay, he said. What’s important is that we give it our best shot to provide an opportunity to everyone. He said the AATA had come up with the best that it could to meet the needs that had been identified and expressed through communities across the county. “If, for whatever reason, we didn’t get that right, we can keep working at it,” he said. He characterized this step as the beginning of the journey, not the end. He hoped that as many jurisdictions would cooperate as possible.

The AATA board and administration must have been surprised, however, at the totality of the reaction.  Municipalities began voting to opt out almost on receipt of the letter (see the post, Washtenaw County Transit: More Outs than Ins, for more details.)  By the end of October, every township, with the exception of Ypsilanti Township, had opted out, as had many villages and cities.  Among cities and villages, only the cities of Ann Arbor, Ypsilanti and Saline remained.  (Saline passed a resolution affirming its intention of joining the authority.)  The Village of Dexter postponed its decision.

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

What Happened?

So why did most Washtenaw County communities opt out after sending representatives to nearly a year’s worth of meetings, many of whom were very encouraging about the process and even allowed their images to be used in promoting it?  One reason is that they simply didn’t have much to gain by joining.

Summary map for Washtenaw Ride services as of September 2012 (click for larger version)

As seen in this map, most townships were offered very limited services.  (Poor Bridgewater counted for so little that is covered up, as is most of Saline Township.) They were offered vanpools (AATA has already moved to take over this service from a previous operator) and enhanced service from WAVE (a contractor; the green lines).  The red lines are express buses that have limited stops and times and are mostly designed for 9-5 commuters into Ann Arbor.  The larger villages and cities have a local circulator (blue).  Otherwise, most bus services and even the demand services like Dial-a-Ride are limited to the urban area.

As we have outlined earlier, most townships have a very low operating millage rate, by design.  The millage for the countywide authority has been forecast to be 0.58 mills, though that was subject to revision depending on how many units opted out.  To many Ann Arbor residents, that might not seem too consequential as a standalone amount, as we have many millages for specialized services that have received a popular vote.  But to understand county politics, you must understand how large a commitment that seems to many township residents.  If they are going to tax their residents even that much, they must receive visible services for that money.

Pittsfield Township trustees were very clear in their discussion prior to opting out, as reported by AnnArbor.com.

The township currently levies a 0.5 mill tax on residents for parks and recreation activities, Grewal said, and prides itself on its low taxes.

Israel stated that he did not believe Pittsfield Township’s participation in the new transportation authority guaranteed the expansion of transit options in the township.

The township’s trustees also noted another feature of the plan: that their township’s taxes would be paying for other services elsewhere.

Israel noted AATA’s proposed express route to Canton Township in its five-year service plan – and said he didn’t think Pittsfield Township voters should be paying out for that kind of service.

On the other hand, Ypsilanti Township, the sole township to stay in the regional authority, will receive expanded bus services and “demand” (Dial-a-Ride) service.  (Note the dashed red outline on the map.)  Its supervisor, Karen Lovejoy Roe, remarked in a comment on AnnArbor.com’s earlier coverage of the Pittsfield decision that the availability of services for seniors and enhanced ability for workers to get to jobs were important reasons for the township to ask its voters to take on the additional millage.

Mixed Messages

One of the reasons this venture hasn’t quite come together is that there are several different, sometimes competing, messages about why we need county-wide transit.  Looked at from a township perspective, they don’t compute.

Connectivity:  “Our life does not end at city borders.  We should recognize that we are a greater community.”  This is a nice sentiment but it is hard to attach dollar value to it.  Also, the bus routes provided are not designed for casual travel to other communities, but only for commuting.

Environment: The argument is often made that mass transit will reduce air pollution and global warming.  But though this is likely true (and we certainly hope so), there have been some contrary comments about how this really pencils out.  Those making the argument for environmental benefit often use the “hand-waving” method, rather than citing data studies.  In any case, clearly a substantial ridership is needed for an individual transit vehicle to make a difference; there must be a payback ratio, and this is not discussed much.  Certainly no dollar value to local communities is easily attached.

Need:  It’s hard to argue with this one, since it is a primary reason to support mass transit.  People who have poor access to personal transportation or are low income need to be able to get to work and other places.  But the countywide plan really only addresses this for the urban area (Ann Arbor and Ypsilanti areas).  As someone from Lyndon Township told me, in order to get to Ann Arbor, they’d have to take WAVE to Chelsea, then take the express bus, and then they wouldn’t be able to get home again later (unless at strictly commuter times), and it would be expensive.

Regional Business Development: This is, in my opinion, one of the primary drivers behind the plan.  Notice all those express buses going out of the county to areas that are not paying in?  But it would mostly benefit businesses located in the greater Ann Arbor area, and of course the University of Michigan.

And of course, though most of the discussion is about bus services, the county-wide authority is also seeking money to support expensive rail and connector services that will benefit only a very limited population, and centered on Ann Arbor.  The townships are rightly suspicious.  The idea of paying into a regional pool for something that doesn’t benefit them (or their residents) directly doesn’t match their idea of governance.  As we noted some time ago, there has been a suspicion among township residents that this entire scheme was a way to get their money for the benefit of Ann Arbor.

Partners for Transit, a rather informally organized advocacy group for regional transit (it appears to be supported by the Michigan Suburbs Alliance, Conan Smith’s shop), has been making the case that really, the massive opt-out is not a concern because the greatest population of the county will be served.  Further, this is where the need is.

Partners for Transit cartogram representing communities’ areas as a function of population

But though this observation is true enough, it ignores the entire question of governance.  An authority limited to these urban communities abandons the idea of “county-wide” transit (and many of the rationales on which it was based) and it will inevitably mean that Ann Arbor is simply subsidizing the two Ypsilanti communities.  (The purchase of service agreements shown for connecting townships are not necessarily in place or defined.)  Recall that the plan is for Ann Arbor to continue paying 2+ mills, plus the new one, Ypsilanti City to continue  its approximately 1 mill, plus the new one, and then Ypsilanti Township would pay only the new millage.  It also means that a higher millage (in addition to the existing Ann Arbor and Ypsilanti city millages) would be necessary to achieve that level of service.  To get some sense of proportional contribution, see our earlier post in which even with the entire county participating, we would be paying approximately 75% of the cost.

If we wish to subsidize Ypsilanti, surely there is a more efficient way to do it rather than to create a whole new authority with expanded powers but a territory hardly larger than is served under our present system.  And there will still be an issue of governance.  Would we give the two Ypsilanti communities seats on our joint transit board, even though we are subsidizing their service?  They would probably expect that.  And how would we allocate them?  The same options apply as mentioned earlier: a choice between unitary representation, population-based, or monetary contribution.  Each of these has potential political obstacles. If we include the townships that wish to have only a service contract (in which they would pay only the cost allocated to their own service), an even more unequal form of governance might be possible.

Partners for Transit is also stating that Ann Arbor would have a higher level of service, as well.  But we could achieve that ourselves, simply by using our existing millage for Ann Arbor rather than to support the many regional and commuter-oriented additions that the AATA board has introduced.  Or we could pass an additional millage for our own use.

Regrouping

With all this before them, a good-sized fraction of the Ann Arbor City Council is now preparing to regroup.  Tonight (November 8, 2012) has a new agenda item.  The resolution to opt out from the Act 196 authority also calls for abrogating the 4-party agreement.  (A lengthy discussion and analysis is in this from the Ann Arbor Chronicle.)  It contains this language in explanation (click on the text for a larger view):

UPDATE: The Ann Arbor City Council voted 10-0 to withdraw from the Act 196 authority and the 4-party agreement (November 8, 2012).    Here are links to news accounts:  AnnArbor.com        Ann Arbor Chronicle

Michael Ford sent out a news release acknowledging the loss and pointing to future action.   He pledged to concentrate on the urban core but also said “Efforts to extend the benefits of transit to a greater number of Washtenaw County residents will continue”.  AATA Press Release-New Transit Authority Update

Regional Transit in Ann Arbor and Beyond: A Matter of Governance

Some public services are best performed on a strictly local basis; those aimed primarily at privately owned property, for example.  But others lend themselves best to a broad regional approach, and transportation is surely one of them.  A transportation network needs central planning.  Imagine the Interstate Highway system administered by counties.  Public transit systems logically should be regional in nature, especially in this era where people expect to work at a distance from where they live.  But two attempts in southeast Michigan to institute regional transit have run up against obstacles inherent in Michigan political organization.  The two wannabe regional transit authorities are the Regional Transit Authority (RTA) and the Washtenaw Ride.   Each of these must resolve a matter of governance in order to launch successfully.

Regional transit hopefuls (L to R), Megan Owens of Transportation Riders United, Jesse Bernstein of the Ann Arbor Transportation Authority, and Conan Smith of the Michigan Suburbs Alliance, August 2012

Governance is a word that has come into vogue lately.  It alludes to the manner in which government conducts its business and especially the way it interacts with its citizens.  Some of the important elements in this interaction are representation, taxation, and power.   People generally want to believe that they are fairly represented at the decision-making level.  If the body collects taxes, are they proportionate to the function of the governing body?  And does this body exert a level of power over daily lives that is appropriate to its function, not dictatorial or burdensome?

The proposed Detroit metro area RTA has a very specific prescription for how representation will be determined.  As we reported, Governor Snyder proposed a major revamp of Michigan’s transportation laws and system nearly a year ago.  A summary of the bills that emerged to implement this ambitious plan is available in our post, Those State Transportation Bills and the Regional Transit Authority.  Most of the bills have not moved very far.  The bills that would implement the RTA are “tie-barred”, meaning that the principal bill, Senate Bill 909/House Bill 5309, must pass before the others in the package can be implemented.  The best explanation of this package of bills is contained in an analysis from the excellent Senate Fiscal Agency.  SB 909 has been amended  and a substitute (S-3) has been reported out of the Senate Transportation Committee, which I understand to mean that it may be taken up by the Senate as soon as it is placed on an agenda.  The analysis has a good deal to say about governance, specifically about representation. There is apparently some rule that legislation cannot name specific municipalities, thus they have to be described by population and other indirect means. The legislation calls for two members appointed from each of the four counties (Oakland, Macomb, Wayne, and Washtenaw), plus one appointed by the Mayor of Detroit. This has proved to be an issue that has apparently been at least one reason for the slow progress of the legislation.  Detroit representatives have complained that they should be entitled to more than one seat.  But one of the Wayne County seats is allocated to Detroit as well.  This has led to Wayne County’s complaint that they are entitled to two full seats and the suggestion that Washtenaw County should give up one of its seats. Conan Smith, who as one of his hats has been negotiating on behalf of Washtenaw County at both the state and regional levels, has apparently (according to the Ann Arbor Chronicle) offered to give up one of Washtenaw’s seats in order to seal the deal.  (Smith is very invested in the RTA concept, presumably in part because of his position at the metropolitan Detroit Michigan Alliance of Suburbs;  the MSA is hiring staff to promote the concept.)

Rounded-down figures for population of the 5 RTA communities

Note that the representation is based on a simple formula of equal representation for each geographical unit, except for the single appointee from the city of Detroit.  The populations of the different geographical units are quite different.  If the basis of the appointments was on an equal representation for each person (one man, one vote concept), the result would be very different.  This first table shows the lower figure of population of each unit from the legislation.  Note that the figure for Wayne County must include the population of the City of Detroit, since it is within that county.

Seats apportioned on the basis of percent population, if current 9 members were retained

If we subtract the population of Detroit from Wayne County, it still holds its own as one of the highest populations among the five communities to be represented in the RTA.  If we then apportion the number of seats based on percentage of the total population, Detroit and Washtenaw would both have only one, while the biggest two counties would have three. The problem with such a solution is that these are all sovereign entities, each with local constituencies and concerns.  Pride is a factor, especially for Detroit. But self-preservation also makes joining an alliance as a weaker member unsavory.  The possibility exists that the more powerful (in terms of votes) communities could force policies or requirements down the throats of the weaker ones.

Another way to apportion seats could be by relative monetary contribution.  But since this is to be funded by vehicle registration fees, it could be a shifting number over time, and it could also be a measure of the relative affluence of each community, which would presumably disadvantage Detroit, again unpalatable from a political viewpoint.  Yet on the other hand, one suspicion that participants in a regional venture have is that this is not a cost-sharing opportunity, but rather a cost-shifting move.  In other words, that the suburban counties (including Washtenaw) might be picking up the tab for Detroit.  This has its own political calculus. Emphasizing the difference in monetary contribution could also lead to heavy-handedness on the part of the larger contributors, and to squabbles over what the exact proportions are, or other factors.  The lesser contributors might also fear that their needs would be slighted in favor of the more powerful members’ priorities.

The rationale for passage of the bill package and establishment of the RTA shifts depending on whose eyes you are looking through.  To Transportation Riders United, it is a simple question of needing adequate bus transit service within the greater Detroit area.  Bus transit in the Metro area has a sad confused history, as recorded in this detailed chronology.  Two different bus systems, Detroit Department of Transportation (City of Detroit) and SMART (regional transit authority which serves Oakland, Macomb and Wayne Counties) do not interconnect adequately and leave many functional gaps in transit coverage. This is frustrating to everyone from riders to civic leaders to economic development planners.  We explained in our earlier post that improving this coordination is apparently one motivation for the new RTA.  Dennis Schornack, the Governor’s spokesman, intimated at one meeting that his intention (not expressed in these words) was basically to smack the two authorities alongside the head and make them behave.

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

But this wasn’t what the Governor stressed when he made his presentation.  Instead, he stressed the importance of rapid efficient transit within the metro area, including to Detroit Metro Airport.  As explained in various venues, this would be in the form of Bus Rapid Transit (BRT) routes.  The famous example of this is Cleveland’s Euclid corridor line.  BRT routes in the purest form are segregated lanes with high-tech long buses, somewhat like a small train.  They are necessarily express routes, especially over a long route like those being proposed here, so they don’t stop at every corner.  The purpose is to enable commuters and business interests to travel quickly to the economic center in Detroit.  This is favored by economic development planners.

In spite of these two bus-related types of motivations, the RTA legislation has languished in the legislature.  Suddenly in September, the House Transportation Committee held a public hearing on the bills.  (No action was scheduled, just the hearing.)  Many business and civic leaders turned up to testify, along with a crowd of enthusiastic transit supporters.  But in watching it, one suddenly realized that the subject for many of them was not buses, even BRT.  The subject was light rail.  A group of investors has been pushing a light rail line down Woodward Avenue, called M-1.  It is 3.4 miles in length and it could be argued that it is less about transit than about development and economic revitalization.   But the investors have run up against resistance from the Federal government when seeking grant funds to help finance it.  It turns out that US Transportation Secretary Ray LaHood has been pressing local leaders to achieve a regional transit authority before Federal funds will be made available.  From this Detroit News story,

LaHood has said federal officials are prepared to offer $25 million for a proposed light rail project on Woodward “if the community can get its act together.” On Monday, he wouldn’t specify the amount, but noted one of the hurdles is the creation of the regional authority to coordinate mass transit.

The Michigan Chronicle lays out some even more specific points about the pressure being put on legislators:

We’re willing to put on the table millions of dollars if this community can get its act together,” LaHood said of the Metro Detroit region… I met with the speaker of the house and senate majority leader and they told me that they support the idea of a regional transportation system and that legislation.

The story goes on to quote Governor Snyder in saying that he hopes that the Legislature will address the matter in the lame-duck session.  That makes sense from a strategic viewpoint because it is a time that legislators can take action with relatively little fear of retribution from constituents.  [I'm sure that Conan Smith is hoping it will be passed as immediate implementation (otherwise it might not take effect until next year).  One provision is that the Chair of the Washtenaw County Board of Commissioners appoints the two Washtenaw County members of the RTA board, and his term as Chair expires on December 31, 2012.]

There are many fine details to this legislation that deserve attention, including the question about the true priority for attention and funding.  Is it the bus system?  The BRT? The M-1 rail?  The voters of the four counties will still have to approve the vehicle fees, and the description of what services are being provided will be critical.  The populations of the three counties outside Detroit may not be persuaded by the M-1 priority, for example.  New taxes usually hold out a promise for delivery of services.  Will that be convincing across the region?

And ultimately, the message to the voters will have to deal with the governance question successfully.  Voters from each municipal unit will have to be convinced that they are signing on to a system which represents them and for which they receive at least some direct benefit.  Of course, since Washtenaw County has such a small proportion of voters, our vote may not matter much.

UPDATE:  As reported by the Ann Arbor Chronicle, the Washtenaw County Board of Commissioners acted to withdraw support of the RTA on November 7, 2012.  It is not clear what effect that action will have on the ultimate fate of the initiative.

SECOND UPDATE: The Detroit News reports today (November 27, 2012) that the RTA legislation is having a rough go in the state legislature.  Ironically, much of the story focuses on the possible loss of funds for M-1.

The story mentions the actions earlier this month withdrawing BOC endorsement of the idea:

The Washtenaw County Board of Commissioners passed a resolution this month saying the county wants to manage its own transportation systems and funds and let voters decide whether to join the authority. Ann Arbor and several townships opted against forming a countywide bus system.

There are numerous issues, including funding and condemnation powers the new authority would have.

The story quotes Mark Ouimet, who lost his re-election bid this year when Gretchen Driskell was elected instead.  Ouimet was a major supporter of the RTA concept.

THIRD UPDATE:  News services report that the RTA passed the State Senate this afternoon (November 27), with amendments.  Washtenaw County is still included in the region.   SB 0909 passed 22-16.  SB 0911 passed 22-15.  SB 0912 passed 23-15. SB 0967 passed  23-15.      SB 0445 passed 23-15.

FOURTH UPDATE: Most measures have now (December 9, 2012) passed the House and are anticipated to be signed by the Governor. (SB 912 and SB 0967 are still pending.)

For further updates on this subject, see The SE Michigan Regional Transit Authority in Progress.