Wednesday, Sept. 26, 2012
AATA submits FY2013 balanced budget for board review
Plan continues service enhancements despite $803,500 reduction in state revenue
ANN ARBOR – The Ann Arbor Transportation Authority’s (AATA) board of directors is scheduled to vote Thursday on a proposed operating budget for the 2013 fiscal year that was balanced through a combination of spending cuts, a wage freeze for AATA non-union personnel and the use of federal funds now available for day-to-day operations, as well as a $300,000 withdrawal from AATA’s reserves.
This use of reserve funds was necessitated by the unexpected loss of $803,500 to the FY2013 budget due to a reduction by the Michigan Department of Transportation in state operating assistance for urban mass transit systems. MDOT cut a combined total of about $8 million in state funding for local bus systems in Ann Arbor, Grand Rapids, Lansing, Saginaw, Kalamazoo and Muskegon, transportation officials said.
The Board established a policy for reserves for such instances. The policy states, “It is necessary for the AATA to have on hand a prudent reserve to cover the expenses necessary to maintain service levels in the event of interruption or delay of the receipt of state or federal funding.”
The $32.7 million proposed budget will allow AATA to continue offering advance implementation of services recommended in its recently released Five-Year Transit Program.
Reducing service to AATA passengers because of MDOT’s decision “was not an option that we would consider,” said Michael G. Ford, AATA’s chief executive officer. “We chose to tighten our belts to ensure reliable passenger service continues without disruption to riders.”
AATA’s budget proposes cuts in staff and administrative funding – including foregoing filling some positions – and uses $300,000 in AATA reserve funds that are specifically intended to address such unforeseen financial setbacks.
The AATA plan also would utilize some of AATA’s $1.47 million in federal funds for operating expenses. Formula funding represents the primary source of federal revenue that is allocated to AATA. Those funds can be used for capital projects and specific kinds of operating expenses, including preventive maintenance and planning. AATA expects to receive a total of $5.8 million in federal formula funding in the 2013 fiscal year. The upcoming AATA fiscal year is from Oct. 1, 2012 through September 30, 2013.
AATA’s strategic utilization of federal funds in the FY2013 budget is permissible through legislation approved by Congress as part of a new transportation bill called Moving Ahead for Progress in the 21st Century, or MAP-21 for short.
“The way AATA programs and uses federal formula funds reflects astute financial leadership that has left us in very good shape with the new federal transportation legislation,” Ford said.
“We are proud of our long history of sound fiscal stewardship, and this budget continues that tradition of wisely using our resources,” Ford said. “At AATA, we are committed to using local, state and federal funding efficiently.”
Several other urban transit systems in Michigan historically have depended on discretionary funds to replace buses, while AATA has always made sure to have formula funds available for bus replacement. In addition, other urban transit systems in Michigan usually use all of their formula funds each year, while AATA conservatively carries over those funds from one year to the next.
AATA plans to use some of the $1.47 million federal formula funds to help pay the cost of the new services that are part of the Five-Year Transit Program.
Proposed spending in the 2013 budget will help continue additional service on Route 4 (Washtenaw Avenue between Ann Arbor and Ypsilanti), as well as expansion of the NightRide (late-night, shared-taxi service) and AirRide (round-trip service between Ann Arbor and Detroit Metro Airport) services.
Those services are included in the Five-Year Transit Program, which was developed by the AATA with input from citizens, elected officials and civic leaders representing local and county government.
The latest information on AATA routes, schedules and detours is available
at 734.996.0400 and on the AATA Routes and Schedules page.