Fare Structure Proposal

Full Proposal Details

Public comment period ended February 27, 2009

Summary of Public Comments Received

Fare Change Proposal Press Release

Frequently Asked Questions

How do AATA Fare’s compare with its Peers?

If the senior and ADA fare on fixed routes is going to be eliminated, does that mean seniors and ADA cardholders have to pay the full fare?

Why does AATA need to raise its fares?

What has AATA done to reduce the cost to operate service?

What percent of AATA operating expenses are covered by fares?

Does AATA have reduced fares for those who can least afford to ride?

Why do some riders get to ride for free such as University of Michigan students, downtown workers, etc?

If ridership is increasing, why does AATA need to raise the fares?

How do AATA Fare’s compare with its Peers?

• Over the last two years AATA has been conducting peer analysis using nine peer transit agencies including AATA. The peers were selected based on similarities in population, population density, and geographic area and were selected specifically by our Board of Directors. The peer agencies selected are located in the following cities:
• Grand Rapids, MI
• Lansing, MI
• Kalamazoo, MI
• Toledo, OH
• Madison, WI
• Colorado Springs, CO
• Des Moines, IA
• Knoxville, TN
• Toledo and AATA have the lowest base fare. However, Toledo does not offer transfers (a fare is charged even if a transfer is needed to complete a trip), they do not offer reduced fares for low-income individuals, seniors 60-64 and students K-12. They also charge more for seniors and individuals with disabilities.
• AATA has the lowest senior and disability fare.
• AATA is the only agency that offers a reduced fare for low-income individuals.

If the senior and ADA fare on fixed routes is going to be eliminated, does that mean seniors and ADA cardholders have to pay the full fare?

• No, the proposal is to allow seniors and ADA cardholders to ride AATA fixed-route buses for free.

Why does AATA need to raise its fares?

• The AATA Board adopted a balanced FY2009 Operating Budget with no increase in expenses from 2008. However, our five year projection reflects significant losses in future years due to funding and expense trends.
• The funding challenges are due to a projected decrease in local property tax revenue from lower property values, the removal of the Pfizer property, and continued pressures on state operating assistance.
• The City of Ann Arbor is projecting an unprecedented decline in property tax revenues; Revenue from property taxes currently covers 40.8% of AATA operating expenses.
• State operating assistance is the same amount we received in 1997 and there is little expectation for this to improve; currently this represents 32% of AATA’s operating assistance.
• The costs to operate service continue to rise despite implementing the many cost reduction strategies.

What has AATA done to reduce the cost to operate service?

• The costs to operate service continue to rise despite implementing the following cost reduction strategies:
• Reduced 2009 fixed route operating costs by $5 per service hour
• Reduced the volatility of fuel costs by using fuel futures contracts and using hybrid electric buses
• Reduced employee health care costs by 14% by changing our plans and using a new health care insurance carrier
• AATA moved from defined health care benefit to a defined post employment health care contribution plan
• Partnering with the City to reduce telephone expenses by using Voice Over Internet Protocol; savings $30,000
• Partnering with the City and County to reduce internet email and web hosting expenses. Exact amount of savings are yet to be determined.
• The following represent approximately $300k in additional measures to reduce operating costs and are either underway or can be implemented this year:
• Reduce growth in demand for paratransit service by proposing free fare on fixed-route service for seniors and persons with disabilities. Unlike fixed-route service, each additional rider on paratransit service adds to the cost of providing the service.
• Reduce energy costs associated with old computer technology
• Reduce service hours operated during holidays when demand is lower.
• Reduce costs for maintaining bus shelters by partnering with  property owners to  agree to assume snow and trash removal responsibilities.
• Shift to hiring more part-time employees as allowed by our current labor agreement

What percent of AATA operating expenses are covered by fares?

• Fares cover 21% of the operating expenses for fixed-route service.
• Fares cover 12.8% of the AATA senior and ADA door-to-door, para-transit service.

Does AATA have reduced fares for those who can least afford to ride?

• Yes, not everyone pays the full base fare.
• AATA offers many reduced and discounted fares for the groups listed below.
• AATA’s fare change proposal plans to keep these reduced fares in place, in addition, allow seniors 65 and older and individuals with a disability who show an AATA identification card will ride for free.
• Seniors 65 and older: base fare is discounted by 75%.
• ADA eligible: base fare is discounted by 75%
• Seniors 60-64: base fare is discounted by 50%
• Individuals with disabilities who are not eligible for ADA: base fare is discounted by 50%.
• Low Income Eligible: base fare is discounted by 50%.
• Students K-12: base fare is discounted by 50%.
• Children 5 and younger ride for free.
• AATA also offers discounted 30-Day passes for those who don’t qualify for the reduced fares, as well as for those who qualify for the reduced fares.

Why do some riders get to ride for free such as University of Michigan students, downtown workers, etc?

• There are several organizations that “sponsor passenger fares”. This means that the fare is paid by a third party. Someone other than the rider pays the fare. Since the sponsor is paying the fare, they determine who is eligible. Currently, the following organizations sponsor the fare for eligible riders:
• MRide: University of Michigan pays for all rides taken by valid MCard holders (students, faculty and staff).
• EMU: Eastern Michigan University pays the fare for all riders who use Route 33.
• WCC Pass: Washtenaw Community College pays a portion of the fare for eligible students and staff.
• Go!Pass: Ann Arbor Downtown Development Authority (DDA) sponsors the go!Pass and pays the majority of the fare for employees who work in the DDA district who ride using a go!Pass. Participating employers who have a business in the DDA pay the difference for their employees to ride using a go!Pass.
• LINK-The fare is covered by payments from the university, the DDA and AATA.
• Student Semester Pass-The fare is paid by the Ann Arbor Public Schools for students who have a 7th-hour class at an Ann Arbor high school.

If ridership is increasing, why does AATA need to raise the fares?

• AATA has seen fixed-route ridership increase by 40% over the past four years and demand for paratransit service increase by 17% in the last three years.
• The fares paid by riders represent only a fraction of the costs to operate service.
• Fares cover 21% of the operating expenses for fixed route service.
• Fares cover 12.8% of the AATA senior and ADA door-to-door, paratransit service.
• As ridership increases, fares do increase, but do not cover the entire cost of providing the service. In fact, as ridership increases, it is necessary to add new service to avoid leaving passengers behind due to buses being full.