AATA Board approves balanced budget for Fiscal Year 2009

The AATA Board of Directors approved the budget at its September 17 meeting following extensive efforts by the Board’s Finance and Audit Committee and AATA staff to streamline the costs of its public transit operations.

Under the new budget, the cost for operations of TheRide fixed-route services next year will be reduced from about $105-106 per service hour to $103.29.

AATA Board Chair David Nacht said, “I am very proud that the staff of AATA has been so receptive to the leadership of Treasurer Ted Annis and other members of the Board’s Finance Committee in putting together this year’s budget. This is a great example of Ann Arbor community leadership. Ted’s appointment to the board was because of his belief that the Authority could run its operations more efficiently.

“This budget reflects a decrease in the cost to provide service without cutting service. It also takes into account AATA’s new five-year labor contract and historically high fuel costs. The community can expect even more efficiencies in years to come. We are all working hard together so Ann Arbor taxpayers will get the biggest bang for their buck,” Nacht said.

Among the actions taken to balance the budget was reducing the work force through attrition by five full-time employees. Several positions have remained vacant and no layoffs are planned.

The introduction of 20 new hybrid electric buses into its bus fleet will help AATA realize fuel savings. The addition of seven new hybrid electric buses in April 2009 will further reduce fuel consumption during the fiscal year, which runs from October 1, 2008 through September 30, 2009.

Finance Committee Chair Annis said, “An agreement was reached on how to phase in increases over time to AATA’s purchase of service agreement partners, (other than the University of Michigan), so that AATA is no longer subsidizing them.”

He added that the Finance Committee, which also includes Board Members Sue McCormick and Rich Robben, met with U-M for preliminary discussions on the contract with U-M. A committee will be formed to begin regular negotiations on the contract due to expire July 31, 2009.

The new budget will also cover purchase of a new $1.1 million fare collection system through a federal grant.

Total expenses are expected to increase less than one percent for the new fiscal year, with no cuts in service and with the addition of the a2Chelsea Express service. Although the Finance Committee examined the potential effects of a fare increase, this budget did not assume an increase in passenger fares, Annis said.

The Finance Committee has also reviewed AATA’s five-year projections and its operating reserves, and will continue to review and address AATA’s financial operations to quickly address any future systemic cost or funding problems.

Finance Committee Member Rich Robben expressed his appreciation for the staff’s excitement and upbeat attitude about examining many aspects of the operations, saying, “I am very proud of the work that was done by staff and was very proud to work with staff during the process.”

Early in the budget process, Robben suggested that staff look at ways to incorporate the concept of continuous improvement as a way to continually re-inspect AATA’s processes and the way it does business.

As a result, AATA staff has developed seven continuous improvement teams, which are focusing on improving efficiency in the areas of energy conservation, facilities maintenance, vehicle maintenance, holiday services, paratransit services, employee staffing and internal culture. The overall goal of these teams is to maintain a high level of service to the public, while lowering or limiting the growth of AATA’s operating expenses whenever and wherever possible.

One result of this team effort is AATA’s move to increase the number of part-time employees, which is expected to increase workforce flexibility and reduce the cost of employee benefits over time.

The latest information on AATA routes, schedules and detours is available at 734.996.0400 and on the AATA Routes and Schedules page.