ANN ARBOR TRANSPORTATION AUTHORITY. Conversion of AATA from Act 55 to Act 196

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1 Revised 1 1 /06/09 A. Brief Description B. Entities C. Contrcts D. Advntges ANN ARBOR TRANSPORTATION AUTHORITY Conversion of AATA from Act 55 to Act 196 Convert AATA from its current sttus s n entity orgnized under Act 55 to n entity orgnized under Act 196. This conversion would mke no chnge in the City's ownership of the trnsit entity system or in the current method of trnsit service outside the City limits. AATA converts from n Act 55 uthority to n Act 196 uthority without ny ownership or bord structure chnges. Mintin existing contrcts with townships; dd contrcts s negotited on piecemel bsis; possible contrct with County for service to townships not otherwise covered by seprte contrcts. City retins its control of AATA nd existing service Even without countywide trnsit, Act 196 hs dvntges over Act 55 0 Act 196 is more detiled, giving better guidnce on more trnsit subjects o Act 196 hs no geogrphic limittions on service o Act 196 offers the possibility of millge for up to 25 yers if light ril is funded (see Notes on lst pge) Becuse of Act 196 dvntges over Act 55, Act 196 puts City nd AATA in better position to led countywide trnsit efforts Does not hve ny legl effect on current Ann Arbor chrter millge being used for public trnsporttion

2 "Service Contrct" Option A. Brief Description B. Entities C. Contrcts D. Advntges E. Disdvntges AATA extends service on piecemel bsis by negotiting dditionl contrcts with dditionl townships nd possibly with County (for portions of County not served by township contrcts). AATA cn do this with or without converting first from Act 55 to Act 196, but conversion is recommended (see p. 1). Existing AATA only - no chnge needed in ownership or bord structure, whether under Act 55 or Act 196. Mintin existing contrcts with townships Add contrcts s negotited on piecemel bsis Possible contrct with County for service to townships not otherwise covered by seprte contrcts Simplicity: Beyond the conversion, this pth my be simpler thn the other pths. Need not crete ny new trnsit uthorities. Remining under Act 55 insted of using Act 196 does not resolve the issue of AATA's potentil geogrphic service limit.

3 A. Brief Description B. Entities C. Contrcts D. Advntges E. Disdvntges Out-Countv Act 196 Authoritv (Citv of Ann Arbor excluded) plus Citv millge: the "donut" millge Sme s countywide uthority, except the new uthority will consist of the entire county except for the City of Ann Arbor, which would exercise its sttutory rights to be excluded from the new Act 196 Authority. The result would be two trnsit uthorities with respective millges resembling "donut": the out-county millge "donut" surrounding the City s the "donut hole" to continue its current chrter millge. Existing AATA continues without ny ownership or bord structure chnges, either under Act 55 or Act 196. New countywide uthority formed, with the expecttion tht City exercises its sttutory right to exclude itself from the countywide uthority within 30 dys fter the uthority is formed. Assume lso tht no other city, villge or township within the county exercises tht sme exclusion right. New uthority bord ppointed by nd controlled by County, since County would be the sole uthority member Existing AATA contrcts with out-county uthority for trnsit service in the outcounty res in exchnge for receipt of out-county millge imposed by the outcounty uthority. If other cities, villges or townships exclude themselves from the out-county uthority, those excluded units cn negotite for contrct service. Avoids the "lyered" millges tht would be imposed on City txpyers under countywide uthority described bove. Insted, the out-county uthority could levy its own millge, excluding the City. Out-county millge rte would need to be higher thn countywide millge rte to rise the sme mount of trnsit revenue, becuse n out-county millge would not be imposed on ny of the txble property within the City of Ann Arbor. Remining under Act 55 insted of using Act 196 does not resolve the issue of AATA's potentil geogrphic service limit.

4 Countvwide Act 196 Authoritv plus City millge: the "lver cke" millge A. Brief Description Existing AATA continues, either under Act 55 or Act 196. County forms new Act 196 Authority covering the entire County nd seeks voter pprovl of countywide trnsit millge. This cuses two millges: one within the City of Ann Arbor nd nother throughout the entire County. Txpyers in City of Ann Arbor py both millges: City millge "lyered" on top of County millge. B. Entities Existing AATA continues without ownership or bord structure chnges, either under Act 55 or Act 196 New Act 196 Authority formed with County s sole member, County ppoints entire bord of new uthority, new uthority levies low level millge throughout the entire County to support service bove nd beyond current AATA levels within the City of Ann Arbor Assume tht fter cretion of the countywide uthority, no city, villge or township within the County exercises its sttutory rights to exclude itself from the uthority jurisdiction nd from ny proposed County millge. C. Contrcts Service contrct between AATA nd new County Act 196 Authority providing for countywide collection of millge to be turned over to AATA in exchnge for greed-upon levels of countywide trnsit service Consider dditionl service contrct between AATA nd ny excluded city, villge or township tht excludes itself from the County uthority (see bove) D. Advntges Stble countywide dedicted millge for countywide trnsit service AATA remins s the sole designted recipient of federl funds nd runs ll trnsit service in exchnge for receipt of millge funds from countywide uthority E. Disdvntges Somewht more complexity thn the service contrct model, since it requires cretion of new uthority nd negotition between AATA, City nd the new County uthority regrding service levels nd millge pyments City txpyers will py two lyers of millge insted of one Remining under Act 55 insted of using Act 196 does not resolve the issue of AATA's potentil geogrphic service limit.

5 Notes 1. All of the bove options ssume tht AATA is the service provider. Vrious lterntives my exist for equipping nd stffing countywide trnsit service. 2. These options do not ddress the possibility or the dvisbility of mending the Ann Arbor City Chrter to chnge its existing trnsit millge. 3. Millge informtion:. Act 55. Act 55 llows AATA to propose city-wide millge of up to 5 mills for up to 5 yers. AATA hs tht legl power tody, regrdless of the City's current perpetul chrter millge of 2.5 mills. b. Act 196. Act 196 hs the sme mximum millge limits s Act 55 (5 mills nd 5 yers), except tht millge my be pproved for up to 25 yers if the Act 196 uthority is seeking tht millge for public trnsit services tht include "fixed guidewy project uthorized under 49 USC 5309", which cn include light ril projects. c. Other Millge Mtters. Michign's Hedlee tx limit will ffect future yers. The exct scope of permitted uses of millge h ds should lso be exmined. For exmple, to wht extent could you use millge funds for HOV (high occupncy vehicle) lnes?

6 Revised 1 1/06/09 ANN ARBOR TRANSPORTATION AUTHORITY CONVERSION OF AATA FROM ACT 55 AUTHORITY TO ACT 196 AUTHORITY PROPOSEDITIMELINE nd libilities from Old AATA to New AATA: identify third prty consents, begin process to obtin stte nd federl pprovl for New AATA to become designted recipient of stte nd federl funding, etc. possible how long some of these pprovls my tke 5. Publish Articles once in re newspper; file signed Articles with Secretry of Stte, Wshtenw County Clerk nd Director of Michign Stte Deprtment of Trnsporttion 6. Ann Arbor City Council ppoints the first 7 member Bord of Directors of New AATA 7. New AATA Bord holds first meeting to ppoint officers, dopt bylws nd other routine initil orgniztionl mtters /15/10 03/01/10 New AATA existence begins when filing nd publiction re complete Existing AATA Bord members cn be ppointed for continuity

7 8. (Formlity) New AATA sends notice to Ann Arbor City Clerk giving 30 dys to withdrw under Section 8(7) of Act Expirtion of 30-dy period for Ann Arbor to withdrw dy period for chllenging Act 196 Authority expires (60 dys fter rticles re published) Sttute requires this notice; for AATA this is only formlity Sttute requires 30 dys Sttute provides for this 60-dy period 1 1. New AATA dopts resolution pproving Trnsfer Agreement 12. Old AATA dopts resolution pproving Trnsfer Agreement 13. Complete due diligence nd pre-closing process, obtin ll third prty consents, nd close the trnsfer from Old AATA to New AATA; New AATA begins using "Ann Arbor Trnsporttion Authority" nme nd opertes public trnsporttion service 14. Ann Arbor City Council dopts resolution dissolving Old AATA becuse it hs no more ssets nd no longer does business After 06/01/10

8 ANN ARBOR TRANSPORTATION AUTHORITY ILLUSTRATION OF TRANSIT OPTIONS Countywide Trnsit A "Service Contrct" Method Countywide Act 1 96 Plus City Millge ("Lyer Cke" Millge) A Out County Act 196 Plus City Millge ("Donut" Millge) j Elther Current Act 55 Entity or Convert to Act 1 96 Entity 4 AATA Converted to Act 196 Entity City of Ann Arbor AATA This grphiclly shows severl pths of moving towrd Countywide Trnsit Service. Attched re: () One pge summries of ech pth's key points, including dvntges nd disdvntges; nd (b) A step sheet with timelines for converting AATA from n Act 55 uthority to n Act 196 uthority.

9 INTRODUCTION TO ACT 55, ACT 196 AND COUNTYWIDE TRANSIT Short nswers re provided to ech of the eight questions listed below. For more informtion, see the dditionl documents ttched. 1. Wht re the differences between Act 55 nd Act 196? The key differences re:. Members: only cities with fewer thn 300,000 people my form Act 55 uthorities, but n Act 196 uthority my be formed by ny city, villge, township or county or combintion of them. b. Txtion: lthough both my levy 5 mills for up to 5 yers, Act 196 uthorities my sk for millge of up to 25 yers if prt of the funds re used for fixed guide wy system, such s light ril. No more thn one election my be held in clendr yer under either uthority, but Act 55 uthorities my hold dditionl elections if mjority of its members consent. c. Geogrphic Scope of Services: Act 196 uthorities hve no limits, but Act 55 uthorities my operte only within the incorporting city's boundries, plus certin dditionl boundries tht existed before July 18, d. Adding nd Removing Members: Both cts llow n uthority to dmit dditionl politicl subdivisions s members. Act 55 llows those dditionl members to withdrw only with the uthority's permission. Act 196, however, llows members nd other politicl subdivisions within the district to opt out of the uthority without the uthority's permission in certin situtions. 2. Wht historv exists bout Act 55 nd Act 196? Act 196 ws encted in 1986 to fcilitte reorgniztion of the Grnd Rpids public trnsporttion system which operted under the nme GRATA t tht time. Act 55 ws encted in We do not hve ny history redily vilble regrding the resons for encting Act Would converting AATA from 55 to 196 reuire AATA to go to countvwide service? Wht re com~ellin~ resons for AATA to convert to Act 196 even if AATA doesn't go to countvwide svstem? No, converting from 55 to 196 does not require ny countywide trnsit whtsoever. See the ttched pge entitled "Conversion of AATA from Act 55 to Act 196" for resons why converting from 55 to Act 196 my be compelling even without countywide trnsit. countvwide? 4. Wht would Act 196 men for AATA if it converts but does not PO The conversion would hve no impct on levels of service, the current Ann Arbor Chrter millge, or ny other opertionl spect of AATA's service. The Ann Arbor City Council would hve role in ppointing persons to the new Act 196 bord, just s the City does

10 for the current Act 55 uthority. For more informtion, see the ttched pge entitled "Conversion of AATA from Act 55 to Act 196". does it help? 5. Wht would Act 196 do for AATA if it does eo countvwide? How Act 196 provides more predictble nd flexible method of designing countywide trnsit thn Act 55. See the ttched chrt entitled "Illustrtion of Trnsit Options" nd the onepge description of the three methods tht uthorities under Act 196 could move towrd countywide trnsit. 6. Wht other options re vilble to AATA to go countvwide? Three generl options re vilble to pursue countywide trnsit service. See the ttched flow chrt entitled "Illustrtion of Trnsit Option" nd the one-pge description of ech of those options. 7. Is there preferred pth to 196? Is there preferred pth to countvwide service? The preferred pth for converting from Act 55 to Act 196 is described on the ttched pge entitled "Conversion of AATA from Act 55 to Act 196" nd the ttched timeline for tht conversion. The preferred pth for countywide service depends on whether countywide millge is desired. If no millge is desired, see the ttched description of the "service contrct" method. If countywide millge is desired, the preferred method will depend on whether the stkeholders prefer "lyer cke" millge system or "donut" millge system. See the ttched documents for explntions. 8. Wht ne~otitions need to hmen with Ann Arbor City, Wshtenw County, nd other stkeholders? Wht timing would pply? Discussions with the City, County nd townships would undoubtedly be required to determine the degree to which they wnt to prticipte nd the specific form of prticiption. Negotitions will depend on whether countywide trnsit is pursued t this time nd if so, wht method of countywide trnsit might be pursued. Timing will be ffected by mny non-legl subjects such s the length of time negotitions my tke, the desired trget dte for ny proposed millge elections, the speed t which certin third prties would need to pprove ny reorgniztions (such s the Federl Trnsit Administrtion regrding federl fbnding nd MDOT regrding stte funding), nd other prcticl nd politicl mtters. The following documents re ttched to this introduction: 1. Chrt entitled "Illustrtion of Trnsit Options" 2. Five-pge description of the Conversion from 55 to 196, plus descriptions of the three methods of pursuing countywide trnsit 3. Smple timeline for converting AATA from Act 55 to Act 196