Ann Arbor Area Community News
From Chris White, AATA
August 24, 2005
AATA Funding and Increased Costs
In 1998, AATA was receiving 50 percent of its operating costs in state funding. Since that time, the percentage has been steadily declining, with the available funding level for Fy 2005 at 34.6 percent. There is a possibility that the state share could be reduced further to fund just 33.3 percent of AATAÃ¢â‚¬â„¢s operating costs. This level is equal to the 1997 level and is the statutory floor.
In 1999, AATA was paying 65 cents per gallon of fuel. The current cost is $2.08 per gallon as of August 24, 2005. For every 10 cents that the cost of fuel increases, the annual expense to fuel AATA vehicles goes up by $70,000.
Health care costs have increased by an average of 12-15 percent each year since 1999.
Over the next two fiscal years, 27 AATA buses will be due for replacement. In the past, federal capital funds paid for 80 percent of the cost of new buses, with the state paying for 20 percent. The state is proposing to reduce the share of capital funding from 20 percent to 13 percent. This 7 percent reduction represents $567,000 in lost revenue for the purchase of buses over the next two years.
Measures Taken by AATA
In the face of these constraints, AATA has implemented the following measures to reduce costs and find alternate revenue sources:
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