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June 08, 1978 - Image 5

Resource type:
Michigan Daily, 1978-06-08

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The Michigan Daily-Thursday, June 8, 1978-Page 5
Defieits and old buses plague AATA

The Ann Arbor Transit Authority
(AATA) board is trying to hammer out
a budget for next year that will be a lit-
tle more realistic, in light of this year's
estimated $115,919 deficit.
The authority started out last year
with a $262,462 deficit which was
remedied by a federal grant. Executive
Director Karl Guenther explained the
budget overruns at last night's board
meeting, saying "I know it will be taken
as defensive, but percentage-wise
we're very close to on-budget." Board
chairman Ed Pear preceded Guen-
ther's comment by pointing out the
three per cent excess in expenditures
on the $5 million budget.

GUENTHER, SAID the expected
revenue from fare boxes will not be
achieved since, as of May 6, only $488,
892 had been taken in on the projected
$601,922 figure for the fiscal year ending
July 1.
Guenther said the primary overrun
areas were employee fringe benefits,
including paid days off and insurance
premiums. The 1.8 per cent overrun in
that area will also apply to next year's
budget. Guenther defended his
management by pointing out the un-
predictable nature of Social Security
and the Blue Cross-Blue Shield rates.
A state moratorium on new equip-
ment has apparently caused the
authority a great deal of trouble by for-

cing it to use buses on heavy service
lines that should have been retired. A
discrepancy of 3,404 in service hours
from the expected budget was another
cause of overruns.
FORMER BOARD chairman Bob
Bring told the board he believed they
'should have taken their variances into
account when they ratified the union
contract. "The budget is a tool to
manage, but when you're going to have
a variance, use it to make adjustmen-
ts." Bring, who served on the board for
five years, said AATA should rely less
on federal funds and instead raise fares
"a lot more than the proposed nickel
and a lot sooner," like July 1. Guenther

said he doesn't predict an increase in
ridership next year.
Board member Joel Samoff stressed
a "hold-the-line" budget without a
decrease in service. Board member
Willie Horton concurred, saying,
"Correcting any discrepancies that
have cost overruns would be a better
way to proceed and don't disrupt ser-
vice or compound errors."
Board members will hold a working
budget session next week and hope to
finalize the budget at' the July 5
meeting. They also must finalize a par-
tial budget to carry the AATA through
until November when they can bid for
more federal money and possibly get
some new equipment.

freeze on
state jobs
(Continued from Page 3)
Since the measure slashes the aver-
age homeowner's and businessman's
property tax by 57 percent, that
eliminates tax deductions worth an
estimated $2 billion annually.
The California Federation of
Teachers, the California Teachers
Association and the California State
Council of Service Employees brought
suit against the state's 58 county tax
assessors and asked the court to
restrain them from taking any action to
implement the 57 percent property tax
cut approved by voters Tuesday.
Meanwhile, the vote has confused the
tax-exempt bond market as investors
try to figure out what impact the
decision will have on municipal
TUESDAY'S VOTE to lower property
taxes to 1 percent of market value has
caused problems for about $2,8 bilion of
bonds sold by cities and towns in
California. The price has fallen for
But financial experts yesterday said.
they don't expect the decision to affect
bonds sold by communities in other
states unless those states adopt similar
tax ceilings.
"We're following the situation closely
and are not taking any actions now. It's
impossible to say what will happen,"
said Freda Ackerman, a vice president
at Moody's Investor's Services, one of
the two major agencies that rate the
credit of cities, towns and states.
Two types of municipal bonds will be
hardest hit: tax allocation bonds, sold
by city urban renewal agencies and
paid off by taxes paid on newly
developed or improved property, and
lease-rental bonds, issued to pay for
projects like schools or convention
Haircutting By Experts
Maple Village-761-273$
E. Liberty-668-9329
E. University-662-0354



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