Regional Transit Authority of Southeast Michigan

Annual Operating Budget and Work Program

Fiscal Year Ending: September 30, 2015
November 2014

Regional Transit Authority of Southeast Michigan

Fiscal Year: October 1, 2014 - September 30, 2015
Abstract:

This document summarizes RTA's proposed budget and work program for the Fiscal Year ending
September 30, 2015. Revenues expenditures and descriptions of major activities are included. Staff
positions, one time start up costs, and federal grant dollars are also contained within this document.
Permission is granted to cite portions of this publication with proper attribution. The source
attribution must be "Regional Transit Authority of Southeast Michigan." Subsequently "RTA" is
sufficient. Reprinting in any form must include the publication's full title page. RTA documents and
information are available in a variety of formats. Contact RTA Information Services to discuss your
format needs.
RTA Information Services
1001 Woodward Avenue, Suite 1400
Detroit, MI 48226
info@rtasoutheastmichigan.org
(313) 402-1020

Table of Contents:

Abstract
Table Of Contents:
Letter to Board
Organizational Information
Mission and Vision Statements
Board Members
Operating Budget Overview
Assumptions Worksheet
Operating Expense Comparison
Operating Budget Narrative
Grants Budget
Monthly Budget Projections
Treasurer's Report Template
Appendices:
A: RTA Work Program Elements
B: RTA Organizational Chart

Organizational Description
The RTA was created by Public Act No. 387 of 2012. Its 10-member board is appointed for three year
terms by the county executives of Wayne, Oakland and Macomb counties, the chair of the Washtenaw
County Board of Commissioners, the Mayor of Detroit, and the Governor of Michigan. The Governor's
appointee serves as chair and without a vote.
The purpose of the RTA is to plan for and coordinate public transportation in the four-county region,
including the City of Detroit, and to deliver rapid transit in a region where none exists. It is the entity
through which transit providers must apply for state and federal funds, and through which those funds
are allocated to providers. The RTA is also responsible for developing a Regional Master Transit Plan to
guide present and future service and is empowered to put funding questions on the ballot for public
vote.

DRAFT Mission Statement

The Regional Transit Authority of Southeast Michigan's mission is to manage and secure transportation
resources that significantly enhance mobility options, to improve quality of life for the residents and to
increase economic viability for the region.

DRAFT Vision Statement

We envision a region with sufficient and secure funding to support enhanced public transportation
options that will ensure accessibility, satisfy the integrated mobility needs of the community, and
promote livable, healthy, and sustainable growth.

Regional Transit Authority of Southeast Michigan

Board of Directors

Paul Hillegonds, Chairman of the Board

Governor Representative
Executive and Policy Committee Chair

Alma Wheeler Smith, Providers Advisory Council Liaison

Washtenaw County Representative

Elisabeth Gerber, Ph.D., Vice Chair, CAC Liaison

Professor of Public Policy, University of Michigan
Washtenaw County Representative

Mary Lisa Franklin, Citizens Advisory Council Liaison

President, Warriors on Wheels
City of Detroit Representative

Mark Gaffney, Board Secretary

Teamsters Local 214
Wayne County Representative

Dr. Curtis L. Ivery, Board Treasurer

Chancellor, Wayne County Community College District
Wayne County Representative

Oakland County Representative

Vacancy

Roy Rose, Planning and Service Coordination Committee Chair

President and CEO of Anderson, Eckstein and Westrick, Inc.
Macomb County Representative

Donald Morandini, Providers Advisory Council Liaison

Adjunct Faculty, Macomb Community College,
Macomb County Representative

Tim Soave, Finance and Budget Committee Chair

Director of Finance, Older Person's Commission of
Rochester Hills, Rochester, and Oakland Township
Oakland County Representative

RTA 2014-2015 Operating Budget

FY2015
Proposed
Budget

FY2016
Budget
Projection

Variance

% Change

FY2017
Budget
Projection

Revenue
Beginning Balance
Federal Revenue (Administration)
State Match (Administration)
State Revenue*
Other Revenue/Contributions
Total Revenue

Expenditures
Salary*
Fringe
Worker's Compensation Insurance
Administrative Contracts
Marketing/Printed Materials
Rent
Hardware/Software*
Phone Equipment*
Phone and Internet Service Fees
Supplies
Utilities
Furniture*
Meetings/Retreats
Travel/Professional Development
Subscriptions/Memberships
Board Compensation
Total Expenditures
Ending Balance

571,381
259,200
64,800
900,000
100,000
1,895,381

223,371
276,000
55,200
1,100,000
200,000
1,854,571

(348,010)
16,800
(9,600)
200,000
100,000
(40,810)

-61%
6%
-15%
22%
100%
-2%

196,081
200,000
396,081

571,367
257,083
980
473,100
200,000
20,000
20,000
2,500
5,780
5,000
1,200
15,000
40,000
35,000
10,000
15,000
1,672,010

631,013
315,506
1,200
392,600
150,000
42,000
10,000
1,000
6,572
3,000
3,600
2,000
40,000
35,000
10,000
15,000
1,658,491

631,013
58,423
220
(80,500)
(50,000)
22,000
(10,000)
(1,500)
792
(2,000)
2,400
(13,000)
(13,519)

10.4%
22.7%
22%
-17%
-25%
110%
-50%
-60%
14%
-40%
200%
-87%
0%
0%
0%
0%
-1%

643,633
321,817
1,400
213,900
100,000
42,000
7,500
1,000
5,033
2,500
3,600
1,500
40,000
35,000
10,000
15,000
1,443,883

223,371

196,081

(1,047,802)

*State Revenue in FY15 was appropriated in FY14 and is reflected in FY15, the actual year of expenditure.
*State Revenue in FY16 has been appropriated in FY15 and is reflected in FY16, which will be the actual year of expenditure.

RTA Budget Assumptions

Worksheet
Fiscal Years Defined
Year 1
Year 2
Year 3

FY 2015
FY 2016
FY 2017

10/1/14 - 9/30/15
10/1/15 - 9/30/16
10/1/16 - 9/30/17

Staffing
Staffing % of Budget
Full Time Staff
5
Fringe
50% BLS/CPI
FY17
2.0%
FY15
FY16
Part Time Staff/Interns
2
Fringe
0 BLS/CPI
2.0%
55%
57%
67%
Total Staff
7
* - 7% of Federal Contracts will support staffing, specifically, Grants Administration in Years 1 and 2. FY17 assumes no Federal grant administration staff support.
*BLS/CPI, Bureau of Labor Statistics and Consumer Price Index report that annual salary increases for government workers is 2%
Federal Contracts
Year 1 Expenditure
Year 2 Expenditure

Federal Grants Administration % of Administrative Budget

FY15
FY16
FY17
19%
20%
0%

54%
46%

* - It is anticipated that just over half of the planning work will be completed in the first 8 months, ending FY15. The remaining work will be completed in FY16 (May 2016). 15 month timeline.
* - Woodward NEPA study, it is expected, will achieve 80% completion in FY15 and the remaining work will be completed in early FY16 (by December 2015).

Admin. Contract % of Budget

Administrative Contracts
D&O Liability Insurance
Legal
PEO/Human Resources
Accounting Services
Financial Audit
Web Development/Content Management
Communications
Public Education Initiatives
User Satisfaction Survey
Information Technology Support
Other Contract
Total

FY15
1.20%
4.49%
0.18%
0.90%
0.90%
0.75%
2.99%
5.98%
8.97%
0.45%
1.50%
28.30%

FY16
1.21%
4.52%
0.18%
0.60%
0.90%
0.15%
3.01%
12.06%
0.00%
1.03%
1.51%
23.67%

FY17
1.52%
3.46%
0.21%
0.69%
1.04%
0.17%
3.46%
3.46%
0.00%
0.79%
1.73%
14.81%

Regional Transit Authority of Southeast Michigan

FY 2015 Operating Budget

Expense Comparison
FY 2014
Approved
Budget
Salary*
Fringe
Worker's Compensation Insurance
Total Compensation
Administrative Contracts
Marketing/Printed Materials
Rent
Hardware/Software*
Phone Equipment*
Phone and Internet Service Fees
Supplies
Utilities
Furniture*
Meetings/Retreats
Travel/Professional Development
Subscriptions/Memberships
Board Compensation
Total Expenditures

481,500
224,000
705,500
74,500
40,000
19,740
2,700
2,700
3,600
14,000
20,000
10,000
14,676
907,416

FY2015
Proposed
Budget
571,367
257,083
980
829,430
473,100
200,000
20,000
20,000
2,500
5,780
5,000
1,200
15,000
40,000
35,000
10,000
15,000
1,672,010

Change
89,867
33,083
980
123,930
398,600
200,000
(20,000)
260
(200)
3,080
5,000
(2,400)
1,000
40,000
15,000
324
764,594

% Change
19%
15%
100%
18%
535%
100%
-50%
1%
-7%
114%
100%
-67%
7%
100%
75%
0%
2%

Regional Transit Authority of Southeast Michigan

Operating Budget Narrative
Fiscal Year 2015

The purpose of the budget narrative is meant to expand the information provided in the budget spreadsheet by explaining how the budget cost elements are necessary to
implement project objectives and accomplish the results. The budget narrative is a tool to help the Board of Directors and key stakeholders fully understand the budgetary
needs of the organization and is an opportunity to provide descriptive information about the costs beyond the constraints of the budget template. Together, the budget
narrative and budget spreadsheets should provide a complete financial and qualitative description that supports the proposed budget.
Revenue:

The Operating Revenue for FY15 includes carryover funding of $571,381 from FY14. The RTA did not employ full time staff in FY14. Beginning FY15, the RTA began payroll
activity for staffing operations and has begun work in earnest. The RTA Operations revenue consist of State Revenue, Charitable Contributions, seven percent of
administrative fees from a Federal Transit Administration Planning Grant, and State Match funding to support the FTA grant. The total revenue in FY15 is $1,877,376. Please
note that the RTA has no cash on hand. Once the system of accounts has been established, the Michigan Department of Transportation will novate their grant funding from
SEMCOG to the RTA and release cash in advance to satisfy approximately four months of funding, which will continue quarterly over the life of the appropriation.
Expenses:

As of November, 2014, RTA has identified additional operating expenses totaling $764,594 over FY14. These additional costs are illustrated on the Expense Comparison
Worksheet and explained in further detail below. The comparison highlights differences in the approved FY14 budget relative to the FY15 proposed budget. Total expenses
for FY15 are $1,672,010.

TOTAL COMPENSATION

Total Compensation increased by 18%. The salaries and fringe benefits were adjusted to reflect more accurately the job descriptions identified in the staffing plan. Median
salaries were researched resulting in the increases over FY14. The Fringe benefits will cover health care costs, vacation and paid holidays, and retirement contributions.
Until the RTA is staffed with 5 full time employees, it is not possible to sign up for a group health insurance plan. As such, exact costs are to be determined. Various fringe
benefit options are being evaluated. The RTA will pursue a 50% fringe rate, consistent with MDOT and SEMCOG and will not exceed this rate.

ADMINISTRATIVE CONTRACTS

Administrative Contracts increased by 535%. During FY14, there was limited need for letting administrative contracts. Primarily, administrative contracts in FY14 were
related to legal expenses associated with building institutional capacity to run the organization and securing Directors and Officers liability insurance. Beginning FY15, many
of the non-core operations of the RTA will be contract services such as; Accounting, Human Resources (ASO), Web Development and Content Management, Communications,
Information Technology, Public Education Initiatives, and Financial Audit.

MARKETING/PRINTED MATERIALS

The Marketing and Printed Materials budget increased by 100%. The RTA did not incur expenses in this category during FY14. The production of the Regional Map will
increase this cost category substantially. The RTA will seek to partner with organizations that are willing to share in this expense to realize potential cost savings
RENT

The RTA is temporarily housed in the SEMCOG office space. It is anticipated that the RTA will find a permanent office location by the end of the Fiscal Year. Costs were
calculated to account for four months of rental and utility expenses.
MEETINGS/RETREATS

The Meetings and Retreats budget increased by 100%. This line item did not appear in the FY14 budget. SEMCOG has covered many of the costs for meeting expenses on
behalf of the RTA. These costs include accommodations for items such as food, interpreters to meet ADA requirements, rental space (public meetings), and parking fees
associated with RTA business.
TRAVEL/PROFESSIONAL DEVELOPMENT

The Travel and Professional Development budget increased by 75%. The RTA is required to meet federal and state requirements, coordinate existing services, and provide
compelling evidence to the public to support a dedicated funding mechanism for an enhanced public transportation system. RTA management believes that a staff of five
individuals should have equal access to professional development opportunities to become and continue to be subject matter experts, which will be critical to ensure the
RTA's success.
Summary:

The RTA has adopted a long term planning approach and has developed a forecast through Fiscal Year 2017. We have identified a budget deficit of $1.1 million in FY17. In
order to minimize that shortfall, the RTA will continuously seek spending reductions over the next two years. The RTA is currently exploring additional sources of potential
revenue to ensure uninterrupted operations for the organization. The RTA legislation and the Master Agreement allow the Authority to capture up to a 1% share of the Local
Bus Operating (LBO) Funds for oversight and coordination of services for the public transit agencies. The RTA is committed to exhausting all other funding possibilities before
exercising the LBO option. We are optimistic that our ballot proposal will be successful, but the RTA will begin working with the transit agencies now to ensure they are
prepared for the possibility of a 1% reduction in their LBO funding in FY17. Our primary goal is to secure a source of dedicated funding that will ultimately benefit all of public
transportation.

RTA 2014-2015 Federal Grant Budget

FY2015
Proposed
Budget

FY2016
Budget
Projection

FY2017
Budget
Projection

Federal Planning Grant Funding

Federal Revenue
State Match
Total Revenue

3,336,400
834,100
4,170,500

3,163,600
790,900
3,954,500

Woodward EA
Michigan AA
Gratiot AA
Regional Plan*(TBD)
M-59 AA (TBD)
Grants Administration*
Total Expenditure

200,000
1,242,000
1,026,000
1,026,000
352,500
324,000
4,170,500

50,000
1,058,000
874,000
874,000
822,500
276,000
3,954,500

Expenditures

Remaining

*7% of the Grants Budget Allocated to the Administrative Budget totaling $600,000 in staff support
over two years for the $6.5 million FTA award

Regional Transit Authority

As created under Public Act 387 of 2012

Treasurer's Report
Report for the month of: October 2014
RTA BOARD

Beginning Balance FY 15

CHAIR

571,381.00

Paul Hillegonds
VICE CHAIR

Elisabeth Gerber
SECRETARY

Mark Gaffney
TREASURER

Dr. Curtis Ivery

Jean Chamberlain
Mary Lisa Franklin
Don Morandini
Roy Rose
Alma Wheeler Smith
Timothy Soave

REVENUES
Beginning Balance FY 15
Federal Grants (Administration)
State Match (Administration)
State Revenue
Other
TOTAL REVENUE:

Monthly
-

YTD

EXPENSES:
Salary
Fringe
Total Compensation
Administrative Contracts
D&O Liability Insurance
Legal
ASO
Accounting Services
Audit
Website
Communications
Public Education Initiatives
User Satisfaction Survey
IT Support
Other Contract
Total Administrative Contracts
Marketing/Printed Materials*
Rent
Hardware/Software
Phone Equipment
Phone and Internet Service Fees
Supplies
Utilities
Furniture
Meetings/Retreats
Travel/Professional Development
Subscriptions/Memberships
Board Compensation
TOTAL EXPENSES:

Monthly
4,808
1,577
6,385

YTD
4,808
1,577
6,385

10,488

10,488

10,488

10,488

56

56

1,183

1,183

572
18,684

572
18,684

Treasurer's Signature:
Dr. Curtis L. Ivery
* Future obligation - Maps - $24,253

Budget
571,381
259,200
64,800
900,000
100,000
1,895,381

Remaining
571,381
259,200
64,800
900,000
100,000
1,895,381

Budget
571,367
258,063
829,430

Remaining
566,559
256,486
823,045

20,000
75,000
3,000
15,000
15,000
12,500
50,000
100,000
150,000
7,600
25,000
473,100
200,000
20,000
20,000
2,500
5,780
5,000
1,200
15,000
40,000
35,000
10,000
15,000
1,672,010

20,000
64,513
3,000
15,000
15,000
12,500
50,000
100,000
150,000
7,600
25,000
462,613
200,000
20,000
20,000
2,500
5,724
5,000
1,200
15,000
38,817
35,000
10,000
14,428
1,653,326

Appendix A:

Regional Transit Authority of Southeast Michigan

Fiscal Year 2015: Work Program Categories

The purpose of this document is to identify critical tasks necessary to accomplish the work of the organization during its first year of staffed operations.

Development of a Culture of Inclusion and Transparency

Office Management and Regulatory Compliance
Regional Transit Plan
Woodward Avenue NEPA study
Gratiot Avenue Corridor Planning Study
Michigan Avenue Corridor Planning Study
M-59 Corridor Planning Study
Public Education Initiative
User Satisfaction Survey
5310 Paratransit Funding Allocation
Coordination of Existing Services
FTA Triennial Review Preparation
Board and Committee Monthly Meetings (Preparation: pre and post)
Stakeholder Meetings and Public Engagement
Website Development and Content Management
Development and Management of Accounting Systems
Strategic Planning: Ballot Proposal
Revision and Implementation of Master Agreement
Review of all State and Federal Grant Applications from Public Transit Providers
PAC and CAC Relationship Building

Appendix B:

Regional Transit Authority of Southeast Michigan: Organizational Chart

Board of
Directors

Chairman of
the Board

Human Resources

Manager of Financial Analysis

and Planning

Staff:
Contract:TBD

Contract: ASO

Regulatory
Compliance/ Civil
Rights

Deputy CEO
Chief Operating Officer

Legal Counsel

Information
Technology/Web

Executive Administrative
Assistant/Board Clerk and Office
Manager

Chief Executive Officer

Community Outreach Manager

Communications

Staff: Outreach Intern

Contract: Vendor TBD

Accounting

Planning
Intern

Contract: Vendor TBD