MI: City west of Ann Arbor uses rural transit services the most, but contributes less than requested

Chelsea officials recently opted to contribute fewer funds to the Western-Washtenaw Value Express (WAVE) than the nonprofit transportation organization had requested.

The decision comes amid concern over potential upcoming reductions in services in the city.

WAVE leadership says they want residents to understand why they had asked Chelsea to increase its contribution, as they work to increase efficiencies and balance the budget.

While WAVE and city officials are expected to try to maintain or scale service levels to meet the needs of Chelsea residents, some services in the city could be reduced due to funding constraints.

WAVE had asked the city to contribute 80% more, $180,000, up from $100,000 the city approved last year. On May 18, Chelsea City Council narrowly voted 4-3 to approve a lower contribution, $120,000 in fiscal year 2026-2027, which begins this October.

A previous ask had been higher, $255,000 to maintain current service levels, before WAVE dropped it to $180,000.

WAVE Executive Director Marie Gress explained the reasons behind asking the city to increase its contribution amid rising costs and uncertainty around how much the state will reimburse public transportation service providers.

Chelsea uses WAVE services more than any of the other 16 member communities in western Washtenaw County, Grass Lake and Grass Lake Township.

As the largest user, Chelsea “had fallen behind their utilization to payment ratio,” Gress said.

In fiscal year 2025 Chelsea was at over 60% of the door-to-door trips WAVE provided, 16,393 of 27,268 rides. Those trips in Chelsea remain above 50% of trips to date. The city is also serviced by Chelsea Community Ride shuttle bus service within the city and the fixed-route Community Connector that travels between communities.

That fiscal year, Chelsea contributed $85,600 of the $569,100 total local contributions from participating communities — about 15%.

In fiscal year 2026, Chelsea contributed $100,000 of the $612,160 total local contributions — about 16%.

Gress said WAVE changed how it allocates costs to communities, which actually brought down what the organization needed to ask Chelsea to contribute.

“We shifted from trip information to service miles and service hours,” Gress said.

Calculating it that way brought Chelsea’s utilization of door-to-door service down to about 41-42% based on service miles and hours.

When Gress came on board in 2023, the organization was grappling with an aging fleet, supply chain issues stemming from the COVID-19 pandemic and changes at the state level regarding vehicle replacements.

“That was one of the reasons our budget costs increased,” she said.

Since then, WAVE has made improvements, including increasing its fleet. In 2024, they expanded door-to-door service hours to 6 a.m. to 9 p.m. to include morning and evening commute hours.

There were also fluctuations in state funding for public transportation. State reimbursement rates for next year remain unresolved.

“That’s the other huge variable,” Gress said.

About a year and a half ago, Gress said WAVE projected Chelsea might need to contribute as much as $400,000 a year to keep services the same. That was when the state was telling WAVE that the reimbursement rate for rural public transportation service would continue to drop from 35% to 27%, and then it was stabilized at 34%.

“The current budget being discussed at the state is that the Governor and (state) Senate are keeping rates the same but the (state) House is talking about the 27% again,” Gress said.

Before 2000, the reimbursement rate was 60% for rural public transportation services, according to data from WAVE.

In addition, the Ann Arbor Area Transportation Authority increased how much federal funding it would pass through to WAVE from about $173,000 to more than $300,000. That was part of the reason WAVE had previously dropped its projection from $400,000 to $255,000.

Gress said future funding from the countywide Older Persons Millage could also help. The county has already allocated a total of $833,000 in millage funds to WAVE for expanded services for residents 60 or older through the end of the year. Officials are expected to pursue multi-year contracts next.

Some Chelsea city officials were unconvinced the city’s increased contribution to WAVE was warranted.

Chelsea City Manager Elle Cole previously said WAVE’s model is “an old model that doesn’t fit Chelsea very well anymore.”

WAVE and the city, she said, need to look at how Chelsea residents actually use the services and who uses the services the most to determine the best service model moving forward.

Gress presented a list of potential service reductions that would start in October at the May 18 Chelsea City Council meeting.

Door-to-door shuttle service hours would be reduced by one hour in the morning and three hours in the evening to 7 a.m. to 6 p.m. It is currently available 6 a.m. to 9:30 p.m. Rides to medical appointments and jobs and grocery trips could be impacted.

In addition, the Chelsea Community Ride, a shuttle bus that travels around the city, would stop operating on Saturdays and Sundays, which could impact people who use the shuttle for shopping trips, for example.

Fixed-route Community Connector shuttle bus service would not be impacted.

City officials could also decide to increase the contribution in the future, depending on the impact.

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