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City of Ann Arbor staff outline FY2026 transportation funding: Act 51, millages and transfers to alternative transportation
Summary
Ed Adar, the city's financial manager for public services, presented the proposed FY2026 transportation-related budget on April 16, reporting an Act 51 revenue projection of about $16.8 million, a $28.2 million expenditure plan for major and local street funds, and transfers to an alternative transportation fund.
Ed Adar, the financial manager for public services with the City of Ann Arbor, briefed the Transportation Commission on April 16 on the transportation elements of the proposed FY2026 budget, highlighting state-distributed Act 51 funds, city millage revenue, and capital-program priorities.
Adar said the city will propose a total municipal expenditure budget of about $639.5 million for FY2026 ($146.7 million in the general fund, $184.2 million in enterprise funds, $99.7 million in special revenue funds, $55.1 million in trust funds and roughly $153.8 million in other funds, including internal service funds and debt). For transportation-specific revenue, he reported a projection of about $16.8 million in Act 51 distributions (the state formula-based major and local street funds derived from vehicle registration and gasoline taxes) and an expenditure allocation of roughly $28.2 million for major and local street programs.
Adar explained that the city transfers a portion of Act 51 funding to an alternative-transportation fund to support bicycle, pedestrian and similar projects; that transfer is budgeted at about $840,000 for FY2026. The alternative-transportation fund’s line items include programs such as the North Main Transportation Study; Adar said the fund’s FY2026 active-transportation budget is about $1.1 million (staff clarified that this figure reflects the alternative-transportation program budget, not $1.1 billion).
The commission heard an overview of the city’s other transportation revenue sources: the longstanding street, bridge and sidewalk millage, which Adar said is expected to yield about $1.616 million in FY2026 for transportation investments; construction reimbursements and interdepartmental transfers for projects that combine road work with utilities; and contributions from partner agencies such as the University of Michigan and Washtenaw County on shared projects. Adar called out the Nixon Road improvements as an example of a reconstruction project that bundles roadway reconstruction with roundabouts, protected bike lanes and crosswalk and sidewalk upgrades.
Commissioners asked for clarifications on several items: Commissioner Pete requested a follow-up explaining how the sidewalk-construction millage changes the financing equation versus special assessments; Adar said staff would provide a follow-up. Commissioners also asked about the county mental-health-millage allocation (some city millage funds previously supported pedestrian lighting and other safety items and were later reallocated when the city adopted a climate-action millage) and about how alternative-transportation funds are applied when projects include multiple funding sources.
Adar said the proposed FY2026 budget will go to the city council for first reading in late April/May and final vote in May; staff noted that lower-than-expected bid results on some projects could create budget savings within the program.
No formal commission action was taken; the presentation served as an informational briefing and commissioners requested follow-up detail on millage impacts and special-assessment alternatives.
