Annapolis advances microtransit pilot and electric buses; parking fund transfer fills FY26 gap

Marcus Moore, Director of Transportation, told the Finance Standing Committee on April 24 that the department's FY26 budget leans on a parking fund transfer while the city pilots microtransit and adds electric buses and charging infrastructure.

Moore said the department launched a three-year microtransit on-demand pilot called Go Time in summer 2024 to replace two underperforming fixed routes and that the transit development plan (TDP) will go to the council for public testimony. He reported that two fully electric buses and a DC fast charger were delivered or obligated and that the department expects six smaller cutaway vehicles for ADA and microtransit service soon.

The proposed FY26 revenue mix shown to aldermen included a $4.076 million transfer from the parking fund, about $1.3 million in grants, a $350,000 intergovernmental payment, roughly $265,000 in fares and about $160,000 in advertising. The departments year-to-date farebox recovery for FY25 was 12.8%; staff proposed a FY26 target of 15 percent and a projected operating cost per vehicle-hour of $85 (down from a FY25 year-to-date of about $101).

Moore and Kwaku Dua, Deputy Director, described the AVL (automatic vehicle locator) and rider-facing Transit App implementation; an AVL procurement will be advertised. Moore said AVL integration will let riders see real-time vehicle location and reduce confusion when vehicles are substituted or out of service.

Committee members pressed staff on payment options, and Moore said the transit agency's current electronic fare boxes could be upgraded to permit credit-card tap payment; he agreed to return with a cost estimate. Aldermen also discussed headways and on-time performance; staff said most fixed routes currently run at 30-minute headways and that reducing headways (increasing frequency) would carry significant labor and rolling-stock costs.

A major budget concern raised in the hearing was the parking fund transfer that balances part of the transit budget. Budget manager Jake Trudeau and others explained that the parking fund transfer to transportation relies in part on one-time proceeds from a trust closing; those funds are available for FY26 but are not a guaranteed ongoing revenue source, and sustained transfers at the FY26 level would deplete the parking fund balance.

Moore and committee members discussed other financial pressures: the capital cost to transition to a fully zero-emission transit fleet (staff referenced a 2023 capital estimate of about $13.7 million that would be higher today), higher electricity use to charge buses, and the uncertain availability of federal funding. Jackie Guile, deputy city manager for resilience and sustainability, said federal grant programs could help cover the delta between diesel and electric vehicle costs.

Transportation staff said they will continue implementing the TDP recommendations, evaluate microtransit zones and AVL performance, and provide committee follow-ups on fare payment upgrades and the parking fund waterfall (the committee requested a breakdown of parking garage vs. on-street revenue and fines/fees). The department also flagged ongoing coordination with Anne Arundel County on cross-jurisdiction service gaps.