MET Transit flags FY27 operating shortfall and rising fuel costs; electric buses help but have maintenance/software issues

Rusty (Met Transit) presented the MET Transit operating and capital budgets for FY27 and described recent ridership growth after a 2023 service overhaul. He said ridership is projected to grow 9–10% this year, with calendar-year ridership exceeding 600,000 in 2025. On the revenue side, the agency faces reductions in some federal and state grants and property-tax-related adjustments; the operating projection shows about $8.2M in operating revenues and $8.7M in operating expenditures, leaving an anticipated operating shortfall of roughly $481,000 to be covered from reserves.

Transit staff cited sharply higher fuel and parts costs and modest grant reductions as major drivers of the gap; fuel projections may be higher than in the presented slide and fleet parts costs have risen due to inflation and availability issues. Rusty said electric buses are currently more cost-effective given diesel price increases, and they have lower maintenance outlays while under warranty; however, staff are still working through software and charging-demand issues with the manufacturer.

Capital priorities include bus stop and shelter improvements, Stewart Park amenity updates including a public restroom, a forklift replacement, and a service window at the downtown transfer center to centralize customer service. The FY27 capital plan uses a mix of local funds, FTA and competitive grants and projected reserve drawdowns; staff estimated a combined operating and capital shortfall of about $711,000 for FY27 that would be covered from reserves.

Rusty and council discussed potential revenue solutions identified in a governance and funding study, including fare increases, parking-district revenue, transport impact fees and CMAQ funding; staff said they will bring findings from the governance/funding study and recommended options back to council.