The Virginia Department of Rail and Public Transportation (DRPT) announced a 45-day public comment period for proposed program changes to the Making Efficient and Responsible Investments in Transit (MERIT) operating and capital assistance on October 7, 2025.
Here is a link to the MERIT Operating and Capital Assistance Proposed Program Changes
Comments will be accepted through 5:00pm on November 21, 2025, and can be sent to drptpr@drpt.virginia.gov or 600 East Main Street, Suite 2102, Richmond, VA 23219.
As part of this process, a 2025 MERIT Review – Proposed Changes webinar will be held on November 12, 2025, at 1:00 p.m. (virtual only). The session will review the proposed program changes, revisit information from previous meetings, and provide an opportunity for attendees to ask questions. Participation is encouraged to ensure all partners understand the updates and can provide feedback during the public comment period.
To attend the MERIT review webinar – Please Register Here
Background
The MERIT Program provides funding for operating expenses for eligible public transportation services by using a performance-based methodology to determine the specific allocation of operating assistance funds to each transit agency. MERIT is currently undergoing its Code required evaluation by DRPT with input from the Transit Service Delivery Advisory Committee (TSDAC). TSDAC consists of transit leaders, local government leaders (one of which is appointed by VACo) and a member of the Commonwealth Transportation Board and advises DRPT in the development and review of the MERIT program. The current TSDAC Chair is VACo appointee and James City County Supervisor, John McGlennon. While there is a capital assistance component to MERIT, this article will focus solely on the operating changes and recommendations that county leaders should know.
DRPT has stated that the goals of this review are:
- Emphasis on outcome focused metrics (ridership/service) over input focused metrics (operating costs)
- Emphasis on performance-based allocation
- Formula simplification
- Year over year predictability
Currently, the MERIT operating formula allocates 100% of the available funds for the program and looks like this:
DRPT believes the recommendation that best satisfies the stated goals is being called the “Sizing + Performance Adjustment Scenario.” Here is what this recommended scenario would look like:
Sizing Metric
Starting with the Sizing Metric, in the current formula, the relative “size” of a transit agency is treated as being:
- 50% operating cost
- 30% ridership
- 10% vehicle revenue hours
- 10% vehicle revenue miles
The recommended scenario changes the Sizing Metric to encompass:
- 35% operating cost
- 35% ridership
- 15% vehicle revenue hours
- 15% vehicle revenue miles
DRPT states that the recommended formula prioritizes service (outcome measures) over cost (input measure) by increasing outcome focused weights such as ridership, vehicle revenue miles and hours. As with the current formula, the recommended scenario will not allow any transit agency to receive more than 30% of its operating assistance from the MERIT program.
It is important to note that available MERIT operating funds in the recommended scenario are divided into two distinct “pots.” 95% of available operating revenues would be distributed based on the relative Sizing Metric for each agency. The remaining 5% will come from the performance-based allocation.
Performance Based Allocation
Currently, MERIT operating scoring goes through a complex formula that looks like this:
Currently, all available funds are first allocated via the STEP 1 sizing formula. After that step is completed, the allocated funds are put through the STEP 2 Performance Adjustment, using five equally weighted metrics, until all available funds are allocated. Step 2 can move the amount of funding up or down based on an agency’s performance compared to the three-year statewide average.
The recommended scenario would replace the current performance adjustment with one that looks like this:
The recommended scenario would replace the current Step 2 Performance Adjustment with this Performance Allocation. This step would allocate a portion of funding based on an agency’s recent single-year performance data measured using three efficiency and effectiveness measures:
- Cost per passenger
- Vehicle revenue hour per passenger
- Vehicle revenue mile per passenger
DRPT states that the recommended changes simplify the formula by removing the trend adjustment and further emphasize performance-based allocation.
Alternative A
There is another proposal up for consideration which is called Alternative A. The only thing Alternative A would do differently than the previously discussed recommended scenario is that instead of a single year of performance data used to calculate the Performance Allocation, Alternative A would use a three-year average.
Recommended Scenario Funding Adjustment Estimates:
DRPT and their consultant team have estimated how the proposed changes would affect the funding transit agencies would receive through the MERIT system.
This is an estimate of the funding results by VDOT construction district for FY24-26:
Here are the same estimates broken down by individual transit agencies:
As you can see, no matter how the funding metrics are changed or amended, unless the overall total MERIT funding allocation is increased to support transit agencies across Virginia, some regions / localities will gain funding while others see a reduction in funds.
VACo is grateful to staff at DRPT and the consultant team for hosting many meetings with TSDAC, as well as VACo staff directly, to go over the proposed changes and impacts of these changes.
DRPT is aiming to present final recommendations to the Commonwealth Transportation Board in December 2025 with adoption of changes in January 2026. If adopted, these changes would not be implemented until FY 2028. VACo urges county leaders to discuss the proposed MERIT changes with your local transit agencies to discuss any impacts on your local transit system as well as county budgets. Lastly, VACo would like to thank TSDAC Chair, Supervisor John McGlennon, for his leadership thus far in the process.
As always, feel free to reach out to VACo staff to discuss how these proposed changes may or may not affect your locality.
VACo Staff: James Hutzler