Subject
title
Authorize the City Manager to Execute a Grant Agreement with the Maryland Energy Administration for the FY 2025 Medium-Duty and Heavy-Duty Zero-Emission Vehicle Grant for the Purchase of Two Electric Senior Transit Buses
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Department
PW - Environmental Management
Recommendation
Staff recommends the Mayor and Council authorize the City Manager to execute the FY 2025 Medium-Duty and Heavy-Duty Zero-Emission Vehicle Grant Agreement (Attachment 1) between the Mayor and Council of Rockville and the State of Maryland, to support the purchase of two electric senior transit buses.
Discussion
In May, the Maryland Energy Administration (MEA) provided notice of a grant award of up to $160,000 to support the purchase of two electric senior transit buses. The grant was awarded from the State of Maryland’s FY 2025 Medium-Duty and Heavy-Duty Zero-Emission Vehicle Grant, a program designed to support Maryland fleet companies, organizations, and communities to help defray the costs of purchasing qualified, newly manufactured zero emission medium-duty or heavy-duty zero-emission fleet vehicles.
The grant funding was conditional upon a signed and executed grant commitment letter, which the Mayor and Council authorized the City Manager to sign on May 19, 2025 (Attachment 2). On July 21, 2025, MEA sent the official grant agreement (MEA Grant No. 2025-12-518S1, Attachment 1) with a deadline for the City Manager to sign and execute by August 8, 2025.
Authorizing the grant agreement with MEA would allow the city to accelerate electrification of the city fleet. The grant letter references a short-haul truck for the purposes of calculating incentives for a Class 4 vehicle (14,001- 16,000 lbs). This vehicle class best aligns with the planned replacement of a 25-passenger transit bus. This project, and others previously funded under MEA grants, support Rockville’s greenhouse gas reduction goals, described in Rockville’s Climate Action Plan adopted on January 10, 2022. This project helps the city address Action M-06 to convert the City fleet to cleaner and more efficient fuel sources. Additionally, the project supports Rockville’s Electric Vehicle Readiness plan adopted on March 28, 2025, by addressing Action 3.1.2 to monitor and pilot clean technologies for medium-duty and heavy-duty vehicles. This grant supports the next phase of fleet electrification involving medium-duty transit buses that serve local senior transit routes.
Mayor and Council History
On May 19, 2025, the Mayor and Council authorized the City Manager to execute the FY 2025 Medium-Duty and Heavy-Duty Zero-Emission Vehicle Grant Commitment Letter (Attachment 2). Staff is now requesting authorization to execute the full official grant agreement (MEA Grant No. 2025-12-518S1, Attachment 1).
Fiscal Impact
The adopted FY 2026 budget appropriates $239,700 for the purchase of one electric senior transit bus. The updated total estimated cost for two buses is $492,000. Upon Mayor and Council approval, the $160,000 grant funding, along with the additional $92,300 to support the city’s required match will be recognized on the second FY 2026 budget amendment. The Electric Vehicle Infrastructure Capital Improvement Program (GA23) includes funding for charging infrastructure to support the electric buses.
Next Steps
Once authorized by the Mayor and Council, staff will coordinate with MEA and the City Manager to execute the grant agreement in a form substantially similar to the attached agreement and approved by the Office of the City Attorney.