With city finances sputtering and ridership plummeting, Palo Alto's shuttle program is approaching its final stop after 20 years of operations.

The City Council endorsed last week the elimination of the small shuttle program, which was launched in 1999 and which offers free rides to seniors, students and other local riders. The move will save the city about $500,000 at a time when it is facing a projected budget gap of $38.8 million.

The elimination of the shuttle program is one of a series of changes that the council approved to the city's planning and transportation operations, which are collectively seeing their budgets reduced by 16%, or about $3.5 million. The bulk of the cuts will be in the Planning and Development Services Department, which will lose nine positions. The reduction will mean slower turnaround time for building inspections and significant delays in application processing.

The Office of Transportation, by contrast, will see two changes, each of which is rooted in factors that preceded the pandemic. In addition to scrapping the shuttle program, which has seen a steady decline in ridership over the past three years, the office plans to switch to license-plate readers to enforce the Residential Preferential Parking programs in different neighborhoods. The move is expected to help save about $185,000 because the city won't need as many enforcement officers.

The switch to license-plate readers is also expected to increase citation revenue, Chief Transportation Official Philip Kamhi told the council during the May 13 budget review.

Kamhi said the new parking system will allow for "virtual permits," eliminating the need to issue stickers and hangtags to permit holders. The permitting system also will allow customers to easily adjust permits and vehicles without going to City Hall or waiting for their permits to arrive by mail, he said.

Kamhi noted at the May 13 budget review that the changes to the parking program were ones that the city was considering even before the economic downturn, which made implementation more urgent. The pandemic, in effect, sped things up.

"The program modifications in this proposal are items that have actually been part of our long-term strategy that would have taken us years of approaching and dealing with," Kamhi said. "And we're really outside the current plan, but they really should be accelerated in order to achieve cost efficiencies immediately."

He was less sanguine about ending the shuttle program. Its two routes, Crosstown and Embarcadero, connect downtown to south Palo Alto and to businesses near the east side of U.S. Highway 101, respectively. The budget acknowledges that the action "will reduce free alternative transportation options to residents and visitors to Palo Alto, including senior citizens and local students."

The proposed elimination follows several years of declining ridership, which has dropped from more than 150,000 trips in 2016 to about 100,000 in 2019, Kamhi said. The city will be "lucky" if it sees 70,000 riders this year, he added.

"We expect ridership will likely be impacted further post-COVID as people attempt to continue to distance," Kamhi said.

Kamhi said that to be successful, the shuttle program would need significant additional investment.

"It would need marketing and other service enhancements to really make it an appealing service and make it a service that drives back to the ridership that we experienced just five years ago," Kamhi said.

The council agreed to eliminate the shuttle, even as several council members lamented the end of the program. Councilwoman Alison Cormack called it a "tough loss" and Councilwoman Lydia Kou said she is "very said" to see the routes eliminated, noting that they help provide "last mile" and "first mile" solutions to commuters.

Councilwoman Liz Kniss suggested partnering with Palo Alto Unified School District to preserve a shuttle route, in recognition that students represented about a third of the ridership in surveys conducted earlier this year. She also suggested a switch from fixed routes to on-demand services, an option that Kamhi said should be considered in the future, if the city chooses to restore funding for the shuttle.

"An on-demand-type service would really give us the ability to cost control and give us parameters on the types of trips we'd be subsidizing and how much we subsidize," Kamhi said.

The council tentatively approved the budgets for both planning and transportation services. The only item that the council opted to restore is $273,988 that staff was planning to cut from long-term planning. The action would have cut funding from housing-related assignments and projects such as the North Ventura Coordinated Area Plan, a forthcoming document to lay out a new vision for a 60-acre portion of the Ventura neighborhood, which includes the former location of Fry's Electronics. It would have also limited staff's ability to advance the council's land-use policies, as laid out in the Comprehensive Plan, according to the budget.

Mayor Adrian Fine argued that the funding should be maintained, particularly given the shifting state mandates on housing and new developments. Having funding for long-term planning would help the city "implement them in a way that is amenable to Palo Alto." Fine said. Cormack, Kniss and Councilman Greg Tanaka joined him in a 4-3 vote to maintain the funding.

"To remove that program will not serve us well, particularly given the contentiousness and the attention Palo Altans pay to development issues," Fine said.

The council plans to resume its budget discussion on May 26.

Find comprehensive coverage on the Midpeninsula's response to the new coronavirus by Palo Alto Online, the Mountain View Voice and the Almanac here.