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San Clemente, California
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AGENDA REPORT
CITY OF SAN CLEMENTE
CITY COUNCIL MEETING
CITY OF SAN CLEMENTE
Meeting Date: June 17, 2025 Agenda Item: 11V.
Submitted By: Public Works
Prepared By: Fatana Temory, Management Analyst
Zak Ponsen, Assistant City Engineer
Subject:
..titl e
CONSIDERATION OF A RESOLUTION TO ACCEPT OCTA MEASURE M2 PROJECT V GRANT FUNDING, APPROVE A SUPPLEMENTAL APPROPRIATION IN THE AMOUNT OF $150,000, AWARDING A PROFESSIONAL SERVICES AGREEMENT TO LYFT, INC. FOR SAN
CLEMENTE RIDESHARE SERVICES PROGRAM (SC RIDES), AUTHORIZING THE CITY
MANAGER TO EXECUTE THE AGREEMENT AND FINDING THE PROJECT CATEGORICALLY ..body EXEMPT FROM THE CALIFORNIA ENVIRONMENTAL QUALITY ACT Fiscal Impact:
This action will accept Orange County Transportation Authority (OCTA) grant revenue of $3,264,428 for On-Demand Transit Services, and enter into a professional service agreement with Lyft, Inc. (Lyft) for a three-year contract for $1,050,000. The estimated total annual cost for the SC Rides program is $350,000. OCTA will fund 50% of this program up to $150,000 per year, resulting in a potential $200,000 annual match from the City. There are available funds within the Local Transit Program Fund for the Fiscal Year (FY) 2025/26 approved budget. Funding for future years will be recommended during the FY 2026/27 and FY 2027/28 budget process. Additional detailed financial information is discussed below.
Summary:
Staff requests the approval of Resolution No. 25-105 authorizing the formal acceptance of the OCTA Measure M2 Project V grant funding for on-demand transit services, and approving a Professional Services Agreements between Lyft and the City of San Clemente for Rideshare Services.
Background:
In 2016, the City Council approved an agreement with Lyft to implement a pilot on-demand transportation service titled “SC Rides,” designed to help mitigate the loss of former local bus routes 191 and 193 which were cancelled by the Orange County Transportation Authority (OCTA). In 2018, the City executed an agreement with Butterfli to provide a companion service capable of providing on-demand rides for SC Rides users requiring special assistance (e.g., wheelchairs, canes, walkers) that can’t be accommodated by typical Lyft contracted drivers.
The SC Rides program allows riders daily discounted rides within a 0.25-mile radius of the original 191 and 193 bus routes. Riders save up to $9 on rides, and pay as low as $2 a ride. The SC Rides program has an average of 3,500 riders a month.
Under the previous OCTA’s Project V grant program, OCTA awarded funds to the City to provide 1 Attachment 3
Meeting Date: June 17, 2025 Agenda Item: 11V.
CITY OF SAN CLEMENTE
up to 90% of the cost of this program through June 30, 2025. The Butterfli agreement was 100% funded by OCTA.
Last year, the City submitted an application to OCTA for the 2024 Project V Grant, requesting a new grant to continue the program. Staff is pleased to announce the recent approval of the grant, which will allow for continuation of the SC Rides program and the creation of a new Last Mile On-Demand Transit Program through the Fiscal Year (FY) 2030/31. The Last Mile Program will be brought to City Council at a later date for a potential start of the program in the summer of 2026.
The City will receive $3,264,428 through the 2024 OCTA Project V Grant to support on-demand transit programs through FY 2030/2031. However, under the new grant guidelines, OCTA’s contribution will decrease to 50%, requiring the City to provide a matching contribution of 50%.
Additionally, under recent OCTA requirements, the selected vendor must provide ADA-compliant rides, either directly or through a subcontractor. The City can no longer have two separate contracts for these services.
While the cooperative agreement is still in process, the projects have been granted pre-award authority by OCTA to allow the City to begin implementation efforts. Staff will be returning to the City Council at a future date once the cooperative agreements are ready for final approvals. In the future, the City may consider reducing its cost for the program by reducing the area of service and decreasing the rider subsidy.
Discussion:
The current contracts with Lyft and Butterfli are set to expire on June 30, 2025. Pursuant to City Policy 201-2-3, Staff conducted a Request for Proposals (RFP) for Rideshare Services on May 19, 2025 through PlanetBids. Staff advertised a Request for Proposals (RFP) from qualified transportation service contractors to provide rideshare services for the period of three years commencing July 1, 2025, with the option, at the City's sole discretion, to award two additional years.
On June 4, 2025, the City received a proposal from one (1) vendor: Lyft, Inc. After careful evaluation, Staff found Lyft demonstrated superior knowledge in the program and working alongside OCTA to provide accurate data analysis required for Project V reporting. In addition, Lyft is currently the provider the City’s rideshare program and has provided good service to the City and its riders. Lyft has been accessible, responsive and willing to work with the City to adjust practices and reporting as needed throughout the existing contract. Lyft has also proposed that ADA rides will be provided through Butterfli; Butterfli will be serving as a subcontractor to their contract. Staff’s recommendation is based on the combination of various factors including technical expertise, methodology and work plan, project experience, staff qualifications, delivery schedule, quality control, local knowledge and fair and reasonable cost. Staff recommends the contract be awarded to Lyft.
The current average monthly invoice for Lyft is approximately $26,000, with a City subsidy rate of $9 per ride. Beginning July 1, 2025, the City’s required match for the program will increase to 50%. As a result, the City may consider adjusting the subsidy rate if program costs rise. If the subsidy rate and ridership remains the same, the estimated annual total cost is $350,000. OCTA 2 Meeting Date: June 17, 2025 Agenda Item: 11V.
CITY OF SAN CLEMENTE
will fund 50% of this program up to $150,000, resulting in a potential $200,000 annual match from the City. However, since costs have remained consistent to date, Staff recommends maintaining the current subsidy rate. Staff will continue to monitor costs closely and, if necessary, return to Council with a recommendation to reduce the City’s subsidy rate contribution or alter the program if it appears to potentially exceed the $200,000 cost to the City.
Since the Project V grant funding amount was not known at the time of the adoption of the FY 2025/26 City budget, staff is recommending a supplemental appropriation of $150,000 to fund operational cost for FY 2025/26 from the OCTA grant.
Council Options:
Approve Resolution No. 25-105, which will formally accept the OCTA Measure M2 Project V grant funding, authorize a supplemental appropriation of $150,000, and authorize the City Manager to enter a Professional Services Agreement between Lyft and the City of San Clemente for Rideshare Services.
Modify and adopt Resolution No. 25-105.
Continue the Item and provide Staff with alternative direction. Do not approve the Professional Services Agreements with Lyft for Rideshare Services. Note:
The Lyft and Butterfli contract expire on June 30, 2025. This would result in the City disrupting the SC Rides Program.
Environmental Review/Analysis:
Staff recommends that the City Council determine this project to be categorically exempt from the California Environmental Quality Act (CEQA) under Public Resources Code section 21080(b)(10) because it is a project for the institution or increase of passenger or commuter services on rightsof-way already in use.
Recommended Actions:
Staff Recommendation ..recommendation
..recommendation
Staff recommends that the City Council adopt Resolution No. 25-105, which would:
..recommendation
1. Find the project statutorily exempt from CEQA under Public Resources Code section 21080(b)(10).
2. Accept the OCTA 2024 Project V Grant for on-demand transit service in the amount of $3,264,428 (to Local Transit Program revenue account 021-000-33790); and
3. Approve a supplemental appropriation in the amount of $150,000 from the Local Transit Program revenue account 021-000-33790 to the SC Rides contract expenditure account 021- 808-43890; and
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CITY OF SAN CLEMENTE
4. Award a three-year Professional Services Agreement contract to Lyft, Inc. for on-demand SC Rides rideshare services with the option, at the City's sole discretion, to award two additional years; and
5. Approve, and authorize the City Manager to execute the three-year Professional Services Agreement contract by and between the City of San Clemente and Lyft, Inc. for on-demand SC Rides rideshare services with the option, at the City's sole discretion, to exercise two additional years, in an amount not to exceed $1,050,000 in a contract form substantially similar to that presented to City Council on June 17, 2025. ..end
Attachment:
1. Resolution No. 25-105
2. OCTA Project V Grant Summary Application
3. Lyft Professional Services Agreement
4. Lyft Proposal
Notification:
None.
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