COUNCIL AGENDA REPORT
TO: Mayor and City Council
FROM: Brett Fulgoni, Director of Public Works
DATE: May 6, 2025
SUBJECT: Adoption of a Resolution Approving Santa Maria Regional Transit’s Fiscal Year 2025-26 Ca lifornia Transit Development Act Claim for $6,884,219
Description:
The City Council will consider authorizing the Transit Division’s Transit Development Act Claim for Fiscal Year 2025-26 in the amount of $6,884,219 to partially fund Santa Maria Regional Transit’s operations and capital expenditures.
Environmental Notice: The activity is not a “Project” as defined under Section 15378 of the California Environmental Quality Act State Guidelines; therefore, pursuant to State Guidelines Section 15060(c)(3) no environmental review is required.
RECOMMENDATION:
Adopt a Resolution authorizing the Public Works Director, or designee, to file the City of Santa Maria’s claim for California Transit Development Act funds with the Santa Barbara County Association of Governments for allocation of T ransit Development Act funds for Fiscal Year 2025-26.
BACKGROUND:
The City of Santa Maria’s Transit Division operates as an Enterprise Fund, relying solely on its own sources of funding, primarily federal and state funding, to support its operation.
California’s Transit Development Act (TDA) provides a significant portion of the Transit Division’s funding. TDA provides local municipalities funding for their transit, paratransi t, transportation planning, pedestrian and bikeway facilities in a specific priority order, referred to as Articles 1 through 8. While TDA funds may be used for street and road projects, based on certain transit conditions being met and as a low priority article, the exception is when a city exceeds 100,000 in population, per census data, such as Santa Maria. Therefore, TDA funds cannot be used for street and road projects in Santa Maria.
TDA provides two major sources of funding for public transportation: Local Transportation Funding (LTF) and State Transit Assistance (STA) Funds.
2 LTF: Local Transportation Funds (LTF) is derived from a ¼ cent of the statewide general sales tax. The State Board of Equalization distributes the tax revenue to each county based on sales collected, and counties then appropriate funds based on population.
STA: State Transit Assistance Funds (STA) funds are appropriated by the legislature to the State Controller’s Office (SCO), which allocates the funds using a formula: 50 percent based on population and 50 percent based on prior fiscal year transit operator revenues.
DISCUSSION:
Every year, the City must apply for its allocation of TDA funds through its Metropolitan Planning Organization (MPO), which in this case is the Santa Barbara County Association of Governments (SBCAG). SBCAG distributes TDA funds to local agencies using the formulas noted above.
The City’s TDA application supports SMRT’s operating costs, representing approximately 45 percent of the program’s total op erating budget. The remainder is funded through federal grants and local fare revenue. STA funds are released later in the year after estimates are provided by the SCO and are not included in this initial claim. However, the Resolution authorizes the Publ ic Works Director (or their designee) to automatically initiate claims and manage these funds once they become available. The Resolution also permits administrative adjustments to TDA claims if requested by SBCAG or the State of California. The City primarily uses STA funds for capital expenses not easily covered by federal sources.
Alternative(s)
The only alternative to approving the TDA claim is to reject it. Doing so would significantly jeopardize the operation of the transit system and potentially place operational costs on the City’s General Fund.
Environmental Review
California State Bill 2922 (SB -922) exempts transit projects from having to conduct the CEQA analysis until 2030.
Fiscal Considerations
The total FY 2025 -26 TDA claim for City of Santa Maria is $5,578,670 . In addition, the County of Santa Barbara is allocating $1,182,000 of its TDA funds to the City to support SMRT services to unincorporated areas (e.g., New Cuyama, Orcutt, Tanglewood, and Los Alamos), bringing the total TDA claim to $6,884,219, as shown in Table 1.
3 The line-item details of the claim are as follows, Table 1:
Type of LTF Funding: Amount:
Regional Transportation Planning
(PUC 99262 & 99402)
$ 181,617.00
Pedestrian & Bikeway Facilities (PUC
99234)
$ 123,549.00
Articles 4 & 8 $ 5,578,670.00
County of Santa Barbara Contribution $ 1,182,000.00
Total $ 6,884,219.00
Attachment B contains Santa Maria’s TDA Claim with additional details.
Impact to the Community
TDA funds serve as the matching requirement for approximately $6 million in Federal Transit Administration funds necessary for transit operations and capital projects.
Approval of the TDA claim will secure continued state and federal funding for SMRT services, which provide vital transpo rtation for thousands of commuters, students, seniors, and individuals with disabilities in Santa Maria and northern Santa Barbara County.
Other Agency Review
The SBCAG serves as the reviewing body for all TDA claims and coordinates the transfers of TDA funding from the County of Santa Barbara to Santa Maria.
ATTACHMENT(S)
A. Resolution
B. FY 25-26 TDA Claim