COUNCIL AGENDA REPORT
TO: Mayor and City Council
FROM: Brett Fulgoni, Director of Public Works
DATE: September 16, 2025
SUBJECT: Adoption of a Resolution Approving a Transit “Ride Free” Fare Promotion Reimbursement Agreement with Santa Barbara County Association of Governments
Description:
The City Council will consider authorizing a “Ride Free” Fare Promotion Reimbursement Agreement with the Santa Barbara County Association of Governments.
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:
1. Adopt a Resolution approving a Transit Fare Promotion Reimbursement Agreement with the Santa Barbara County Association of Governments; and
2. Authorize the City Manager or designee to execute agreement and administer administrative and immaterial changes as needed during the life of the agreement.
BACKGROUND:
The Santa Barbara County Association of Governments (SBCAG) provides regional planning and coordination for public transit agencies in Santa Barbara County. In Fiscal Year (FY) 24-25, SBCAG was awarded Low Carbon Transportation Opportunity Program (LCTOP) funds. The purpose of these funds, and the resulting agreement, is to support area transit agencies in offering recurring promotional “Ride Free” promotions b y reimbursing them for fare revenue lost during these periods.
The term of this Agreement will commence upon execution by all Parties and will end no later than June 30, 2029, unless terminated earlier.
The agreement formalizes SBCAG’s reimbursement to Santa Maria Regional Transit (SMRT) for “Ride Free” periods using the State of California’s FY 24 -25 LCTOP funds, per the terms of the agreement.
2 DISCUSSION:
A common strategy used by transit providers to increase ridership is to offer “Free Rides” promotions. These promotions help reduce financial barriers for riders and encourage ridership during lower -demand periods, such as weekends. However, transit providers typically offer these promotions on a limited basis, as fare revenue is an important funding source for both operations and capital needs.
Using State LCTOP funds, SBCAG has created an agreement that allows participating transit agencies to be reimbursed for “Ride Free” promotions, thereby making it possible to offer them more frequently and without financial loss.
Under this program, the transit provider will submit a valid invoice to SBCAG listing the number of passengers boarding by rider category and total amount due. As backup documentation, SMRT shall attach a farebox system report fo r the promotion period showing boardings by route and rider category.
Upon receipt and acceptance of a valid invoice, SBCAG will reimburse SMRT at a rate equal to its current average cash fare ($1.00), in accordance with the Fare Promotion Agreement program rules.
Alternative(s)
An alternative is not to approve the proposed Transit Fare Promotion Reimbursement Agreement. This is not recommended, as it would prevent the City of Santa Maria from participating in SBCAG -coordinated fare promotions and receiving reimbursement for free or reduced fares. It would also limit opportunities to increase transit ridership and awareness of available services.
Fiscal Considerations
There are no impacts on the City’s General Fund. The Transit Division is an Enterprise Fund with its own operational and capital funding sources. Approving the agreement will allow SMRT to be reimbursed by SBCAG for fare revenues not collected during “Ride Free” promotional periods. These funds help support the Transit Program’s operations.
Impact on the Community
Participation in this agreement will positively impact the community by increasing awareness of public transit services and encouraging higher ridership through free or reduced fares. This can enhance mobility for residents and potentially reduce greenhouse gas emissions by promoting public transit use.
ATTACHMENT(S)
A. Resolution
B. Agreement