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 Memorandum of Understanding with the San Luis Obispo Council of Governments and the City of San Luis Obispo for a Pilot Route Express Transit Service between Santa Maria and San Luis Obispo
Description:
The City Council will consider approving a Memorandum of Understanding (MOU) with the San Luis Obispo Council of Governments and the City San Luis Obispo. The MOU establishes a new pilot express transit route connecting Santa Maria to San Luis Obispo.
This pilot service is scheduled to begin on Se ptember 15, 2025, and will operate for two years unless terminated or extended. The service will utilize the City of San Luis Obispo's right-of-way at the Downtown Transit Center.
Environmental Notice: The activity is not a “Project” as defined under Sect ion 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 Memorandum of Understanding with the San Luis Obispo Council of Governments and the City of San Luis Obispo for a pilot express transit service between Santa Maria and San Luis Obispo; and
2. Authorize City Manager or designee to execute the M emorandum of Understanding.
BACKGROUND:
For several years, City staff and regional partners have recognized strong demand for increased direct public transit connections between Santa Maria and San Luis Obispo, with the two communities being economically i ntertwined. This corridor is an important transit link, providing access between Santa Maria’s housing stock and San Luis Obispo’s employment centers, educational institutions (e.g. Cal Poly), medical facilities and commercial centers.
San Luis Obispo Council of Governments (SLOCOG), as the Metropolitan Planning Organization (MPO) for the San Luis Obispo (SLO) region, provides regional transportation planning and oversees federal and state transportation funding for San Luis Obispo County. In an effort to improve regional connectivity, Santa Maria Regional Transit 2 (SMRT) has collaborated with SLOCOG and the City of San Luis Obispo to develop an agreement outlining the parameters for a new, dedicated express transit route between the two communities while ensuring there are no adverse impacts on existing SLO County transit services (e.g., SLO RTA). This collaboration has resulted in the proposed MOU
DISCUSSION:
Beginning in September 2025, SMRT will operate a new express fixed-route pilot service from Sa nta Maria and San Luis Obispo. The pilot will run for two years, with direct weekday service during peak commute times in the morning and afternoon. The route will depart from the Santa Maria Crossroads Shopping Center and travel directly to the Downtown Transit Center in San Luis Obispo.
The Memorandum of Understanding (MOU) formalizes each agency's roles, responsibilities, data -sharing protocols, and communication methods during the pilot phase. SMRT will also participate in the SLO RTA Regional Pass Pro gram, allowing passengers to use their existing regional passes on the new route. RTA, which administers the program, will reimburse SMRT for accepted regional passes. Should SMRT determine that the route should become permanent, a new MOU will be developed to outline additional roles and responsibilities for transit operators within San Luis Obispo County.
SMRT will provide monthly performance reports to SLOCOG and San Luis Obispo Transit, including on-time performance, ridership by stop, and customer feedback data.
The pilot service will benefit commuters traveling between Santa Maria and San Luis Obispo, particularly those making weekday morning and evening trips. It is not entirely duplicative of RTA’s Route 10, as it provides nonstop service between the two cities. By offering competitive travel times compared to driving, the direct route is expected to attract additional riders, reduce roadway congestion, and support regional mobility goals. Both SLOCOG and San Luis Obispo staff are supportive of this enhanced transit service.
Alternative(s)
Deny the recommendation: This would prevent the creation of the new route and the fare- sharing agreement. The unmet regional transit need would persist, and the city would miss an opportunity to secure grant funding for this project.
Fiscal Considerations
The City’s Transit Program is an Enterprise Fund sustained solely by State and Federal funding sources that do not compete with General Fund programs. The Transit Program’s budget includes dedicated state and federal funding for this project. Because these funds are based on state and federal appropriation bills, they are considered consistent and ongoing.
Additionally, the MOU outlines that SMRT will retain all fares collected on the pilot route, except for trips paid with the San Luis Obispo Regional Pass, for which SMRT will be reimbursed. This provides an added source of route funding. 3 Impact on the Community
The pilot express service will improve regional m obility by providing a faster, more convenient connection between Santa Maria and San Luis Obispo. It will expand access to jobs, education, medical care, and services, while helping reduce traffic congestion and emissions. The route particularly benefits commuters, students, and residents without personal vehicles.
ATTACHMENT(S)
A. Resolution
B. Memorandum of Understanding