COUNCIL AGENDA REPORT
TO: Mayor and City Council
FROM: Brett Fulgoni, Director of Public Works
DATE: January 20, 2026
SUBJECT: Adoption of a Resolution Approving a Revised Memorandum of Understanding for the Pilot Santa Maria to San Luis Obispo Express Transit Services
Description:
The City Council will consider authorizing the City Manager, or their designee, to sign a revised Memorandum of Understanding (MOU) with the San Luis Obispo Council of Governments (SLOCOG) and the City of San Luis Obispo. This revised MOU outlines the parameters for the new pilot express transit route connecting Santa Maria to San Lu is Obispo, originally presented for consideration on September 16, 2024.
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 and adopting a revised Memorandum of Understanding, with the San Luis Obispo Council of Governments and the City of San Luis Obispo for the Pilot Santa Maria to San Luis Obispo Express Transit Service (SLO 210); and
2. Authorize the City Manager, or designee, to execute the revised MOU.
BACKGROUND:
Due to minor changes requested by the City of San Luis Obispo after the initial presentation, and the subsequent recommendation from the City Attorney's Office, staff is presenting the final, updated version of the MOU for formal adoption by the City Council.
The changes are minor and reflect an incremental iteration of the service
Original Intent and Context
The original Memorandum of Understanding (MOU) was developed through collaboration between Santa Maria Regional Transit (SMRT), SLOCOG, and the City of San Luis Obispo to establish a dedicated express transit route addressing the strong demand for a direct public transit connection between Santa Maria and San Luis Obispo. The service, operating on weekdays during peak commute times, is intended to be a direct route from the Santa Maria Crossroads Shopping Center to the Downtown Transit Center in San Luis Obispo.
2 The MOU formalizes each agency's roles, responsibilities, data sharing protocols, fare revenue retention (SMRT retains all fares except for SLO Regional Passes, for which they are reimbursed), and participation in the San Luis Obispo County Regional Pass Program.
DISCUSSION:
Revisions
Following the initial Council meeting, the City of San Luis Obispo requested several minor changes to the drafted MOU, necessitating the creation of a revised version. The primary changes include:
1. Route Name Specified: The name of the pilot express route is now explicitly identified as (SLO 210) in the Recitals section.
2. Termination Clause Clarification: The language regarding the two -year term was modified to explicitly state that the term is "effective September 15, 2025, and will remain in effect for two (2) years or until terminated with or without cause or extended by either party". Additionally, the cure period for an immediate "for cause" termination was specified as ten (10) calendar days.
3. Hold Harmless/Indemnification Language: The Hold Harmless Agreements section for claims between Santa Maria and San Luis Obispo was revised to use the "jointly and severally indemnify, defend, and hold harmless" language, aligning with the language used for indemnifying SLOCOG.
4. Bus Stop Responsibility: Responsibility for bus stop facilities at the SLO Downtown Transit Center was clarified: SAN LUIS OBISPO is responsi ble for installation/maintenance of bus stop infrastructure at the Downtown Transit Center, but SANTA MARIA will be responsible for the cost of any increased maintenance resulting from the pilot program.
5. Transit Center Congestion: A clause was added to ensure that pilot express transit vehicles do not "block, delay, or idle in the street or otherwise contribute to congestion while waiting for access to the Downtown Transit Center," reinforcing the priority of SAN LUIS OBISPO vehicles.
6. Minor Schedule Adjustments: The proposed service schedule in Exhibit 1 was slightly adjusted, with a later second morning departure and a later final evening departure time. (Example: The initial draft's 6:40 AM departure changed to 6:45 AM, and the 5:10 PM departure was added).
The City Attorney's Office has reviewed these final changes and advised that, given the revisions to the contract language, particularly in the Hold Harmless and Termination clauses, the updated MOU must be formally brought back to the City Council for adoption before the City Manager can be authorized to sign the final document. 3 Alternative(s)
The City Council has two primary alternatives to the staff recommendation:
1. Deny
2. Direct staff to negotiate further changes: The Council could request staff to return to the partner agencies (SLOCOG and the City of San Luis Obispo) to negotiate additional or alternative changes to the MOU language. However, due to the already launched service, the necessity of securing partner approval, this course of action could inevitably delay adoption of a “Final MOU” and could jeopardize the entire agreement. Staff recommends against this alternative, as the current revised MOU incorporates all necessary legal and operational adjustments.
Fiscal Considerations
The City of Santa Maria’s Transit Division is an Enterprise Fund with its own sources of financial support that have no impact on the City’s General Fund. The fiscal considerations remain unchanged from the previous report. The project is su pported by State and Federal Transit Program funds and does not compete with the City's General Fund. SMRT will retain all fares collected on its pilot route, except for payments made with the San Luis Obispo Regional Pass, for which they will be reimbursed.
Impact on the Community
This is only an administrative action; there is no impact on the community.
ATTACHMENT(S)
A. Resolution
B. Revised SLOCOG and SLO City MOU for Route 210 Pilot Service