COUNCIL AGENDA REPORT
TO: Mayor and City Council
FROM: Brett Fulgoni, Director of Public Works
DATE: April 7, 2026
SUBJECT: Adoption of Resolution Approving Amendment No. 6 to the Operations & Maintenance Agreement with RATPDev
Description:
The City Council will consider adopting a Resolution approving Amendment No. 6 to the existing Transit Operations and Maintenance Agreement with RATPDev to extend the contract term through June 30, 2028, and approve an increase to compensation for a total contract amount of $16,383,897.90, which includes: $7,982,578.96 for Fiscal Year 2026- 27, and $8,401,318.94 for Fiscal Year 2027-28.
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 Amendment No. 6 to the Transit Operations & Maintenance Agreement with RATPDev to extend the term until June 30, 2028, and approve an increase to compensation for a total amount of $16,383,897.90 for Fiscal Years 2026-27 and 2027-28; and
2. Authorize City Manager , or designee, to execute agreement and implement the service enhancements and wage augmentations.
BACKGROUND:
The City of Santa Maria operates a fixed-route and paratransit public transit system within the Santa Maria Urbanized Area (which includes Orcutt and Tanglewood), for the City of Guadalupe and throughout Northern San ta Barbara County and into San Luis Obispo County. The City’s public transit operations and maintenance have long been outsourced to third-party vendors since the 1990s, often through multi -year contracts with optional extensions; as allowed by the Federal Transit Administration (FTA).
The City’s public transit operations, known as Santa Maria Regional Transit (SMRT) is funded by a combination of dedicated Federal and State transit funding sources, including funding from transit partners such as the County of Santa Barbara and City of Guadalupe, for their respective shares of the SMRT service area.
2 After an extensive R equest for Proposals (RFP) in 2018, the City Council awarded the current Transit Operations and Maintenance contract to RATPDev. The agree ment included a four -year base term with the potential for five optional extension years. The City has already exercised the first three of five extensions. Two optional extensions are remaining and are being brought to City Council for consideration.
DISCUSSION:
The proposed extension includes a 5.5% increase from the current contract (before adding additional service). Approximately 82% of the requested 5.5% increase is dedicated directly to enhancing driver’s wages. This adjustment is primarily driven by fact that a neighboring transit agency (SLORTA) has augmented the salaries of their bus drivers by 20.2%. Since RATPDev employs drivers represented by the same union (Teamsters Local 986), they are proposing an up-to 17% salary increase for Santa Maria bus drivers in order to bring compensation parity. As RATPDev drivers are part of the same Teamsters union, a comparable increase is necessary to address:
The potential loss of qualified drivers to neighboring agency, which without them, could cause missed service.
To help avoid a potential labor strike stemming from pay disparity with the other transit agency for comparable work.
And to help return bus driving as a potential "head of household" paying job, which is vital for attracting and retaining quality personnel.
The remaining 18% of the 5.5% increase is to address RATPDev’s growing overhead and inflationary costs.
System Growth and New Service
Given continued ridership growth, included within the proposal is the project costs for adding two ad ditional routes over the next two years and to align with the next budget cycle. Budgeting for future service needs will help ensure that SMRT can continue to grow to meet community needs and stay within not-to-exceed amounts. Should the addition of service be postponed, SMRT would not incur those charges as the City only pays RATPDev for actual service hours provided.
Additionally, the cost proposal accounts for two “extra -board” drivers, these drivers employed for the sake of filling-in during other driver absences or for helping maintain on- time performance. Budgeting for extra -board drivers had not typically been part of the contract because the RATPDev is only reimbursed for actual revenue hours provided therefore there was no incentive to “over hire. ” However, the addition of extra -board drivers has now become a necessity to keep up a growing workforce and potential absences. Budgeting for these two positions means the contractor will be compensated for the additional staff that fill in at critical times.
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Alternative(s)
The Council could deny the extension and direct staff to go out to bid. This is not recommended, as a new long -term contract process would not likely result in cost savings, with driver wage augmentation being the biggest factor for determining costs, regardless of any bidding provider.
Fiscal Considerations
The negotiated price is consistent with the Transit Funds Fiscal Year 2026 -28 budget forecast. Federal and State transit funds are projected to be sufficient to support SMRT operational costs. Especially considering that SMRT has largely transitioned to a fully electric transit fleet, saving significant operating costs on fuel and maintenance , and which can now be reinvested to support other areas seeing operation costs increase (i.e., labor).
Compensation Breakdown
Compensation: The City shall compensate the Contractor at the negotiated rates and budgeted amounts specified in the cost proposal (Exhibit A in Amendment No. 6 ). The Total Service Costs (Fixed + Variable + Maintenance) for the extension period are established as follows:
Fiscal Year 2026-27: $7,982,578.96
Fiscal Year 2027-28: $8,401,318.94
Impact on the Community
This extension ensures the continued delivery of effective, reliable transit services. By addressing driver wage disparities, the City reduces the risk of service interruptions and maintains a high standard of safety and performance for the community
ATTACHMENT(S)
A. Resolution
B. Amendment No. 6 to Agreement