COUNCIL AGENDA REPORT
TO: Mayor and City Council
FROM: Brett Fulgoni, Director of Public Works
DATE: June 2, 2026
SUBJECT: Adoption of a Resolution Authorizing Filing of FY 2026-27 CA Transit Development Act Claim For $7,320,246
Description:
The City Council will consider adopting a resolution authorizing the Transit Division’s Transit Development Act Claim for FY 2026 -27 in the amount of $7, 320,246 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:
1. Adopt a Resolution authorizing the filing of the City of Santa Maria’s claim for California Transit Development Act funds with the Santa Barbara County Association of Governments for allocation of Transit Development Act funds for Fiscal Year 2026-27; and
2. Authorize City Manager or designee to execute and file claim.
BACKGROUND:
The City of Santa Maria’s Transit Division is an Enterprise Fund, relying solely on its own sources of funding to support operations, namely, federal and state funding.
California’s Transit Development Act (TDA) funds are a major source of the Transit Division’s funding. California TDA provides local municipalities funding for transit, paratransit, transportation planning, pedestrian and bikeway facilities in a specific priority order, referred to as Articles 1 through 8. Notably, although TDA language allows for the use of TDA funds for street and road projects under certain transit conditions and as a low-priority article, this does not apply to cities exceeding 100,000 in population based on census data, such as Santa Maria. Therefore, TDA funds cann ot be used for street and road projects in Santa Maria.
TDA provides two major sources of funding for public transportation: Local Transportation Funds (LTF) and State Transit Assistance (STA) Funding.
2 LTF is derived from a one-quarter cent of the general sales tax collected statewide. The State Board of Equalization, based on sales tax collected in each county, returns the general sales tax revenues to each county’s LTF. Each county then apportions the LTF funds within the county based on population.
STA funds are appropriated by the Legislature to the State Controller’s Office (SCO). The SCO then allocates the tax revenue, by formula, to planning agencies and other selected agencies. Statute requires that 50% of STA funds be allocated according to population and 50% be allocated according to transit operator revenues from the prior fiscal year.
DISCUSSION:
Every year the City must submit an application for its allocation of TDA funds with the area Metropolitan Planning Organization (MPO) which is the Santa Barbara County Association of Governments (SBCAG). SBCAG distributes the TDA funds to the local agencies based on the above-mentioned formulas.
The City’s Transit Division TDA application provides funding for Santa Maria Regional Transit (SMRT) operating costs, totaling roughly 45% of the program’s total operating budget. The remainder of the Transit program’s budget is made up of federal funding and local fares.
STA funds are released later with estimates being announced by the SCO later in the year and are absent from this initial claim. However, the Resolution authorizes the Public Works Director, or their designee, to automatically initiate cla ims, receive, and manage these funds once they are available. The Resolution also allows for administrative adjustments to TDA claims if requested by SBCAG or the State of California, which can occur from time to time. The City of Santa Maria primarily use s STA funds for capital expenses that federal funds do not easily cover.
Alternative(s)
The alternative to approving the TDA claim is to not approve the TDA claim. However, should Council not approve it, operation of the transit system would be severely jeopardized, and potential operational costs could come to bear on the City's General Fund.
Environmental Review
This does not constitute a project. Further, California State Bill 2922 (SB922) exempts transit projects from having to conduct the CEQA analysis until 2030.
Fiscal Considerations
The total FY 2026 -27 TDA claim for City of Santa Maria is $6,003,246. Additionally, a separate line item highlights the County of Santa Barbara allocation of some its TDA funds, in the amount of $ 1,317,000, to the City of Santa Maria to support SMRT’s transit service to unincorporated parts of the County (e.g. New Cuyama, Orcutt, Tanglewood 3 and Los Alamos) , and $185,303 for Regional Transportation Planning, totaling a TDA claim of $7,320,246, as shown in Table 1 below.
The line-item details of the claim are as follows, Table 1:
Type of LTF Funding: Amount:
Pedestrian & Bikeway Facilities (PUC 99234) $ 126,056
Articles 4 & 8 $ 5,691,887
County of Santa Barbara Contribution $ 1,317,000
Regional Transportation Planning $185,303
Total $ 7,320,246
Attachment B is Santa Maria’s TDA Claim with additional details
Impact on the Community
TDA funds are the matching funds to Federal Transit Administration funds (approximately $7M) required for transit’s operating and capital needs. Approval of the TDA claim will ensure adequate funding, both state and federal, continues for SMRT’s services which provides lifeline transportation for thousands of daily commuters, students, elderly, and disabled residents in Santa Maria and throughout northern Santa Barbara County.
Other Agency Review
The SBCAG is a reviewing body for all TDA claims and coordinates the TDA funding transfer from the County of Santa Barbara to Santa Maria.
ATTACHMENT(S)
A. Resolution
B. FY 26-27 TDA Claim