City Council Staff Report Page 1 of 4 January 13, 2026
Staff Report
Agenda Item No. 4.9
DATE: January 13, 2026
TO: Honorable Mayor and Members of the City Council
FROM: Joan Malloy, City Manager
SUBJECT: Adopt a Resolution Authorizing the City Manager to Exercise the Second Option Year to the Operations and Maintenance Agreement with MV Transportation, Inc., for Union City Transit (Fixed-Route, Paratransit, and Microtransit), with a Second Option Year Not-toExceed Amount of $8,157,217, and Authorizing the City Manager to Execute the Contract Amendment in a Form Approved by the City Attorney
EXECUTIVE SUMMARY
Staff recommends the City Council adopt a resolution authorizing the City Manager to exercise the second option year to the Operations and Maintenance Agreement with MV Transportation, Inc., for Union City Transit (fixed-route, paratransit, and microtransit), with a second option year not-to-exceed amount of $8,157,217, and authorizing the City Manager to execute the contract amendment in a form approved by the City Attorney.
STRATEGIC PLAN ALIGNMENT
Goal A: Foster fiscal health through disciplined long-term planning and cost control, heightened efficiency, increased revenue, and cost recovery.
BACKGROUND
On March 14, 2023, the City Council adopted Resolution No. 6096-23, awarding the Operation and Maintenance Agreement with MV Transportation, Inc., of Dallas, Texas, to operate Union City Transit services after a competitive bid process. The base period of the ensuing contract, C5948, was twenty-one (21) months, beginning April 1, 2023, and ending December 31, 2024. The contract included four (4) types of transportation services:
• Union City Transit: Fixed-Route bus service in Union City • Union City Paratransit: Americans with Disabilities Act (ADA) complementary service in Union City and Paratransit Plus non-ADA service to parts of Fremont, Hayward, and Newark
City Council Staff Report Page 2 of 4 January 13, 2026
• Union City Flea: Zone-based on-demand microtransit service open to the general public in Union City
• Ride-On Tri-City!: Wheelchair Accessible Vehicle (WAV) service for residents of Fremont and Newark with destinations in Fremont, Newark, and Union City The Ride-On Tri-City! program was overseen and paid for by the City of Fremont.
On September 3, 2024, the City of Fremont awarded a contract for a multi-year pilot of same-day wheelchair-accessible van (WAV) service to Via Transportation, Inc., commencing on January 1, 2025. This action also included not exercising the Ride-On Tri-City! Service in the first option year of contract C5948.
On December 10, 2024, Union City Transit staff were presented with an adjusted cost proposal for contract pricing, reflecting staff who were partially funded through the RideOn Tri-City! Portion of the contract, but are key to Union City Transit's administrative and maintenance operations.
The difference in annual costs for the first option year was approximately $199,236, and Union City Transit believed it could absorb the 2.61% cost increase but indicated that it would need to start evaluating future option years for financial viability.
On December 30, 2024, Union City Transit staff issued a Continuation of Service letter to MV Transportation, Inc., based on the revised cost proposal.
On January 28, 2025, the City Council adopted Resolution No. 2025-019, authorizing the City Manager to exercise the first option year of the Operation and Maintenance Agreement with MV Transportation, Inc.
On November 25, 2025, Union City Transit staff were presented with an adjusted cost proposal for contract pricing reflecting the recent union contracts for drivers and mechanics.
On December 29, 2025, Union City Transit staff issued a Continuation of Service letter to MV Transportation, Inc., based on the revised cost proposal.
DISCUSSION
Union City Transit initially awarded the contract based on a calendar year, meaning that the option years are tied to the calendar year starting on January 1 and not the fiscal year beginning on July 1. This was done because of the potential nexus with City Project No. 21-14, the Dumbarton Express Service contract, which is administratively overseen by the Alameda-Contra Costa Transit District (AC Transit), which preferred the term in calendar years rather than fiscal years. Union City Transit awarded the contract on March 14, 2023, presenting fiscal-year values for the City Council to consider and adopt to be consistent with the City of Union City’s biennial budget.
The table below shows Union City Transit’s three (3) services as approved initially, using six (6) months of each fiscal year (FY) to create the first option year, and the proposed cost changes in the same format, along with the percentage increase in total cost.
City Council Staff Report Page 3 of 4 January 13, 2026
Fixed-Route $184,557.49 $278,871.45 6 $2,780,573.64
Modified FY26 JanJun
Paratransit & Flea $89,398.95 $126,940.15 6 $1,298,034.60 Modified Option Year 2
Fixed-Route $184,557.49 $278,871.45 6 $2,780,573.64
Modified FY27
Jul-Dec
Paratransit & Flea $55,269.93 $67,789.47 6 $1,298,034.60 Total $8,157,216.48 1.71%
The difference in annual costs is approximately $137,263, and Union City Transit can absorb this 1.71% increase for the second option year. Still, it will need to implement service changes in February 2026 to ensure financial viability, as some State of California funds are expected to become unreliable.
Service Type Monthly
Fixed Fee
Monthly
Variable Fee Months Annual Totals
Percent
Increase
Fixed-Route $181,476.40 $276,464.34 6 $2,747,644.44
Paratransit $51,082.05 $72,520.41 6 $741,614.76
Original FY26 Jan-Jun
Flea $29,635.84 $42,809.03 6 $434,669.22
Fixed-Route $187,652.12 $290,366.63 6 $2,868,112.50
Paratransit $52,812.99 $76,217.59 6 $774,183.48
Original Option Year 2
Original FY27 Jul-Dec
Flea $30,640.69 $44,980.87 6 $453,729.36
Total $8,019,953.76
Service Type Monthly
Fixed Fee
Monthly
Variable Fee Months Annual Totals
Percent
Increase
City Council Staff Report Page 3 of 4 January 13, 2026
City Council Staff Report Page 4 of 4 January 13, 2026
Union City Transit has secured funding as follows for the second option year:
• Federal Transit Administration (FTA) Section 5307 ADA Set-Aside Operating • California Transportation Development Act (TDA)
• California State Transit Assistance (STA)
• Low Carbon Transit Operations Program (LCTOP)
• Alameda County Transportation Commission (Alameda CTC) Measure BB This item is presented to the City Council for consideration because the contractual financial responsibility of the City is increasing beyond the threshold of the City Manager’s authority.
FISCAL IMPACT
The second contract option period of one (1) year will be funded with $5,561,147 from the Transit Fund (Fixed-Route Account Number 511-34002-54114) and $2,596,070 for fixedroute service from the Paratransit and Transit Funds (Paratransit Account Number 512- 34022-54114 and Microtransit Account Number 511-34042-54114) for demand-response services (paratransit and microtransit) for using funds from the FTA, State of California, and Alameda County.
There will be no impact on the General Fund.
RECOMMENDATION
Staff recommends the City Council adopt a resolution authorizing the City Manager to exercise the second option year to the Operations and Maintenance Agreement with MV Transportation, Inc., for Union City Transit (fixed-route, paratransit, and microtransit), with a second option year not-to-exceed amount of $8,157,217, and authorizing the City Manager to execute the contract amendment in a form approved by the City Attorney.
Prepared by: Steve Adams, Transit Manager
Submitted by: Marilou Ayupan, Public Works Director
Attachments
1. Draft Resolution