AGENDA CAPTION:
Title
Consider approval of Resolution 2026-156R, approving a Public Transit System Interlocal Agreement with the Capital Area Rural Transportation System (“CARTS”) to provide public transit service and maintenance in the San Marcos urbanized area, with funding to CARTS in the amount of $2,489,447.00, of which $792,101.00 is to be paid by the city and the balance to be paid from federal and state sources; authorizing the City Manager, or her designee, to execute the agreement on behalf of the city; and declaring an effective date.
Body
Meeting date: September 1, 2026
Department: Public Works
Amount & Source of Funding
Funds Required: $2,486,747.00
Account or Project Number (C = CIP funds): 23006345-52450
Funds Available: $2,486,747.00
Account Name: Local City Route
Fiscal Note:
Prior Council Action: Res. 2025-165R FY 2026 Public Transit System Interlocal Agreement approved September 2, 2025
City Council Strategic Initiative: [Please select from the dropdown menu below]
Mobility & Connectivity
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Comprehensive Plan Element (s): [Please select the Plan element(s) and Goal # from dropdown menu below]
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N/A Transportation - TR-2: Create a multi-modal, well-connected, and efficient transportation network that minimizes congestion, energy use, and climate pollutants
N/A Core Services
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Background Information:
The City of San Marcos is the designated Direct Recipient of Federal Transit Administration (FTA) funds for the San Marcos Urbanized Area. After the community exceeded a population of 50,000 in the 2010 Census, San Marcos transitioned from a rural transit district to a small urbanized area. As a result, the City became responsible for ensuring public transportation services for the community. To meet this obligation, the City has maintained a long-standing partnership with the Capital Area Rural Transportation System (CARTS) and has contracted with CARTS to operate small urban public transit services since 2013. Prior to this transition, CARTS offered rural transit service in San Marcos starting in 1993.
CARTS is committed to continuing this long standing partnership by providing transit service for the residents and visitors in San Marcos for the next fiscal year. The only change from the Fiscal Year 26 Interlocal Agreement (ILA) to the Fiscal Year 27 ILA is the service cost per hour. The service cost per hour increases 4.5% in this year’s hourly rate, going from $90.00 per service hour to $94.05 per service hour. This rate adjustment is due to increases in maintenance costs from an aging fleet, the recent volatility of fuel prices and increases in personnel costs. Those factors require this increase.
The City of San Marcos is recognized by the FTA as a small urban transit system and, as such, receives federal funding to support the provision of public transportation services. These services include fare free fixed route bus operations within the city, complementary paratransit service for individuals with disabilities, and interurban express service connecting San Marcos to Austin (Fare is $4 one way or $6 for daily pass).
The City contracts with CARTS to supply operators, vehicles, and vehicle maintenance services. The Interlocal Agreement between the City of San Marcos and CARTS ensures ongoing delivery of fixed route service, complementary paratransit, and interurban express service to Austin. CARTS continues to manage daily operations and maintenance responsibilities for the transit system.
The total value of the FY 2027 agreement is $2,486,747.00, with the City responsible for a local share of $792,101.00. Funding for this agreement is provided through Federal Transit Administration and Texas Department of Transportation Public Transportation Division grants, with local funds fulfilling the required federal match.
The costs will be apportioned as follows:
$279,935.00 - FTA American Rescue Plan funding
$1,077,906.00 - FTA section 5307 Small Urbanized Area
$285,805.00 - TxDOT-PTN Urbanized Area
$792,101.00 - General fund
$60,000.00 - Interurban express fares (projected)
Public transit in San Marcos provides significant benefits to the community, including:
• Greater mobility and access to employment, education, medical care, and other essential destinations.
• A low cost transportation option, with fare free service within San Marcos and affordable fares for trips to Austin ($4 one way or $6 for a daily pass).
• Improved air quality by reducing single occupancy vehicle trips and lowering greenhouse gas emissions.
• Traffic congestion relief by moving more people using fewer vehicles.
• Support for economic development through increased access to businesses and job centers.
Council Committee, Board/Commission Action:
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Alternatives:
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Recommendation:
Staff recommends approval of the item