REPORT TO COUNCIL
SUBJECT
Title
Authorize the Issuance of the Service Order for the Sunnyvale Microtransit Service with Via Transportation, Inc. Doing Business as Nomad Transit LLC for the Sunnyvale Microtransit Service for $8,358,000, Authorize City Manager to Execute all Agreements Related to the Operations of the Sunnyvale Microtransit Service, and Approve Budget Modification No. 14 in the Amount of $5,096,000
Report
BACKGROUND
In 2023, Council proposed a Study Issue to “Evaluate Range of Options for Shuttle Service and Alternative Transportation Options for Fremont and Homestead High School Students Who Live in North Sunnyvale” (Study Issue DPW 23-06). Study Issue DPW 23-06 was intended to evaluate various potential transportation options including, but not limited to, partnering with neighboring cities on any existing shuttle service, expanding Santa Clara Valley Transportation Authority (VTA) bus service, coordinating with Fremont Union High School District (FUHSD) on school bus options, and partnering with existing ride share companies.
At the January 9, 2024 Council meeting, Council directed staff to evaluate options for an on-demand shuttle service in Sunnyvale like the Silicon Valley Hopper. Council also asked staff to identify potential grant opportunities and consider replacing Study Issue DPW 23-06 with this effort.
At the March 26, 2024 Council meeting, City Council received information on potential shuttle options, authorized the City Manager to apply for microtransit grants with a 50% maximum local match, and directed staff to pause work on Study Issue DPW 23-06 until Transit & Intercity Rail Capital Program (TIRCP) or Environmental Protection Agency (EPA) grants were announced (RTC No. 24-0026). Council also directed staff to explore partnerships with the Fremont Union High School District, Foothill De Anza College District, and the business community to share in the funding of a microtransit program.
In April 2024, staff worked with VTA to submit a grant application for the EPA Climate Pollution Reduction Grant Program to launch and operate an on-demand citywide microtransit shuttle service, but the application was unsuccessful.
In July 2024, staff submitted a grant application to the California State Transportation Agency (CalSTA) for the Sunnyvale Zero-Emission First-Mile Last-Mile (FMLM) Microtransit Project, also known as the Sunnyvale Microtransit Service. The total project cost is estimated at $8,358,000 for five (5) years of service, with a request for $4,179,000 in TIRCP grant funding and a required 50% local match from the City. The proposed program will utilize nine (9) zero-emission vehicles to provide citywide, on-demand, low-cost transportation service, operating Monday to Friday from 7 a.m. to 9 p.m., and Saturday to Sunday from 9 a.m. to 5 p.m., covering the entire 19.2 square miles of Sunnyvale.
On October 23, 2024, the City was notified that its grant application was successful, resulting in a $4,179,000 TIRCP grant award, covering 50% of the total project cost.
On September 30, 2025, the Sunnyvale City Council adopted a resolution authorizing the City Manager to execute a Master Agreement with the California Department of Transportation, which includes all grant-related documents required for state-funded transit projects, including the TIRCP grant awarded for the Sunnyvale Microtransit Service (RTC No. 25-0803).
At their October 16-17, 2025 meeting, the California Transportation Commission (CTC) approved to allocate $4,179,000 in state funds to the City of Sunnyvale to launch and operate the Sunnyvale Microtransit Service (Attachment 1).
DISCUSSION
TIRCP is a state grant program that funds major transit projects to reduce greenhouse gas emissions, increase ridership and improve sustainable transportation in California. It is funded by Cap-and-Trade and Senate Bill No. 1 and supports projects like new transit services and zero-emission vehicles.
The Sunnyvale Microtransit Service is designed to provide efficient and flexible transportation solutions that bridge the FMLM gap, enhancing connectivity for both residents and commuters throughout the city. Currently, VTA operates the Peery Park Rides Shuttle Program, a two-year pilot microtransit service managed in partnership with the City of Sunnyvale, which serves a 3.5-square-mile area encompassing the northwest area of the city, including Peery Park Specific Plan Area, Downtown Sunnyvale, and the Caltrain Station. With the support of the TIRCP grant, the new microtransit program will build upon and expand the reach of the Peery Park Rides Shuttle Program, offering broader coverage to better meet community needs. After the Citywide service is launched, both the new Sunnyvale Microtransit Service and the existing Peery Park Rides Shuttle Program will operate in parallel for approximately six (6) months. At the conclusion of the two-year pilot Peery Park Rides Shuttle Program, the Sunnyvale Microtransit Service will continue operations offering FMLM services within the city. The Peery Park Transportation Management Association, a business-driven effort, would evaluate the Peery Park Rides pilot program to determine whether the businesses in Peery Park Specific Plan area would provide funding to continue the Peery Park Rides Shuttle Program or contribute funds for operation of Sunnyvale Microtransit Service.
The Transportation and Traffic Division in the Department of Public Works will be responsible for the management of the TIRCP grant.
EXISTING POLICY
Council Policy 7.1.5 Grants, Donations, Contributions and Sponsorships:
The City Manager may apply for grants of any dollar amount but shall notify the Council when grants are being pursued pursuant to Council Policy 7.1.1 (Fiscal - Long Range Goals and Financial Policies), B.4. (Grants and Intergovernmental Assistance). The City Manager may accept and appropriate grant funds up to $250,000 that do not require an unbudgeted local match or obligate the City to any unplanned ongoing expenses, through an administrative budget modification. Any grants of $250,000 or more, or that require an unbudgeted local match or obligate the City to unplanned ongoing expenses, shall require Council approval of a budget modification before funds can be expended by staff. The budget modification shall include the use to which the grant will be placed; the objectives or goals of the City that will be achieved through use of the grant; the local match required, if any, plus the source of the local match; any increased cost to be locally funded upon termination of the grant; and the ability of the City to administer the grant.
This grant does not meet all of the criteria to be administratively appropriated by the City Manager; therefore a budget modification is required. Grant funds from the CTC have external reporting requirements and fall under the federal single audit guidelines.
Pursuant to Sunnyvale Charter Section 1305, at any meeting after the adoption of the budget, the City Council may amend or supplement the budget by motion adopted by affirmative votes of at least four members so as to authorize the transfer of unused balances appropriated for one purpose to another, or to appropriate available revenue not included in the budget.
In accordance with Sunnyvale Municipal Code Section 2.08.220(a), the purchasing officer may authorize the city's participation with one or more other governmental, public or quasi-public agencies in a cooperative agreement for the procurement of goods and/or services, provided that at least one of the agencies has solicited bids using methods similar to those set forth in Section 2.08.060.
ENVIRONMENTAL REVIEW
This action is exempt from the California Environmental Quality Act (CEQA) pursuant to Public Resources Code Section 21080(b)(10) which provides that CEQA does not apply to a project for the institution or increase of passenger or commuter services on rail or highway rights-of-way already in use, including modernization of existing stations and parking facilities. Specifically, the proposed project will utilize nine (9) electric vehicles which will travel on public streets within City limits and will offer City residents and commuters an alternative to single-occupancy vehicles. The City filed a Notice of Exemption with the State Clearinghouse on March 31, 2025 (Attachment 2).
FISCAL IMPACT
The TIRCP Seventh Round grant funds require a 50% local match. Currently, $835,800 (or 20%) of the local match requirement has been appropriated from the Council Service Level Set Aside in the General Fund to Project 836340 - Transportation and General Fund Grant Match, with the remaining $3,343,200 committed over the following four years in the FY 2025/26 General Fund 20-Year Resource Allocation Plan. Due to upfront costs, it is anticipated that $917,000 is needed for the local match for the first year of the program.
Budget Modification No. 14 has been prepared to transfer $917,000 from Project 836340 to a new project, Sunnyvale Microtransit Service, as well as appropriate $4,179,000 for the TIRCP Grant, for a total modification in the amount of $5,096,000. The remainder of the local match requirement will be appropriated in the new project as part of FY 2026/27 Budget.
Budget Modification No. 14
FY 2025/26
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Current |
Increase/ (Decrease) |
Revised |
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General Fund |
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Revenues |
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TIRCP Grant |
$0 |
$4,179,000 |
$4,179,000 |
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Expenditures |
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Project 836340 - Transportation and General Fund Grant Matching |
$3,188,314 |
($917,000) |
$2,271,314 |
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|
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New Project - Sunnyvale Microtransit Service |
$0 |
$5,096,000 |
$5,096,000 |
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PUBLIC CONTACT
Public contact was made by posting the Council meeting agenda on the City's official-notice bulletin board at City Hall, at the Sunnyvale Public Library and in the Department of Public Safety Lobby. In addition, the agenda and this report are available at the City Hall reception desk located on the first floor of City Hall at 456 W. Olive Avenue (during normal business hours), and on the City's website.
ALTERNATIVES
1. Approve Budget Modification No. 14 to appropriate $4,179,000 in Transit and Intercity Rail Capital Program Grant Funds and $917,000 from the General Fund for the Sunnyvale Microtransit Service, authorize the issuance of the Service Order for the Sunnyvale Microtransit Service with Via Transportation, Inc. doing business as Nomad Transit LLC for the Sunnyvale Microtransit Service for $8,358,000, and authorize the City Manager to execute all Agreements related to the operations of the Sunnyvale Microtransit Service.
2. Do not approve Budget Modification No. 14 to appropriate $4,179,000 in Transit and Intercity Rail Capital Program Grant Funds and $917,000 from the General Fund for the Sunnyvale Microtransit Service, do not authorize the assuance of the Service Order for the Sunnyvale Microtransit Service with Via Transportation, Inc. doing business as Nomad Transit LLC for the Sunnyvale Microtransit Service for $8,358,000, and do not authorize the City Manager to execute all agreements related to the operations of the Sunnyvale Microtransit Service.
3. Other action as directed by Council.
STAFF RECOMMENDATION
Recommendation
Alternative 1: Approve Budget Modification No. 14 to appropriate $4,179,000 in Transit and Intercity Rail Capital Program Grant Funds and $917,000 from the General Fund for the Sunnyvale Microtransit Service, authorize the issuance of the Service Order for the Sunnyvale Microtransit Service with Via Transportation, Inc. doing business as Nomad Transit LLC for the Sunnyvale Microtransit Service for $8,358,000, and authorize the City Manager to execute all Agreements related to the operations of the Sunnyvale Microtransit Service.
JUSTIFICATION FOR RECOMMENDATION
Providing a citywide on-demand shuttle service in Sunnyvale will bridge the FMLM gap which would enhance connectivity for residents and commuters of all modes throughout the city. In addition, the Sunnyvale Microtransit Service will provide a flexible transportation option for students to attend school as well as after school activities. Most importantly, Sunnyvale Microtransit Service aligns with the City’s Climate Action Goal to reduce pollution and create a greener, healthier Sunnyvale by decarbonizing transportation.
Levine Act
LEVINE ACT
The Levine Act (Gov. Code Section 84308) prohibits city officials from participating in certain decisions regarding licenses, permits and other entitlements for use if the official has received a campaign contribution of more than $500 from a party, participant, or agent of a party or participant in the previous 12 months. The Levine Act is intended to prevent financial influence on decisions that affect specific, identifiable persons or participants. For more information see the Fair Political Practices Commission website: www.fppc.ca.gov/learn/pay-to-play-limits-and-prohibitions.html
An “X” in the checklist below indicates that the action being considered falls under a Levine Act category or exemption:
SUBJECT TO THE LEVINE ACT
___ Land development entitlements
___ Other permit, license, or entitlement for use
_X_ Contract or franchise
EXEMPT FROM THE LEVINE ACT
___ Competitively bid contract*
___ Labor or personal employment contract
___ Contract under $50,000 or non-fiscal
___ Contract between public agencies
___ General policy and legislative actions
* "Competitively bid" means a contract that must be awarded to the lowest responsive and responsible bidder.
Staff
Prepared by: Erik Trujillo, Transportation Planner
Reviewed by: David Battaglia, Purchasing Officer
Reviewed by: Angela Obeso, Transportation and Traffic Manager
Reviewed by: Chip Taylor, Director of Public Works
Reviewed by: Matthew Paulin, Director of Finance
Reviewed by: Sarah Johnson-Rios, Assistant City Manager
Approved by: Tim Kirby, City Manager
ATTACHMENTS
1. Transit and Intercity Rail Capital Program - Program Allocation Plan Update
2. CEQA Notice of Exemption
3. Draft Services Agreement
4. 791 Purchasing Cooperative and Vendor Agreement