The Capital Area Rural Transportation System, which provides on-demand bus service for the City of Georgetown, will end service in the city Aug. 30.

The rural transportation provider will no longer receive funding to operate in the city after Georgetown was labeled as part of the Austin urbanized area by the U.S. Census Bureau in 2012.

"Last year at this time we were scrambling to figure out what to do in regards to the urban area designation," Georgetown Transportation Services Director Ed Polasek said. "[The Texas Department of Transportation] came through with one additional year of [funding] so we could continue with rural service for one additional year—this fiscal year—to give us time to work out a more practical plan to implement transit."

City staff has proposed a five-year, phased program that could continue a CARTS-type service in the 2013–14 fiscal year through an agreement with Capital Metro. The program could lead to a fixed-route bus service, Polasek said.

At a City Council workshop May 14, council members directed staff to include $159,600 in the budget to pay for the next year's service and continue additional studies. City Council will consider the city's budget for final approval in September.

Last year, in response to the urban designation, City Council directed city staff to develop a budget and interlocal agreement with Capital Metro—which is the designated recipient for federal transportation dollars—to administer the on-demand response program that could replace CARTS, said Meredith Highsmith, assistant research scientist with the Texas Transportation Institute's Transit Mobility Program.

The plan provides estimated dollar amounts the city may have to pay to fund a fixed-route system that could be fully operational by 2019.

"Already, some of the numbers we've been hearing in regards to service hours have increased since CARTS began running service in the city," Highsmith told the council. "You guys have considerable demand for transportation within the city itself."

In the past year, CARTS provided more than 11,000 trips and 5,000 hours of service.

"This is the first time we've actually seen ridership numbers and the fact that we have so much demand was kind of shocking to us," Polasek said.

Following the timeline in the plan, capital purchases could be made in 2015 and 2016, and routes could begin to be implemented in 2016. However, each year the council could reconsider its options, Polasek said.

In 2008, the city completed a study that included six routes with multiple stops, which could be used and implemented based on demand over a period of time. Polasek said new routes could also be identified.

The final memorandum of understanding and interlocal agreement with Capital Metro will be brought to council for final approval, Polasek said.