When the U.S. Census Bureau reclassified San Marcos as an urban area in March, the classification meant Capital Area Rural Transportation System would no longer be able to use its federally allocated rural funds in the area.

To ensure residents could still get to their destinations using the buses, CARTS formed an urban-rural transit district, which allows the organization to receive and administer funds allocated for urban areas directly from the state and federal government and, thus, maintain operations in San Marcos.

Laurie Moyer, managing director of community services for the City of San Marcos, said the city is currently on a six-month contract with CARTS to provide regular service to all its stops in San Marcos. The transit provider will also offer paratransit services—those that require riders to call and schedule transportation—in Kyle and Buda.

"People who use the CARTS system now really won't see any significant changes immediately," Moyer said. "We will be making some minor route adjustments to provide additional senior services, and we want to make some bus stop improvements."

The six-month extension will allow CARTS to continue servicing the area using its rural funds. Moyer said that at the end of the six months, the city will use its new federally allocated urban funds to begin a three-year contract with CARTS. The city and CARTS will use the three years to determine a long-term transit solution for the area.

Transportation collaboration

San Marcos and CARTS have begun working with Texas State University on a possible partnership to share transportation services by 2015.

"Should we find an operator that makes sense for both the university and the city, then we will create a new system based upon university and city operations, and we will no longer contract with CARTS. We will have the same service; it will just be combined into the new system with the university," she said.

According to the CARTS, the system serves nine counties in Central Texas, with San Marcos as the largest city in its service area. From September 2011 to August 2012, 144,822 riders used CARTS' fixed-route and paratransit services in San Marcos, Kyle and Buda.

CARTS President David Marsh said that going forward, the organization is more focused on improving quality of service than increasing ridership.

Marsh said the university, San Marcos and CARTS will team up to create a uniform system for bus stops.

The project will involve creating new flags for bus stops and signage indicating whether the stop is shared between the city and university. Marsh said this project is the first that will help achieve a collaborative transit system between Texas State and San Marcos.

Texas State currently contracts with First Transit for its transportation services, and the university recently decided to extend that agreement until August 2014. In the meantime, the university will release a request for proposals from other transportation companies to take over provision of the service.

Joe Richmond, director of transportation services at Texas State, was recruited from the University of North Texas in February. Prior to his work at UNT, Richmond acted as the liaison between The University of Texas and Capital Metro. Richmond said he believes his previous work with municipal bodies and educational institutions will serve him well in the coming years.

"We want to partner and cooperate, but our first priority is the students' transportation for Texas State," Richmond said. "[The partnership] is new in the program, and everyone is looking to see how it evolves."

Richmond said the university's bus service provides several million rides each year. Because the buses are full, the possibility of shared shuttles between the university and city could be a challenge. He said it is more likely that a deal would include shared facilities through a common service provider.

"This is a transit-rich environment," he said. "A lot of transportation over the years is going to be coming here. The Lone Star Rail, all this stuff up and down I-35, the City of San Marcos, the urban district... It's at a turning point. It's exciting stuff."

New urbanized areas

Marsh said that when the U.S. Census Bureau reclassified Kyle as part of Austin's urbanized area, it took both Kyle and San Marcos by surprise.

"Everyone expected Kyle to be part of a Kyle-San Marcos urbanized area, and that's what all of our planning and work had been directed toward," Marsh said. "But now, all that is by the wayside because they're part of the [Austin] metropolitan area, and the appropriate mechanism for funding service there is going to have to come through Capital Metro."

Kyle and Buda have never had the kind of regularly scheduled service that San Marcos has, but Chance Sparks, the City of Buda's director of planning, said the city has been proactive in talking to their new transit service provider, Capital Metro, about possible routes.

Sparks said that although the population of both cities has skyrocketed since the 2000 census, there is no guarantee that Capital Metro will be able to begin providing the type of service it offers in Austin and Leander.

Capital Metro funds itself from a 1 percent sales tax in the participating jurisdictions. Kyle and Buda are both at the state's sales tax cap of 8.25 percent, and Sparks says this will probably provide the biggest hurdle for the cities and transit provider to overcome.

"Cap Metro is having to grapple with the question of 'OK, these areas have started to urbanize. They're eligible for service, but how do we do that in a method that's equitable?' " Sparks said.

Todd Hemingson, vice president of strategic planning and development for Capital Metro, said they along with officials from Buda and Kyle have been in discussions about how to provide transit service despite the lack of sales tax income in the area.

Hemingson said Capital Metro will be presenting a range of options to the cities as well as possible ways to fund the service without using sales tax.

"Given the proximity of those two cities, it might make sense for them both to participate. Then residents from both areas could make use of a park-and-ride and then express bus service into downtown Austin, UT and the Capitol complex," Hemingson said. "I think that would be an ideal outcome. There are economies of scale and so on, but it will really be an independent decision on the part of each entity."