Council Report

City Council Report 
 
Date:  
January 26, 2026 
To: 
 
City Council 
Through: 
Brent Stoddard, Assistant City Manager  
 
 
 
From:  
Jodi Sorrell, Transit Services Director 
 
 
 
Subject: 
Intergovernmental Agreement with Valley Metro Rail, Inc. (METRO) for 
light rail operations and maintenance for Fiscal Year 2025/26 
Districts 3 and 4 
 
 
Purpose and Recommendation 
 
The purpose of this report is to recommend and request the City Manager, or his 
designee, to enter into a contract with Valley Metro Rail, Inc. (METRO) for the Mesa 
share of costs for operation of light rail service, agency operating costs and 
reimbursement for landscaping maintenance authorizing the City to disburse funds in 
an amount of $18,043,000 during Fiscal Year 2025/26. 
 
Background 
 
The City of Mesa and METRO entered into a Light Rail Transit Operations Master 
Cooperative Funding Agreement (“Master Agreement’), effective November 17, 
2008. The Master Agreement specifies that each fiscal year the METRO Board of 
Directors will identify annual operations and maintenance funding amounts for the 
member cities. The annual operations and maintenance costs allocated is based 
on the number of miles light rail operates within each city.   
 
Discussion 
 
Operations and maintenance costs established by the METRO Board of Directors 
for Fiscal Year 2025/26 are $108,009,000.  The operations and maintenance 
budget include safety, security, propulsion power, vehicle maintenance, systems 
and facilities maintenance, transportation contractors, materials and supplies, 
general and administrative agency costs and liability insurance. These costs are 
distributed to Mesa, Phoenix and Tempe based on light rail miles in each city. 
Mesa’s estimated costs are $18.043,000.  The City also has Valley Metro maintain 
landscaping at the Sycamore Transit Center and Gilbert Road Transit Center. This 
additional work is estimated at $22,000 in Fiscal Year 2025/26.  For a total estimate 
of $18.043,000.  
 
Mesa uses several revenue sources to offset the General Fund contribution to fund 
light rail operations. This includes approximately $2,933,743 in forecasted light rail 
fares, advertising revenue, Arizona Lottery funds and other revenues help reduce the

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funding contribution by the City. After applying the various light rail revenue sources, 
Mesa’s General Fund contribution to light rail operations is $15,109,257.    
 
Fiscal Impact 
 
Light rail operations, maintenance and agency operating costs are approved and 
included in the City of Mesa Transit Services budget for Fiscal Year 2025/26 in the 
amount of $18,043,000. 
 
Coordinated With 
 
METRO has reviewed and agrees with the terms of the funding agreement. The City 
Attorney has also reviewed and concurs with the amendment as to form.