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Transit is an innovative, modern bus system, owned by the public of the East Bay. Its family tree dates back to 1869, the year America's two coasts were joined by transcontinental rail. In that year, AC Transit's first predecessor began carrying passengers from the foot of Broadway through burgeoning Oakland in a horse-drawn rail car.
In November 1956, citizens voted to establish the Alameda Contra Costa Transit District. Funding for the District was initially provided in 1959 through a voter-approved bond of $16.5 million that allowed AC Transit to acquire the bankrupt Key System from the California Public Utilities Commission in 1960. Further funding mechanisms were approved by the voters, providing AC Transit with necessary operating assistance. The move to publicly operate a privately owned company was proof that voters viewed public transit as an integral component of their quality of life in the East Bay.
By 1974, AC Transit's service area stretched from the western Contra Costa County cities of San Pablo and Richmond to the southern cities of Fremont and Newark. It is important to note that with the exception of passenger fares, no special taxing authority currently exists for the Alameda-Contra Costa Transit District. Therefore, the District must rely on other agency recognition and cooperation at the federal, state, and local level to fund capital and operating needs.
AC Transit's service area is divided into two parts, called Special Transit Service Districts 1 and 2. Property taxes for the two districts are collected separately, and allocations for other local sales tax assistance are also made separately. However, transit operations are fully integrated. To the public, the entire AC Transit area is considered a single district.
Special Transit Service District 1 extends from San Pablo Bay to Hayward, including the cities of Richmond, San Pablo, El Cerrito, Albany, Berkeley, Emeryville, Oakland, Piedmont, Alameda, San Leandro, Hayward, and the unincorporated areas of Ashland, Castro Valley, Cherryland, El Sobrante, Kensington, and San Lorenzo. Special Transit Service District 2 consists of the cities of Fremont and Newark in southwestern Alameda County where AC Transit operates a network of local routes. Local service within Union City is operated by a separate agency, Union City Transit. Service to Palo Alto across the Dumbarton Bridge on the DB line is provided by a private operator under contract with a consortium of operators, led by AC Transit.