In Turkey, municipalities provide a major portion of the city public transportation service. Since the service has to be provided potentially to every resident, and at a low price, municipalities are often left struggling with negative balance. This implies that operating under low cost is essential for survivability. We conduct a study to analyze the public bus transportation system in Ankara which is the capital city of Turkey. The analysis reveals that there exist inefficiencies in the service due to fleet allocation, routing, dispatch frequency, and scheduling of the vehicles.Considering the daily and hourly transportation needs of the passengers, we determine routes, dispatch frequencies and schedules through a mixed integer programming model. The solution of the model is compared with the current practice under performance measures such as demand coverage, transit duration, and cost. Results show that there is potential for improvement.