BEFORE THE FEDERAL TRANSIT ADMINISTRATION

Charter Complaint

49 U.S.C. Section 5323(d)

Docket No. 2004-19

The Tecumseh Trolley & Limousine,

Complainant,

v\.

Capital Area Transportation Authority,

Respondent.

DECISION

[Summary]{.underline}

On November 1, 2004, The Tecumseh Trolley & Limousine (\"Tecumseh
Trolley\") filed a complaint with the Federal Transit Administration
(\"FTA\") alleging that Capital Area Transportation Authority
(\"Respondent\" or \"CATA\") had provided service in violation of FTA\'s
charter regulation, 49 Code of Federal Regulations (C.F.R.) Part 604.
The two services specifically complained of pertains to Respondent\'s
providing service for the Ag Expo and service for fraternities.
Respondent filed an answer dated December 9, 2004. Complainant filed a
reply on February 9, 2005 (the response is dated Jan. 3, 2005).
Respondent filed an additional response on May 6, 2005.

Upon reviewing the allegations in the complaint and the subsequent
filings of the Complainant and the Respondent, FTA has concluded that
one of the services in question does violate FTA\'s regulations
regarding charter service. Respondent is hereby ordered to cease and
desist in providing such illegal service in the future. Respondent is
also ordered to disallow improper charter mileage for the vehicles that
were used for the purposes of calculating useful life.

*[Complaint History]{.underline}*

Complainant Tecumseh Trolley filed its complaint with the FTA on
November 1, 2004. The complaint alleges that the Respondent had provided
illegal charter service[^1] by providing private charter service for the
Ag Expo, as well as running a fraternity \"bar hop\" service.

Specifically, Complainant alleges the following: CATA ran a closed door
shuttle service for the Ag Expo and that CATA was observed running \"bar
hop" services for individual fraternity houses. Complainant alleges that
when he attempted to board the CATA bus, he was told that the bus was
for a private party and he needed a student identification to board the
bus.

On Dec. 9, 2004, CATA responded to the complaint. In its response, CATA
stated that it did provide service for the Ag Expo, but that it does not
intend to provide the service again. CATA states, however, that the
service met the definition of mass transportation. CATA asserts that the
service was advertised, open door, and CATA determined the number of
buses, the routes and the schedule. CATA denies providing any \"bar
hop\" service.

On Feb. 9, 2005, FTA received a reply from the Complainant dated Jan. 3,
2005. In its reply, the Complainant states that the \"bar hop\" service
took place on Oct. 22, 2004. The service allegedly took place from the
300 block of Harrison Avenue in East Lansing, MI. Complainant also
continued to assert that the service provided for the Ag Expo was
impermissible charter service.

On May 6, 2005, CATA filed an additional response. In its response, CATA
provided an affidavit that no CATA service was provided on Oct. 22,
2004, other man regularly scheduled line-haul service; copies of
dispatch sheets showing that the only bus in service at the time in
question was the regular Route 25 bus; and a letter from Michigan State
University stating that there is no fraternity located at 335 Harrison
Street.

*[Discussion]{.underline}*

As Complainant has accurately stated, recipients of Federal financial
assistance cannot provide charter service using Federally funded
equipment or facilities, unless one of the limited exceptions applies.
In the absence of one of the limited exceptions, the recipients are
prohibited from providing the service. 49 C.F.R. Section 604.9(a).
Respondent is asserting that it did not provide direct charter service
for either the Ag Expo or a fraternity \"bar hop\" service.

*A. Ag Expo*

Under 49 C.F.R. Section 604.9(a), if a recipient desires to provide
charter service, it must first determine whether there are any willing
and able private charter providers. In the absence of one of the limited
exceptions, the recipients are prohibited from providing the service. 49
C.F.R. Section 604.9(a). Complainant is not asserting that any of the
charter exceptions apply, but rather that the service CATA provided was
charter service.

The regulations define charter service as the following:

> transportation using buses or vans, funded under the Acts of a group
> of persons who pursuant to a common purpose, under a single contract,
> for a fixed charge for the vehicle or service, who have acquired the
> exclusive use of the vehicle or service in order to travel together
> under an itinerary either specified in advance or modified after
> leaving the place of origin. Includes incidental use of FTA funded
> equipment for the exclusive transportation of school students,
> personnel, and equipment. 49 C.F.R. § 605.5(e).

Thus, a determination needs to be made as to whether Respondent\'s
service meets the definition of charter by examining the elements
required for charter service. In order to qualify as charter service,
the following questions need to be answered:

> 1\. Is this transportation service using buses funded with FTA money?
>
> 2\. Is the service for a common purpose?
>
> 3\. Is it under a single contract?
>
> 4\. Is it for a fixed charge for the vehicle or service?
>
> 5\. Is the exclusive use of the vehicles to travel together under an
> itinerary either specified in advance or modified after leaving the
> place of origin?

The Ag Expo service utilized buses that were funded with Federal funds.
There was a common purpose, specifically for the Ag Expo. Although the
Respondent indicates that CATA issued notices advertising the service as
a \"Special Route for Ag Expo\"; a notice is not the normal procedure
for adding new routes. It was a three-day event, not regularly scheduled
service. The service was for a common purpose; the exclusive use of the
vehicles was to transport individuals to the Ag Expo. Although the
service was open to the public, it was not mass transportation. It was
only for those individuals interested in attending the Ag Expo. CATA did
not have a formal contract, but it had an arrangement with Michigan
State University (\"MSU\").[^2] MSU paid CATA to provide the service and
CATA did not charge the riders for the service. The service was provided
for a fixed charge for the service. This service did not involve
additional buses on a regularly scheduled route, which would have not
been charter service, but rather involved service that was added without
following the required procedures for providing a new route. The
specific itinerary was to transport Ag Expo attendees from Parking Lot
89 to the Pavilion and MSU Farms. Based on all the characteristics of
the Ag Expo service, FTA determines that the service provided for the Ag
Expo constituted charter service. The Respondent has not asserted that
one of the charter exception applies; therefore, it constituted illegal
charter service.

Although the Respondent cites to the *California Bus Association v.
Sacramento Regional Transit District*, Charter Complaint No.2003-01, as
a basis for the assertion that the Ag Expo service was mass
transportation, the service at issue in the California case is
distinguishable. The Downtown Circulator service was a regular service
that the Grantee offered after following the public participation
process for adding new service, including holding a public hearing. CATA
does not argue that the Ag Expo service was intended to be new service.
In fact, it indicates it does not intend to provide the service again.

*B. \"Bar Hop\" Fraternity Service*

Based on the evidence submitted, there is not enough proof that the
alleged \"Bar Hop\" service occurred. The Complainant has provided no
additional evidence other than his word that the alleged service took
place. CATA has provided log records and an affidavit indicating that no
other service was provided on the evening of October 22, 2005, other
than regular line-haul service. Therefore, FTA makes no charter finding
with regard to the alleged \"Bar Hop\'\' service.

*[Conclusion]{.underline}*

Based on all the information provided, FTA finds that the Respondent
provided illegal charter service for the Ag Expo. FTA makes no
determination regarding the alleged \"Bar Hop\" service.

*[Remedy]{.underline}*

Complainant has requested that Respondent immediately cease the charter
operations at issue. CATA has indicated that it does not intend to
provide service for the Ag Expo in the future. If Respondent desires to
provide charter service in the future, it must follow the notice and
review procedures for determining if there are any willing and able
private charter operators pursuant to

49 C.F.R. Part 604.

*[Order]{.underline}*

FTA finds that Respondent did provide impermissible charter service and
orders it to cease and desist any such further service. Refusal to cease
and desist in the provision of this service could lead to additional
penalties on the part of FTA. Additionally, the mileage for improper
charter use should not accrue towards the useful life of the Federally
funded vehicles.

In accordance with 49 C.F.R. § 604.19, the losing party may appeal this
decision within ten days of receipt of the decision. The appeal should
be sent to Jennifer Dorn, Administrator, FTA, 400 Seventh Street, S.W.,
Room 9328, Washington, D.C. 20590.

Donald Gismondi

Acting Regional Administrator

June 16, 2005

[^1]: Respondent receives Section 5307 and 5309 funds from FTA;
    therefore, they must comply with the charter regulations.

[^2]: FTA confirmed in a telephone call with CATA\'s counsel on June 16,
    2005, that the Ag Expo service was provided through a fee
    arrangement with Michigan State University, but there was not a
    formal contract.