January 2, 2003

Paul J. Yesawich, III, Esq.

Harris Beach

99 Garnsey Road

Pittsford, New York 14534

Re: Charter Service Complaint Docket No. 2002-02

Appeal from Regional Administrator\'s Decision

Dear Mr. Yesawich:

The Rochester-Genesee Regional Transportation Authority (RGRTA) sent its
Appeal from the September 18, 2002, charter service decision of Federal
Transit Administration (FTA) Regional Administrator Thompson to me on
September 30, 2002. On October 4, 2002, FTA accepted the Appeal of RGRTA
as timely filed. On October 8, 2002, Kemps Bus Service, Inc. (Kemps)
filed its Response to RGRTA\'s Appeal. RGRTA received Kemps\' response
on October 14, 2002, and submitted its Rebuttal on October 24, 2002.

**Procedural Finding**

FTA\'s Charter Service appeal procedure states that:

> The Administrator will only take action on an appeal if the appellant
> presents
>
> evidence that there are new matters of fact or points of law that were
> not available
>
> or not known during the investigation of the complaint.

49 CFR § 604.19(b).

On October 4, 2002, FTA accepted RGRTA\'s Appeal. Having thoroughly
examined the evidence presented by RGRTA of new matters of fact or
points of law, it is apparent that there are no *new* matters of fact or
points of law that were not available during the time the original
investigation was pending. I, therefore, will not take action on this
Appeal. Accordingly, the September 18, 2002, decision of Regional
Administrator Thompson is administratively final.

*New Matters of Fact*

RGRTA stated that it did not receive a copy of all the documents and
other evidence submitted by the complainant in this matter. RGRTA stated
that if it had received such

evidence, it would have been able to respond to that evidence and the
outcome of the proceeding may have been different. Specifically, RGRTA
stated that as of September 30, 2002, it had not received a copy of
Kemps\' second rebuttal dated May 21, 2002. The agency file indicates
that Kemps\' letter dated May 21, 2002, was sent to Don Riley, CEO,
RGRTA. Also, Kemps\' October 8, 2002, Response to the Appeal, Tab C,
contradicts RGRTA\'s claim by providing a copy of the letter itself, the
certified mail receipt, and the return receipt signed by a RGRTA
representative. RGRTA did not dispute this in its October 24, 2002,
Rebuttal.

In addition, RGRTA presented \"new\" evidence in the form of an
affidavit from RGRTA Chief Financial Officer Robert Frye concerning
numbers of paid riders on routes located entirely within and partially
within the Rochester Institute of Technology (RIT) campus during the
period September 1, 2001, until August 31, 2002. Mr. Frye\'s affidavit
relies on data that was within the control of RGRTA at all times during
the investigation of this complaint by Regional Administrator Thompson,
but RGRTA did not present it until its Appeal. Therefore, RGRTA has not
presented any \"new matter of fact\" within the meaning of 49 CFR §
604.19(b) that would constitute grounds for me to act on this Appeal.

*New Points of Law*

In its Appeal, RGRTA argues that FTA committed various \"errors of law\"
in its decision. Asserting an \"error of law,\" however, is not a proper
ground for appeal. Section 604.19(b) states that the Administrator will
take action on an appeal only if the appellant presents evidence that
there are \"new \... points of law that were not available or not known
during the investigation of the complaint.\" RGRTA has failed to meet
this standard. While RGRTA disputes FTA\'s reasoning, RGRTA does not
allege a specific \"point of law\" that was not available or known to
RGRTA during the investigation. RGRTA, therefore, has not presented any
new points of law that would constitute grounds for me to act on this
Appeal.

**Advisory Opinion**

For advisory purposes only, I address here RGRTA\'s specific arguments
alleging \"errors of law\" in the Regional Administrator\'s decision.
Recipients of Federal financial assistance are prohibited from providing
charter service, except in very limited circumstances, 49 CFR §
604.9(a). FTA Regional Administrator Thompson investigated the charter
service complaint brought by Kemps, a local private carrier, against
RGRTA, on March 18, 2002. Regional Administrator Thompson\'s September
18, 2002, decision found that RGRTA provided impermissible charter
service and ordered it to cease and desist any such further service as
soon as practicable, in accordance with its existing contracts.

The service specifically complained of is RGRTA\'s bus service to a
Rochester firefighter\'s funeral service near Syracuse, New York on
March 12, 2002; a school field trip service provided by Livingston Area
Transportation Service (LATS), a subsidiary of

RGRTA, on March 15, 2002; transportation service provided by RGRTA to
Siena Catholic Academy on March 27, 2002; service from a senior living
complex to a local supermarket, service between parking lots and a
country club for the Ladies Professional Golf Association (LPGA)
Tournament in June 2001 and June 2002; and service provided to the
Rochester Institute of Technology (RIT) for commencement on May 25-26,
2002 and for intercampus shuttle service that is not part of RGRTA\'s
regular route service. In addition, on May 6, 2002, Kemps complained
about the direct agreement RGRTA has with the Town of Chile to provide
charter service.

*Definition of Charter Service*

FTA\'s charter service regulation provides that recipients of FTA
funding must enter into an agreement with FTA that the recipient will
provide charter service that uses equipment or facilities provided under
the Federal transit laws only to the extent that there are no private
charter service operators willing and able to provide the charter
service that the recipient desires to provide, unless one or more of the
exceptions in 49 CFR 604.9 applies, 49 CFR § 604.7. Charter service is
defined as \"transportation using buses or vans, or facilities under the
Acts of a group of persons who pursuant to a common purpose, under a
single contract, at a fixed charge (in accordance with the carrier\'s
tariff) for the vehicle or service, have acquired the exclusive use of
the vehicle or service to travel together under an itinerary either
specified in advance or modified after having left the place of
origin.\" 49 CFR § 604.5(d).

*Wegmans Grocery Shuttle*

Kemps complained that local supermarkets work directly with RGRTA to
provide transportation. RGRTA provides what it refers to as \"regular
lease service\" from various senior citizen complexes to Wegmans grocery
store. RGRTA acknowledged that this service is paid for by Wegmans and
that no fare is required of any passenger. RGRTA did not provide a copy
of a written contract between itself and Wegmans. RGRTA argues that
these are public routes with publicly advertised schedules and fares
that any member of the public may use. RGRTA argued it has operated this
service for more than twenty years and that FTA has not questioned this
service in its triennial reviews.

In its April 23, 2002, correspondence, RGRTA provided a newly revised
\"grocery shuttle outline\" showing layovers at the store of from 40 to
100 minutes from arrival to leaving. According to the \"grocery shuttle
outline,\" the buses do not proceed to any other destination once they
arrive at the store; the buses idle and wait for the grocery store
customers to complete their shopping before leaving the store. In
addition, the \"grocery shuttle outline\" does not look anything like
the schedules and maps contained in RGRTA\'s regular service schedules.

In response to FTA\'s request to provide previous existing schedules of
its Wegmans service, on July 15, 2002, RGRTA provided maps and schedules
that are partially handdrawn and hand-written, do not include details
like location of bus stops or bus stop arrival and departure times, and
that do not appear anything like RGRTA\'s other maps

and schedules. The only documents that include definite arrival and
departure times at specific stops also include specific details to the
bus driver about where and when to take a service road and what
direction to take at a stop-sign along with directions to \"pick up
group\" and \"drop off group.\" The schedule also states, \"Please stop
at First Federal Bank for any passengers requesting to get off at that
location.\"

RGRTA stated that schedules for this service are available at its
Customer Service Center, Midtown Sales Center and Reception Desk;
however, these measures do not indicate widespread availability of the
information to the general public. The schedules are not published in
the same format as the regular service RGRTA provides. The schedules
indicate extended layovers so that Wegmans customers can conduct their
business. It is clear from reviewing the schedules that the service
RGRTA is providing to Wegmans is prohibited contract charter service for
the benefit of Wegmans customers rather than regular mass transportation
for the public at large. RGRTA provides the service for a group of
persons (persons living in senior citizen complexes) who pursuant to a
common purpose (grocery shopping at Wegmans) at a fixed charge (paid by
Wegmans) have acquired the exclusive use of the vehicle or service (the
buses layover at Wegmans for the senior citizens to return) to travel
together under an itinerary either specified in advance or modified
after having left the place of origin (riders are taken to Wegmans, may
alight at First Federal Bank, and return to their point of origin).

*Ladies Professional Golf Association Wegmans Rochester International
Golf Tournament*

In response to Kemps\' complaint, RGRTA acknowledged that it has
provided shuttle service to and from the Locust Hill Country Club in
Pittsford, New York, for the Ladies Professional Golf Association (LPGA)
Tournament. This is a special five-day annual event and RGRTA produced
evidence that it provided this service for the past two years and
contemplates providing it again in 2003. Based on the \"Public
Schedule\" RGRTA submitted, it provided either five-minute or ten-minute
service from various parking lots in Rochester to the Locust Hill
Country Club in Pittsford, New York, from June 4 through June 10, 2001.

As evidence of its control over the LPGA service, RGRTA provided a copy
of the contract between itself and Disabled Children of Monroe County
Golf Tournament, Inc., dated May 8, 2002. RGRTA did not charge any fare
to passengers because New York State subsidized \$60,000 in
transportation costs. Disabled Children of Monroe County Golf
Tournament, Inc., did not provide a cash subsidy, but in-kind
advertising services valued at \$10,000. The contract indicated that
RGRTA was to provide buses from June 17 through June 23,2002, and
through June 24, 2002, should a weather delay extend the event. Exhibit
A of the contract indicated specific days of service, shuttle times,
number of buses and lots to be used. Exhibit A specifically noted that
on June 17 through June 19,2002, RGRTA would hold buses until the course
was clear. A general note to the schedule stated that, \"Closing times
are approximate. The gauge is one-half hour after the last group comes
off from the 18th hole. Twenty-nine (29) foot small buses will be
used.\" RGRTA asserted that the LPGA schedule was disseminated to the
public

in a variety of ways including by news release, on RGRTA\'s automated
telephone system, at RGRTA\'s Midtown Sales Center, and at its Reception
Desk.

RGRTA stated that the LPGA service is not charter service since it falls
squarely within example 27(c) contained in \"Charter Service Questions
and Answers,\" 52 Fed. Reg. 42248, November 3, 1987. This example
described \"Service to regularly scheduled but relatively infrequent
events (sporting events, annual festivals) that is open door, with the
*routes and schedules set by the grantee* \[emphasis added\] and with
fares collected from individuals, whether or not the individual fares
are subsidized by a donor.\" Charter Service Question and Answer 27(c),
however, is merely an illustration of how the criteria for charter
service apply to regularly scheduled but relatively infrequent events
such as sporting events and annual festivals.

Based on the facts presented, the service RGRTA provided to the LPGA
does not fit within any of the exceptions established in section 604.9
of the charter service regulation. The evidence presented establishes
that LPGA controlled the service by requiring an indefinite schedule
based on whether the golf course was clear, and that twenty-nine (29)
foot small buses were to be used. In addition, the service was provided
under a single contract or series of annual contracts. Finally, the
service was for the benefit of people attending the golf tournament
rather than the public at large.

FTA looks not only at who rides the bus in determining if it is open
door, but also at the intent of the recipient in offering the service.
To determine the intent, FTA considers what attempts the recipient has
made to make the service known. For instance, FTA has found that
publishing the service in the grantee\'s pre-printed schedules is the
best marketing effort. *Washington Motor Coach Association v.
Municipality of Metropolitan Seattle*, WA-09/87-01 (March 21, 1988). In
its Appeal, RGRTA argued that it widely advertised the LPGA routes to
the general public. But according to its July 15, 2002, response to FTA,
RGRTA only issued a news release, placed the information on its
automated telephone system for passengers, and made it available at its
Midtown Sales Center and Reception Desk. There was no evidence of
advertising on inside and outside bus cards, radio, or television. These
limited publicity efforts evidence that the service was designed to
benefit the LPGA rather than the public at large.

Finally, RGRTA argued that the Regional Administrator\'s decision is
contrary to the decision of the United States District Court in *Blue
Bird Coach Lines, Inc, v, Linton*, 48 F. Supp. 2d 47 (D.C.D.Ct.
1999).[^1] The facts presented here are distinguishable from the facts
in the *Blue Bird* decision. In *Blue Bird*, RGRTA was providing service
to carry passengers from the Rochester area to football and basketball
games in Buffalo and Syracuse, respectively. In *Blue Bird*, RGRTA
published brochures regarding the service, and fares were paid as
customers boarded. FTA concluded in that instance that the shuttle
service was not charter service because \"there was no single contract
with a fixed charge, no exclusive use, nor an itinerary controlled by
other than the transit operator\"

*Blue Bird*, at 51. In contrast, RGRTA provided service to LPGA pursuant
to a single contract; schedules and equipment used were the subject of
contract rather than solely within RGRTA\'s control; and the LPGA
service was not designed to benefit the public at large.

*Rochester Institute of Technology Campus Service*

Kemps made clear in its May 21, 2002, response to FTA that its issue was
specific to RGRTA service (provided through its subsidiary, Regional
Transit Service, Inc. (RTS)) provided for inter-campus shuttling and
graduation commencement. Kemps acknowledged that although RGRTA provides
RIT students with \"links to off-campus life, most of their shuttles are
within the campus and do not link to the community at all.\"

RGRTA responded to Kemps on July 15, 2002, and provided copies of four
agreements between RGRT/RTS and RIT for (1) Additional Campus Shuttle
Service; (2) Public Shuttle Route-RIT Inn and Conference Center; (3)
February 24-28 and March 9-10, 2002, Midtown, Amtrak and Airport Shuttle
Service; and (4) May 23-26,2002, Midtown, Amtrak and Airport Service.

RGRTA/RTS\'s letter contracts confirm RIT\'s requests for additional
services and the stops, schedules and fees for providing the services.
The letter contracts note that RIT may elect to add additional operating
days and fold the service into the existing service agreement. RIT
decides when it wants to add another bus to the schedule and the time of
day the bus will operate. RIT decides whether the service will continue
to operate or not. RGRTNRTS charges RIT \$62.00 per hour for its
service. RGRTA/RTS\'s letter contract for Public Shuttle Route-RIT Inn
and Conference Center stated that \"RTS will also track the actual
service hours provided each month and will make an adjustment to the
final monthly installment, if necessary, to reflect the actual hours of
service provided during the nine-month period.\" Periodically, RIT
requests special service, for example, the services from campus to
Midtown, Amtrak and the Airport as evidenced by the above referenced
letter contracts.

RGRTA contends that the service is open door and therefore is not
charter service as explained by FTA in \"Charter Service Questions and
Answers,\" question 27(d). RGRTA\'s reference is to FTA\'s
interpretation of whether service within a university complex
constituted prohibited charter service: \"If the service is for the
exclusive use of students and the university sets fares and schedules,
the service would be charter. However, such service operated by a
recipient which sets fares and schedules and is open door, though it
services mainly university students, would be mass transportation.\" 52
Fed. Reg. 42252, November 3, 1987.

In its September 30, 2002, Appeal RGRTA included an affidavit from
Robert Frye, Chief Financial Officer for RGRTA, stating that during the
period from September 1, 2001, until August 31, 2002, approximately
2,400 individuals paid the regular RTS fare to ride on routes located
entirely within the RIT campus. Mr. Frye further stated \"during this
same period approximately 339,282 individuals rode on routes subsidized,
at least in part,

by RIT. Approximately 154,000 of these passengers did not have RIT
identification and paid the regular RTS fare.\" Mr. Frye\'s affidavit
shows that only a very small number of people from outside the RIT
community used the routes located entirely within the RIT campus. It is
not clear which routes Mr. Frye is referring to (except that they are
subsidized *only in part* by RIT) when he stated that a large number
(approximately 45%) of the passengers paid the regular fare and were not
subsidized by RIT.[^2] In any event, open door service does not of
itself mean that the service is not prohibited charter service. Question
27(d) also requires that the recipient (RGRTAIRTS) set the fares and
schedules. In this case, however, the evidence shows that it is RIT, not
RTS, that sets the stops, schedules and fares (free to RIT students,
faculty, and employees who show an RIT identification card).

RGRTA\'s response to Kemps\' complaint regarding graduation commencement
service is that it is an expansion of its existing route structure that
services the RIT campus. RGRTA did not, however, provide a copy of any
contract for this particular service. If, as RGRTA argues, the
graduation commencement service was an expansion of its existing route
structure, I find that it is also prohibited charter service for the
reasons stated in the preceding paragraph regarding RIT\'s control of
the service.

Finally, RGRTA argued that the four letter agreements for intra-campus
service have all expired. RGRTA then concluded that it is already in
compliance with FTA\'s Order since the services are no longer being
performed. The expiration of the four letter agreements does not absolve
RGRTA of responsibility for providing prohibited charter service. RGRTA
stated that it would renegotiate its contract with RIT to clarify that
RGRTA has complete control over the fares and schedules and is open
door.

*Rochester Firefighter\'s Funeral Service, Livonia School District Field
Trip, Siena Catholic Academy Service, and Town of Chile Service
Contract*

RGRTA does not appeal from the Regional Administrator\'s decision with
respect to these services.

**Conclusion**

RGRTA has not shown new matters of fact or points of law that were not
available during the investigation. Accordingly, RGRTA\'s Appeal is
denied. This decision is administratively final.

Sincerely,

Jennifer L. Dorn

cc:

John H. Kemp, President

Kemps Bus Service, Inc.

2926 Lakesville Road

Avon, NY 14414

[^1]: Kemps was one of the Complainants, and RGRTA the Respondent, in
    FTA's charter service complaint decision that was upheld in Blue
    Bird.

[^2]: Mr. Frye states that these routes are subsidized only in part, by
    RIT. These would be the routes that travel between the campus and
    the Mall, the so-called "Movie Mall Shuttle." Kemps did not complain
    about routes that travel outside the RIT campus.