UNITED STEELWORKERS OF AMERICA,

LOCAL 8751,

Complainant,

vs.

MASSACHUSETTS BAY TRANSPORTATION }

AUTHORITY,

Grantee/Respondent

MA-01/87-01

I. SUMMARY OF DECISION

This decision is in response to a complaint filed with the Urban Mass
Transportation Administration (UMTA), on January 7, 1987, by the United
Steelworkers of America, Local 8751 (Steelworkers), which alleged that a
school transportation plan to be put into effect on January 12, 1987, by
the Massachusetts Bay Transportation Authority (MBTA), failed to comply
with various provisions in the Urban Mass Transportation Act of 1964, as
amended (UMT Act), and its implementing regulations and policies.

The complaint specifically alleged that the MBTA plan violated Section
3(g), which prohibits grantees from providing exclusive school service;
Section 5(i)[^1], by failing to hold public hearings prior to the
inception of the new service; \".and Sections 3(e) and 8(e), which
require grantees to involve the private sector to the maximum extent
feasible in the planning and provision of mass transportation. Under the
new plan, school bus service for approximately 2,56b students at several
Boston public schools, which had formerly, been provided by a private
operator, was to be performed by MBTA starting on January 12, 1987. The
Steelworkers represent some 35 bus drivers to be laid off by the private
operator as a result of the plan's implementation.

UMTA\'s examination of the materials submitted by the parties leads it
to conclude that because the service provided by MBTA does not conform
to the requirements of 49 CFR 605.3, it is exclusive school service, in
derogation of Section 3 (g) of the UMT Act. UMTA will not, however, make
a determination on the private sector issue raised in the complaint,
since it appears that no member of Steelworkers is a private operator of
mass transportation services, as required by Section 3 (e). Finally,
UMTA finds that since MBTA has submitted a certification under Section 9
(e)(3)(H), it is not required to comply with the public notice
requirements in Section 5(i).

II\. COMPLAINT

On January 7, 1987, Steelworkers filed a complaint with UMTA, alleging
that a school transportation plan to be put into effect by MBTA on
January 12, 1987, at the request of the Boston School Committee, failed
to comply with various provisions of the UMT Act. The complaint claimed
that MBTA planned to begin service on approximately 40 new bus routes,
created solely for the purpose of transporting students to and from
Boston public schools. Service on these routes had formerly been
provided, the complaint pointed out, by National School Bus Company, a
private operator, and the employer of 35 of the complainant\'s members.

The complaint alleged that the new MBTA service would constitute
exclusive school service, in violation of Section 3(g), since it failed
to make provision for regular MBTA stops or published schedules, as
required by 49 CFR 605.3.

The complaint moreover alleged that the new service violated Section
5(i), by providing for no public hearing and opportunity to comment on
the new service.

Finally, the complaint claimed that MBTA had failed to solicit private
enterprise participation, as required by Section 8(e) and 9(f) and
UMTA\'s implementing guidelines and policies.

Several supporting documents were attached to the complaint. These
included an affidavit by Margaret A. Geddes, a law clerk for
Steelworkers\' attorneys, who stated therein that her inquiries to MBTA
headquarters had revealed that no published schedules or route
information were available for the new service. Ms. Geddes further
stated that when she called the MBTA route information telephone line,
she was told that although the new bus routes would be open to the
public, no scheduling information on them would be made available to the
public. When she expressed interest in using one of the new bus routes,
Ms. Geddes said, she was discouraged by MBTA personnel from doing so.
The affidavit also stated that when Ms. Geddes asked MBTA personnel
whether provision had been made for public hearing or notice on the new
service, she learned that it had not been. She was also told, Ms. Geddes
said, that MBTA's Board of Directors had discussed the new service on
one occasion during the previous five months, namely during its meeting
of September 10, 1986. She attached to her affidavit a copy of the
minutes of this meeting, as well as copies of documents pertaining to
items discussed at the meeting.

Steelworkers also enclosed an affidavit by Susan M. Moir, a bus driver
employed by National Bus Company. Ms. Moir therein stated that she had
received route sheets for the new school transportation service from the
office of Boston\'s Superintendent of Schools. She traced these routes,
Ms. Moir stated, on the MBTA's present public route map, for the purpose
of establishing their correlation with regular MBTA routes. Ms. Moir
said that

she followed by car four of the proposed routes, and that these routes,
at least in part, did not correspond with regular MBTA service. On three
of the routes, Ms. Moir said she saw only nine marked MBTA stops of a
total of thirty-nine pickups designated on the route sheets. On the
fourth route, she stated, only ten of the fourteen designated stops were
regular MBTA stops. Copies of the route sheets and the MBTA map in
question were attached to the affidavit.

III\. RESPONSE

UMTA forwarded a copy of Steelworkers\' complaint to MBTA on January 8,
1987. The accompanying letter stated that a review of the evidence
presented enabled UMTA to determine that a violation of 49 CFR 605 would
take place if MBTA\'s new school transportation plan were put into
effect. Should the new service begin, UMTA stated, MBTA would have 30
days from its receipt of the letter to show why no violation had
occurred.

The letter further stated that Steelworkers\' complaint alleged that
MBTA had not complied with the private sector participation requirements
in Sections 3(e), 8(e), and 9(f) of the UMT Act and the implementing
policies. Since the proposed school transportation plan would involve
new or restructured service, the letter noted, the private sector should
be considered prior to its inception. UMTA pointed out that its policy
is to encourage parties to resolve their differences at the local level
before becoming involved in the complaint. It was therefore directing
the one member of Steelworkers understood to be the owner of a private
mass transportation company, UMTA said, to contact MBTA in order to
resolve any differences. UMTA stated that this party would be allowed to
file a formal complaint with UMTA if there was no resolution of these
differences within 30 days of his contacting MBTA.

UMTA moreover stated that Steelworkers' complaint had also alleged that
MBTA had violated the public notice requirements set forth in Section
5(i) (3) of the UMT Act. UMTA said, however, that it held the position,
set out in the Federal Register notice of October 10, 1986, that Section
5(i)(3) had been superseded by the requirements of Section 9(e)(3)(H),
which require private sector participation only if there is a fare
increase or a service reduction, and not for service increases. The
letter indicated that MBTA would not be bound by the requirements of
5(i)(3) if it had submitted a certification under 9(e)(3)(H).

MBTA responded by letter dated February 5, 1987. The letter first of all
claimed that steelworkers lacked standing to bring this complaint, since
none of its members appeared to be a private bus operator. MBTA cited
[Bradford School Bus Transit, Inc. v. Chicago Transit
Authority]{.underline}, 537 F.2d 943 (7th Cir. 1976), in support of its
contention that only such private operators fall under the protection of
the UMT Act.

MBTA denied that its new service constituted exclusive school service in
violation of Section 3(g) of the UMT Act and 49 CFR 605. MBTA instead
stated that its new school transportation plan involved supplemental
service which met the definition of \"tripper service\" contained in 49
CFR 605.3. Its new service, MBTA stated, was regularly scheduled, open
to the public, and modified to meet the needs of school students and
personnel. MBTA also affirmed that the buses used stop only at regular
MBTA service stops, and their routes appear on MBTA\'s published
schedules. MBTA claimed that the instances cited in affidavits submitted
by Steelworkers, in which supplemental buses admitted only students or
passed by regular stops, were rare and exceptional cases, which the MBTA
Operations Directorate had sought to remedy by issuing special orders to
bus drivers. These orders, MBTA said, are sent out whenever supplemental
service is initiated or resumed, or whenever deviations are brought to
the attention of MBTA. MBTA attached a copy of these special orders to
its response.

MBTA moreover claimed that since June 1984, it had continuously complied
with the tripper service requirements. MBTA attached copies of a letter
dated June 22, 1984, which it had sent to UMTA and which outlined action
it had taken to remedy any deviations from tripper requirements. Also
attached was a copy of a letter \"dated July 25, 1984, from UMTA and
which stated that MBTA had satisfactorily resolved any problems with
regard to its tripper service.

As concerns Steelworkers' allegations that MBTA has failed to comply
with UMTA\'s private sector participation policy, MBTA stated that the
policy was not applicable in this case. The privatization requirements,
MBTA affirmed, are triggered only when a grantee contemplates the
establishment of new service or a significant increase in service on an
existing route. MBTA cited UMTA\'s definition of \"new or restructured
services\", contained in the [Federal Register]{.underline} of January
24, 1986, at 3307, and which reads as follows:

> establishment of a new mass transportation service; addition of a new
> route or routes\...; a significant increase in service on an existing
> route\...; or a change in the type or mode of service provided on a
> specific, regularly scheduled route\...[^2]

Since the new school service consisted merely of placing extra buses on
existing routes, MBTA stated, there was \"no significant increase in
service\" as envisaged by the notice. This being the case, MBTA said,
the notice and consultation requirements of the privatization policy had
not been triggered.

Finally, MBTA stated that it had not been contacted by any member of
Steelworkers who is the owner of a mass transportation company, as
stated in UMTA\'s letter of January 8, 1987.

IV\. REBUTTAL

On February 13, 1987, UMTA forwarded to Steelworkers a copy of MBTA's
response. Steelworkers was given 30 days from its receipt to furnish a
rebuttal.

Steelworkers submitted its rebuttal by letter dated March 11, 1987.
Steelworkers first of all denied MBTA\'s claim that Steelworkers lacked
standing to bring a complaint for violation of the regulations
concerning school bus operations. Steelworkers cited 49 CFR 605.30,
which states that \"any interested party\" may file a complaint with
UMTA alleging violation of the school bus regulations.

Second, Steelworkers rebutted MBTA\'s claim that the new school
transportation plan conformed to the tripper service requirements set
out in 49 CFR 605.3. The new service is not open to the public,
Steelworkers stated, since the supplemental buses do not stop for riders
waiting at regular stops, and operate either unsigned or with confusing
signs. Steelworkers also stated that the buses stop at places without
marked MBTA stops to discharge student riders. Steelworkers attached
affidavits and photos in support of these affirmations.[^3] Moreover,
steelworkers said, route cards had not yet, to the best of its
information, been published for the supplemental runs which,
Steelworkers said, were hybridized MBTA routes, that for the most part
track the former yellow school bus routes.

Third, Steelworkers stated that MBTA had ignored the private enterprise
guidelines triggered by its new school service. Steelworkers maintained
that MBTA\'s supplemental service is exactly the type of service
envisioned in the Act and the regulations as requiring the grantee\'s
consideration of private sector participation. Since MBTA had not
undertaken any private enterprise participation prior to its inception
of this new and

restructured service, it was in violation of UMTA\'s privatization
policy guidelines.

V. DISCUSSION

Before reaching the main issues in this case, it is necessary to make a
preliminary determination on a threshold question raised in MBTA's
response, namely that of whether Steelworkers has standing to bring a
complaint under the UMTA school bus regulations. MBTA cites [Bradford
School Bus Transit, Inc. v. Chicago Transit Authority]{.underline}, 537
F.2d 943 (7th Cir. 1976) in support of its contention that only private
bus operators are entitled to bring a complaint under the said
regulations. MBTA states that in that case, the court defined those
interests Congress intended to protect in enacting the UMT Act, and
found that only private bus operators fall clearly within the statute\'s
zone of protection. Since none of the complainants appears to be a
private bus operator, MBTA claims, they are outside the zone of interest
created and protected by the statute, and thus lack standing to file a
complaint with UMTA.

In this administrative complaint, the language of the school bus
regulations is clear and controlling. 49 CFR 605.30 provides that \"any
interested party\" may file a complaint with the Administrator alleging
a violation of the grant agreement not to engage in school bus
operations. 49 CFR 605.3 defines an \"interested party\" as

> an individual, partnership, corporation, association or public or
> private organization that has a financial interest which is adversely
> affected by the act or acts of a grantee with respect to school bus
> operations.

Complainants, as a group of individuals whose financial, interests have
been adversely affected by loss of their jobs because of the school bus
operations undertaken by MBTA, clearly fall within the category of
persons entitled under these provisions to bring a complaint.

Since Steelworkers\' standing to bring this administrative complaint has
thus been established, a determination can be made on the three main
issues presented therein, and which are as follows.

1\. [Whether MBTA\'s supplemental bus service constitutes exclusive
school service]{.underline}

Under Section 3(g) of the UMT Act, no Federal financial assistance may
be granted to providers of mass transportation unless the applicant and
the UMTA Administrator enter into an agreement that the applicant will
not engage in school bus operations exclusively for the transportation
of students. This section, and its

implementing regulations in 49 CFR 605, are aimed at protecting private
school bus operators from unfair competition with UMTA grantees.

Under the terms of 49 CFR 605.3, however, a grantee may modify its
regularly scheduled service to accommodate the needs of school students
and personnel. This specially modified service, termed \"tripper
service\", must meet the following criteria:

> \- Buses used must be clearly marked as open to the public and may not
> carry designations as \"school bus or \"school special\";
>
> \- Buses must stop at a grantee\'s regular stops;
>
> \- Routes must be indicated in the grantee\'s published schedules.

In its complaint, Steelworkers alleges that the supplemental bus service
to be begun by MBTA on January 12, 1987, would be exclusive school
service, since it fails to meet the above criteria. The complaint claims
that the buses used follow private school bus routes, are filled to
capacity with students to the virtual exclusion of other riders, do not
stop at regular MBTA bus stops, and their routes are not included in
MBTA\'s published route schedules.

While the regulations do not prohibit supplemental buses from using
existing routes or from loading up with students, they do require that,
in order to qualify as \"tripper\" buses, these vehicles stop only at
the grantee\'s regular stops and appear in the grantee\'s published
schedules. Steelworkers\' allegations on these points, then, if true,
indicate a violation of the school bus regulations on the part of MBTA.

MBTA, in its response, denies these allegations, and states instead that
its supplemental buses are clearly marked with regular route numbers and
destinations, and are open to the public. All supplemental buses, MBTA
asserts, stop only at regular MBTA stops, and their routes appear in
MBTA\'s published schedules. MBTA states that it is aware that
Steelworkers has submitted affidavits describing instances in which the
supplemental buses have failed to display route numbers and destination
signs, have admitted only students, and have stopped at locations other
than regular stops. These are, however, MBTA affirms, \"rare instances,
which the MBTA Operations Directorate continues to remedy through
diligent reminders to drivers, in the form of special orders to all
surface line operators.\" In support of its claims, MBTA has submitted
copies of these special orders, drafted in May 1984, and which it states
are re-issued each time supplemental service is resumed.

While UMTA does not question the good faith or intent behind the
issuance of these orders by MBTA, it does question their effectiveness.
Seven of the affidavits, submitted by Steelworkers nearly a month after
the date of MBTA's letter to UMTA, detail several examples of continued
non-compliance by the supplemental buses with tripper service
requirements. The affidavits cite instances in which supplemental buses
bearing \"No Stops\" or \"Limited\" destination signs and carrying only
school children, bypassed persons standing at regular MBTA stops.[^4]
Photos of some of the buses in question accompany the affidavits. The
affidavits also contain accounts of buses passing by persons attempting
to flag them down, while stopping at non posted stops solely to
discharge school children.[^5] One MBTA user states that when he
attempted to board one of the supplemental buses, he was told that it
was a school bus, and was instructed by the driver to take another bus
to his destination.[^6]

In rebuttal of these complaints and allegations, MBTA offers only its
affirmation that drivers have been ordered to conform to the tripper
regulations, and correspondence of June 1984, with UMTA attesting that
MBTA\'s school operations satisfied tripper requirements at that time.
It is plain, from the affidavits and from MBTA's failure to furnish more
concrete evidence of compliance, that the measures it has taken to
ensure that its supplemental service conforms to tripper requirements,
have not been sufficient. Moreover, the 1984 correspondence between MBTA
and UMTA may evidence the former\'s conformance with the requirements at
that time, but does not apply to the present situation. UMTA has in no
way indicated or implied that the service begun by MBTA on January 12,
1987, meets the requirements of 49 CFR 605.3. In fact, UMTA\'s letter of
January 8, 1987, to MBTA notes that there is cause to believe that the
service constitutes exclusive school bus service, and states that \"we
encourage you to refrain from providing this service in order to prevent
any violation of this regulation\". Finally, while MBTA asserts that the
supplemental bus routes appear in MBTA\'s published schedules, it has
offered no such schedules in evidence. UMTA must therefore accept
Steelworkers\' allegation that no regular schedules for the supplemental
buses have been published.

MBTA has, then, failed to demonstrate that it has effectively conformed
the supplemental school service it initiated on January 12, 1987, to the
requirements of 49 CFR 605.3. Consequently, UMTA holds that the service
in question is exclusive school service, in violation of UMTA\'s school
bus regulations. [Travelways, Inc. v. Broome County Department of
Transportation]{.underline}. (December 4, 1985).

2\. [Whether the new MBTA transportation plan involves \"new or
restructured service\" requiring the grantee to follow UMTA\'s
privatization guidelines]{.underline}

Steelworkers\' complaint alleges that MBTA began its new school service
without consideration of private sector alternatives, in derogation of
Sections 3(e), 8(e) and 9(f) of the UMT Act, and UMTA\'s implementing
guidelines. An aim of these provisions is to protect the interests of
private operators by allowing them a chance to participate in the
provision of services whenever a grantee contemplates the implementation
of \"new or restructured service.\" \"New or restructured service\" is
defined in UMTA Circular C 7005.1 as:

> Establishment of a new mass transportation service; addition of a new
> route or routes to a grantee\'s mass transportation system; a
> significant increase or decrease in service on an existing route in a
> grantee\'s mass transportation system; a significant realignment of an
> existing route in a grantee\'s mass transportation system; or a change
> in the type or mode of service provided on a specific regularly
> scheduled route.

In its rebuttal, MBTA states that the private sector consultation
guidelines do not apply in the case of its new school service, since it
has not established new service or significantly increased existing
service, but merely provided tripper service. MBTA claims that the new
service consists solely of adding extra buses to existing routes during
the hours of school opening and closing, thereby falling short of the
\"significant increase in service\" which would trigger the notice and
consultation requirements of the privatization policy.

UMTA takes exception to MBTA\'s characterization of its new school
service as the simple \"adding of extra buses to existing routes.\" The
supplemental service involves the transportation of approximately 2,500
students to 7 Boston high schools, travelling over 18 modified bus
routes. Moreover, according to documents presented by MBTA at its board
of directors meeting of September 10, 1986, a detailed analysis had
indicated that the new service would require 44 additional vehicles, and
staffing by 48 part-time operators. In view of these projected
additional costs to be incurred under the new transportation plan, the
MBTA board approved a Supplementary Current Expense Budget for the
period from January 5, 1987 to June 29, 1987, in the amount of
\$859,193. Given the magnitude of the numbers of students, bus routes,
and vehicles, as well the importance of the expense involved, it is
difficult to perceive of MBTA\'s supplemental plan as anything other
than the \"significant increase in service\" envisaged in UMTA\'s
private sector guidelines. Furthermore, materials

submitted by the parties suggest that the supplemental buses do not
follow existing regular runs, but travel over routes specially altered
to meet the needs of school students, and stop at locations other than
regular stops. The service thus constitutes a \"significant realignment
of an existing route\" in MBTA\'s mass transportation system of the type
contemplated in the circular.

However, compliance with Sections 3(e) and 8(e) is triggered only when
the grantee is providing mass transportation services. Since it is clear
that the MBTA attempted to provide tripper service, it should have
complied with UMTA\'s private sector guidance in the planning and
provision of the service.

UMTA, however, has been clear from the beginning of its handling of the
complaint that we were not including the Steelworkers\' allegations of
non-compliance with the UMT Act\'s private sector participation
requirements as part of this complaint. The letter transmitting the
complaint to the MBTA states:

> UMTA\'s policy on complaints under these private sector provisions is
> that the parties must attempt to resolve their differences at the
> local level before UMTA will become involved in the complaint.
> Although the Steelworkers are not private providers of mass
> transportation service, it is our understanding that at least one of
> their members is the owner of a private mass transportation company.
> Therefore, we are directing him, through the Steelworkers, to contact
> you and attempt to resolve any differences. If there is no resolution
> of these differences within 30 days of his contacting you, he may file
> a formal complaint with UMTA.

Thus, while we find the service to be new or restructured, we do not
here make any determination as to the MBTA's compliance with UMTA\'s
guidance in its attempted provision of school services as tripper
service, i.e., as mass transportation.

3\. [Whether MBTA is required to comply with the public notice
requirements of Section 5(i)(3) of the UMT Act]{.underline}

Steelworkers\' complaint alleges that MBTA has violated the notice
requirements in the UMT Act which require a recipient to provide the
public with an opportunity for comment on service and fare increases
before they go into effect. These requirements are set forth in Section
5(i) (3) of the UMT Act and in 49 CFR Part 635.

As indicated, however, in the [Federal Register]{.underline} notice of
October 10, 1986, at page 36403, it is now UMTA\'s position that the
requirements in 5(i)(3) have been superseded by the requirements in
Section 9(e)(3)(H) of the UMT Act. These new requirements only require
public notice if there is a fare increase or a service reduction, and
not for service increases. Thus, the new requirements are more narrow
than those in 5(i)(3).

The notice states that the recipient must still comply with the
requirements in section 5(i)(3) until it has submitted a certification
under Section 9(e)(3)(H) or it is no longer an urbanized area. A review
of UMTA\'s files shows that MBTA submitted a Section 9 certification on
November 6, 1986, and is thus no longer subject to the requirements of
Section 5(i){3).

Steelworkers\' complaint that MBTA has failed to provide public notice
on its new service is thus not valid, since MBTA is under no statutory
obligation to provide such notice.

VI\. CONCLUSION

In view of the foregoing, UMTA holds that the supplemental school
service begun by the MBTA on January 12, 1987, does not meet the
requirements of 49 CFR 605.3, and thus constitutes exclusive school
service, in derogation of Section 3(g) of the UMT Act. UMTA accordingly
orders MBTA to cease and desist from providing the service as presently
constituted within 10 calendar days of receipt of this decision. In the
event that this service is not terminated within the prescribed time
limits, UMTA will impose a suspension of the drawdown of the MBTA\'s
Federal funds and will bar the MBTA from receiving further Federal
assistance, consistent with Section 3(g) of the UMT Act.

UMTA moreover concludes that the MBTA school transportation plan meets
the definition of \"new or restructured service\" as set forth in
UMTA\'s private sector participation guidelines. We have however, not
treated this as a private sector complaint and have made no conclusions
as to the MBTA\'s compliance with UMTA\'s guidance on the subject. If,
in the future, the MBTA provides service similar to that which is the
subject of this complaint, UMTA reminds it that it must comply with our
private sector guidance prior to instituting the service.

Finally, UMTA finds that MBTA has submitted a certification under
Section 9(e)(3)(H), and is thus not subject to the requirements of
Section 5(i)(3). Consequently, MBTA was under no statutory obligation to
provide public notice or hearing prior to the inception of the new
service.

Richard H. Doyle

Regional Administrator

MAY 15 1987

Joseph A. LaSala, Jr.

Chief Counsel

MAY 1 3 1987

[^1]: This section was erroneously cited in the complaint as Section
    3(i).

[^2]: The guidelines set forth in this Federal Register Notice were
    effective only for FY 1986. Guidelines for 1987 and beyond are
    contained in UMTA Circular C 7005.1, which broadens the definition
    of \"new or restructured service\" to include \"a significant
    realignment of an existing route in a grantee\'s mass transportation
    system\". UMTA C 7005.1, at page 3.

[^3]: Steelworkers submitted with its rebuttal eight affidavits by
    National bus drivers and MBTA users who stated that, while waiting
    at regular MBTA bus stops, they or other persons were bypassed by
    supplemental buses, and that these buses discharged or picked up
    students at places other than regular MBTA stops. Also enclosed were
    photos of supplemental buses carrying \"No stops\", \"Out of
    Service\", or \"Limited\" destination signs.

[^4]: Affidavits of Susan Moir, Lilly Darling, David Darling and William
    McGargle.

[^5]: Affidavits of Susan Moir, Lilly Darling, David Darling and Garry
    Merchison.

[^6]: Affidavit of K.L. Onufry.