Four years later!

PIERRE, S.D. One of the first if not THE first formal complaints filed by a private bus operator against a public transit agency for providing illegal charter bus service under the federal charter service rule adopted four and a half years ago has finally been decided.

The administrator of the Federal Transit Administration, Peter M. Rogoff, issued a strong ruling posted on the FTA website last month in favor of Forell Limousine & Bus Service of Pierre, and rejected an appeal from River Cities Public Transit, also of Pierre, which provided the illegal service in 2008, and reportedly continues to regularly violate the charter service rule.

"Im pleased about (the FTA) decision," said Dawnita Forell, who co-owns Forell Limousine & Bus with her husband, Charles. "But its like putting a Band-Aide on an artery."

During the past seven or eight years, the Forells have lodged numerous charter rule complaints against River Cities Public Transit. They win most, lose some, but every complaint represents a challenge for the small operator.

Thats because in a charter service case, the FTA, which has a cozy relationship with virtually all of the public transit agencies it funds, has set a very high bar for complaints.

"The complainant bears the burden of proof," says Rogoff. "The complainant must prove its case by a preponderance of the evidence."

Like other small operators, the Forells do not have the time, money or resources to continually investigate every possible violation by River Cites Transit it hears about. "They seem to do whatever they want and a lot of people dont want to get involved," Dawnita Forell told Bus & Motorcoach News three years ago.

Additionally, "its pretty hard to get a decision from the FTA."

And sometimes it takes four years to get a final decision.

Making its case

The complaint that resulted in last months win for the Forells is a perfect example of the obstacles to be found in pursuing a charter complaint.

The incident that formed the basis of the case happened on June 21, 2008. On that day, River Cities Transit picked up a group of 21 individuals, including Jeremy Kelly, and transported them to a shooting range at Willow Creek in Fort Pierre, S.D.

Several days before the trip, Kelly had contacted River Cities Transit by phone on behalf of the group and scheduled a pickup time, a pickup location, and a drop-off destination. He paid River Cities Transit $105 for the trip.

On Sept. 5, 2008, the Forells filed a complaint with the FTA, alleging River Cities Transit provided service to the Kelly group in violation of the then four-month-old federal charter service rule.

The Forells asserted Kelly had organized a "bachelor party," which included the trip to the shooting range. The Forells also said Kelly paid for the trip on behalf of his friends, and that the individuals had exclusive use of the River Cities Transit bus.

In support of its assertion the group had exclusive use of the vehicle, the Forells submitted a sworn affidavit from an individual who was unrelated to the group but who attempted to board the vehicle and was denied service to a different destination.

The driver instructed the man to contact River Cities Transit to make arrangements for another vehicle to provide service.

The Forells also submitted a sworn affidavit from a man who was a passenger on the vehicle. The man said he attended the bachelor party with his son, and the vehicle was full to capacity. The man also said he paid nothing for the trip, and that he believed Ke11y "paid for everyone."

Additionally, to support of their arguments, the Forells submitted a series of photographs.

Obviously, the Forells were forced to go to a lot of trouble to prove their case.

Initial ruling

In mid-2009, FTA Acting Chief Counsel Scott A. Biehl found that River Cities Public Transit violated the charter service rule when it provided transportation for the bachelor party.

However, because he considered the circumstances of the violation minor and the revenue generated by the trip was $105, he fined River Cities just $100.

River Cities Transit appealed and it took three years for the appeal to be finally settled by Rogoff, who rejected virtually every argument put forth by River Cities Transit, and made clear that demand-response agencies like River Cities Transit do not have carte blanche to provide whatever service they want.

River Cities Transit contended in its appeal the bachelor party trip was part of its demand-response service; the decision (if upheld would) negatively impact rural public transportation nationwide; no third party paid for the trip; the destination was within River Cities Transit service area, and River Cities Transit charged the individuals standard fares.

Rogoff noted that as a condition for receiving federal money from the FTA, public transit agencies must agree they will not provide charter bus transportation outside the urban area in which they provide regularly scheduled public transportation service.

Such an agreement is designed to assure federal money going to public transit agencies is not used "to foreclose a private operator from providing intercity charter bus service if the private operator can provide the service."

Rogoff also noted that under the federal charter service rule, the FTA defines "charter service" as transportation provided by a public transit agency at the request of a third party for the exclusive use of a bus or van for a negotiated price.

Defining charter service

Some of the characteristics of charter service, according to Rogoff, are a third party pays the transit provider a negotiated price for the group; any fares charged to individual members of the group are collected by a third party; the service is not part of the transit provider's regularly scheduled service, or is offered for a limited period of time, or a third party determines the origin and destination of the trip as well as scheduling.

FTA, he continues, defines "demand-response" service, which is exempt from the charter service prohibition, as "any non-fixed route system of transporting individuals that requires advanced scheduling by the customer, including services provided by public entities, nonprofits, and private providers."

However, Rogoff went on to note that "the exemption of demand-response service is not absolute and it does not exclude rural and small urban public transportation systems in their entireties.

"The exemption is intended to exclude only service provided to individuals, as opposed to a group, who request service. Service to individuals includes service based on the needs of individual members of the group, rather than the group as a whole," he said.

Finally, when a public transit agency accepts money from the FTA, the FTA and the transit agency execute what is called a "master agreement." Under the master agreement, the transit agency agrees that neither it nor any public transportation operator performing work in connection with a project financed by the feds will engage in charter service operations, except as authorized by federal rules and FTA regulations.

In his ruling, Rogoff said River Cities Transit provided "impermissible charter service," violating both the charter service rule and the agencys master agreement with the FTA .

"Charter service has three distinguishing elements: it is requested by a third party; the party has exclusive use of the vehicle, and the party negotiates a price. The (River City Transit) service at issue contains all three elements," said Rogoff.

He let the $100 fine stand and ordered River Cities Transit to pay the fine within 60 days.

The transit dangers

Commenting on the decision, UMA Vice President and Chief Operating Officer Ken Presley said "River Cities Transit stands as a symbol of why our nation continues to be mired in debt, and how communities become addicted to subsidized transportation, eroding private-sector initiative.

"Its all so innocent," said Presley, "yet ultimately an unsustainable model."

It is Presleys contention that when public transit agencies provide charter service, they discourage people from taking risk and investing in their communities "even when there seems to be opportunities.

"From my personal observation, this is the real transit crime."

What that translates to in a place like Pierre, S.D., is there is not a single privately-owned taxicab operating in the community. What makes that an amazing fact is that Pierre is the capital of South Dakota and the county seat.

While Pierre is the second-smallest state capital in the U.S., with a population of roughly 13,600, the nations smallest state capital, Montpelier, Vt., with a population of just 7,900, has a local taxi service and two more in small communities within nine miles.

River Cities Transit has a fleet of upwards of 100 vehicles, most of which are parked daily outside two multi-million-dollar facilities paid for with tax money.

River Cities Transit did not respond to requests for comment.