fta’s charter regulations and provision of service under contract presented at the calact autumn...

FTA’s Charter Regulations and Provision of Service Under

Contract

Presented at the

CalACT Autumn ConferenceMonterey, CA

October 6, 2005

Presented by:

Rich GarrityRichard Garrity and

Associates

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Presentation Agenda

1. Charter vs. Public Transit: Definitions 1. Charter vs. Public Transit: Definitions

2. Guidelines: Provision of Contract Service 2. Guidelines: Provision of Contract Service

3. Charter Rule Exemptions 3. Charter Rule Exemptions

4. Special Local Circumstances 4. Special Local Circumstances

5. FTA Charter Rule Determinations5. FTA Charter Rule Determinations

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Overview of Services: Definitions - Charter,

Eligible Mass Transportation, and

Contract Services

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Applicability

FTA Recipients Under Sections: § 5307 § 5311 § 5309 Interstate Transfers

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Definition

“…Transportation Using Buses or Vans, or Facilities Funded 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”

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Definition

Applicable to Vehicles and/or Facilities that were Financed, in Whole or in Part, with FTA Funds

Transportation is Provided Under the Terms of a Contract

Contracting Party Has Acquired Exclusive Use of the Vehicle

Contracting Party Travels Under an Itinerary Specified by the Contracting Entity, Not the Transit System

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Definition

What About Use of Vehicles Not Funded by FTA?

If Facilities Were Funded (e.g., Maintenance Facility), 49 CFR part 604 Still Applies

FTA Specifies that the Transit System Generally Must Completely Separate Charter Function from Public Transit Function

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Issues

Contract Service Provided to Social Service Agencies Under Contract are Often Similar to FTA’s Charter Definition

Legal Interpretation Issued by FTA are Almost Exclusive to Fixed Route Environments

Demand Response Services Present Challenges

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49 CFR 604 – Basic Requirement

FTA Recipient Must First Determine If There Are Any Private Charter Operators Willing and Able to Provide the Charter Service Which the Recipient Desires to Provide

If Willing and Able Operators are Found to Exist, the Recipient May Not Provide Charter Service Unless One or More Special Exemptions Apply

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Eligible Mass Transportation Services

To Assist in Understanding When Contract Services May be Provided, We Must Understand FTA’s Definition of “Eligible Mass Transportation” This Term is the Same as

“Public Transportation”

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49 U.S.C. § 5302(a)(7) States That "Mass Transportation" Means:

“…Transportation by a Conveyance That Provides Regular and Continuing General or Special Transportation to the Public, but Does Not Include School Bus, Charter, or Sightseeing Transportation”

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FTA Has Developed an Expanded Definition Used Determine if Service is Eligible Mass Transit or Charter Service

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Three Key Factors Determine if a Service is Mass Transportation: Service is Under the Control of

the Recipient Service is Designed to Benefit

the Public-at-Large Service is Open to the Public and

Not Operated “Closed Door”

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Distinction Between Mass Transit and Charter Services Not Always Clear

In Making a Determination in Formal Charter Complaints, FTA Speaks of the “Balancing Test” That Must Be Used in Weighing All Elements of the Service

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Social Service Agency Transportation

A Second Key Understanding Must Also Be Made About Service Provided by Recipients Under Contract to a Social Service Agency

Distinction is Particularly Important to the Section 5311 Program

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Social Service Agency Transportation

Legislative History of the Section 5311 Program Clearly Indicates that Congress Intended for Recipients to Coordinate and Provide Service to Social Service Agencies Unique Matching Formula Requirements Required Condition of Award

•“Maximum Feasible Coordination”

FTA Circular 9040.1E Social Service Agency Transportation

“Usually” Mass Transportation

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Social Service Agency - Definition

There is No FTA Definition Recommended:

A Government Entity or a Nonprofit Organization Exempt From Taxation Under Subsection 501(c)(1), 501(c)(3), 501(c)(4), or 501(c)(19) of the Internal Revenue Code; and

A Recipient of Federal Funds, Either Directly or Indirectly, From One or More of the Funding Programs Administered by the U.S. Departments of Health and Human Services, Labor, and Education (See Recent GAO Study/List)

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Social Service Agency - Definition

While Vast Majority of Complaints Directed at Larger, Fixed Route Transit Systems, Growing Body of Complaints Regarding Contract Services

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Guidelines for Provision of Service Under

Contract

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Defining Eligible Social Service Agency Contracts

Suggested Guidance to Public Transportation Projects Meet the Three Basic Conditions for Eligible Mass Transportation in a Demand Response Environment

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Under the Control of the Recipient

Regular and Continuing Service

Control of ScheduleUse of Fully Allocated CostsControl Over Vehicle

Assignment

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Regular and Continuing Service Service Provided Throughout

The Fiscal Year Trip Intervals No Less

Frequent Than Monthly

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Control Over Scheduling Contract Should Not Specify

Exclusive Use of a Vehicle Recipient is Responsible for Setting

Pick-Up, Drop-Off Times Consistent with Policies for the Public re:•Pick Up Window•Wait/Dwell Time

No Use of Restricted Group Subscription Service in Automated Scheduling

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Use of Fully Allocated Cost Fully Allocated Cost of

Operations, Maintenance, Non-Vehicle Maintenance, and Administration

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Control Over Vehicle Assignment Transit System, Not Social

Service Agency, Assigns Appropriate Vehicles to Runs

Does Not Preclude a Social Service Agency from Requiring Accessible Vehicles

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Designed to Benefit the Public-at-Large

Consistent with Existing Modal Operations

Service Provided During Normal Span of Operation

Advertising and Marketing Consistent with All Other Services

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Open to the General Public

Capacity in the System During the Hours and Days of Contract Service Delivery

No Policy/Contractual Restrictions on the Assignment of Passengers to Social Service Agency Runs

No Policy/Contractual Restrictions on Exclusive Transport of Clients

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Fixed Route Service

Same Three Basic Requirements (Control, Benefit to Public, Open to the General Public)

Keys: Fares Paid by Customers Avoidance of Vehicle Hour Charges Incorporation of Multiple Destinations

that Benefit the General Public Marketing Consistent with Other Fixed

Route Services Connectivity with Other Services

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Fixed Route Example – Not Eligible Mass Transportation

RemoteParking Lot

Hospital

0 0.5 1

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Fixed Route Example – Eligible Mass

Transportation

RemoteParking Lot

Hospital

0 0.5 1

TransferCenter

CountyBldg.

SocialSecurity

Bus Stop

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Approach to Contract Service Planning

Good Sound JudgmentApply Basic Transit

Planning Principles Integration of General

Public Needs with Needs of Contract Users

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Options

Design the Service as Public Transit

Operate the Service as a Charter Consistent with the Provisions of 49 CFR part 604.9

Cease to Operate the Service

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Basic Provisions of FTA Charter Regulations

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Requirements for All Recipients

Annual Submission (with Each Grant Agreement) of an Executed “Charter Agreement” 49 CFR part 604.7 May be Incorporated by

Reference After First Submission

Certification of Compliance

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Requirements for Provision of Charter Services

If a Recipient Desires to Provide Any Charter Service Using FTA Equipment or Facilities the Recipient Must First Determine If There Are Any Private Charter Operators Willing and Able to Provide the Charter Service Which the Recipient Desires to Provide

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Requirements for Provision of Charter Services

If There is at Least One Such Private Operator, the Recipient Is Prohibited From Providing Charter Service With FTA Funded Equipment or Facilities Unless One or More of the Exceptions in Sec. 604.9(b) Applies

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The Exceptions of 49 CFR part 604.9(b)

1) No Willing and Able Operators2) Provision of Equipment or Service

Service Exceeds Private Operator’s Capacity

Lack of Accessible Equipment

3) “Special Events” Generally of National Significance

(e.g., the Olympics) Requires the FTA Administrator’s

Approval

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4) Social Service Agency Exception

Must Be a Governmental Entity or a Nonprofit Agency Exempt from Taxation Under Section 501(c)(1), 501(c)(3), 501(c)(43), or 501(c)(19) of the Internal Revenue Code

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4) Social Service Agency Exception (Con’t.)

Conditions:•There Will be a Significant Number of Disabled Passengers; or •The Agency Receives (or is Eligible to Receive) Funding from a List of Federally Sponsored Programs; or•There Will be a Significant Number of Transit Disadvantage Persons on the Trip

Trip is Consistent with the Mission of the Social Service Agency

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4) Social Service Agency Exception (Con’t.)

Charter Trip is Operated Consistent with Title VI, Section 19 of the Acts, and 49 CFR part 27

Social Service Agency Executes a Certification

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5) Agreement has Been Executed with All Willing and Able Operators that Specifically Allows the Trip

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Special Exceptions of 49 CFR part 604.9(b)

In Addition to these Five (5) Basic Exceptions, Nonurbanized Area Grantees Have Two Unique, Additional Exceptions: Rural Economic Hardship

Exception Elderly Exception

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Rural Economic Hardship Exception Must Petition State DOT Charter with Private Operator

Creates Hardship Because:•Operators Impose Minimum Duration

Requirements Pursuant to State Regulation That Exceed the Trip Requirements

•Willing Operators are Located Too Far from the Charter Service Area

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Rural Elderly Exception Must Be a Governmental Entity or

a Nonprofit Agency Exempt from Taxation Under Section 501(c)(1), 501(c)(3), 501(c)(43), or 501(c)(19) of the Internal Revenue Code

Fifty (50%) Percent of Passengers Will be Elderly

Trip is Consistent with Agency Mission

Agency Executes Certification

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Allowable Charter

If One of the Five Basic Exceptions Can Be Met, or

A Nonurbanized Project Meets Either One of the Five Basic or Two Special Exceptions:

Charter Service May be Provided However….

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Allowable Charter

Charter Service Must be “Incidental”

Incidental Charter Service Means Charter Service Which Does Not: Interfere With or Detract From the

Provision of the Mass Transportation Service for Which the Equipment or Facilities Were Funded Under the Acts; or

Does Not Shorten the Mass Transportation Life of the Equipment or Facilities

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Allowable Charter

Other Examples of That Would Not be “Incidental“ Service Performed During Peak

Hours Service Which Does Not Meet Its

Fully Allocated Cost Service Being Used to Count Toward

Meeting the Useful Life of Any Facilities or Equipment

Service Provided in Equipment That Is in Excess of Fleet Spare Ratio

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Allowable Charter

Tracking Incidental Charter Service and Vehicle Useful Life Rule Permits Any Reasonable

Computation Transit System Does Not Have to

Track by Specific Vehicles System Averages May be Applied

to Entire Fleet Records of Specific Charter Usage

Should be Maintained

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Procedures for Determining Willing and Able Private Operators

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Procedures for Determining Will and Able Charter

Operators Requirements

Annual Public Participation Process•Notice in Newspaper•Direct Mail to All Known Private

Operators in the Service Area or Any Operator Who Requests the Notice

•Sending Notice to UBOA and ABA

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Operators Notice Contents

Recipient Name Description of Proposed Charter Activity Process for Response (30 Days) Address Evidence Required to Be Submitted Statement of Action Statement Indicating Recipient Will Not

Do Charter if One Willing and Able Operator is Found To Exist (Unless an Exception is Found to Exist)

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Operators Description of Proposed

Charter Activity Description of the Days Times of Day Geographic Area Categories of Revenue Vehicle for

Service Any Other Information the System

Deems Useful

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Operators Transit Systems Must Allow a

Minimum of Thirty (30) Days to Permit Private Companies to Respond

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Operators Changes

An Operator May Go Through The Notice and Determination Process More Than Once Per Year•Suspension of Authority of an Existing

Willing and Able Carrier•New Carrier Market Entry in Mid-Year

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Operators Carrier Retraction of Willing Status

If a Private Operator Retracts Its Willingness to Provide Charter Service Less Than a Year After It Was Determined Willing and Able, and No Other Private Operators in the Service Area Have Been Determined "Willing and Able," a Recipient May Resume Charter Service Without Re-publishing a Notice for the Rest of That Year Only

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Operators “Willing” Operator

An Operator Need Only Express, in Writing, That It Desires to Provide Some or All, of the Proposed Charter Service

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Operators “Able” Operator

The Operator Has the Physical Capability of Providing the Categories of Revenue Vehicles Specified in the Notice

The Operator Has the Required Legal Authority to Operate Charter Service in the Area

Transit Systems May Not Use Other Criteria to Exclude Operators from its Willing and Able List

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Operators Special Circumstances

Tour Brokers•FTA Had Determined a Transit System

May Exclude Tour/Charter Brokers from the Definition of Willing and Able Private Operators Because They Do Not Own Equipment

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Operators Transit System Must Provide

Written Response of Determination Within Sixty (60) Days of Submission Deadline

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Penalties and Sanctions for Non-Compliance with 49

CFR part 604 Language Changed with SAFETEA-

LU (effective August 10, 2005) FTA/State DOT Investigates Violation, If Found, Must Be

Corrected FTA May Bar a Recipient From

Receiving Federal Transit Assistance in an Amount Considered “Appropriate” If a Pattern of Violations Occurs

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Transit System Referrals

There are No Requirements for a Transit System to Systematically Refer Inquiries to Operators

If the System Opts to Provide Names as a Public Service, It is Recommended that All Operators on the Willing and Able List Be Provided to Avoid the Appearance of “Steerage” to Specific Operators

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Special Local Situations

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Special Situations

Public Requests Use of Unique Vehicle (e.g., Trolley) Only Available Through the Transit System FTA Recognizes Only Two Types

of Equipment – Buses and Vans Transit System May Not Operate

Charter Under this Circumstance

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Special Situations

Use of Management Companies to Provide Charter Services Two Issues:

•Must be a Separate Business Entity from the Management Company– Charter Regulations Apply to

Subrecipients and Contractors

•Must Be “Able” (Hold Requisite Federal/State Authority)

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Special Situations

Use of Management Companies to Provide Charter Services Fully Licensed:

– The Legal Authority to Operate Motor Vehicles For-Hire

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Special Situations

Special Events Based on FTA’s Definition,

“Special Events” are Not County Fairs or Other Type Events

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Special Situations

Free Service FTA Has Determined Cost is Not

a Factor in Determining Whether a Service is Charter or Eligible Mass Transportation

Even if the Transit System Does Not Charge Users or the Contracting Entity, the Service May Still be Charter

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Special Situations

Provision of Vehicles to Private Charter Operators The Transit System is Not

Obligated to Provide Such Equipment

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Special Situations

Requests by County Board or City Council to Use Public Transit Vehicles FTA Has Determined that Use of

Vehicles for this Purpose is Charter

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Special Situations

Court Orders FTA Has Determined that Use of

Vehicles for this Purpose is Charter•“FTA Would Urge a Court Seeking to

Impose Upon a Recipient an Order to Provide Charter Service, to Secure Service From a Private Operator If a Private Operator Has Been Determined Willing and Able”

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Special Situations

Public Emergency FTA Has Determined That Transit Systems

May Perform Otherwise Prohibited Charter Service in the Case of a Serious Emergency

Emergencies - Man-Made or Natural Disasters• Fire • Chemical Spills • Floods •Hurricanes

The Need to Transport Persons to Meet Social Obligations or Protocol Type Demands, Would Not Be Considered an Emergency

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Some Recent Experience in FTA Charter

Oversight

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Recent FTA Involvement

FTA Involvement Special Events Exemptions Complaints Filed by

Consumers/Private Charter Companies

Triennial Review/State Review Findings

Other Exemptions and Hardship Waivers

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Recent FTA Involvement

12.2%

24.3%

50.0%

6.8%6.8%

Triennial/State Reviews Special Event Exemptions

Complaints Willing & Able Issues

Waivers & Exemptions

Source: Charter Service Report, Federal Transit Administration, October 15, 2004.

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Complaints

Complaints Constitute the Bulk of the FTA Charter Docket

From 2001 – 2004, FTA Received 37 Complaints Where a Docket Was Established

Complaints Lodged Against Both Urban and Rural Systems Alike

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Complaints

Overwhelmingly, FTA Sides with the Plaintiff and Either: Transit System Ceases the

Service FTA Issues a Cease and Desist

Order Trolley Service Generates

About Twenty (20%) Percent of These Complaints

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Special Event Exemptions

Since 2001, Eighteen (18) Requests Have Been Made Fifteen Determinations Documented

•Ten Approved•Five Denied

Type of Events Super Bowl, Democratic National Convention,

Presidential Addresses, etc.

Approvals Based Not Only on Event, But Previous/Current System Documentation of Willing and Able Operators

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Triennial/State Reviews

About Twelve (12%) Percent of the Docket Consist of Cases that Originate from Findings of a Triennial Review of State DOT Review

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Waivers and Exemptions

A Number of Grantees Request FTA to Grant Exemptions

Based on Case History, FTA Looks To Render a Finding Based on Existing Regulatory Exemptions

FTA Has Generally Sided with the Transit System, as the Request Is Consistent with One of the Exemptions in 49 CFR part 604.9(b)

One (1) Hardship Waiver Granted

fta’s charter regulations and provision of service under contract presented at the calact autumn...

Documents

eligible mass transit

definitions charter

provision of service

charter servicepage

issuescontract service

special transportation

provision of contract

ftas charter regulations