Pace/CTA Competing with private companies

[ibebobo]

Hi All and thank you in advance with any replies.

Does anyone know the law about federally funded angencies (Pace and CTA, etc...) competing with a private charter company? I am under the impression, according to FTA laws, that if a private company is "willing and able" to preform the duties, a federally funded transit agency is not allowed to compete. Now they (Pace, CTA) can hire a private company to do the work like they currently do.

Any help on this topic would be appreciated.

[Busjack]

The relevant law is in 49 USC 5323, which you can read yourself, but the highlights are:

• School bus: Federal funds are available "only if the applicant agrees not to provide schoolbus transportation that exclusively transports students and school personnel in competition with a private schoolbus operator." (subject to certain exceptions, such as if the city was transporting the students)
  
• Intercity charter: Federal funds available only if the operator "will not provide charter bus transportation service outside the urban area in which it provides regularly scheduled public transportation service."
  

It seems like CTA and Pace comply by saying that its (for instance UPS and U of C) routes are public routes with posted schedules. For instance, there was the business that Pace had to go through the public hearing requirement to cancel 426-Northwestern Shuttle, because it was a public route, although darn few thought of it as that. It was replaced by a charter operator, but note that it was not an intercity route. CTA has publicized that anyone can board a 170 series route if they pay the normal CTA fare, but only those with U of C identification ride free.

Similarly, it was noted that Pace reinstated routes in Waukegan once the school district started purchasing passes, but, again, those have public timetables, so they aren't exclusively transporting students and school personnel.

There was a stink that the RGRTA RTS service in Rochester N.Y. had violated the ban on competing with school bus operators, by procuring federally-paid buses that were run on routes that were not on the public schedule and exclusively served schools.

[ibebobo]

The relevant law is in 49 USC 5323, which you can

Well, that covers some stuff, but not specifically what I am looking for. According to the FTA website, a federally funded transit agency cannot compete with a private charter company if there is one "able and willing" to do the same job. A job is considered a "charter" when among other things, there is a "contract"

[Busjack]

Well, that covers some stuff, but not specifically what I am looking for. According to the FTA website, a federally funded transit agency cannot compete with a private charter company if there is one "able and willing" to do the same job. A job is considered a "charter" when among other things, there is a "contract"

Sorry, I hit post before I finished; please read the above again.

Anyway, though, the law is the law, the website isn't. There are interpretations of who is willing and able, but if the recipient's service isn't "exclusively students and school personnel" or "charter operations outside the urban area," that doesn't matter in the CTA and Pace case. It might matter if no one was running a private school bus company in this area, but CPS does contract with many of them, and the students who pile onto CTA buses are on public routes, even though, for instance, some runs are augmented to serve Taft or Northside Prep.

[Busjack]

Would those be "charter" runs as it serves employees and businesses rather than the general public?

No, you can ride one (if you want to get off at some place on Lake Cook Road and you won't have a way back) if you pay $1. Also, they all started with federal grants, so they can't be charter buses. In fact, 627 is still on a federal grant (and thus was exempted from the doomsday threat).

It's like Niles. The employers pay the fares, but there are other subsidies from Metra, Pace, and the feds.

Why are you so concerned whether publicly scheduled runs are charters? As I previously mentioned, the only thing that is barred is charter service outside the service area.

[ibebobo]

No, you can ride one (if you want to get off at some place on Lake Cook Road and you won't have a way back) if you pay $1. Also, they all started with federal grants, so they can't be charter buses. In fact, 627 is still on a federal grant (and thus was exempted from the doomsday threat).

It's like Niles. The employers pay the fares, but there are other subsidies from Metra, Pace, and the feds.

Why are you so concerned whether publicly scheduled runs are charters? As I previously mentioned, the only thing that is barred is charter service outside the service area.

Well, I am concerned when a federally funded transit angency using tax dollars creates unfair competition because of their subsity. The rules as I read them say that if there is a private charter company that is "willing and able" to do the job, a transit agency cannot compete unless there are very specific exceptions. There are also new laws that back this up that start at the end of this month. The obvious intent of this law is to prevent your tax dollars from benefitting the wrong people. Routes that have specific destinations (corporations) would likely not be viewed as a "public" route, but more for the employees of the corporation, thus should not be using public funds that would be much better spent elsewhere.

[Busjack]

Well, are you going to tell the federal DOT to pull the subsidies it has been giving for the past 12 years to the Shuttle Bug system (apparently under the CMAQ or JARC programs)? There were reports that a lot of people in Deerfield and Northbrook worked hard to get those grants; they were not handouts to Pace (in fact, some people report that a private van pool company first operated the vehicles, although I don't know about that).

Your theory would undermine the whole basis of the JARC program. If you want to write your congressperson and advocate repealing 49 USC 5316, fine, but I don't think there will be much support for it.

Also, you continue to ignore the "outside the service area" limitation.

[ibebobo]

Well, are you going to tell the federal DOT to pull the subsidies it has been giving for the past 12 years to the Shuttle Bug system (apparently under the CMAQ or JARC programs)?

Well, I didn't write the laws. If there is a subsity, it should go to a private company that runs the routes...if there is one willing and able to do so. The new laws are VERY specific about this. Maybe no one has pursued it but when the taxpayers have to keep paying more and more for services most of them do not use and people who really need the service can't get it, something has to give. This is an ethical issue and a legal issue.

[Busjack]

This is an ethical issue and a legal issue.

Ethical issue yes, legal issue no.

As I mentioned, write your congressperson.

[jajuan]

Well, I didn't write the laws. If there is a subsity, it should go to a private company that runs the routes...if there is one willing and able to do so. The new laws are VERY specific about this. Maybe no one has pursued it but when the taxpayers have to keep paying more and more for services most of them do not use and people who really need the service can't get it, something has to give. This is an ethical issue and a legal issue.

I've observed this debate with some interest, and I'll pose this question. If you don't want taxpayers paying for services they don't use where do you put the dividing line? I've made extremely rare uses of Metra, maybe once or twice in my whole life. Should I now ask that Metra stop being funded and leaving thousands of passengers with very few or no options of getting to their jobs because I don't use it? I don't use Pace nearly as much as CTA, with my living in the city. Should their funding get slashed too? Within the CTA itself, I don't use every single bus or rail route, now should I ask that those routes that I don't use be cut? Extreme moves yes, which I know don't relate to the central issue at hand. However, once you yield to that kind of thinking, it becomes a slippery slope.

I do have to agree with Busjack, this is getting to be some odd habit, that you are ignoring the key issue of the law. The forbidden competition has to be outside the public agencies' service area. The routes with destinations to different suburban businesses are within Pace's service area. The businesses believed Pace could provide more efficient service, which is why they fund part of the subsidy. The U of C routes are within CTA's service area. They used to be operated by a private bus company. The U of C thought the CTA could do a better job so it pays CTA to operate these routes. Similar story with the Museum of Science and Industry for the current route 10 and UPS in regard to routes 168 and 169. Can an ethical argument be made about this? Yes, perhaps. A legal one? No.

As for taxpayers paying for these routes, it's been repeated that the taxpayers are not completely paying for the operations of these routes. The companies in question are footing part of the bill. Again that's why they weren't on the doomsday chopping block.

[Busjack]

I've observed this debate with some interest, and I'll pose this question. If you don't want taxpayers paying for services they don't use where do you put the dividing line?

That's a fair question (also a fare one) and I think some hints were in the Doomsday discussion. Thus, the discussion is not what is legal under title 49, but what the RTA should be subsidizing with state tax money.

I'm bothered by the policy that an entity (employers or Niles) "pays the fares" and get the credit, even though the RTA (i.e. the taxpayers) forks up the regular subsidy, or over 60%. The CTA claimed that the U of C routes were fully funded by the University and hence immune from cuts, but the ones Pace runs apparently were not (all the Shuttle Bugs were on the chopping block as Metra feeders, except 627, which is under a federal grant).

Despite a dispute with trainman over the cost of the Pace Special Events bus, I don't think they should be run with a subsidy, since the people can pay the big bucks for the tickets and would otherwise pay big money for parking. I exempt from this analysis supplements to regular Pace routes (221 and 386), but would tend to agree with Carole Brown that Pace shouldn't be running buses to Soldier Field, but my view qualifies that to if it takes a subsidy to do it, unless there is an overwhelming congestion and air quality benefit.

On the other hand, buses to employers (including those who do pay the fares) do help provide access to the jobs. I think JARC means more than just the proposed common bus proposed from Harvey to Rosemont (and I don't know if that is a JARC project). Hence, one can divine that I have mixed feelings about the UPS and Shuttle Bug routes. Conceivably, UPS could pay a private operator to run them, and in the case of the 891 and 892 runs from Indiana to UPS, whoever is paying for those (it appears to be Workforce Development and the E.C. Casino foundation) could certainly pay either the local carrier or a charter company, and in these Indiana cases, the RTA is apparently not subsidizing the run. One could also throw the Subscription Buses into that mix, although only one is left.

Getting back to the Shuttle Bugs, I don't consider them any different than the reverse feeders in Elmhurst, Naperville, or Lisle, which only have the function of taking employees to various industrial parks.

[jajuan]

That's a fair question (also a fare one) and I think some hints were in the Doomsday discussion. Thus, the discussion is not what is legal under title 49, but what the RTA should be subsidizing with state tax money.

I'm bothered by the policy that an entity (employers or Niles) "pays the fares" and get the credit, even though the RTA (i.e. the taxpayers) forks up the regular subsidy, or over 60%. The CTA claimed that the U of C routes were fully funded by the University and hence immune from cuts, but the ones Pace runs apparently were not (all the Shuttle Bugs were on the chopping block as Metra feeders, except 627, which is under a federal grant).

Despite a dispute with trainman over the cost of the Pace Special Events bus, I don't think they should be run with a subsidy, since the people can pay the big bucks for the tickets and would otherwise pay big money for parking. I exempt from this analysis supplements to regular Pace routes (221 and 386), but would tend to agree with Carole Brown that Pace shouldn't be running buses to Soldier Field, but my view qualifies that to if it takes a subsidy to do it, unless there is an overwhelming congestion and air quality benefit.

On the other hand, buses to employers (including those who do pay the fares) do help provide access to the jobs. I think JARC means more than just the proposed common bus proposed from Harvey to Rosemont (and I don't know if that is a JARC project). Hence, one can divine that I have mixed feelings about the UPS and Shuttle Bug routes. Conceivably, UPS could pay a private operator to run them, and in the case of the 891 and 892 runs from Indiana to UPS, whoever is paying for those (it appears to be Workforce Development and the E.C. Casino foundation) could certainly pay either the local carrier or a charter company, and in these Indiana cases, the RTA is apparently not subsidizing the run. One could also throw the Subscription Buses into that mix, although only one is left.

Getting back to the Shuttle Bugs, I don't consider them any different than the reverse feeders in Elmhurst, Naperville, or Lisle, which only have the function of taking employees to various industrial parks.

Thank you, Busjack. You bring up some very interesting points. I agree with you about the 891 and 892 in terms of who their carrier should be. I was going to bring that up, but my post was getting kind of longwinded. :lol:

[trainman8119]

Getting back to the Shuttle Bugs, I don't consider them any different than the reverse feeders in Elmhurst, Naperville, or Lisle, which only have the function of taking employees to various industrial parks.

I will stand corrected on my previous statement about how maybe the Shuttle Bugs could be considered charters. I think the statement above describes, pretty well, just what Shuttle Bugs are...they are reverse commute routes. They do have a schedule and do have route numbers. I am not too fond of the concept of private companies paying for this stuff though. In the case of UPS, they basically controlled how those buses run...how many, to where and how often. If they didn't like something, they were clamoring for a change and Pace really sucked up to them. The real problem in that case, is that once again, the operation was getting away from the carrier and non-transit people were calling the shots. This also happened at Sears. They were real good in demanding certain types of buses on their routes. When they didn't get it, it really hit the fan and there was a lot of consoling and schmoozing involved. The Shuttle Bugs are a little different, in that Pace really does do the planning and operating of the routes involved. The companies on the North Shore let them do what is necessary, and the operation is popular and very successful, and I might add, very well run. It would've only made sense, in the current management climate we have here, that had doomsday happened that those routes would have found they way to the scrap heap. The formula seemed to be....the more popular and more used, the more likely it was on the chopping block.

[ibebobo]

I will stand corrected on my previous statement about how maybe the Shuttle Bugs could be considered charters. I think the statement above describes, pretty well, just what Shuttle Bugs are...they are reverse commute routes. They do have a schedule and do have route numbers. I am not too fond of the concept of private companies paying for this stuff though. In the case of UPS, they basically controlled how those buses run...how many, to where and how often. If they didn't like something, they were clamoring for a change and Pace really sucked up to them. The real problem in that case, is that once again, the operation was getting away from the carrier and non-transit people were calling the shots. This also happened at Sears. They were real good in demanding certain types of buses on their routes. When they didn't get it, it really hit the fan and there was a lot of consoling and schmoozing involved. The Shuttle Bugs are a little different, in that Pace really does do the planning and operating of the routes involved. The companies on the North Shore let them do what is necessary, and the operation is popular and very successful, and I might add, very well run. It would've only made sense, in the current management climate we have here, that had doomsday happened that those routes would have found they way to the scrap heap. The formula seemed to be....the more popular and more used, the more likely it was on the chopping block.

Here is a definition of a charter from the FTA web site. The new rules take effect at the end of this month. The shuttle bugs are charters. There is a contract for them between the TMA and the corporations they serve. They are one way routes. Although they are advertised to the general public, they do not serve the general public as they go to PRIVATE CORPORATIONS that the general public do not go to. The taxpayers fund a portion of this and it is a misuse of public funds and should have never been allowed to start in the first place UNLESS THERE WAS NOT A PRIVATE COMPANY WILLING AND ABLE TO DO THE JOB. I see no where in the rules about whether it is within the service area.

604.1 Purpose.

The purpose of this part is to implement

section 3(f) and section 12©(6) of

the FT Act.

§ 604.3 Applicability.

This part applies to all applicants

and recipients of Federal financial assistance

under:

(a) Sections 3 (excluding section

16((2)), 5, 9A, 9 or 18 of the FT Act; or

( Sections 103(e)(4), 142(a), or 142©

of Title 23 United States Code which

permit the use of Federal-Aid Highway

funds to purchase buses.

§ 604.5 Definitions.

(a) All definitions in the FT Act (at

49 U.S.C. 1608) are applicable to this

part, except as may otherwise be provided

in this section.

( The Acts means the FT Act and

those parts of Title 23 United States

Code, 23 U.S.C. 103(e)(4), 142(a) and

142©, that provide for assistance to

public bodies for purchasing buses.

© Administrator means the Administrator

of FTA or his or her designee.

(d) Categories of Revenue Vehicle

means bus or van.

(e) Charter Service means 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. This definition

includes the incidental use of FTA

funded equipment for the exclusive

transportation of school students, personnel,

and equipment.

Go to www.fta.dot.gov and look under regulations. There are all kinds of rules here that will confirm what I say.

[Busjack]

Here is a definition of a charter from the FTA web site. ... I see no where in the rules about whether it is within the service area.

604.1 Purpose.

...

§ 604.3 Applicability.

...

§ 604.5 Definitions.

....

Go to www.fta.dot.gov and look under regulations. There are all kinds of rules here that will confirm what I say.

The quick answer is that the rules are subject to, must be consistent with, and be interpreted in light of the statute. The statute does say outside the service area. Also you have only quoted definitions, not the substantive part of the rules. Furthermore, as clearly stated in 604.1: "The purpose of this part is to implement section 3(f) and section 12( c)(6) of the FT Act" not supersede it.

If you want to disclose your legal training fine. Rest assured that I have it. But (and the hounds of hell will descend on me again), I'm not going further until you do.

P.S. I once got into it with Adam Kerman on his legal analysis, and his answer was that even if he was impressed with my resume, that wouldn't alter his argument. So it doesn't pay to argue law in Internet forums.

My answer, as before, is to write your congressperson, or as the Gray Line people did, file a complaint with the FTA. Arguing here accomplishes nothing.

[ibebobo]

The quick answer is that the rules are subject to, must be consistent with, and be interpreted in light of the statute. The statute does say outside the service area. Also you have only quoted definitions, not the substantive part of the rules. Furthermore, as clearly stated in 604.1: "The purpose of this part is to implement section 3(f) and section 12( c)(6) of the FT Act" not supersede it.

If you want to disclose your legal training fine. Rest assured that I have it. But (and the hounds of hell will descend on me again), I'm not going further until you do.

P.S. I once got into it with Adam Kerman on his legal analysis, and his answer was that even if he was impressed with my resume, that wouldn't alter his argument. So it doesn't pay to argue law in Internet forums.

My answer, as before, is to write your congressperson, or as the Gray Line people did, file a complaint with the FTA. Arguing here accomplishes nothing.

There is no intent to start an argument. I was mearly asking peoples opinion. I hate when the big boys misuse public funds and no one steps in to stop it. In the mean time, we are now paying more in taxes and private companies benefit from it. People who really need more service can't get it and it make me sick. Everyone here should be filing a complaint as it is the right thing to do. I wonder what would happen if the media found out about it??????

[Guest metralink]

There is no intent to start an argument. I was mearly asking peoples opinion. I hate when the big boys misuse public funds and no one steps in to stop it. In the mean time, we are now paying more in taxes and private companies benefit from it. People who really need more service can't get it and it make me sick. Everyone here should be filing a complaint as it is the right thing to do. I wonder what would happen if the media found out about it??????

if we want to carry it that far, let the private railroads run the Metra lines, oh let's see they went bankrupt and had to be bailed out. I would say the shuttles will stick around as there is a market, they serve a purpose and serve the public good.

[ibebobo]

if we want to carry it that far, let the private railroads run the Metra lines, oh let's see they went bankrupt and had to be bailed out. I would say the shuttles will stick around as there is a market, they serve a purpose and serve the public good.

This has NOTHING to do with it. I am SPECIFICALLY talking about what is considered a CHARTER route being operated by a PUBICALLY FUNDED transit agency. IMO, the SHUTTLE BUGS are a charter as they fall under the FTA CHARTER guidelines, Metra is not nor are the "PUBLIC" routes including the UIC CTA routes and the Niles routes. PRIVATE COMPANIES are served by the SHUTTLE BUGS. They are not designed to serve the GENERAL PUBLIC. They are very specific routes thet TERMINATE at a PRIVATE COMPANY. You can't even ride back to the Metra stations in the AM, according to the published schedule. So they are ONE WAY routes that serve the EMPLOYEES of PRIVATE COMPANIES., not THE PUBLIC. IMO, the PRIVATE COMPANIES should be paying 100% of the cost, not the taxpayers. The new rules that take effect at the end of this month will make it very easy to clarify this. If there are specific rules that say otherwise, please copy and paste them here or send a link to the web site that has them.

Thanks.

[Busjack]

I'm glad that the assertions are now on the basis of IMO, since, as I noted, there can be a legitimate debate about what RTA (i.e. taxpayer) funds subsidize.

However, if you really want something to sink you teeth into, I would go after the UPS routes. Obviously UPS is contracting with CTA and Pace to provide buses that obviously do not serve the general public, as they don't pick up on the Tollway and do run at such convenient hours as 2 a.m. (we previously discussed how can Pace keep the North Shore division open after its last regular bus at 10 p.m. to run a 2 a.m. UPS route, although that one doesn't run express). However, the feds gave a grant to construct a Transportation Center for sole use of UPS in Hodgkins.

Nonetheless, the facts that the Shuttle Bugs were started with federal grants (and apparently not to Pace, but the TMA, the entity who you say should not be making arrangements with a public carrier), and federal grants were given to construct the UPS TC indicates that there is a strong presumption against anything being done about them, although you are entitled to your opinion that that isn't a good use of taxpayer funds.

[trainman8119]

Bobo is right to a point, I guess, and in some cases the private companies do pay the bulk, as in the case of UPS. There are so many loopholes in the legalities it would make your head spin. You have to understand what the purpose of mass transit is, and that is to provide transportation, which the Shuttle Bugs do. Personally, I am not fond of the many of the conceptual aspects Pace has, especially the corporate shuttles. I grew up in the city and am most familiar with fixed routes, and feel from a funding point, feel that is what transit agencies should concentrate on. With van pool programs, subscription routes, subcontracting service and the such, I am afraid Pace is getting away from the basic concept of Public Transportation and are becoming more of a private carrier, and I think that might be where bobo is aiming at in his (her) comments. My fear is that exactly what CTA wants too and that would be all too wrong.

if we want to carry it that far, let the private railroads run the Metra lines, oh let's see they went bankrupt and had to be bailed out. I would say the shuttles will stick around as there is a market, they serve a purpose and serve the public good.

This makes absolutely no sense, in terms of what bobo is talking about. Other than a private car on a UP North Line train, I don't know of anywhere where Metra caters to private companies like Pace does.

[ibebobo]

Bobo is right to a point, I guess, and in some cases the private companies do pay the bulk, as in the case of UPS. There are so many loopholes in the legalities it would make your head spin. You have to understand what the purpose of mass transit is, and that is to provide transportation, which the Shuttle Bugs do. Personally, I am not fond of the many of the conceptual aspects Pace has, especially the corporate shuttles. I grew up in the city and am most familiar with fixed routes, and feel from a funding point, feel that is what transit agencies should concentrate on. With van pool programs, subscription routes, subcontracting service and the such, I am afraid Pace is getting away from the basic concept of Public Transportation and are becoming more of a private carrier, and I think that might be where bobo is aiming at in his (her) comments. My fear is that exactly what CTA wants too and that would be all too wrong.

This makes absolutely no sense, in terms of what bobo is talking about. Other than a private car on a UP North Line train, I don't know of anywhere where Metra caters to private companies like Pace does.

BUSJACK,

Have you or anyone else here read the CHARTER SERVICE AGREEMENT that Pace has with the TMA or anyone else?

[Busjack]

BUSJACK,

Have you or anyone else here read the CHARTER SERVICE AGREEMENT that Pace has with the TMA or anyone else?

Nope.

Not the one with UPS either.

Also, you assume that something by that title exists. Fact not yet in evidence.

[Busjack]

Also, since the relevant provision of 49 U.S.C. says:

Financial assistance under this chapter may be used to buy or operate a bus only if the applicant, governmental authority, or publicly owned operator that receives the assistance agrees that, except as provided in the agreement, the governmental authority or an operator of public transportation for the governmental authority will not provide charter bus transportation service outside the urban area in which it provides regularly scheduled public transportation service. An agreement shall provide for a fair arrangement the Secretary of Transportation considers appropriate to ensure that the assistance will not enable a governmental authority or an operator for a governmental authority to foreclose a private

operator from providing intercity charter bus service if the private operator can provide the service.

ibebobo:

Do you have a copy of those agreements with CTA and Pace?

[ibebobo]

Also, since the relevant provision of 49 U.S.C. says:

ibebobo:

Do you have a copy of those agreements with CTA and Pace?

No. I also do not know if they exist. I assume that since the middle man has a pretty hefty contract with the companies, they would not assume that kind of risk without having a contract with Pace.

[Busjack]

No. I also do not know if they exist. I assume that since the middle man has a pretty hefty contract with the companies, they would not assume that kind of risk without having a contract with Pace.

Maybe correct, except that:

• If there were a contract of the type you suggest, Pace couldn't have put the buses on the chopping block for Doomsday, and it admitted that other fully funded routes, such as 907, were not on the block until their funding ran out.
  
• More than likely, it is not a "charter agreement," but something like with Niles to "pay the fares."
  

Also, having looked at the proposal for the Wheaton area contract documents, soliciting contractors to run the Pace routes now subject to the DuPage area restructuring, there is a provision giving Pace the right to terminate the agreement, with no further liability except to pay for services already provided, if funds are not available from revenues, the RTA, IDOT, FTA, or any other funding agency. That kind of clause, which appears to enable Doomsday cuts, would not provide the kind of assurance you say that the TMA would want.

Having worked for a company that supported a Shuttle Bug until it decided to close 80% of its local operation and quit its subsidy, saying that there were too few remaining employees to justify it, I remember that Pace went through the effort of trying to drum up interest from employees of other companies on the route, and then had to call a public hearing (in accordance with the FT Act) to cancel it. Not consistent with having a "charter contract."