STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

TRYCAP TRANSPORTATION MANAGEMENT ) INC., d/b/a WORLD TRANSPORTATION ) INC., )

)

Petitioner, )

)

vs. ) CASE NO. 94-5181

)

CENTRAL FLORIDA REGIONAL ) TRANSPORTATION AUTHORITY and ) ORANGE-SEMINOLE-OSCEOLA )

TRANSPORTATION AUTHORITY, )

)

Respondent. )

)

RECOMMENDED ORDER

Pursuant to notice, the above-styled matter was heard before the Division of Administrative Hearings by its duly designated Hearing Officer, Daniel M. Kilbride, on April 10-13, 1995, in Orlando, Florida. The following appearances were entered:

APPEARANCES

For Petitioner: Thomas B. DeWolf, Esquire

Robert S. Hoofman, Esquire

DeWolf, Ward, O'Donnell & Hoofman, P.A.

111 North Orange Avenue, Suite 2000 Orlando, Florida 32801

For Respondent: David E. Cardwell, Esquire

James L. Simon, Esquire Mary Beth Cantrell, Esquire Stacy Blank, Esquire Holland & Knight

Post Office Box 1526 Orlando, Florida 32802

STATEMENT OF THE ISSUES

Whether Petitioner is a substantially affected party and entitled to a formal hearing pursuant to the provisions of Section 120.57(1), Florida Statutes.

Whether LYNX' 1992 application for "Section 9" federal grant funds complied with the planning and grant requirements of the Federal Transit Act, 79 U.S.C.

1601, et seq, as amended, and state law.

Whether LYNX complied with the Private Enterprise Participation requirements of the Federal Transit Administration (FTA).

Whether the level of demand for mass transportation service in the International Drive Corridor requires that increased service capacity be provided and under what criteria.

Whether the proposed restructured service for the International Drive Corridor should be provided by LYNX or a private mass transportation provider.

PRELIMINARY STATEMENT

On May 12, 1994, Petitioner, Trykap Transportation Management, Inc., d/b/a World Transportation, Inc. (WTI), filed a Petition Requesting Formal Hearing, pursuant to Section 120.57(1), Florida Statutes, with Respondent, the combined agencies of Central Florida Regional Transportation Authority and Orange- Seminole-Osceola Transportation Authority (LYNX). The Petitioner's request for a hearing was granted on May 26, 1994. Respondent elected to appoint a member of the governing board to conduct the hearing as the agency head. Subsequently, the Chair of the Board was appointed hearing officer on June 10, 1994. On June 14, 1994, Petitioner filed a Motion to Disqualify Presiding Officer. The motion was denied. Petitioner appealed the order of denial to the Fifth District Court of Appeal. The District Court of Appeal rendered its opinion on July 21, 1994 that the Hearing Officer should be disqualified, and recommended that a Hearing Officer from the Division of Administrative Hearings (DOAH) be appointed to conduct the hearing. World Transportation, Inc. v. Central Florida Regional Transportation Authority, 641 So.2d 913 (Fla. 5th DCA 1994). On remand, the Hearing Officer disqualified herself and requested the Division of Administrative Hearings to conduct the hearing. On September 15, 1994, Respondent filed a request to assign a Hearing Officer with the Division of Administrative Hearings and this matter was referred to the undersigned.

Following rulings on various preliminary motions and initiation of discovery, this matter was set for hearing. The hearing was continued at the request of Respondent upon good cause being shown. By order of March 29, 1995, disputed issues of material fact that are beyond the jurisdiction of this forum were struck. Pre-filed direct testimony of expert witnesses was filed prior to the hearing. A Prehearing Stipulation was received on April 6, 1995. The hearing commenced on April 10, 1995. The parties jointly filed a stipulation of facts which was admitted as Joint Exhibit No. 1. Petitioner called four witnesses, and offered deposition testimony of four witnesses with exhibits, in lieu of live testimony; the pre-filed direct testimony of Henry Fishkind, Ph.D., and the cross examination by deposition was admitted in evidence, in lieu of live cross examination. Petitioner's exhibits 1 through 51B were admitted in evidence, except for exhibits numbered 10, 20, 34, and 39, which were withdrawn.

Respondents called five witnesses. Respondent offered exhibits numbered 1 through 68 which were admitted in evidence, except for exhibits numbered 38, 42 and 57, which were withdrawn. The transcript of the hearing was filed on May 2, 1995 and the parties each filed proposed findings of fact, conclusions of law and memoranda on May 23, 1995. I have given careful consideration to all of the evidence and each of the parties' proposals. My specific rulings on the parties' proposals are set forth in the Appendix attached hereto.

Based upon all of the evidence, the following findings of fact are determined:

FINDINGS OF FACT

1. Central Florida Regional Transportation Authority (CFRTA) and the Orange-Seminole-Osceola Transportation Authority (collectively, LYNX) are each a

   public body authorized to provide mass transportation services within the counties of Orange, Seminole and Osceola, as well as all cities within those counties, including the City of Orlando. The two Authorities operate as one entity and have merged their activities and assets, with CFRTA being the successor entity.

   
   

2. LYNX is the duly constituted regional transportation authority for the Central Florida Region, which includes Seminole, Orange and Osceola Counties. It is created and established pursuant to the Interlocal Agreement dated May 2, 1972, under the authority of Section 163.01, Florida Statutes, and Section 343.63, Florida Statutes.

   
   

3. LYNX is a designated recipient of local federal transit assistance.

   
   

4. Trykap Transportation Management, Inc., d/b/a World Transportation, Inc. (WTI) is a closely-held for-profit corporation which operates a mass transportation bus service, transporting riders from a number of hotels and motels in the Kissimmee, Lake Buena Vista and Orlando area to tourist attractions in Central Florida. Jay Kaplan is the president of WTI.

   
   

5. The Federal Transit Administration (FTA) is the federal agency responsible for reviewing and approving applications for the use of federal grant funds in local transportation projects.

   
   

6. ETC of Central Florida, Inc. (ETC) is a Florida not-for-profit corporation organized in 1988. Beginning in 1991, ETC has been instrumental in proposing and encouraging increased mass transportation service in the International Drive area. ETC supported the establishment of a special taxing district for the purpose of funding increased transportation service on International Drive.

   
   

7. The International Drive Master Transit and Improvement District Municipal Service Taxing Unit (the District), an independent special district created by ordinance of Orange County, Florida, was created in December 1992 for the purpose of developing additional transit service for the International Drive area. This local government unit is an independent entity and is not related in any way to LYNX.

   
   

8. The Orlando Urban Area Metropolitan Planning Organization (MPO) is responsible for transportation planning in the Orlando urbanized area. The MPO is responsible for preparing the Transportation Improvement Program (TIP) for submission to Florida's Department of Transportation and the FTA.

   
   

9. The "International Drive (I-Drive) corridor" consists of a major north/south collector roadway, International Drive, which extends from Kirkman Road on the north to Central Florida Parkway on the south, a distance of approximately 4.6 miles. There are hotels, attractions, the Orange County Convention Center, restaurants and other commercial retail establishments located within the corridor. There are no residential areas located along the I-Drive corridor.

   
   

10. Since 1976, LYNX has continuously provided bus service on and around International Drive. LYNX currently provides service on International Drive with 7 different routes.

    
    

11. For several years, the International Drive corridor has been the subject of transit studies done by the City of Orlando, Orange County, ETC, the

    Metropolitan Planning Organization and other public and private entities having an interest in the International Drive corridor.

    
    

12. As the regional transit authority, LYNX was involved early on in various discussions with ETC and the District regarding their plans for developing transportation on International Drive. Part of LYNX's responsibility as the regional transit authority is to offer assistance and advice in the promotion and development of public transportation. Consistent with that responsibility, LYNX staff met frequently with representatives of ETC and the District to answer technical and operational questions as well as to offer assistance, support and the benefit of LYNX's expertise and experience.

    
    

13. In 1989, James F. Charlier was retained by the City of Orlando and the ETC as a transportation planning consultant. Charlier produced numerous studies, letters and presentation materials in regard to the I-Drive Project and appeared before numerous local government agencies on behalf of the Public Transit Project (PTP). A comprehensive study was also completed by Gannett- Fleming, Inc. for the PTP, entitled "Orlando/International Corridor Transportation Study Final Report" which analyzed four public transportation alternatives, including bus service for the I-Drive area.

    
    

14. Following the formation of the District in December 1992, and through 1993, LYNX staff began to have conceptual discussions with the District about the possibility of LYNX enhancing its existing bus service on International Drive under contract with the District.

    
    

15. During all of 1993 and the early part of 1994, there were dozens of meetings, workshops and public hearings conducted by various agencies in the community on LYNX's consideration of whether to restructure its current bus service. WTI participated fully in these preliminary proceedings.

    
    

16. Jay Kaplan of WTI, often accompanied his legal counsel, attended between fifteen and twenty meetings regarding transportation services on International Drive, and he spoke at approximately half of those meetings. Kaplan's legal counsel also spoke at various meetings regarding transportation services on International Drive.

    
    

17. WTI requested and received numerous documents as early as January, 1993, and continued to request and receive information throughout the course of the proceedings.

    
    

18. At the same time, the District continued to explore the possibility of contracting with a private provider for transportation service on International Drive.

    
    

19. Once the District began to develop more specifically its service needs, LYNX commenced its own analysis of whether to restructure its International Drive service.

    
    

20. On March 22, 1994, LYNX issued a Draft Feasibility Analysis and Request for Written Comments Regarding New or Restructured Service in the International Drive Corridor relating to the provision of restructured bus service along International Drive. This Draft Feasibility Analysis stated the intent of LYNX to restructure its bus service in the International Drive corridor and also disclosed the specific costs and service plan for the project. The Draft Feasibility Analysis requested public comment on proposed public transportation service changes in the International Drive corridor.

21. LYNX provided the Draft Feasibility Analysis and request for comment to over 200 private transportation companies whose interests might be affected by LYNX's decision, including WTI.

    
    

22. WTI provided a written response within the 30-day comment period. Two other providers, Gray Line and A-1 Bus Lines, also submitted formal comments on the Draft Feasibility Analysis regarding restructured service on International Drive.

    
    

23. The written comment on the Draft Feasibility Analysis submitted by WTI included WTI's complete response to the LYNX analysis. LYNX staff considered all comments filed in response to the draft feasibility analysis and prepared a staff recommendation for the LYNX Board.

    
    

24. On May 9, 1994, LYNX gave notice of its intent to take action on May 12, 1994 on the restructured bus service. The details of the restructured service plan contemplated by LYNX appear in the Final Feasibility Analysis and Staff Recommendation published May 12, 1994.

    
    

25. On May 12, 1994, LYNX held a board meeting for the purpose of receiving the LYNX staff recommendation and approving or rejecting the enhanced service plan.

    
    

26. LYNX permitted counsel for WTI to address its concerns at the May 12, 1994 LYNX Board Meeting, and counsel for WTI presented a summary of its objections to implementation of the new or restructured bus service on International Drive.

    
    

27. At the May 12, 1994 LYNX Board Meeting, the LYNX Board approved implementation of the restructured bus service on International Drive to commence on June 26, 1994. The Board also authorized entering into an interlocal agreement with the District.

    
    

28. In June, 1994, the Governing Board of the District authorized the District to move forward with an agreement with LYNX for the provision of that service.

    
    

29. LYNX did not reach a formal agreement with the District for the provision of bus service on International Drive prior to June 1994.

    
    

30. The enhanced service commenced on June 26, 1994.

    
    

31. In August 1992, LYNX submitted an application for so called "Section 9" federal grant funds under the provisions of the Federal Transit Act, 79

    U.S.C. App. 1601, et seq. for the purchase of approximately 54 buses. The grant approval date was December 1992. LYNX ultimately ordered 47 buses, including fifteen thirty-passenger buses.

    
    

32. The application was for federal formula grant dollars available to LYNX. The FTA allocates Section 9 grant dollars based upon a formula which considers a number of variables. The formula determines the amount of funding assistance to which each grantee is entitled under the Section 9 program, which is essentially a block-grant program.

33. In its August 1992 application to the FTA, LYNX applied for grant funds to purchase buses for replacement of old equipment and expansion of its fleet generally.

    
    

34. For purposes of the federal transit assistance program, the term "service level" refers to the location and number of individual bus transit stops, the frequency of service to such stops (also referred to as "headway"), extension of routes or internal changes to routes, and similar matters concerning passenger service.

    
    

35. The Final Feasibility Analysis states that LYNX's restructured bus service involves changes in service levels in an existing corridor of service. The restructured service follows closely that service historically provided by LYNX along International Drive. The substantial difference between the restructured service and the service that LYNX has provided continuously along International Drive since 1976 is that additional bus stops have been added and those stops are serviced more frequently by new equipment, 1/ with the buses having clearly identifiable logo.

    
    

36. A "transportation improvement program" (TIP) is a locally developed and controlled planning device. It is mandated under the provisions of the federal Mass Transit Act and regulations and guidance have been issued by the FTA to implement the Federal Transit Act.

    
    

37. A transit grantee must disclose in the TIP federally-funded capital projects. A "project" for federal transit grant purposes is any proposal for new equipment, service or facilities which cannot be undertaken by a grantee with resources already in the control of that grantee.

    
    

38. Changes in service levels, such as those made by LYNX on International Drive pursuant to the Final Feasibility Analysis, are not "projects" and do not require a modification of a TIP even if federally-funded buses are used to increase the service levels.

    
    

39. "New" service is a project which must be included in a TIP. "New" service is defined as service provided in a new transit corridor not previously serviced by the transit grantee. Any enhancement of service in an already existing corridor is not "new" service, and therefore need not be included in the TIP.

    
    

40. LYNX was not required to disclose its restructured service along the International Drive Corridor in the TIP or elsewhere in the grant application filed in August, 1992.

    
    

41. Three things are required before service levels can be changed, these are: 1) an analysis of the demand for services, 2) an analysis of the cost of providing the revised service, and 3) notice to the public and interested parties and an opportunity for public comment. Each of the three prerequisites for modifying service may be satisfied by a written analysis which addresses service cost and other operating characteristics of the proposed service modification, and provides an opportunity under legal notice for comments to be received in writing from the public and interested parties.

    
    

42. LYNX complied with these requirements by virtue of its Draft and Final Feasibility Analyses.

43. Prior to the recision of the Federal Transit Administration's Private Enterprise Participation Policy, grant recipients were subject to certain private enterprise participation requirements in connection with their subsequent use of federal grant funds. Grant recipients developing new and restructured transit services were required to provide: 1) early consultation,

    1. a description of how new and restructured services would be evaluated (i.e., service criteria for the proposed change in service and a disclosure of the fully allocated costs of providing the proposed service directly with the grantee agencies' own equipment and personnel, 3) an opportunity for comment from the public and other interested parties, including private providers of transportation, 4) an analysis which reasonably flows from the record in support of the decision to provide the service either in-house or under contract, and 5) a dispute resolution process.

       
       

44. The Draft Feasibility Analysis of new and restructured service for the International Drive corridor issued by LYNX in March 1994 complies with the federal private enterprise participation requirements.

    
    

45. Lynx provided "early consultation" within the meaning of the federal private enterprise participation requirements with regard to new and restructured service in the International Drive corridor as part of the feasibility analysis of 1994.

    
    

46. For a period of years prior to 1994, there were various public meetings, studies, and other elements of consultation with and among all sectors of the community, including private transportation providers. There were abundant opportunities for the public, including private transportation providers, to evaluate conditions, consider alternative service concepts for transit service in the International Drive corridor prior to the formulation of specific service criteria.

    
    

47. The 1994 Draft Feasibility Analysis specifically afforded all interested parties a concrete opportunity to comment on LYNX's specific proposals regarding service criteria, costs and proposed operations. It also afforded interested parties an opportunity to have such comments analyzed and incorporated by LYNX into the Final Feasibility Analysis before the proposed modifications of service levels were presented to the LYNX governing board for review and decision.

    
    

48. On or about March 24, 1994, LYNX issued a Notice of Draft Feasibility Analysis and Request for Written Comments Regarding New or Restructured Service for the International Drive Corridor (DFA). The DFA defined the I-Ride service and LYNX's intent to operate it. The DFA also incorporated by reference several prior studies.

    
    

49. The DFA was sent to private providers, and requested submission of comments by April 25, 1994.

    
    

50. The DFA provides an adequate description of how new and restructured service for the International Drive corridor would be evaluated. The DFA enumerates the pertinent service criteria (i.e., the number of vehicles proposed for the service, hours and days of service operation, the route and scheduled stops for the service, the qualifications and training of drivers and supervisors, and maintenance to be required).

    
    

51. The DFA provides an adequate disclosure of the fully allocated costs of the proposed service. The DFA includes a breakdown of all of the cost pools

    which comprise the actual costs to LYNX of providing the service, including both direct costs and indirect costs.

    
    

52. The submission of a private enterprise participation policy, including a complaint resolution process, is a requirement of receiving a federal transit assistance grant. The FTA's acceptance of the adequacy of a local private enterprise participation policy, including a complaint resolution process, is a precondition of receiving a federal transit assistance grant.

    
    

53. As an FTA agency recipient, LYNX had in place a private enterprise participation policy, including a complaint resolution process, which conformed to the applicable federal requirements.

    
    

54. On April 25, 1994, WTI filed its comments objecting to the I-Ride Project and requested a formal hearing prior to final agency action by the LYNX Board.

    
    

55. On May 6, 1994, LYNX Executive Director issued an Operating Order to its drivers, dispatchers, and supervisors concerning the "Special Requirements of operators who elect to pick I-Ride division work assignments." Special training efforts were made to handle tourist relations and "ambassador training" was provided for I-Ride drivers before the service began.

    
    

56. On May 9, 1994, LYNX gave Notice of Intent (NOI) to take action on May 12, 1994 to implement the I-Ride service, and to enter into an Interlocal Agreement with the District for the I-Ride bus service.

    
    

57. The NOI failed to state the right or a time limit for a person substantially affected by the proposed action to request a formal hearing pursuant to Section 120.57(1), Florida Statutes.

    
    

58. On May 12, 1994, prior to the LYNX Board meeting, WTI filed a formal Petition requesting a 120.57(1) hearing.

    
    

59. At the May 12, 1994 Board meeting, WTI also appeared through counsel and requested a formal hearing. The request for hearing was initially denied. The LYNX Board proceeded to approve implementation of the I-Ride bus service to commence on June 26, 1994 and authorized entering into the interlocal agreement with the District.

    
    

60. The LYNX Board erred in proceeding with implementation of the bus service. WTI is entitled to a hearing under Section 120.57(1) because it has demonstrated a "substantial interest" in this matter and is substantially affected by the proposed agency action, to wit: the implementation of the I- Ride services and interlocal agreement. The LYNX Board should have granted the petition and proceeded forward only as a party litigant.

    
    

61. WTI's request for a formal hearing was granted by order, dated May 26, 1994, and a member of the LYNX Board was subsequently appointed as the hearing officer. The case was set for hearing. Upon denial of a motion to disqualify the presiding officer, the interlocutory order was appealed to the Fifth District Court of Appeal. The restructured I-Ride bus service was implemented and commenced service in mid-June, 1994 and is currently in operation.

    
    

62. LYNX operates traditional fixed route local bus service with on-street stops. LYNX service does not use tour buses or shuttle vans, but rather regular city buses.

63. The restructured LYNX service does not reach any area attractions that are not located on International Drive.

    
    

64. LYNX buses do not stop or pick up or disembark passengers on private hotel property. The LYNX fare is 75 cents one way.

    
    

65. WTI provides express "point-to-point" (i.e., door-to-door) shuttle service between a number of hotels located on International Drive and major attractions in the Orlando area. WTI's bus and shuttle van service picks up customers at hotels and delivers them to certain area attractions.

    
    

66. Although WTI services a predetermined route, they only stop at hotels along that route if customers at the hotels have called ahead of time to make reservations. If there are no reservations at a given hotel, the shuttle van does not stop at that hotel and instead travels directly to its destination. In addition, the shuttle vans picks up customers only at such other locations on the route as are prearranged by the customers.

    
    

67. WTI's bus service picks up customers from designated locations on International Drive and delivers those customers to the following locations only: Sea World, Universal Studios and Walt Disney World theme parks. Customers on WTI's buses disembark at the ultimate destination. Customers do not embark at any other stop along the route. The current fare charged by WTI for trips to Universal Studios and Sea World is $5.00 round trip and $3.00 one way per customer. The current fare to the Walt Disney World theme parks is $9.00 round trip and $5.00 one way per customer.

    
    

68. The U.S. Department of Transportation defines the term "local bus service" as a bus service that picks up and discharges passengers at frequent, designated places (stops) on city streets. Such service does not require passengers to go to any particular destination stop. FTA Circular 9030.1A, Appendix A, Definitions.

    
    

69. The service offered by LYNX is a "local bus service" as defined by the Department of Transportation.

    
    

70. The U.S. Department of Transportation defines the term "gather service" as a service that collects passengers from many origins and delivers them to a specific point. Gather service passengers do not disembark at intermediate points on a route other than the designated final destination. FTA Circular 90.30.1A, Appendix A, Definitions.

    
    

71. WTI's service falls within the Department of Transportation's definition of a "gather service."

    
    

72. For purposes of federal transit planning and grants, a gather service does not compete with a local bus service.

    
    

73. Applying the federal guidelines, the LYNX service on International Drive does not compete with WTI's service because the two are distinct kinds of service which serve different purposes and different markets.

    
    

74. In addition, the LYNX service does not compete with WTI because there is very little overlap in actual destinations serviced by WTI and the LYNX service. The LYNX restructured service does not travel to Universal Studios,

    Walt Disney World theme parks or Belz Outlet Mall. The only destination serviced both by WTI and LYNX is Sea World.

    
    

75. Sea World is geographically located near the end of International Drive. As a result, LYNX services Sea World and has done so for many years. Under its restructured plan, LYNX continues to service Sea World. The only change is the frequency with which LYNX buses service that stop.

    
    

76. The competition that does result from service to Sea World was well known to WTI before it began its operations on International Drive in 1990.

    
    

77. WTI has not shown substantial injury in fact because the bus services offered by WTI and LYNX are different and are not significantly competitive. WTI has not proven by a preponderance of evidence it has suffered actual economic loss as a result of the I-Ride service.

    
    

78. The International Drive portion of WTI's total passengers in both 1993 and 1994 is less than 2 percent. WTI's total annual revenue from shuttle bus and point to point shuttle services was higher for 1994 than for 1993. In addition, WTI's average monthly revenue was also higher for 1994 than for 1993.

    
    

79. Any losses suffered by WTI have not been proven to be attributable to the LYNX service. The daily average number of passengers taking a WTI shuttle bus or point to point shuttle from International Drive to Universal Studios during the latter half of the year was lower in 1994 than for the same period in 1993. Likewise, the daily average number of passengers taking a WTI point to point shuttle from International Drive to Belz Outlet Mall during the latter half of the year substantially decreased in 1994 from the 1993 level for the same time period. However, LYNX's restructured service does not go to the Belz Outlet Mall or Universal Studios. Therefore, WTI's decrease in passengers to Belz and Universal have not been shown to be the result of competition from LYNX's service.

    
    

80. There is also strong direct correlation between WTI's 1994 revenue from shuttle bus and point to point shuttle services and the 1994 occupancy rates of hotels and motels on International Drive. When hotel and motel occupancy is up, so is WTI's revenue. Likewise, when hotel occupancy is down, WTI's revenue is also down. Changes in WTI's revenues correlate proportionately to changes in occupancy levels.

    
    

81. LYNX's restructured service has had no apparent impact on the revenue generated by WTI from its International Drive services. Likewise, LYNX's I-Ride service has had no apparent impact on the number of passengers utilizing the transportation services of WTI on International Drive.

    
    

82. The service proposal offered by WTI in response to the Draft Analysis is incomplete. WTI has not demonstrated significant cost efficiencies which would be realized by the LYNX by contracting out the service.

    
    

83. The level of demand for mass transportation services in the International Drive corridor has grown to the point where increased service capacity is necessary. As the Regional Transportation Authority, LYNX is responsible for providing an integrated, efficient, and comprehensive public transportation system throughout the three-county area.

84. LYNX is the only provider of scheduled mass transportation fixed route bus service in the International Drive corridor. LYNX operated eight fixed route scheduled bus routes serving the International Drive corridor prior to 1994.

    
    

85. Based upon consideration of all of the evidence it is concluded that it would be more efficient for LYNX to directly operate the proposed restructured mass transportation fixed route bus service for International Drive.

    
    

86. From the evidence of record, the proposed restructured service should be based upon the LYNX staff recommendation contained in the Final Feasibility Analysis and Staff Recommendation, dated May 12, 1994, and consisting of the following:

    
    

    The proposed new or restructured service would provide fixed route local circulator service between a terminal at the bus/shuttle/taxi drop off location in the Sea World complex near Sea Harbor Drive and a proposed terminus on American Way near the International Drive/

    Kirkman Road intersection (see Exhibit H to the Draft Analysis for a map of the proposed route alignment). Southbound buses would operate along Sea Harbor Drive to International Drive, through several key employment, residential, commercial and tourist activity centers to the Kirkman Road terminal, making approximately 25 local stops. Northbound buses would proceed along International Drive from Kirkman Road to American Way and a temporary terminal at the Sea World complex. The initial Northbound route would make approximately 25 stops.

    
    

87. As set forth in the Final Feasiblility Analysis the following service characteristics and criteria for the proposed new or restructured service on International Drive should include:

    
    

    1. The new service shall be implemented as soon as practicable.

    2. The proposed International Drive service will be provided 365 days a year from 5:00 a.m. to 2:00 a.m. The proposed level of service is five (5) to ten (10) minute headways.

    3. The International Drive service alignment shall be as depicted in Exhibit I of the Draft Analysis.

    4. The vehicles utilized for the International Drive service shall be new standard 30 foot coaches.

    5. A peak fleet of 12 coaches shall be provided with an additional provision of 4 coaches as spares.

    6. The system will require 2.5 terminal supervisors/starters who will be equipped with a van type vehicle.

    7. All maintenance and dispatch responsibilities shall be coordinated through LYNX Central Dispatch and Maintenance, currently located at 1200 West South Street, Orlando, Florida.

    8. All operators and supervisors must go through a special training program and must meet the qualifications required of LYNX drivers and supervisors.

    9. All vehicles must have equipment compatible with the LYNX radio communications program.

    10. LYNX must approve any fare/transfer policy as well as marketing strategy and/or policy.

    11. There shall be a formal maintenance and preventive maintenance program for the fleet and facilities which meets LYNX requirements.

    12. All labor, insurance, liability, maintenance, operations, safety systems, general reporting and recording, financial reporting and audits, and personnel/equal opportunity employment regulations required by or of LYNX must be met by the new system.

    13. All applicable licensing requirements, federal, state, and local, must be met.

        
        

88. New or restructured fixed route scheduled bus service is necessary to meet the changing transportation requirements in the International Drive corridor.

    
    

89. The service criteria enunciated in the Final Analysis constitutes the appropriate base-line to evaluate the dynamic service requirements of the International Drive corridor during a 2-year test period.

    
    

90. The information provided to demonstrate the preparedness of private sector operators to undertake International Drive corridor service within the parameters of the service criteria which have been established is inadequate. No thorough, adequate, or credible comparison of costs and benefits has been offered to establish any potential benefits to contracting out the new or restructured service in the International Drive corridor.

    
    

91. New or restructured fixed route scheduled bus service in the International Drive corridor should be established pursuant to the service criteria and alignment identified in the Final Analysis and be operated directly by LYNX as an in-house service.

    
    

92. Staff should be authorized to enter into interlocal agreement with the District for said services.

    
    

    CONCLUSIONS OF LAW

    
    

93. Respondent LYNX is an entity created by the Interlocal Agreement dated May 2, 1972, under the authority of Section 163.01, Florida Statutes. The operation of the Respondent is governed by the Interlocal Agreement and Chapter 120, Florida Statutes, as well as such State and Federal laws, rules and regulations which may govern any grant monies expended from time to time by the Respondent. Rule 30B-1.023, Florida Administrative Code.

    
    

94. The Division of Administrative Hearings has jurisdiction over this matter under Section 120.57(1), Florida Statutes.

95. A petitioner is entitled to a hearing under Section 120.57 only if the petitioner can demonstrate that it has a substantial interest which will be affected by the agency action and an injury in fact.

    
    

96. To show a substantial interest a petitioner must demonstrate that 1) a proposed agency action will result in injury in fact to the petitioner which is of sufficient immediacy to justify a hearing, and 2) the injury is of a type that the statute under which the agency is acting is designed to protect.

    
    

97. WTI has alleged that its substantial interests would be affected by LYNX's implementation of I-Ride and would be injured by the agency action. Therefore, WTI has standing and is entitled to a 120.57(1) formal hearing. Society of Opthalmology v. Board of Optometry, 523 So.2d 1279 (Fla. 1st DCA 1988); Boca Raton Artificial Kidney Center, Inc. v. Florida Department of HRS, 475 So.2d 260 (Fla. 1st DCA 1985).

    
    

98. WTI is a private mass transportation provider within the definition of the Federal Transit Act. See 49 App. U.S.C.A. Section 1608(c)(6); FTA Circular 9030.1A, Appendix A, Definitions.

    
    

99. The I-Ride Project constitutes new or restructured service as defined in FTA Circular 7005.1 at p.3 and the private enterprise policies of LYNX and the MPO.

    
    

100. The private enterprise policies of the FTA, [49 App. U.S.C.A. Section 1602(e), Section 1603(a),] and LYNX require LYNX to involve private mass transportation providers in LYNX's plans for significant service changes at an early stage.

     
     

101. LYNX and all other public bodies involved must comply with federal and state laws and guidelines in securing federal funds before they can be utilized in a mass transit project. Three provisions of the Federal Transit Act, specifically Sections 3e, 8e, and 9f, provide for the protection of private enterprise business from use of federal funds to support public sector mass transit operations which would compete with the private sector.

     
     

102. Under Section 3e, the FTA must, before approving a program of projects for funding, find that such program provides for the maximum feasible participation of private enterprise. Title 49 App. U.S.C.A. Section 1602(e) provides:

     
     

     No financial assistance shall be provided under this chapter to any State or local public body or agency thereof for the purpose, directly or indirectly, of acquiring any interest in, or purchasing any facilities or other property of, a private mass transportation company, or for the purpose of constructing, improving, or reconstructing any facilities or other property

     acquired (after July 9, 1964) from any such company, or for the purpose of providing by contract or otherwise for the operation of mass transportation facilities or equipment in competition with, or supplementary to, the service provided by an existing mass transportation company, unless (1)

     the Secretary finds that such assistance is

     essential to the program of projects required by Section 1607 of this title, (2) the Secretary finds that such program, to the maximum extent feasible, provides for the participation of private mass transportation companies, (3) just and adequate compensation will be paid to such companies for acquisition of their franchises or property to the extent required by applicable State or local laws, and (4) the Secretary of Labor certifies that such assistance complies with the requirements of section 1609(c) of this title.

     
     

103. Section 8e (49 App. U.S.C.A. Section 1607(o)) directs FTA recipients to encourage private sector participation "to the maximum extent feasible" in the plans and programs funded under the act. 49 App. U.S.C.A. Section 1607(o). The Federal Transit Act mandates "as a precondition to the receipt of funding under section 9, recipients must develop a program of projects in accordance with the procedures set out in Section 9f." 49 Fed. Reg. 41310, 41311 October 22, 1984. FTA Circular 7005.1 and 9030.1A set out the factors that must be considered and procedural steps that must be followed by an applicant for federal funds. LYNX's rules adopt and incorporate by reference FTA Circular 7005.1 and FTA Circular 9030.1 at Fla. Admin. Code. R. 30B-20.001(a) and 30B- 12.001.

     
     

104. Title 49 U.S.C.A. Section 1602(d) provides:

     
     

     1. Any application for a grant or loan under this chapter to finance the acquisition, construction, reconstruction, or improvement of facilities or equipment which will sub- stantially affect a community or its mass transportation service shall include a certification that the applicant.

        1. has afforded an adequate opportunity for public hearings pursuant to adequate prior notice, and has held such hearings unless no one with a significant economic, social, or environmental interest in the matter requests a hearing;

        2. has considered the economic and social effects of the project and its impact on the environment; and

        3. has found that the project is consistent with official plans for the comprehensive development of the urban area.

     Notice of any hearings under this subsection shall include a concise statement of the proposed project and shall be published in a newspaper of general circulation in the geographic area to be served. If hearings have been held, a copy of the transcript of the hearings shall be submitted with the application.

     
     

105. To qualify for federal grant funds, a grant recipient is required to develop a Transportation Improvement Program (TIP) for major capital projects and coordinate with other transportation agencies in the regional area through a Metropolitan Planning Organization (MPO).

106. A grant recipient must include in the TIP its proposed projects. A "project" for federal transit grant purposes is any proposal for new service, equipment or facilities which cannot be undertaken by a grantee with resources already in the control of the grantee.

     
     

107. For purposes of the federal transit assistance program, the term "service level" refers to the location and number of individual bus transit stops, the frequency of service to such stops (also referred to as "headway"), extension of routes or internal changes to routes, and similar matters concerning passenger service.

     
     

108. Changes in service levels do not constitute a "project" for federal grant purposes and therefore do not require amendments to the TIP prior to the implementation of such changes. This is true even if buses purchased with federal grant proceeds are used to implement the changes in service level.

     
     

109. When changing service levels a grant recipient must provide: 1) an analysis of the demand for services, 2) an analysis of the cost of providing the revised service, and 3) notice to the public and interested parties and an opportunity for public comment. Each of the three prerequisites for modifying service is satisfied by a written analysis which addresses service cost and other operating characteristics of the proposed service modification, and provides an opportunity under legal notice for comments to be received in writing from the public and interested parties.

     
     

110. Under federal requirements, a recipient of federal transit funding must provide an opportunity for the private sector to participate in the planning for any significant changes in service levels.

     
     

111. FTA Circular 7005.1 requires "notice to and early consultation with private providers in plans involving new or restructured service" (FTA Circular 7005.1 section 5.a), an evaluation "to determine if [the services to be provided] could be more efficiently operated by a private enterprise" (FTA Circular 7005.1 section 5.c), and the "use of costs as a factor in the private/public decision" (emphasis added) (FTA Circular 7005.1 section 5.d). R. Ex. 17.

     
     

112. Federal requirements impose only the obligation of notice to and consultation with interested parties, including private operators, and an analysis of alternatives prior to deciding whether to provide new or restructured service "in house" or under contract.

     
     

113. Federal law does not mandate that the local transit grantee use private transportation providers. All that is required of a federal transit grantee is that it give private providers an opportunity to participate in the decision making progress.

     
     

114. Based on the meetings, workshops and hearings in 1993 and 1994 and on the Draft Feasibility Analysis and the Final Feasibility Analysis, LYNX satisfied each of the federal requirements prior to implementing the restructured service on International Drive.

     
     

115. FTA Circular 7005.1 has subsequently been rescinded. However, for the purposes of this hearing, LYNX is required to comply with the private provider participation requirements as set forth in the circular.

116. Affording adequate notice and opportunity for early participation of private transit providers, such as WTI, in the planning process and development of transportation improvement programs and projects is also important under Florida law. Florida rules require that state agencies such as LYNX encourage the participation of private mass transportation companies in mass transit projects "to the maximum extent feasible." LYNX did so in this case and did not violate Florida rules and guidelines. See: Section 163.568, Florida Statutes; Rule 30B-1.023, Florida Administrative Code which adopt the language of 49 App.

     U.S.C. Section 1607(o).

     
     

117. However, on May 9, 1994, when LYNX published a Notice of Intent to take action to be taken at a May 12, 1994 meeting of the Board, its notice of intent to take final agency action was improper.

     
     

118. LYNX's own rules require at least seven (7) days public notice of any meeting or workshop. Rule 30B-2.002, Florida Administrative Code. Where an agency action affects substantial interests, the model rules provide for twenty- one days notice. Rule 28-5.111(1), Florida Administrative Code; Manasota-88, Inc. v. State, Dept. of Envir. Reg., 417 So.2d 846 (Fla. 1st DCA 1982). LYNX's May 9, 1994 Notice failed to articulate and inform affected parties of the right to request a formal hearing under Florida law and the time limits for doing so. The Notice of Intent failed to provide a clear point of entry to the administrative process for substantially affected person. Varney v. Fla. Real Estate Comm., 515 So.2d 383 (Fla. 5th DCA 1987); City of St. Cloud v. Dept. of Envir. Reg., 490 So.2d 1356 (Fla. 5th DCA 1986); FFEC-Six, Inc. v. Fla. Pub. Serv. Comm., 425 So.2d 152 (Fla. 1st DCA 1983).

     
     

119. An agency must grant a party a clear point of entry into the administrative process, and absent a waiver of the right to a Section 120.57(1) hearing, an agency's free-form action is only preliminary, ineffective and non- final. Capeletti Bros., Inc. v. State, Dept. of Transp., 362 So.2d 346 (Fla. 1st DCA 1978), cert. den., 368 So.2d 1374 (Fla. 1979). In Florida League of Cities, Inc. v. Admin. Comm'n., 586 So.2d 397 (Fla. 1st DCA 1991), the court explained:

     
     

     Simply providing a point of entry, however, is not enough if the point of entry is so

     remote from the agency action as to be ineffectual as a vehicle for affording a party whose substantial interests are or will be affected by agency action a prompt opportunity to challenge disputed issues

     of material fact in a 120.57 hearing.

     
     

     Id. at 413. See also, General Dev. Util., Inc. v. Fla. Dept. of Environmental Reg., 417 So.2d 1068 (Fla. 1st DCA 1982).

     
     

120. An agency must follow its own rules and procedures as well as the Florida Administrative Procedures Act. Boca Raton Artificial Kidney Cntr, Inc.

     v. Dept. of HRS, 493 So.2d 1055 (Fla. 1st DCA 1986). See: Kirk v. Publix Super Markets, 185 So.2d 161 (Fla. 1966). In the present case, LYNX failed to follow the rules and state statutes concerning proper administrative procedures. Compare, Ciambro Corp. v. Jacksonville Transp. Auth., 473 So.2d 209 (Fla. 1st DCA 1985); and Bio-Medical Appl. v. Dept. of HRS, 370 So.2d 19 (Fla. 2d DCA 1979).

     
     

121. In the present case, the LYNX Board's order granting WTI's petition for a Section 120.57 hearing after the Board had taken final action and

     authorized implementation of the project was too late and it clearly violates Florida law. Under Section 120.57(1)(b)3., Florida Statutes, once the board recognized that WTI was entitled to a formal hearing, the Board was obligated to take no further action and participate in the administrative process only as a party litigant. LYNX committed a gross abuse of discretion by proceeding forward from its free form administrative action to final agency action, which implemented the I-Ride service, without first providing a clear point of entry to WTI and a 120.57(1) formal hearing.

     
     

122. The formal hearing conducted by the Division of Administrative Hearings has cured the defect and provided WTI with a proper forum in which it could challenge the proposed agency action by LYNX and demonstrate whether the proposed action should be implemented.

     
     

123. At the hearing, WTI had the burden to prove by a preponderance of evidence that LYNX has failed to satisfy federal rules and guidelines in regard to its "Section 9" application for federal grant funds. It has failed to do so. For purposes of federal transit planning and grants, a gather service does not compete with a local bus service. WTI's offer of proof in this case failed to overcome that presumption.

     
     

124. At the hearing, WTI had the burden to prove that the bus services offered by WTI could adequately provide an integrated, efficient and comprehensive mass transportation service for the International Drive Corridor. It has failed to do so.

     
     

125. LYNX has demonstrated that it is best able to operate such a restructured service pursuant to the service criteria enunciated in the Findings of Fact and the Final Feasibility Analysis.

     
     

126. WTI's petition for attorney's fees and costs are denied, pursuant to Section 120.57(1)(b)5., Florida Statutes only. Although the Board was mistaken in proceeding with a vote to adopt the I-Ride service at the May 12, 1994 meeting, nevertheless, it did vote to grant WTI a formal hearing thereafter; and, has cooperated fully and provided discovery in a timely manner during the course of this proceeding.

RECOMMENDATION

Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that LYNX enter a final order which finds that:

1). WTI's is a substantially affected party and entitled to a formal hearing, pursuant to Section 120.57(1), Florida Statutes.

1. LYNX's 1992 application for "Section 9" federal grant funds complied with the planning and grant requirements of the Federal Transit Act.

   
   

2. LYNX complied with the Private Enterprise Participation requirements of the FTA and federal law.

1. The level of demand for mass transportation service in the International Drive Corridor requires that increased service capacity be provided.

2. LYNX can best provide the increased service capacity through its restructured service under the criteria set forth in the Final Feasibility Analysis and Staff Recommendation.

   
   

3. WTI's request for attorney's fees and costs is denied.

DONE and ENTERED this 28th day of August, 1995, in Tallahassee, Florida.

DANIEL M. KILBRIDE

Hearing Officer

Division of Administrative Hearings The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-1550

(904) 488-9675

Filed with the Clerk of the Division of Administrative Hearings this 28th day of August, 1995.

ENDNOTE

1/ Several months after the restructured service began operation its route was extended a short distance south on Westwood Drive through a primarily residential area. This change is minor and does not include any areas served by WTI.

APPENDIX

The following constitutes my specific rulings, in accordance with section 120.59, Florida Statutes, on proposed findings of fact submitted by the parties.

Proposed findings of fact submitted by Petitioner.

Accepted in substance: paragraphs 1 (in part), 2 (in part), 3, 4 (in part),

5 (in part), 6 (in part), 7, 8 (in part), 9 (in part), 10 (in part), 14 (in part), 15 (in part), 16 (in part), 17 (in part), 18 (in part), 19 (in part), 20 (in part), 26 (in part), 27 (in part), 29 (in part), 30 (in part), 31 (in part), 33 (in part), 34 (in part), 37, 38 (in part), 40 (in part), 41, 42, 43 (in part), 44, 45 (in part), 46 (in part), 47 (in part), 48 (in part), 50 (in part),

54 (in part).

Rejected as subsumed or irrelevant and immaterial: paragraphs 1 (in part),

2 (in part), 4 (in part), 5 (in part), 6 (in part), 8 (in part), 9 (in part), 10 (in part), 11, 12, 13, 14 (in part), 15 (in part), 16 (in part), 17 (in part), 21 (in part), 22, 24, 26 (in part), 27 (in part), 28 (in part), 29 (in part), 30 (in part), 31 (in part), 32, 33 (in part), 34 (in part), 35, 36, 38 (in part), 39, 40 (in part), 43 (in part), 45 (in part), 46 (in part), 47 (in part), 48 (in part), 51, 52, 53, 54 (in part), and 55 (in part).

Rejected as against the greater weight of evidence: paragraphs 17 (in part), 18 (in part), 19 (in part), 20 (in part), 21 (in part), 22, 23, 25, 26

(in part), 28 (in part), 34 (in part), 45 (in part), 46 (in part), 49, 50 (in

part), 55 (in part), 56.

Proposed findings of fact submitted by Respondent.

Accepted in substance: paragraphs 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12

(in part), 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 29, 30,

31, 32, 33, 34, 35, 36, 37, 38, 39, 40, 41, 42, 43, 44, 45, 46, 47, 48, 49, 50

(in part), 52 (in part), 53, 54, 55, 56, 57, 58.

Rejected as subsumed irrelevant or immaterial: paragraphs 12 (in part), 28 and 50 (in part).

Rejected as against the greater weight of evidence: paragraphs 51, and 52 (in part).

COPIES FURNISHED:

Thomas B. DeWolf, Esquire Robert S. Hoofman, Esquire DeWolf, Ward, O'Donnell

& Hoofman, P.A.

111 N. Orange Avenue Suite 2000

Orlando, Florida 32801

David E. Cardwell, Esquire James L. Simon, Esquire Mary Beth Cantrell, Esquire Stacy Blank, Esquire Holland & Knight

P. O. Box 1526

Orlando, Florida 32802

Paul P. Skoutelas Executive Director OSOTA & CFRTA

1200 West South Street Orlando, Florida 32805

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to the Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should consult with the agency that will issue the final order in this case concerning their rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.

Docket for Case No: 94-005181

Orders for Case No: 94-005181