Rochester City Lines sues Rochester because they own the transit system

Wow,  I feel sorry for Dan Holter’s employees.  My personal advice for them is below the fold.

Dan Holter the owner of Rochester City Lines previously gave us the brilliant quote:

A business is ENTITLED to make a profit.

So you know what kind of an entitled person we are dealing with.  Dan is now suing the city because he feels he owns the transit system.  I had this to say when interviewed:

I have no idea what Dan is talking about.  We own the buses, shelters, and infrastructure.  I can only assume that Dan thinks the transit system means the gum under the seat.

I met with two of Dan’s senior staffers a few weeks back (shortly after Dan held the public hostage for a $110,000 shakedown).  In talking with them even they realized that RCL didn’t own the system and they couldn’t defend the lack of competition.  A constituent joked to me that Dan’s fighting to maintain his government sanctioned competition free contract would make him a great leader of the old Soviet Communist Party.

Dan also claimed they RCL hadn’t made any money on city bus service for 44 years.  Which begs the question, is Dan lying?  Why would he want to continue to not make money?  I believe that Dan is in fact lying.  I believe he finds profit in the generous salary he pays himself, the generous rent he gets form the city for his ancient garages, and the shared overhead he applies to the city programming.

I would also point out that Dan has claimed he hasn’t made money for 44 years.  So if he wants us to pay him for taking his daddy’s business wouldn’t that amount also be $0.00?

For those that think the city doesn’t have the courage to stand up to Dan.  I think you are wrong.  Even our members that could perhaps be well served by a spinal implant are not likely to take this insanity.

Some have stated that we are only doing this because the city is being forced to by the Federal government.  I believe we should be doing this regardless of the Federal decision.  Why should we have a single source when there are many businesses that would like to have a chance to compete?  I few weeks ago I put the council on the spot.  Many of them were hiding behind the Federal decision, so I asked, “Who here doesn’t think we should open up our transit contract to competition regardless of the Federal decision?”  Not a single council person spoke up.  Which means they want the monopoly but are too cowardly to say anything or they agree that we need competition.  Even Bruce Snyder, Ed Hruska, and Dennis Hanson support the competitive process.

Which brings us back to Dan Holter’s incredible sense of entitlement.  As the city of Rochester was pursuing federal funds to complete our transit garage to better protect our assets, allow for competition, and save us huge rental fees and energy over time, Dan was secretly lobbying against us in DC.  Fortunately in my talks with Federal representatives, I found out what was happening and explained the situation and why Dan didn’t want the garage.  Perhaps coincidence, perhaps not, after a few years of delays we were awarded funds.

This brings me to the victims in this, Dan Holder’s drivers.  I was told off the record that the drivers organized into a labor union over fear for safety and the incompetence of operations under Dan Holter.  Based on my interactions with Dan, I find this very realistic.  The drivers are the reason that RCL has been successful.

In reading how public works staff wrote up the guidelines for bidding to run OUR transit system, they went out of the way to encourage the use of competent trained drivers.  This reaffirmed what the council has said, namely that the drivers and customer service are excellent.

Because there is wide spread appreciation for our current drivers I would suggest that the drivers union also put in a bid to be the service operator.  You will probably need to hire GM / HR talent and secure a line of credit for operating, but this is a way for you to hedge your bets.  I am sure if you contact public works, you can get feedback on what exactly you will need.  There is also a possibility that you could transfer your organization to a new operator.  Maybe it will turn out that Rochester City Lines will be the best of our bidders.  But I would strongly recommend that you not strictly tie your future to the performance, business expertise, or charm of Dan Holter.

Just to be clear, my job is not to pander to Dan Holter, I thought that RCL did a pretty good job.  But my job is to represent what is best for the future of Rochester.  Dan Holter’s actions have raised serious concerns about his ability to be relied upon.

#edit: OK, JH go nuts… 🙂

2 comments

  1. Dan Holter is a real piece of work. His family has been given an unbelievable gift from the city. It has run RCL for over a generation and, regardless of what he claims, has made a nice profit. How many people would love the opportunity to own a business that has vast majority of it’s main expenses (cost of buses) paid for by the city? It gets rent from the city for parking the city owned buses on his property – which looks like a junk yard by they way.

    Now that he faces competition, rather than leveraging the long term relationship his family has with the city (an very enviable position), he does the opposite – he antagonizes the city that has treated him with such generosity. His actions defy logic. It kind of reminds me of Charlie Sheen’s erratic behavior to a lesser degree. He is not just acting like he is entitled, but it’s more like an arrogant entitled.

  2. I am a transit fanatic who has more than a passing interest in Rochester City Lines (I actually lived there for 7 months in 1988-9 to study its history).
    The unusual manner in which the City dealt with RCL is what led to the current day problems.
    In 1966, it was normal and usual for transit to be a city-granted monopoly franchise. No government subsidy was required; it was possible and expected for transit companies to make a profit purely from fares. That is no longer the case for many reasons. Almost all US transit systems were bought out and taken over by local government entities by the 1970s. No transit system today makes a “natural” profit, that is, one purely from fares.
    Instead of taking over RCL as most cities did to their city bus companies, Rochester kept RCL as a private entity and provided subsidies to keep it going. (In all fairness, many other cities did the same but usually as a short-term stepping-stone to a takeover.)
    Over the decades, the City started providing RCL with buses and shelters (since the City could get federal funds for it and RCL, as a private entity, couldn’t), and exercising more control over fares, routes. schedules. Thus the City has gradually assumed control of Rochester City Lines without a formal takeover. This has led to the ambiguity and a legitimate dispute over whether RCL or the City own the transit system.
    I am *not* taking RCL’s side, or the City’s. I am merely saying both sides have a point and it’s probably a good thing for it to be finally resolved by a court.
    There are other aspects of the history of the Holters’ bus operations that are hilarious, but I won’t get into them here.

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