Mat-Su school bus operator docked more than $1.5 million in contract revenues as it faces strike threat

PALMER — The new company providing school bus service in Mat-Su is facing a possible driver strike and is down more than $1.5 million in anticipated revenue after failing to meet contract specifications.

The reduced payments to Durham School Services from the Matanuska-Susitna Borough School District largely reflect missed routes due to bus and driver shortages plus estimated damages due to service deficiencies, district officials say.

Durham also faces the threat of a strike after the union representing drivers, attendants and monitors voted to authorize a strike earlier this month should ongoing contract negotiations fall through. Negotiations were scheduled to resume Monday and Tuesday.

Drivers picketing at the company’s Wasilla bus barn Thursday listed concerns centered on pay and safety issues they blame for continued route delays. Some said they lack basic equipment such as working heaters and windshield wipers.

Durham had a chaotic start to its tenure with the West Virginia-sized district in August with what families and school officials called “unacceptable” issues, including late or missed routes and a number of young students whose parents had no idea where they were for several hours.

[8 elementary schoolers were dropped off at the wrong stop in Anchorage last month]

Since then, rolling bus cancellations continued amid driver shortages until Monday, when the district announced all routes would be running. The Anchorage School District restored full bus service in December.

Now the cost of Durham’s challenging start is becoming clear.

Routes not run

Durham was supposed to receive nearly $16.7 million from the district in its first year of service, according to the company’s contract. Payments are made monthly, district officials say.

So far, however, Durham’s “lost revenue” this school year totals nearly 10% of that, or more than $1,578,760, according to information provided by district spokeswoman Jillian Morrissey in response to a records request.

The company’s losses from August through October totaled more than $1.2 million, with nearly $169,000 reflecting “liquidated damages” — a predetermined amount of money Durham and the district agreed the bus company would pay in case of deficient performance — and the remainder due to “services not being performed,” Morrissey said in an email. Lost revenue for November and December totaled more than $358,000, most of it due to services not being performed plus nearly $11,000 from liquidated damages.

A spokesman for Durham parent company National Express confirmed the district’s figures in a statement last week.

“It is accurate that there was lost revenue for our company during the months mentioned as we do not get paid for services that are not performed. This includes snow days,” spokesman Edward Flavin wrote.

Morrissey in an email, however, said the lost contract revenue did not reflect weather cancellations “but are for routes that have not been operable due to bus shortages and driver shortages primarily. Durham has not suffered a loss of revenue for days in which the District has decided to have remote learning due to inclement weather.”

[Anchorage school days will get longer to make up for snow days]

Reliant Transportation, the bus company the Anchorage district contracts for about two-thirds of its routes, has an estimated revenue loss of $366,000 so far this school year due to snow days, according to chief operating officer Jim Anderson.

‘They don’t have the tools’

The Mat-Su school board in 2021 unanimously approved a 10-year contract with Durham worth at least $188 million and as much as $220 million to take over from longtime bus provider First Student. Durham, which also serves the Fairbanks North Star Borough School District, is a subsidiary of National Express LLC, which operates more than 22,500 school buses across more than 550 school districts in 34 states and three Canadian provinces.

The company’s bus drivers, attendants and monitors have been working without a contract for the duration of the school year. Members of Teamsters Local 959, which represents the Durham bus workers in Mat-Su, voted nearly unanimously to authorize a strike should contract negotiations fail.

More than 60 drivers held picket signs just outside the entrance to the Wasilla bus barn off a Parks Highway frontage road on Thursday. Several said they lacked basic supplies like windshield wipers, working heaters or electrical plug-ins to help vehicles start on cold mornings.

The plug-ins are waiting on parts held up by “supply chain delays,” National Express spokesman Slavin said, adding the parts are on order and will be installed when they arrive.

The lot also lacks assigned parking spots so buses are hard for drivers to find, leading to delays that leave students waiting in the cold, according to Kelsey Taylor, union representative for the drivers.

Meanwhile, the Anchorage School District pays drivers with no experience as much as veteran Mat-Su drivers are making, Taylor said.

“We’ve lost more than 25 experienced drivers since the beginning of the school year,” he said. “I’ve consoled people crying in this parking lot because they take their responsibility seriously. And they have to run late because ... they’re not given the time. They don’t have the tools.”

Flavin, the Durham corporate spokesman, said peaceful picketing is drivers’ “lawful right” and the company continues to negotiate and bargain in good faith with negotiations.