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School bus company may be sold to Illinois outfit

Laidlaw lost Anchorage contract due to poor service

Posted: Thursday, August 29, 2002

The local business that has bused Juneau students for 54 years may be sold to a large Illinois-based company that lost its contract with the Anchorage schools in part because of inconsistent service.

Auke Bay Garage Bus Line Inc. of Juneau may be sold to Laidlaw Transit Services Inc., officials from both companies have said.

Laidlaw lost its contract in Anchorage last year in part because of inconsistent service, concerns that drivers weren't attending safety meetings, and incidents in which drivers failed to report accidents, Anchorage School District officials said.

Laidlaw disputes the Anchorage School District's claims and is suing the district over the loss of the contract.

Laidlaw Transit Services Inc. is a holding of Laidlaw Inc., a multinational transportation and health care corporation based in Canada. Negotiations between ABG and Laidlaw Transit Services went on throughout the summer. The two companies are at an impasse, and the sale, which had been slated to go through before the start of school, has been put on hold, according to ABG owner Eric Lindegaard.

"Everything's got to be right and things aren't quite right yet," Lindegaard said.

At a Juneau School Board meeting on Aug. 6, ABG lawyer Bill Ruddy introduced Lindegaard to the board and said Lindegaard was selling his business because he wants to retire.

In an interview later, Lindegaard said that he felt the quality of the bus service would remain high, and that Laidlaw's safety record in the nation was outstanding.

"We would never do anything to jeopardize the safety of our students," he said.

Lindegaard wouldn't comment further on the possible sale, but Tom Hyatt, Alaska district manager for Laidlaw Transit Services, said he expects it to go through in the next few weeks.

"We've been working at it and I think there is a good chance it is going to go through," Hyatt said. "But, nothing's for sure until you sign all the paper work."

Laidlaw Transit Services operates school buses in nine districts in Alaska, with state contracts, not including Juneau, that will total close to $17 million this fiscal year, according to Eddy Jeans, finance manager with the state Department of Education. Similar to the timing of the Juneau buyout, Laidlaw took over Mayflower, the busing company that had operated in Anchorage for many years, in 1996, mid-way through Mayflower's contract with the Anchorage School District, Jeans said.

In January 2001, the Anchorage School Board voted not to award another $45 million, five-year contract to Laidlaw, although Laidlaw was the lowest bidder, saying the busing company had a "roller coaster" relationship with the district.

Anchorage district transportation manager Steve Kalmes told the Anchorage School Board that Laidlaw had a history of failing to report accidents until after parents had called the district, that drivers skipped safety meetings, that buses were late and didn't follow route plans, and that one cold morning 42 buses wouldn't start because they hadn't been plugged in to heaters over the winter break.

At the time, Laidlaw dismissed the complaints, saying the company was "working on" the problems, according to the minutes from the meeting.

State law allows a district to choose the next highest bidder if that bid is within 5 percent of the lowest bid. A company called First Student agreed to match Laidlaw's bid while providing bigger, newer buses, and was awarded the Anchorage contract.

In a recent interview, Hyatt, Alaska district manager for Laidlaw Transit Services, said the company had a good safety record, and called the complaints Kalmes made "old news" that the district used as an excuse to award the contract to another company. Laidlaw is suing because the company believes the district is required to go with the original lowest bidder, Hyatt said.

"They weren't really following their own rules," he said.

ABG holds a five-year, $10 million busing contract with the Juneau School District. At the Aug. 6. meeting, Ruddy, ABG's legal counsel, presented the School Board with a letter asking it to reassign the contract held by ABG to Laidlaw Transit Services.

If ABG is sold, the Juneau School Board may approve the company's contract with the new management, at the recommendation of the superintendent, or it may put the bus contract out to bid, Jeans said. It would be difficult to attract another bidder to Juneau because, among other reasons, the Juneau contract is relatively small and ABG owns all of the school buses in town, Jeans said.

At a Juneau School Board meeting last week, Superintendent Gary Bader indicated he had reviewed litigation against Laidlaw and was satisfied with the company's record. The company supplied him with the litigation history, but at the time of the meeting he was unaware of the specific problems in Anchorage, he said.

"I haven't agreed to any assignment yet, and as far as I know I'm not being asked to at this point," Bader said. "(If the sale goes through), I'll look into it more."

Bader said he had reviewed another lawsuit, this time against Laidlaw Inc., that ended in 1998, when an Anchorage Superior Court awarded $3.5 million to the parents of an Anchorage girl who sued the company after their daughter was injured in a bus accident.

The bus driver tested positive for marijuana, but Laidlaw did not immediately notify the girl's parents of that fact, according to the plaintiff's attorney. The accident occurred in 1992.

Laidlaw Transit Services randomly drug-tests its drivers, Bader said.

"I got a copy of their substance abuse policies, and was satisfied that they are in conformance with the law," he said.

Also at the 2001 Anchorage School Board meeting at which Laidlaw lost its contract, School Board member Rita Holthouse said the district had received complaints from former Laidlaw drivers about the treatment they received while employed by Laidlaw, according to the meeting minutes.

Kalmes, Anchorage district transportation manager, who interviewed some bus drivers who were leaving Laidlaw's employ, confirmed in a recent interview that drivers had concerns about compensation and benefits, as well as the way employees were treated by management.

Hyatt said that when Laidlaw takes over a company, it doesn't fire the employees, and it tries to maintain some continuity with the previous company. Lindegaard said his employees would keep their jobs and the accompanying benefits after the proposed sale. Hyatt said Laidlaw expects to take on 50 to 75 employees if it buys ABG.



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