No fines for Durham: District seeks long-term stability over penalties

While the Mat-Su school bus driver strike drags into its fourth week, and the Mat-Su Borough School District navigates a $22.5 million deficit, now the district has been accused of declining to impose fines on Durham School Services. Despite months of inadequate service and missed pickups, the district held off on penalizing the contractor, forcing families to scramble to find alternative transportation and seek answers.

Allegations were brought up during the March 18 Matanuska-Susitna Borough School District (MSBSD) school board meeting, when Kelsey Taylor, Business Representative for Teamsters Local 959, addressed the board regarding the ongoing school bus strike and contract dispute. Taylor highlighted that the District has waived thousands of dollars in penalties against Durham School Services despite documented contract failures and urged the district to enforce these contractual obligations.

“These are fines for service deficiencies for a contractor that was failing our community that were waived by the school district” Kelsey told the school board, noting that there were nearly $4M in fines that were waived over the last three and a half years. “To do nothing in the face of this is to be complicit.”

These penalties were discovered via a Freedom of Information Act request by the union, and shared with the Mat-Su Valley Frontiersman.

The contract between the MSBSD and Durham is a long-term agreement for pupil transportation services that began on July 1, 2022, and is scheduled to run through June 30, 2031.

The 10-year partnership was valued at an estimated $188 million to $220 million at its inception, with Durham responsible for operating approximately 148 bus routes per day, as well as charter and extracurricular transportation at the district's request.

While the contract mandates strict performance standards and financial penalties for missed routes or staffing issues, the core issue for many is the failure of the school district to fine Durham.

Taking a look at September, 2026, the documents detail the financial assessment, waivers, and key operational infractions. Total liquidated damages were assessed at $285,493.27. The majority of the assessed damages were attributed to failure to operate a segment, which were reported 256 times, resulting in $205,363.20. There were also 351 instances of late runs 10 minutes or longer, resulting in $72,155.07. The documents do not indicate if the late runs were due to inclement weather

However, the district waived $270,166.26, billing DSS only $15,327.01.

Going back three years, another document summarizes the liquidated damages assessed for the month of April FY2023.The total liquidated damage amount was $22,071.99. The total amount waived was $17,734.33. The total amount billed was $4,337.66.

The documents date back to August, 2023, just one year into the contract. The contractor recorded 223 instances of a "Late Run 10 Minutes or More," which resulted in a calculated total of $45,842.11 in liquidated damages.

According to the documents, so far this school year there have been 1,543 bus runs arriving more than 10 minutes late, and 499 routes that never ran at all. The reports show these failures have generated about $759,000 in contract penalties so far this school year.

The total cost of the penalties is $4,720,353. The amount waived is $3, 921,946, with DSS only being billed 798.407.

In response, the MSBSD has released a press release providing clarification on contract services with DSS, stating that they manage the contract to support student transportation while also controlling costs.

To reduce costs, the District and Durham signed a Memorandum of Agreement this year to decrease the number of operational routes from the contractually required 146 to 138. Under this agreement, the District saves on costs, and Durham is exempt from certain non-safety penalties, provided all 138 routes run. This arrangement directly impacts how specific non-safety-related liquidated damages are applied.

While liquidated damages, assessed amounts, and waivers are easy to visualize, the District says they don't tell the whole story.

“When a route is not operated, the District does not pay for that route. These savings are not reflected in liquidated damages totals, which can make it appear that more money was waived than was actually the case.”

The release goes on to say that the District takes a measured approach to liquidated damages, evaluating the broader context of each service issue. Factors such as road conditions, inclement weather, driver availability, student behavior, and operational disruptions are considered. “The District evaluates these circumstances to support long-term contractor performance and service reliability, rather than prioritizing short-term financial penalties.”

As the Mat-Su Borough School District grapples with a projected $23 million deficit and considers school closures to balance its budget, the revelation that millions in potential fines against Durham School Services have been waived over the past four years has drawn intense scrutiny. While the district maintains its partnership with the contractor, parents and staff continue to question the prioritization of public funds and the enforcement of contract standards for reliable student transportation.

“We have heard different things about the fines being forgiven. The money was and is needed,” said Sara Lamont, a kindergarten teacher at Larson Elementary, during the last school board meeting, questioning the district’s decisions to consolidate schools to save money. She asked for receipts or forgiveness documentation for the fines to confirm that all revenue avenues have been utilized. “You said it wasn’t a spending issue but a revenue issue and you wanted ways to help find the revenue. This is one.”