Feb. 12—PALMER — Durham School Services, the company operating most school buses in Mat-Su, is contending with a bus worker strike about to stretch into a third week after a rocky start in August followed by months of rolling route cancellations.

Now a new problem involving Durham has surfaced.

The company still doesn't have a Matanuska-Susitna Borough permit it was supposed to have secured before the school year began in August 2022. The company also didn't obtain Alaska Department of Conservation approval for a public drinking water system.

Durham, a subsidiary of international transportation giant National Express LLC, is now working with borough and state officials on getting those approvals — after the fact.

The Matanuska-Susitna Borough School District in 2021 awarded Durham a 10-year contract worth at least $188 million and up to $220 million starting this school year. Durham provides buses for all but a handful of schools in the Upper Susitna Valley and Glacier View.

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

Matanuska-Susitna Borough officials learned in April 2022 that Durham didn't have a required conditional-use permit and started the process the next month, according to Jason Ortiz, the borough's development services manager.

Issuing permit approvals after an operation is already up and running is not ideal, Ortiz said.

"It seemed that a company should have done a little bit more due diligence to prepare it for moving in on a big, you know, nearly $200 million contract," he said. "That they would have had some more effort put into that and known that a CUP was needed."

Asked about the permit oversight, National Express spokesman Edward Flavin emailed a brief reply.

"We have applied for and submitted all of our facility's required permits and continue to work with Matanuska-Susitna Borough officials on any questions or concerns they may have with our operations," Flavin said.

'Like living in a football stadium'

The Durham bus barn isn't a barn at all but rather a large parking lot near Wasilla city limits that holds 145 buses and an office that serves more than 200 employees, between a gravel pit and a car dealer.

Durham's parent company, National Express, leases the property from owner McKenna Brothers Investment LLC, a familiar name in Anchorage where McKenna Brothers Paving is a road service area contractor and active in local politics.

Any permits were Durham's responsibility, local officials say.

The borough conditional-use permit provides an extra layer of public process for residents in the congested suburban core area of Mat-Su between Wasilla and Palmer. With little zoning outside its three cities, the permit allows officials to review traffic, lighting or other concerns through public hearings and planning commission review.

The bus barn sits on a gravel road off a Parks Highway frontage road. The road, South Tanya Court, accesses businesses as well as some homes. Officials say they have fielded complaints of potholes, noise and bright lights from nearby residents.

Without a public process, nobody seemed to know Durham was coming.

One bus barn neighor, John Waychoff, said he and his wife had lived in the neighborhood along Tanya Court for more than 25 years but had no idea the commercial enterprise was moving in until June or July of last year, when the construction started — and with it the glare of bright lights at all hours.

"It was like living in a football stadium here," Waychoff said.

New problems appeared once the buses starting running, he said: potholes and washboarding on the road with a hill that's tricky in winter; bus drivers clogging the narrow road with their personal vehicles; clouds of dust kicked up by buses; and idling vehicles starting at 4:30 a.m., complete with horn checks.

"Can you imagine somebody sitting outside your house and blowing their horn 100 times or more ... before 5 o'clock in the morning?" Waychoff said.

He said the couple received support from school district deputy superintendent Luke Fulp and Mat-Su borough mayor Edna DeVries and eventually found a responsive Durham manager who addressed light, parking, and horn issues.

But, Waychoff said, the company never should have put a bus barn off a gravel road in a residential area in the first place.

"I don't ever like the old concept of it's better to obtain forgiveness than permission," he said. "It caused a lot of hard feelings."

School district contract requires permits

School district officials are already taking heat from parents and school bus drivers frustrated over the bus driver, attendant and monitor strike that started Jan. 31 and continues with no new negotiations scheduled.

The company was one of just two bidders for the transportation contract, Mat-Su superintendent Randy Trani said at the school board meeting in early February. The other was First Student, the district's prior longtime bus company, which didn't submit a bid that met district specifications.

So Durham became the only option, Trani said.

The company 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]

Now it's unclear how much the school district knew before allowing Durham to begin operations without the local approvals it needed. District spokeswoman Jillian Morrissey in an emailed response to questions said the district's contract says Durham "will obtain" necessary permits for operations.

"We are aware that Durham is in the process of obtaining the CUP with the Borough & DEC approval and continue to monitor the status of these permits," Morrissey said in an email.

She did not answer other questions emailed to her and Trani including when the district became aware that Durham was operating without permit approvals.

A 'stressful' situation

Durham is in the midst of the borough permitting and state approval process now.

Borough officials realized Durham needed a conditional-use permit after realizing the bus barn would involve more than 100 vehicle trips during peak hours, a permit trigger under borough code.

The school district and National Express "will be required" to work with DOT and the borough to find a solution to the potential need for a right-turn lane at Tanya Court, where it meets the frontage road, according to a 171-page traffic impact analysis Durham filed in early February. The analysis was performed by Dowl Engineering in cooperation with the borough and the Alaska Department of Transportation and Public Facilities, which is responsible for the frontage road.

Two other nearby intersections with the busy Parks Highway won't require any changes but will need to be monitored, according to the analysis.

The company is also working with the Department of Environmental Conservation on an approval for the public water system at the bus barn, officials there say.

The department "became aware of the system" in August 2022 and notified Durham, which submitted paperwork that same month, according to Cindy Christian, DEC's drinking water program manager. The company is actively working with the agency to obtain the necessary approvals, Christian said.

The next steps for Durham and the borough are working to resolve a fuel tank setback issue, plus lighting, storm water, and drainage plans, according to Ortiz.

Once that process is complete, the public phase begins. Borough planning staff will either recommend approval or denial. The 7-member citizen planning commission will make the final decision. Officials say May 1 is probably the soonest the commission could hold a public hearing on the Durham permit.

Waychoff, for one, said he hopes the commission says no.

"I think they could have done this better. I think they could have done this a lot better," he said. "I hope they don't get this permit. There are too many ways of improving on this whole situation. And the best way is for them to find a place that is better suited for a bus barn. This is not it."