MOUNT CARMEL - A dispute over record-keeping abruptly ended the Lower Anthracite Transportation System's 30-year relationship with King Coal Tours earlier this year

LATS, the local, government-funded bus service managed by Mount Carmel Borough, is now contracted with Shamokin-based Catawese Coach Lines instead.

A letter in January from King Coal, based in Kulpmont, said it was ending the partnership because the borough was not paying for services rendered, borough council President Tony Matulewicz said earlier this week. The contract ended Jan. 31.

The borough disputes that, and Matulewicz said the problem started when council asked King Coal to provide bills on a per quarter basis with receipts and detailed lists of specific spending, which is what PennDOT requires. King Coal was not compliant with this request, Matulewicz said.

Jonathan Else, vice president of operations for King Coal, said Friday he had no immediate comment, but that he would like to discuss the issue in further detail with The News-Item. Else seemed frustrated with the borough over the situation.

Matulewicz said Megan Janolek's appointment as LATS executive director in July led to better record-keeping and identification of various issues.

Matulewicz said William Milbrand, owner of Catawese, has been able to provide the requested breakdown of charges without any problem.

Milbrand stressed Friday that he didn't go after the LATS contract. King Coal and Catawese are the two major local bus lines. He said the borough approached him about providing buses and drivers, he agreed and quoted a price.

"I didn't go looking for the business by any means," he said. "They approached me."

The contract with King Coal included a fleet of four buses, drivers, maintenance/cleaning services, insurance and diesel fuel. The contract with Catawese, approved by council in February, does not include insurance and fuel, which the borough is covering on its own.

LATS is funded mostly from federal and state grants through PennDOT and the Lottery Senior Citizen Free Transit Fund. It's intended to provide affordable public transportation (free to seniors over 65) to locations mostly in eastern Northumberland County.

While PennDOT oversees the operation, Mount Carmel must provide management and distribute grant money to the service provider.

Meanwhile, Matulewicz and Janolek are examining audits from 2010 and 2011 and comparing costs from when King Coal was contracted and the first few months with Catawese. The 2012 audit is not yet available.

Furthermore, Matulewicz said the services were supposed to be bid out every five years in accordance with Federal Transit Administration (FTA) and PennDOT regulations, but the borough apparently never made this happen.

On Monday, the borough advertised for bids to provide the bus service in hopes of having a new contract by July 1. Proposals from bus companies are due May 3.

Borough council members have praised Janolek, whose changes to routes for time and efficiency have been generating a higher profit.

In February, $692 was collected in fare revenue. It was $400 in February 2011 and $347 in February 2010.

That change has taken placed despite a reduction in fare price to $1 for those under 65 who use the service, Matulewicz said.