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Anguished Steve Cottrell sets layoffs of 55 Authenticom employees for Feb. 2

Authenticom, a La Crosse-based data integrator in the automotive industry, informed 55 employees that they will be laid off effective Feb. 2 because of the company’s prolonged antitrust battle with two larger companies, founder and CEO Steve Cottrell said Wednesday.

“I consider these people as family,” Cottrell said during a phone interview Wednesday in which his voice reflected obvious anguish over the decision, which he described as a “resizing mode.”

“I deeply, personally regret this. We’ve done everything in our power to avoid this,” Cottrell said of the action, which will leave Authenticom with 36 employees.

La Crosse's Authenticom wins injunction in antitrust suit

Authenticom Inc. gained substantial traction in its antitrust lawsuit against two companies that the La Crosse corporation contends are trying to drive it out of business when a federal judge granted a temporary injunction against the pair.

Cottrell had remained steadfast in his resolve to keep Authenticom’s roughly 110 employees on the payroll as the antitrust suit against CDK Global and Reynolds and Reynolds Co. winds its way through the court system.

Cottrell’s announcement to the affected employees came two days after the Seventh Circuit Court of Appeals in Chicago dealt Authenticom a blow in its suit, which the company filed in federal court in Madison on May 1.

Preliminary injunction quashed

The appeals court set aside a district court’s preliminary injunction barring CDK Global and Reynolds from interfering with Authenticom’s business.

“Although we are disappointed with the Court of Appeals’ ruling, we continue to remain confident in the ultimate success of our case and continue to work diligently through discovery in preparation for trial,” Cottrell said in a letter addressed to “valued partners” Tuesday.

“The human side of the layoffs is sweeping,” Cottrell lamented during the interview. “One employee has been with me for 15 years and has four small children. There are employees with pregnant spouses, and some who have just bought homes.”

Authenticom, which tried to hold its number of layoffs to the dozen announced in August, set the Feb. 2 date to lay off the 55 to extend benefits for them, Cottrell said. They will receive help with job-placement efforts, resume writing and other assistance needed to secure new jobs, he said.

“These are the people who made this company, and made us a success,” he said. “This is a tribute to what the larger team has done.”

After the downsizing, Authenticom will be “well-positioned and viable” and able to pay bills that had piled up as CDK and Reynolds took actions that Cottrell said are intended to bankrupt the company he founded in 2002 in his son’s bedroom.

“We have found significant opportunities outside of the automotive sector,” he said.

“Change is on the horizon, and we are inspired by the way our industry has embraced both technological change and at the same time pushed back on the status quo of control of emerging technology by the privileged few,” he said.

Authenticom, which is headquartered in the Doerflinger building in downtown La Crosse, is a third-party data integrator that links car dealers to software vendors such as CDK and Reynolds. Cottrell’s suit alleges that CDK and Reynolds have colluded in an illegal plot to block Authenticom from access to their data, costing it millions of dollars and pushed it to the brink of insolvency.

CDK and Reynolds counter that their data is proprietary and insist that Authenticom should not be allowed to scrape the information.

Profits plunge nearly 80 percent

The companies’ actions caused Authenticom’s profits to plunge by 77.22 percent between the third quarter of 2015 and the first quarter of this year, according to Authenticom’s suit filings.

They “have left Authenticom cash-flow insolvent, with insufficient earnings and resources to satisfy its outstanding debt obligations,” the suit alleges.

Authenticom had been unable to pay an $11 million principal payment to a bank in April, as well as a tax-related obligation of about $1.17 million that same month, among other financial setbacks, the suit contends.

CDK and Reynolds are the two big dogs in the automotive data sector, in which Authenticom is the other major player. CDK is a publicly traded Delaware corporation with headquarters in Hoffman Estates, Ill. It provides DMS software and services to car dealerships throughout the country and has more than $2 billion in annual revenues. The private corporation of Reynolds and Reynolds is headquartered in Dayton, Ohio.

For its part, CDK issued a statement saying, in part, “We strongly believe that our policy of not allowing unauthorized intermediaries onto our systems is the best way to preserve the integrity of those systems and the security of our customers’ data.”

No court has “mandated unfettered access to the data and systems operated by another company,” according to the statement. “We remain committed to protecting our property rights and those of third parties with data on our systems, and will continue to mount a vigorous defense against the meritless claims that have been made against us by Authenticom.”

Obama lauded company for growth, wages

Cottrell was thrust into the national spotlight in 2015, when President Barack Obama saluted Authenticom during a major financial address he delivered at the University of Wisconsin-La Crosse.

“So this business that began in Steve’s son’s old bedroom is now one of America’s own fastest-growing private companies based in a historic building right here in downtown La Crosse,” Obama said.

“Now, I guarantee you Steve worked hard, he put everything he had into it. He took enormous risks,” the president said. “But he also is somebody who recognizes that he didn’t do it by himself.

“He’s proud of what he accomplished, but he also talks about how fortunate he’s been to be part of a community like La Crosse,” Obama said.

The president lauded Authenticom’s practices of paying fair wages, with paid sick days, and treating employees like family.

In the letter to clients, Cottrell said, “We are ready to further our role as the data integrator of choice and the premier data services provider.”

In addition, he wrote, Authenticom plans to launch new, simplified technology and a new website for its DealerVault product.

During the interview, Cottrell expressed gratitude for the support that Mayor Tim Kabat and U.S. Rep. Ron Kind, D-La Crosse, have offered his company amid the throes of the court actions.

Cottrell also voiced confidence in the company’s ability to rebound, saying, “This is just a chapter in the book, but the book is not written.

“We are taking steps necessary to make this a 100-year company,” he said.

From Tribune files: Openings and closings of La Crosse area businesses

Local
top story
City of La Crosse, Isle La Plume boaters look for winter solutions

La Crosse city staff are working with Isle La Plume marina slipholders to find alternatives for those who winter their boats in the harbor.

Parks, recreation and forestry superintendent Jay Odegaard said Wednesday that the parks department is working to help boaters find alternative accommodations as the marina’s asset holders remove the docks and the city prepares to construct a new facility in its place.

Boat owners who freeze in at the former La Crosse Municipal Harbor, 1500 Joseph Houska Drive, and about nine people who live aboard houseboats throughout the winter were left scrambling late last week when they received notice to remove their boats from the harbor.

The dock owners, Rupel Lewandowski Holdings LLC, asked the boaters to leave after the city of La Crosse gave them 30 days notice to remove their newly purchased assets from city property, clearing the way for construction of a new marina. The city wants the company to remove the docks and other assets by the end of November so it can get the new docks in by the start of the 2018 boating season.

“It’s a real tough situation,” Odegaard said. “Everybody involved is in a tough situation.”

It’s been difficult to find extra space due to the popularity of boating and limited marina options.

“We have a vibrant boating community, there’s no doubt about that, and that bodes well for us in the long run,” he said.

However, the cooperation among the parties involved has left Odegaard optimistic that solutions can be found.

“Everybody is kind of making the necessary steps to move forward, and I think that’s positive,” he said.

TJ Ullery, one of the people who lives at the marina, was glad to hear from the city and get a respite from some, but not all, of the uncertainty surrounding his winter housing.

“It’s a relief, but there’s a little bit of a sense of hesitation there,” Ullery said.

With the fast-moving changes and amount of uncertainty surrounding the situation, he wasn’t certain whether the city might change its mind.

“My hope is that there is going to be a slip for me come May,” Ullery said.

La Crosse Mayor Tim Kabat has repeatedly assured slipholders that the city intends to do everything in its power to honor those slip agreements and Odegaard echoed his sentiments Wednesday.

“The city is looking at honoring the slip agreements that were made for the 2018 season,” Odegaard said.

However, with the design not yet finalized, Ullery remains wary.

Odegaard was confident that the city and boaters would work things out as all the parties involved put aside hard feelings to sort out the situation.

“At the end of the day, when we’re all looking back on this once the docks are in and everybody’s got their new homes, we can look at this and think, yeah, we made it through and something very positive is going to come of it,” Odegaard said.

Ullery agreed that the $1.8 million project would be a positive development for the area.

“Overall, I am excited about them building a new marina. That is exciting. I just wish they’d gone about it differently,” Ullery said.


Local
La Crosse County budget cuts 'nuisance' mosquito control

La Crosse County is nationally known for the success of its battle against mosquito-borne disease, especially the mosquito that carries the virus that causes the strain of encephalitis named after the city. Dave Geske, the vector control manager largely responsible for that success, is retiring Jan. 2, and he has some advice for people: “It’s probably time to invest in Off (mosquito spray) or some other material for next year.”

Geske

The 2018 county budget, which goes to public hearing before the La Crosse County Board on Monday, proposes a large cut in spending on mosquito control, eliminating treatment for “nuisance” varieties while shifting vector control responsibilities outside the county Health Department, contracting for services in the private sector.

The ramifications go well beyond county borders as entities outside the county — 11 other counties, two cities and a tribal nation — have long had contracts with La Crosse County for mosquito control services.

While county mosquito control is a tradition that goes back 40 years, it’s actually pretty unusual among Wisconsin counties. Outside of La Crosse County, only Milwaukee and Dane counties have programs for mosquito surveillance and abatement. The state has no requirement that county or municipal health departments do anything about mosquitoes, disease-carrying or otherwise.

“We are by far going above and beyond what other counties do in vector control,” County Administrator Steve O’Malley said.

O’Malley

But state law does require the county to have an animal control program, and county officials are cutting mosquito spending to shift more resources to animal control after one case of animal cruelty/neglect in the town of Onalaska saddled the county with up to $130,000 in unbudgeted costs this year to care for the animals, which included horses, sheep, dogs, cats, rabbits and rats.

Forty years ago when Geske started working for the county, there were 40 cases of La Crosse encephalitis within a six-county area, and over the 10 years before there were an average of 27 cases per year of the disorder, which can cause severe brain damage. “These were clinically diagnosed cases. There were probably many more cases,” Geske said. “I’ve seen these cases. It’s a horrible disease.”

The good news, though, is that since Geske began his vector control work, there have not even been a total of 27 encephalitis cases in that whole time.

Looking at cases of mosquito-borne illness during the past 13 years across the state, O’Malley noted that it’s hard to find evidence that the county’s vector control program is making a big difference anymore. There’s no significant difference between the incidences of mosquito-borne illnesses in La Crosse County compared with other counties around the state that don’t have such programs.

Roughly 80 percent of the county’s mosquito control spending has gone into treating for pests not known to cause diseases, and there have been many times when the treatment has not been enough to combat the nuisance mosquitoes. “We can never get ahead with nuisance control,” O’Malley said.

Still, while Geske’s efforts could never eliminate nuisance mosquitoes, they did have a marked effect. “I’d be awful disappointed if people didn’t notice if we weren’t doing it anymore,” Geske said. “But sometimes you have to make tough decisions.”

This year’s county budget involves a lot of tough decisions. The county’s state-imposed levy limit rose a healthy 2 percent thanks to new construction, but that nearly $500,000 in additional property tax revenue was almost entirely taken up by increased costs and decreased revenue involved in operating the county jail.

The proposed county budget calls for spending $40,000 next year for the revamped vector control program that will focus on controlling disease-causing mosquitoes in La Crosse County. This year’s budget included $163,183 for the program.

Meanwhile, the budget for animal control tax levy for 2018 will be set at $52,681 in hopes of creating a program that would cut down on animal abuse and neglect and reduce the county’s exposure to major expenses like those incurred in this year’s town of Onalaska case. The full animal control budget is $185,000, but about $132,000 of that will be offset by revenue from dog licenses. In past years, dog licenses fully funded the animal control program.

In animal control, La Crosse County also goes above and beyond, said health department director Jen Rombalski, noting that most county health departments only focus on rabies control. Rombalski emphasized, however, that there is value in doing more animal control activities because there can be a link between animal mistreatment and child neglect.

Rombalski

In addition to being vector control manager, Geske also has been in charge of animal control, but that was not a big focus for him. His passion and training is in bugs and biology, and the county contracts with the Coulee Region Humane Society for much of its animal control program. While Rombalski and O’Malley praised the humane society for its work, they said the system will need to be revamped.

“It’s too gray and it needs to be more black and white in terms of who’s responsible for what and who’s paying for what,” Rombalski said.

“We’ve got to pay more attention on how to prevent high-cost animal cases from impacting our budget,” O’Malley said.

Although no county officials expressed explicit support for having more nuisance mosquitoes next summer, almost all voted for a resolution dealing with the health department’s vector and animal control at committee meetings Tuesday and Wednesday. The county board’s Executive Committee, which is made up of board members who chair standing committees, voted unanimously for the resolution Wednesday morning. Only one member of the Health and Human Services Board, Dr. Cheri Olson, voted against it, arguing that bites from “nuisance” mosquitoes can result in medical issues, too. “There are also consequences we don’t know yet,” she added.

For Geske, letting go of the reins is going to be tough. “It’s a big change. I really believe in what we’ve been doing for 40 years,” he said. “I think you’ve got to put the priority on disease control. ... I just really hope they’re able to orchestrate the money it takes to do it well.”


NATE BEIER, SPECIAL TO THE TRIBUNE 

Bangor’s Carter Horstman signals for a touchdown after a Theo Muellenberg dive to the end zone in the third quarter of Friday’s 16-8 WIAA Division 7 quarterfinal win over defending champion Edgar. The Cardinals meet Abbotsford in a semifinal Friday, and the winner earns a chance to play in the championship game at Camp Randall Stadium on Nov. 16.


Crime-and-courts
2 La Crosse teens charged in gang rape of 2 girls inside South Side garage

Prosecutors Wednesday charged two La Crosse teens in a gang rape of two girls inside a South Side La Crosse garage.

Crosby

Basley

One of the victims said as many as 11 males were involved in the assault at 814 S. 19th St., but Ronald Crosby Jr., 17, and Heavell Basley, 18, are the only people charged as adults in La Crosse County Circuit Court.

A 16-year-old said she and a 15-year-old were in Basley’s garage late Oct. 29 or early Oct. 30 with about 15 other people after the girls had run away from the Family & Children’s Center, according to the complaint.

She said the males raped and hit the 15-year-old before she intervened, the complaint stated.

The 16-year-old girl said she protested and was forced to perform oral sex on “a lot” of offenders until her throat bled. Several males then raped and hit her, according to the complaint.

She told authorities that Crosby forced her to perform oral sex on Oct. 31.

The 15-year-old victim, who suffered internal injuries, said she slipped into unconsciousness after she ingested a drug during forced oral sex before “a whole bunch of guys” raped her, according to the complaint.

One girl also said Basley assaulted her three times and hit and strangled her before calling her a derogatory name for “having sex with all those other guys,” the complaint stated. She also said Crosby assaulted her twice.

Another girl present said the 15-year-old was assaulted at least 10 times but that she couldn’t identify the offenders because it was dark.

Police found a twin mattress, used condoms and buckets filled with urine during a search of the garage.

Crosby denied assaulting the girls.

Basley told investigators he was “being a nice guy” and provided a home for the 15-year-old. He said he witnessed other males assaulting her, before admitting that he had as well, but said she forced herself on him, according to the complaint. He said the 16-year-old was not assaulted.

Prosecutors charged Crosby, of 1317 Redfield St., with sexual assault of a child younger than 16 and first-degree sexual assault, both as party to the crime, and first-, second- and third-degree sexual assault. Basley is charged with four counts of sexual assault of a child younger than 16, one charge as party to the crime, and strangulation.

Crosby is jailed on a $10,000 cash bond and Basley on $5,000.


Geske