Broker Discussion Displays School Board Rift

Split decision on a split board over who will admin health benefits

In a contentious, split vote on Wednesday the Board of Education chose a new administrator for its employee health insurance.

The board chose to hire Arthur J. Gallagher & Co. to administer its health insurance program for the school system’s employees in a 5-4 vote that capped a lengthy, spirited discussion among board members, including a call for the board president to step aside from the vote.

The discussion centered around two competing companies, the former broker of 11 years — Brown & Brown, of Daytona Beach, Fla. — and Gallagher, of Itasca, Ill. Board members were split on the merits of each company, each extolling the virtues of one and disagreeing with the other during an occasionally testy discussion.

Board members Deidra Kukucka, Laurie Cannon, Donald Herbert and Melissa Peters favored choosing the longtime insurance mainstay Brown & Brown. The majority – Board President John Tavis and members Eva Applegate, Anne Moonan, Robin Cervantes and Joe Tonzola — voted to give a $55,000 year-long contract to Gallagher.

“Some change is good, and I think this is one of those times,’’ Tavis said in a statement prior to his vote. “In the end, Gallagher is the better choice.’’

The flap over which broker would administer the district’s insurance benefits began last month when Gallagher was pegged to a resolution to be voted on at the July 10 meeting after they submitted a significantly lower proposal than Brown & Brown during a proposal process the board had earlier conducted.

But hours before the meeting, Brown & Brown revised their bid, lowering their price from $85,000 to $55,000 – the exact price Gallagher had quoted, board members said.

That proposal, however, removed a service frequently used by employees trying to glean answers about their insurance coverage questions. It was still an open question on Wednesday whether Gallagher’s proposal included all or some of those services.

The resolution appointing Gallagher was set aside at the July meeting, with board members saying they did not have enough information to act giving the changing circumstances.

Applegate and Tonzola each were put off by Brown & Brown’s sudden $30,000 reduction in their price when it appeared they were not going to get the contract for a 12th consecutive year.

“It was too big a reduction in price,’’ Applegate said. “To change this now at the 11th hour? It will affect the way we operate in future years.’’

Not all members agreed.

“All I’m going to say is I thing we should stay with Brown & Brown,’’ Herbert said. “They have a good track record, and I think we should stay with them. That’s all I have to say.’’

Cannon, who was the most forceful advocate for Brown & Brown, made a personal plea for the broker, saying that their direct contact with the company was a Wall resident and volunteer who frequently helps out in school or community activities.

“He’s on every committee there is to be on. He helps with the Little League, he helps with Pop Warner… and he helped raise all that money for our TV studio and our courtyard project,’’ Cannon said. “He’s one of those ‘go-to’ people that is willing to help us. I don’t think we should not take that into consideration.’’

Cannon also asked Business Administrator Brian Smyth to weigh in. He did, and said he has had no problems with Brown & Brown and saw no real reason to change.

At the outset of the discussion, Kukucka suggested that Tavis recuse himself from vote and the discussion. Kukucka said Tavis had made direct contact with one of the vendors and that phone call was inappropriate and could call into question the integrity of the board.

“I don’t want there to be any suggestion or hint that there would be inappropriate behavior on the part of the board,’’ Kukucka said.

Tavis, one of the votes that tipped the scales in Gallagher’s favor, said he called Gallagher hours before the July meeting to ask if the broker would provide, and at what cost, the portion of the services cut from the last-minute Brown & Brown bid that brought it in line with the Gallagher price.

“My purpose in getting in touch with one of the vendors, was in no way to give anyone an inside track,’’ Tavis said. “Looking at the purpose, it was only to benefit the board. So for that reason, I will not recuse myself.’’

DUKE August 19, 2012 at 06:00 PM
I am surprised the teachers were not more vocal on this. B&B was there for the teachers through difficult health related decisions. Not that Gallagher won't, but B&B was such a proven organization. Especially if they were willing to change there bid. Even if at the end. That is business. Happens every day. I repeat...Tavis has been disappointing on this issue. Mr. Simon please step up.
Really? August 19, 2012 at 06:32 PM
Liz, Thank you for your obviously insider response. I unfortunately have to rely on what I hear at BOE meetings and then on the audio tape. My question still is, How did B&B find out about the quote by Gallagher? Would that information have come from a committee meeting that is private and not allowed to be leaked to the public? Were all of these questions regarding the difference between B&B and Gallagher asked and answered at your private committee meetings? Lastly, why do you continue to beat a dead horse when the bigger issue here is the theft of $400,000.00 by a overpaid Ex-Administrator? Who checks to see if he took days off? Who was he held accountable to? Is there a Truant Officer for Superintendents?
LOMNOP September 06, 2012 at 10:45 AM
Cannon is stepping down, so who cares what she has to say any longer. Maybe this is the real reason why he was giving donations and volunteering. It helped with his business. If you are going to charge that much of higher. I would no longer call them a donation. Wall is actually paying for them in another way through his company.
LOMNOP September 06, 2012 at 10:46 AM
Habel never did what was right for the students or the district and neither did his bobbleheads.
LOMNOP September 06, 2012 at 11:01 AM
Habel is a piece of garbage. This should be checked in to. He was never concerned about the students. He had to many BOE puppets.


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