In a move that Board member Tom Troyer called “doing the right thing,” the Board of Education voted for Summit Insurance of Morristown to be its insurance agent, rather than a Jersey City firm recommended by the mayor.
The vote was 6-0. Three board members did not attend the special June 28 meeting.
Troyer voted to hire the Morristown firm and questioned the process.
In June, the board’s Finance Committee recommended Summit over RAM of Jersey City, prompting a call from Mayor Dennis Elwell to at least one member of the board requesting that the board re-interview RAM. The board as a whole subsequently listened to presentations from RAM and two other brokers.
RAM, which is the insurance broker and Agent of Record for the town of Secaucus, is a significant political contributor to Elwell’s reelection fund. A broker does not provide the insurance, but negotiates insurance benefits with various providers, seeking to get the best benefits possible.
Earlier this year, during council and Board of Education negotiations, town officials suggested the board might hire RAM to help negotiate among various insurance companies in order to help reduce the board’s escalating insurance costs. In 2001, the cost for health insurance benefits rose by $318,000 for school employees. Mayor Elwell said the idea was to create a larger pool of employees by combining those from the town and the schools to qualify for bigger discounts and lower costs for both the town and the schools.
When reached to comment on the board vote last week, Elwell said he did not know how the vote went, nor did he intend to interfere with the board.
“But I will say this, when the board presented its budget this year, they said a big part of the increase was due to insurance,” Elwell said. “Instead of talking about it, I thought perhaps we could do something to lower those costs.”
In raising objections to RAM, Troyer said the town agent did not have a good enough record in keeping down insurance costs, and the contract – which pays the broker a percentage of the overall costs – does not provide an incentive to lower the price.
Troyer said he feared the school district would suffer even steeper increases if the board agreed to hire RAM. Town records show that health costs fluctuated slighting in 1998 and 1999 before RAM became the town’s agent, rising by $42,000 in 1998 and dipping by $38,000 in 1999. But in 2000, the first year RAM became the town’s agent, costs rose by $208,000, and in 2001, the cost rose by another $360,000.
Town Administrator Anthony Iacono said the reason for the increase had to do with several employees suffering serious illnesses during that time period.
Troyer questions the review process
Board President Paul Amico said that while the mayor had asked him to re-interview RAM, no one from Town Hall had asked the board to hire RAM.
On June 28, the board as a whole listened to presentations from three vendors including RAM.
Troyer, however, raised objections to the way the situation was handled, saying that the board should never have agreed to re-interview the brokers.
“What is the point of having a finance committee if the board won’t listen to its recommendations?” he asked.
“By doing this, the board is undermining the credibility of the committee.”
Troyer argued that by honoring the mayor’s request, the board set a dangerous precedent in dealing with future contracts.
“Anytime anyone dislikes a committee’s recommendations, they’ll challenge them,” Troyer said.
Board member Ed Rittberg, however, said Troyer had agreed to allow the full board to re-interview the three brokers.
“What does Tommy want from us?” Rittberg asked. “First he agrees to let the board re-interview, and then he says we’re wrong for doing it.”
Although other board members claimed Troyer had threatened to quit the Finance Committee over this issue, Troyer said he merely pointed out that the board had stripped the committee of power.
“We might as well not have a committee if the board is going to question its authority,” Troyer said.
Previously, only the Finance Committee had heard the presentations. The finance committee is made up of Michael Pesci, Michael Schlemm and Tom Troyer.
“This mayor has been good to the board,” said Amico in defending his decision to re-interview. “He didn’t make any demands. He asked if we would consider it, and as a courtesy, we did.”