BY DANIELLE MEDINA
Correspondent
BRICK – The Board of Education unanimously agreed to renew the contract of its heath insurance broker of record for the 2006-07 school year, giving the firm a 50 percent increase in its commission over last year’s contract.
Commerce Insurance Services will be paid $8,000 per month, not to exceed $96,000, for heath insurance, plus an additional 1 percent of the dental and prescription premiums, according to a resolution passed June 22.
The additional 1 percent commission translates to a $54,000 bonus, bringing the firm’s total package to $150,000, said board member John Talty, chairman of the board’s business and finance committee.
In its first year of its contract, Commerce received a flat fee of $72,000 or $8,000 per month, for the nine months they worked for the district.
During the board’s June 22 public meeting, former Board of Education member John Bendokas questioned why the district would give Commerce a 50 percent commission increase from the previous year.
“In our second year, we’re up $54,000 on top of a failed budget; on top of ever increasing taxes from the state and the fed; on top of the district that needs computers; on top of a district that’s trying to save some coaching positions,” Bendokas said. “I believe to throw $54,000 out there and then not give the public the dollar amounts and just say it’s 1 percent, I just don’t think it’s the right thing to do.”
Bendokas criticized the board for firing NIA Group Associates last June after they agreed to work as the district’s broker of record for a flat fee.
“You had a contract in front of you that was $100,000 per year for three years with a company that we were with prior to for a year,” Bendokas said. “They handle the Garden State Parkway, different municipalities, and boards of education.”
But several board members defended the decision to tack on the 1 percent commission to Commerce fee, saying that the district’s previous brokers, Delaware Valley Financial Group and NIA Group, didn’t produce such low renewal rates.
Both firms employed broker Mark Senior as its broker.
“The new broker got us 5.5 percent renewal rate that was a very substantial reduction that allowed us to move money into other accounts that basically goes to the children,” Talty said.
Under NIA Group and Delaware Valley Financial group, the district saw increases in its premiums of 30 percent in 2002-03 and 12.8 percent in 2003-04, Talty said.
“Those are huge amounts of dollars,” he said.
The savings in the renewal rate that Commerce negotiated for the district translates to $1.4 million, he added.
“A 5.5 percent rate increase is the best we’ve gotten in the last decade,” said board President Sharon Kight.
The broker, Scott Davenport, has been working with the district to improve its procedures and efficiencies and administers the district’s COBRA plan free of charge, Talty said.
The brokerage firm that gets the district’s contract has been an ongoing issue since Kight and Talty joined the Board of Education in April 2004.
At that time, Delaware Valley came under scrutiny when ethical concerns were raised about whether the relationship between the firm and the board was a conflict of interest. Delaware Valley employs Bendokas’ son, Edward, and Delaware Valley’s managing partner, Thomas Schirmer, is a longtime friend of the elder Bendokas.
After Delaware Valley Financial Group’s contract was not renewed, NIA was hired by the board in March 2005. But after the April 2005 election, and a new majority was in place on the board, NIA’s contract was rescinded.
“Why are you pushing this company so hard?” board member Daniel Rosa asked Bendokas.
“I’m not pushing anyone,” Bendokas said. “I’m stating a fact.”
The contract, which will run from July 1 to June 30, 2007, will be paid by the district’s health-care carrier, Horizon Blue Cross/Blue Shield.