Talty defends granting perks to broker

John Talty

Guest Column

In response to John Bendokas' letter ("Integrity of Brick school board questioned by former board member," June 29), I would like to correct a few statements that are incorrect.

First, Mr. Bendokas would lead you to believe that the Board of Education excluded NIA Group Associates from coming back for last year's review for the broker of health care in our district. This is not true, the fact is NIA - on their own - chose not to be included in the final review.

The board, after consideration of parameters set, chose Commerce Insurance Services (CIS) because we thought its performance would be high and we would receive the best value. If this proved not to be the case this year, the board reserved the right to go out to bid for another broker. We didn't go out to bid because the board was very satisfied with the firm's performance and the value CIS brought to our district.

While we are on the subject of bidding, maybe Mr. Bendokas could tell us when the previous school board ever went out for bid when Delaware Valley/NIA was the district's health care broker. The answer is - never.

Delaware Valley was brought in many years ago under a no bid contract and was renewed without bid every year until 2005. This is shown in the school board minutes compiled by School Business Administrator Mr. [Nicholas] Puleio. I would guess that the school board was satisfied with renewal rate increases on average of 14.3 percent from 2002-2005.

Horizon paid NIA $632,240 in compensation during this period, an average of $211,000 a year. As an example, during the 2004-05 school year, Horizon paid NIA $222,375 in compensation, which included $32,965 for dental; $65,390 for prescriptions; and $124,020 for handling health plans.

Now let us look at what was agreed upon with Commerce by the current school board. During the 2005-06 school year, Commerce received $72,000 from Horizon to take care of all the district's health care contracts, which included dental and prescriptions at no cost.

Commerce got this district a 5.5 percent renewal rate increase, which was a $1.4 million in savings to this district in renewal rate dollars, the lowest renewal rate increase in over 10 years and considerably lower than any number Delaware Valley/NIA got us in their tenure here in Brick.

The reward for this extraordinary performance was a new contract where Commerce gets $8,000 per month, not to exceed $96,000 (same as last year) for health plans, 1 percent (not the 3 percent granted to the former broker) for dental plans and 1 percent (not the 1.5 percent given to the former broker) for prescriptions.

The total compensation likely to be paid out to Commerce in the next year will be approximately $150,000. Comparing this payout to last year's health care broker's compensation, which totaled $222,376, clearly shows a $72,000 savings to this district in one year - all at a time when the performance was, well, I will leave it up to the taxpayers to decide who is getting performance and value for the employees and the taxpayers.

As a final point, we did not shy away from the numbers or hide the compensation the broker is being paid but put the numbers out in public for all to see and hopefully compare in a fair manner. Hopefully you will see the difference in the two approaches taken by the two different boards and agree that we are getting real value and performance from Commerce.

John Talty

Brick

Mr. Talty is chairman of the Brick Township Board of Education's business and finance committee.