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Controversy develops over school district insurance

By Lisa Stevens John - | Jun 14, 2000

The school district’s selection of an insurance carrier always an arduous task is even more difficult this year.

Denny Payne, who is chairman of Brier Payne Meade Insurance, Topeka, hired this spring to serve as insurance consultant for the district, said selecting insurance carriers here never has been easy.

“I know there have been terrible hassles with it here in the past,” Payne said. “I really thought we had it cleaned up this year and then this hit us what a mess.”

On May 31, district officials opened insurance bids from two local agencies. However, those bids were based on vastly different property values.

J.W. Evans submitted a bid through Employers Mutual for $75,214 for a property value of $15.5 million, an amount specified by Payne.

Diane Bretthauer submitted a bid through Hartford Insurance for $77,065 for property values of $17.6 million, an amount specified by Hartford.

At Monday night’s board meeting, Payne said that earlier in the day he received a phone call from J.W. Evans stating that he would like to resubmit his bid, so it would be in line with the higher property value that Bretthauer used.

Although Evans’ new proposal would insure about $2 million more in property, his new bid would cost the district the same as his original proposal.

Bretthauer said it wasn’t fair that Evans saw her bid and then made a second bid.

“My bid was out on the table,” Bretthauer told school board members.

The board Monday night determined it would postpone a decision on the issue until its next meeting, set for June 28.

“I and Hartford will stand by my bid as it is,” Bretthauer said. “It was only $1,800 more for $1.5 million more coverage.”

Bretthauer said she bid a higher amount because of recent improvements in the district, including the new track, bleachers, scoreboard and press box at the high school athletic complex.

Payne said that he made calculations trying to equitably compare Bretthauer’s bid with Evans’ first bid.

“When we did that, the figures were only $7 apart,” Payne said.

Bretthauer said Hartford has paid more than $500,000 to the school district in claims during the 1997-98 and 1999-2000 school years. Those claims included a flood caused by a broken pipe at the high school in February 1998 and the recent tornado that damaged the roof at Tonganoxie Elementary School.

Board member Rick Lamb praised Bretthauer for her company’s swift work after the tornado on getting the elementary school in usable condition so children could attend classes the last week of school.

“I’m a real loyal person,” Lamb said. “And when an insurance company does well for me I try to stay with them. It’s a $75,000 policy and we’re talking about a difference of 3 percent. Well, 3 percent’s within my loyalty factor personally. I appreciate what Diane has done for us, especially in the last three weeks.”

Payne agreed about Bretthauer’s record.

“I know she’s served this district beautifully,” he said.

Payne said he regretted the confusion caused by the difference in property values.

“I really very much apologize for this happening,” he said. “We’ve opened up a can of worms.”

Calling this selection process a “political football,” Payne acknowledged that this is a difficult decision, but that it’s one the board must ultimately decide.

“I can’t deal with the personalities of your agents,” he said. “My recommendation will be based on coverages and premiums. I have no particular loyalty to one or the other. You have to decide this on your own.”

After the meeting, Superintendent Richard Erickson said he has worked with both Evans and Bretthauer during the last four years and said he’s been pleased with service from both agencies.

Erickson termed the bidding process competitive, but said that can be beneficial to district patrons.

“We’ve had some competitive rates,” Erickson said. “And I want a very competitive rate structure. We owe it to our kids and to our taxpayers to operate that way. We’ll work through this process and hopefully come to a fair and equitable solution.”