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R-P runs into insurance snag

By Kirsten Zoellner

Fri, Apr 25th, 2014
Posted in Peterson Education

At the Monday, April 21 Rushford Peterson school board meeting, the district acknowledged a snag with bids for insurance coverage. Board member Taylor Peterson sought clarification, as did local insurance agent Butch Johnson, who was present and addressed the board.

"What was the reason for the misunderstanding or miscommunication?” asked board member Taylor Peterson.

“It was a case of misunderstanding and miscommunication with the Winona Agency,” says district superintendent Chuck Ehler. “When we sent out the proposals the due date listed was April 4. In a conversation with Winona Agency, they thought there was a verbal agreement of a due date of May 4. After the due date, both Winona Agency and Vaaler Insurance Agency, who submitted bids, were contacted and the situation was explained. The Vaaler Agency consented to allow an extension until May 4th for the Winona Agency to have time to secure a viable quote.”

The district advertised for bids in mid-February and received inquiries from four agencies. The district received bids from Vaaler Insurance Agency and Winona Agency. Currently, Vaaler (Trident Insurance) provides the district’s property insurance and Winona provides the district’s workmen’s compensation coverage.

“I put that on him and his agency. They missed the deadline,” responded Peterson.

Johnson, one of the agencies interested in bidding, addressed discrepancies in valuations in the bid, as well as what he believed was a lack of information needed for formulating a bid. “What are we bidding on? It’s not spelled out. Can you make heads or tails of that? The information is not there,” stated Johnson. “My concern is what information are the agencies getting to put a bid on it? I’m wondering if the other agencies are getting special information. It’s totally unbiddable. The whole thing is incomplete. Period.”

Ehler noted his hope that agencies with questions would call for clarification. “All I ask is a phone call.”

Johnson responded regarding a discussion three years ago, at the time the last insurance bids were sought. At that time, he says he indicated to the district that the information was unbiddable. Additionally, Johnson noted that most companies won’t put bids out over 90 days, not being able to guarantee risk. Currently, bids are approved by the school board in August, with an effective date of September 1.

The board discussed the matter at length, considering several possible options forward. At least one move was ruled out, following advice from Johnson. “That’s not a good move for the district. You’d receive a short rate cancellation notice. I’d recommend taking the annual cycle off, just put information out next year, and approve the bids tonight with Vaaler. Winona missed it.”

There was some concern however regarding approving the bid at the meeting, including possible violation of some terms with Winona Agency. The district will seek legal counsel and the discussion with the current insurance providers. Ehler suggested maintaining current contracts for an additional term of one year, allowing for rebidding in 2015 with a three year quote. The board tabled the issue.

In a later discussion regarding the meeting, Ehler clarified to the Journal, “It was clearly pointed out in the meeting that 90 days is ideal for the insurance agencies to gather all of information needed. It’s most unfortunate, that there was a breakdown in our process. It is interesting from the standpoint that the same information was submitted to all interested parties that wanted to submit a quote. The general practice is for companies to submit additional forms/documents for us to complete to assist them with the gathering of all pertinent information for them to present us with a quote. It was a great to have some insights on how we can improve the process. We look forward to maintaining our current insurances. I appreciate the opportunity to ensure and make the insurance quote process as transparent as possible.”

In other news, the district has approved a slight change in the evaluation procedure of the superintendent. Following discussion at the last meeting, the board had time to further review the current procedure and that of other districts. The board unanimously approved merging the current procedure with that of Chatfield, specifically a section referencing goals of the superintendent.

The next regularly scheduled board meeting is Monday, May 19, at 5:30 p.m., at the high school biology room. The public is encouraged to attend.

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