Part Seven: When reforms make headway, The Empire Strikes Back
In late September 2013, CCSD Trustee Erin Cranor came across information indicating that she and fellow trustees had been misled regarding the actual costs of an insurance contract the district was expected to sign.
Rather than falling, those costs were to rise between $6 and $7 million.
Also, differing from earlier versions of the contract, the pending agreement now tripled the commission to be received by the district’s consulting insurance broker, Business Benefits, Inc.
Whereas BBI previously received a 0.75 percent commission on deals negotiated for the district with insurers, the new terms — of which BBI had not informed the district — would have kicked the commission up to 2.25 percent.
Moreover, because commissions under the new terms were, as before, tied to the total cost of CCSD insurance deals, BBI now had an even larger financial incentive to get the district signed to the most expensive insurance contracts possible.
Concerned, Cranor asked the legal counsel for CCSD’s board of trustees to review the new contract language.
The board attorney’s recommendation? For CCSD to end its broker-of-record relationship with BBI.