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New Year, Old Problems for Statesboro Council Divided Over Insurance Broker Bids

The Statesboro City Council wasted no time getting back to work in the new year at their first council meeting on Tuesday morning, bringing forward an issue that divided council members last fall and led the body to send the matter to a third-party independent consultant for assistance.


The discussion Tuesday was no different from those that came before it on the topic of insurance brokerage contracts and, once again, council members were divided on a measure that ultimately led to the denial of staff recommendations.

BACKGROUND

Back in September, the Council approved the award of an insurance brokerage contract to ShawHankins, at the recommendation of the staff department heads, after years of contracting with Glenn-Davis. ShawHankins promised council $1 million in savings and an increase in services provided to city employees.

At the time, Councilman Travis Chance brought to light concerns that the three final bidders, Glenn-Davis & Associates, Capstone, and ShawHankins, were graded on different criteria during the RFQ process, and was concerned about the near 500% increase in costs to the city (arguably for additional services) but despite his efforts to squash the contract, it was awarded anyway.

The original bids were as follows:

1. Capstone Benefits Consulting, LLC — $6,000.00/month
2. Shaw Hankins — $5,376.00/month
3. Glenn Davis and Associates $1,024.00/month

You can read the entire synopsis of that here

OCTOBER MEETING BRINGS APPEALS BY COMPETING BROKERS

At the first meeting in October, representatives from Glenn-Davis and Capstone appealed the award of the bid, given discussion at the September meeting and public concern, and the council decided to seek a third party consultant to evaluate the bids on the exact same criteria for an apples-to-apples comparison.

The full coverage of that meeting is available here.

JANUARY MEETING

Chance brought newly-sworn in mayor Jonathan McCollar up to speed on the matter, explaining his and Yawn’s task with the independent third-party consultant. The consultant, Michael Mark, recommended ShawHankins (4 points) over Glenn-Davis (2 points) and Capstone (0 points), but offered caveats to the recommendation, saying there is cost associated with change and therefore Glenn-Davis was better positioned to continue offering services. Chance said the city was getting into the business of ‘preference over performance’ and once again challenged the idea of making a lateral move for more money. “If the current provider has been doing their job, why would we make a lateral move for more money? I can’t wrap that around my brain.”

Councilman Sam Lee Jones echoed Chance’s sentiments and made an immediate motion to go with Glenn-Davis, not ShawHankins.

Jeff Grant, Director of Human Resources, told council Tuesday that he had previously expressed concerns with the current broker and criticized Glenn-Davis’ services, stating the company was not proactive enough and only renegotiated and sought other services when asked by city employees. He cited complacency as one of the larger problems, along with the failure to develop aggressive strategies and missed opportunities for savings.

Chance told Grant that the concerns over Glenn-Davis were only brought to light after the process was called into question.

Mayor McCollar asked what the cost difference was between the plans. Grant told council that the per employee costs were:

  • $25.00 per employee with ShawHankins (later negotiated down to $20)
  • $19.29 per employee with Capstone
  • $4.00 per employee with Glenn-Davis

Grant told council members that ShawHankins was ‘superior’ to the others, saying “You get what you pay for” and cited a director of wellness and a technology contact as increased services with the increased cost, though Chance refuted that point citing the analysis which only referenced the RFQ and bid documents as ‘superior.’

(The council meeting packet is below. Scroll to page 97 to begin the text of the third-party analysis. If you’re reading on a mobile device and cannot scroll the pages, click here.)

http://bulloch.allongeorgia.com/wp-content/uploads/sites/4/2018/01/01-02-2018-Council-Packet-Statesboro.pdf

Chance also called Grant’s actions out-of-order asking, “If you were having this much issue, why did you let it go on as long as it did? Why did it not get bid out before then?…My biggest issue with this whole process is this whole cloak and dagger BS because none of this was actually presented in the very first meeting that has essentially snowballed to get us where we are now. If these are truly the issues, why were they not brought up then?”

Chance went on, “It’s basically been like ‘We don’t like Glenn-Davis for some reason so we’re pushing them out. If you’ve truly got grievance, state your grievance. Don’t hide behind ‘Okay we don’t want to hurt their feelings,’ because I can assure you, this process has probably done more to hurt everyone involved than it has to help them.”

Chance also told council that the reason the bids were given a second review was due to the fact that complete information was not given the first time around in meetings.

Mayor McCollar told members of council he found the process “too flawed” to make a decision on. “There are too many discrepancies. ‘We can save a million dollars.’ ‘We can’t save a million dollars.’ ‘We got an issue with performance, we don’t have an issue with performance. It’s too much. It’s flawed.”

Yawn said he disagreed with the Mayor and made his decision 100% on the knowledge and recommendations by staff and the work they put forward in the process. “They felt very strongly this needed to be done. I am of the belief that to better progress the City of Statesboro, you better support the people that work for you.”

Councilman Phil Boyum called Chance’s actions with the recommendation into question, saying the consultant was hired so that council could take their recommendation. “We were pretty clear that we were going to really heed that recommendation,” he said. “Why should we go against the recommendation?” Boyum voiced his concerns over going against the staff and the third-party consultant.

Councilman John Riggs said he took the time to speak with city employees and their families with special needs children, specifically, and they said they were getting what they needed from Glenn-Davis and that, should a vote be cast Tuesday, he would go with Glenn-Davis.

Briefly, council considered tabling the issue until the next meeting, but Grant cautioned against prolonging the process more, as did members of the insurance brokerage companies in the audience.

Ultimately, Mayor McCollar called for a motion on the floor and Yawn pushed for the acceptance of the recommendation by the consultant to award ShawHankins the contract. It was seconded by Boyum, but failed 2-3 with Chance, Jones, and Riggs opposing.

Councilman Jones followed with a motion to award the contract to Glenn-Davis, which was seconded by Chance and passed 3-2 with Riggs supporting and Boyum and Yawn both opposing.

McCollar closed the discussion saying, “We do get into a grey area when there is a conflict politically and with the staff, so let us pray we made the right decision.”

 

The video of the meeting is below. The discussion on insurance begins just after the (1:00:00 mark):

Statesboro Council meeting with the swearing in of Mayor-elect Jonathan McCollar and a full agenda. Meeting begins at 9AM, sound will begin just ahead of meeting

Posted by All On Georgia – Bulloch on Tuesday, January 2, 2018

 

Jessica Szilagyi is a former Statewide Contributor for AllOnGeorgia.com.

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