An Altoona Area School Board member said she wants to bring insurance costs down drastically for the school district.

Board member Sharon Bream drew on her 40 years’ experience of securing insurance policies for a farming company and vehemently opposed the administration’s request to approve a broker of record letter to Arthur J. Gallagher for workers’ compensation and property/casualty insurance services.

That letter allows Gallagher to get all insurance companies to compete for the district.

However, two other brokers were interested: Gingrich Insurance and Saleme Insurance. The broker of record letter with Gallagher closes the door on the other two, Bream said.

“What you are saying with this broker of record letter is ‘we are setting up for the incumbent to win,'” she said. “No one should vote for this. And in fact, the company you have here isn’t even a local company. The two others pay taxes in this community and have children in this school.”

Bream had nothing against Gallagher. However, she wanted multiple brokers to compete.

Each broker would get a quote from different insurance companies.

That would increase competition among insurance companies and perhaps lower commission from the brokers who would also be competing against each other, she said.

She argued at length with administrators during a Feb. 4 board meeting.

District Business Manager Camilla Houy said the administration recommended Gallagher based on experience.

“We have two large lawsuits against us,” Houy said “Knowing which line of insurance to file under that will give us the greatest protection, that’s where we can save millions of dollars,” Houy said “That’s where the experience of Gallagher comes in. Gallagher has dealt with lawsuits against large school districts across the state.”

Superintendent Charles Prijatelj said he recommended approving a broker of record letter instead of having multiple competing brokers. The advantage, he said, is that one broker would quote different insurance companies and bring back the best blend and mix of insurances for the district.

Board member Ed Kreuz sided with Bream.

“You don’t save your money from the main insurance company. You save from the local broker who is willing to cut his commission,” Kreuz said, favoring Gingrich.

Other board members supported the administration. Bill Ceglar is a business owner and has experience with switching insurance brokers that did not turn out well.

“I’ve switched companies to get a lower rate, and it’s come back and burnt me,” he said. “Sometimes it’s the person that is selling it to you that really counts.”

Dave Francis does not usually agree with Ceglar, but he did agree on that point.

“Someone (Ceglar) made the point that you don’t always get the best deal from the best bid. I think since Camilla is the one working with the broker, we should trust her judgment. Camilla does run that show, and I have all the confidence in her.”

Kelly Irwin Adams noted that other companies had a chance to give a presentation to the school board.

In a vote of 7-2, the board approved Gallagher as the broker of record to provide workers’ compensation and property/casualty insurance services including quotes from various carriers.

Ceglar, Irwin Adams, Francis, Board President Dutch Brennan, Vice President Wayne Hippo, Ron Johnston and Rick Hoover approved it while Bream and Kreuz voted against it.

In her argument against the administration, Bream also pointed out that the district has a high Experience Modification Rate, which is a number used by insurance companies to gauge both past cost of injuries and future chances of risk.

The lower the “experience mod” of the business, the lower the workers’ compensation insurance premiums will be.

A mod factor more than 1 means losses are worse than expected and a surcharge would be added to the premium.

Altoona Area’s figure is 1.12, which Bream said was ridiculous.

In an interview Monday, Bream said she wants to work to bring down the district’s mod from 1.12 to 0.70.

“I’m sure (savings) can be substantial,” she said.

There are ways to get that mod factor down and get employees back to work quickly, she said.

The district does have back to work program that was implemented in the past couple of years, said district physical plant director and safety committee member Doug Endler.

Endler also said that the district’s workers’ comp isn’t used mostly by custodians or maintenance workers.

“Most of our accidents are students acting on employees and some of those are very serious accidents, assaults in some cases and that’s where the mod is,” he said. “It’s not what you would normally expect, like being in the maintenance group or in custodial group, working with machinery or tools. It’s a person-on-person things causing it.”

Bream works for a farm and said she knows about working with unpredictability.

“I work in a business where you are dealing with animals that are very unpredictable. There are ways to prevent accidents, trust me, and my experience mod is 0.71,” she said. “I mean, it can be done. And eliminating all your competition in your bidding is certainly not the way to do it.”

Mirror Staff Writer Russ O’Reilly is at 946-7435.