Monday, March 16, 2015

BISD INSURANCE GOES FROM $3.3 TO $5.12 MILLION

By Juan Montoya
Following the debacle of the Brownsville Independent School District in awarding a $3.3 million insurance contract to a company without first getting board approval has deteriorated the process to the point where the district may end up paying millions more for the coverage.
And even though the board directed the administration to rebid the contract and seek a better deal, at least four top administrators – CFO Lucio Mendoza, then-Superintendent Carl Montoya, Employee Benefits Director Judy Cuellar, and Purchasing director Rosario Peña – issued the Purchase Order P238491for made out for $3,277,604.54.
Following the administration's award of the $3.3 million  insurance policy for windstorm, hail, boiler machinery insurance policy with current insurer McGriff and Seibels and Williams of Houston, Texas without the benefit of a vote, the district instead bought a 90-day extension of the coverage from the same broker for $1.3 million.
Simple math tells you that four 90-day extensions at $1.3 million equals to $5.12 million for the year, and by that measure the district could end up paying a total of $1.8 million more for the same coverage.
This in spite of the fact that windstorm risk along the Texas coast doesn't start until the beginning of hurricane season in June. The current 90-day extension expires at the end of April.
McGriff, which has held the contract for the past eight years has been the only bidder in recent memory because it has "locked" in insurance carriers who do not like to use more than one broker for a Requests for Sealed Proposals with clients like BISD.
Another company, Klements Insurance, offered the same insurance coverage at less than $500,000 but could not get clearance from McGriff or the carriers to contact them.
Bond brokers for the BISD also said that the bond companies doing business with the BISD required the insurance despite the hurricane season not starting for another month after the 90-day extension.
How did this happen?
The process followed by the Employee Benefits Dept. under Cuellar and her insurance evaluation committee has shown that the process followed in reaching a recommendation for the board was flawed.
The district insurance evaluation committee which recommended McGriff were Employee Benefits administrator Cuellar, Payroll Administrator Kenneth Lieck, Warehouse Adm. Kent Wittenmore, CFO Lucio Mendoza, Finance Coordinator Mark Alaniz, and Belia Rodriguez, a representative from the purchasing dept.
The three BISD board members who head the board's insurance committee are Cesar Lopez, Jose Chirinos and Carlos Elizondo.
McGriff, which has held the contract for the past eight years has been the only bidder in recent memory because it has "locked" in insurance carriers who do not like to muse more than one broker for a Requests for Sealed Proposals with clients like BISD.
However, this year there was another company, Bordon's of Corpus Christi, which listed the identical insurance companies as the McGriff proposal, the only difference being the slightly lower commissions charged by McGriff.
Competitors charged that Bordon's was in reality a "straw" bidder to make it appear that bidding for the services had actually taken place.
There are other complications. Apparently, McGriff is also the BISD's insurance consultant and is listed as a  "risk manager" with the Texas Cooperative Purchasing Network for the district while at the same time acting as a broker to sell it insurance coverage, a no-no according to the Texas Board of Insurance.
Now we have confirmation through BISD administrators and local social media that none other than trustee Joe Rodriguez has indicated that the windstorm insurance contract will be awarded through local broker Joey Lopez, a former BISD trustee who was also an unsuccessful candidate for Cameron County District Clerk.
Doe Rodriguez – with a majority on the board – know something that no one else does?

17 comments:

Anonymous said...

I have a Ph.d in physics. It doesn't take a rocket scientist to figure out what's going on. Some of these jokers are on the take. As a tax payer I am filing a complaint to the Dept. Of Insurace

Anonymous said...

Where's the FBI in all of this? Can't believe no law enforcement comes and rakes these corrupt idiots in jail or prison. Isn't this blatantly corruption, and abuse?

Anonymous said...

Judy, Kent and Lieck are major red flags, they have been personally involved with Mcgriff and Salazar Insurance group for years and these three are catering to certain board members like Cesar Lopez, Otis Powers and the late Escobedo.

So let's see who goes down first. Joe Rodriguez, Minerva Pena, Hector Chirinos of Cesar, Otis and Elizondo.

Anonymous said...

I guess the BISD taxpayers have extra money to throw away! Maybe we're being taxed too much!

Anonymous said...

Everyone should stop paying school taxes and see what these corrupt morons do then. Morons!!

Anonymous said...

Where are Cesar Lopez' promises??? Putting students first and giving employees payraises!

You really meant putting your compadres and yourself first! What a lying scum, nothing but a low life that forgot where he came from and will make a living by wheeling and dealing.

Anonymous said...

What a bunch of fucktards running bisd ,they act as if it were the first time they go out for insurance bids,blind leading the blind or is it something else

Anonymous said...

And this surprises everyone??????????????

Anonymous said...

When Joey was on the Board , he was notorious for being on the take. He was using both hands.

Anonymous said...

Only the people that voted for them.

Anonymous said...

Can anyone really take the district's bidding process seriously?

Anonymous said...

What bidding process ? They are all a big fix. Didn't you know ?

Anonymous said...

Why was Joey Lopez sitting next to Kent Whittemore at the Insurance Meeting? So blatant, no shame he's got the contract as promised by Joe Rodriguez and Balthazar Salazar.

Rumor is Joey himself told Judy Rodriguez and Salazar PROMISED HIM THE contract since August.

And now Joe plays dumb, they pay $1.3 million to McGriff for 3 months, now they will pay Joey $3 or $4 million more to keep their promise, that's that's $4.3 or $5.3 million more than the original premium.

screw the employees, either fire them or give them shit! Hope 5th FBI is looking at all of this.

Anonymous said...

Joey said that the money is what counts. El board Le Quiere dar el contrato pa' que se moche con la comisión .

Anonymous said...

Correction:::: Joey Lopez told Judy Cuellar, he already had the contract.

R W Employee Benefits said...

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Anonymous said...

There are numerous independent consultants that, for tiny fees, will conduct open, fair, public bidding for these insurance contracts. Why don't we as taxpayers find one of these firms & do this? I'll bet we can spend $30,000 & save $1.5M or more. I saw this happen at a former employer's company. In the process the consultant found ridiculous waste, if not outright fraud. Back then we paid $20,000 & saved $370,000.

rita