The Pequot Lakes School Board decided Monday night, June 17, to switch from its local insurance agents to SMA Insurance of St. Cloud for coverage of both its workers’ compensation insurance and property/liability insurance.
The debate over choosing an agent of record for both the district’s workers’ compensation and property/liability insurance began as one over cost, but moved toward an issue of local or non-local agents.
Before Monday night, the district’s agents were Mark Jurchen of Lakeland Agency for workers’ compensation and Chad Nelson of Insurance Brokers of Minnesota for property/liability insurance. Both agents are based in Pequot Lakes.
The issue arose when board members suggested that by switching to a single agent of record, the board could save the district money. Board member Brandon Andersen was one advocate of the switch.
“If you’re shopping insurance as one combined package you have a much better opportunity to negotiate a package,” Andersen said. “With one agent shopping three or four (providers) against each other you have more leverage.”
Andersen said his decision was based on getting the best value and service for the district and taxpayers, “not about maintaining relationships or trying to keep people happy that we know.”
The board needed to make the decision over its insurance agent by a July 1 deadline. Andersen acknowledged that because the board was late in the game, the cost savings might not come this year but in future years.
Board members Valarie Wallin and Mike Erholtz cast the sole votes against the switch to SMA Insurance.
“To me it seems like we’re not going to be saving money, we’re not going to be doing business with yet another local company,” Erholtz said.
“The hardest part of this is that we have two agents who are local and, quite frankly, our district has benefitted in other areas because we have had two agents that are local,” Wallin said. “I mean, we do receive donations, we receive other, you know, just business professional types of things that make our lives easier because we have had this local.”
She said she would struggle to support hiring SMA because the board tells the community that it tries to keep its business local.
Board member Kim Bolz-Andolshek said the reason the district hires a superintendent and business manager is to make recommendations like this one for the board. She also said the decision over insurance agents had become “muddy for reasons outside the decision itself.”
District business manager Lea St. Onge told the board that she and superintendent Rick Linnell interviewed several agencies and were recommending SMA at the June 17 meeting. Linnell was absent from the meeting.
The issue was also discussed at a previous special board meeting June 3. Linnell and St. Onge had recommended Weizenegger Engel on June 3, but questions arose from some board members over whether the services the board desired could be properly provided.
St. Onge said she felt SMA would be a trustworthy provider. She also said she felt she got little communication from the district’s former agents.
The board also discussed the need to measure the effectiveness of the new agent. The decision passed on a 5-2 vote.