The Tribune Democrat, Johnstown, PA

Local News

February 24, 2013

Commissioners divided over shifting insurance

EBENSBURG — In a split vote, the Cambria County commissioners have agreed to shift a contract for insurance services from an Ebensburg-based firm to a Johnstown company.

The recent switch of the county’s excess workers’ compensation program fund from the Ebensburg Insurance Agency to Arthur J. Gallagher Risk Management of Johnstown is the third insurance-related contract the commissioners have awarded to the firm. Until 2011, Gallagher was the Gleason Insurance Agency.

The change is being made because the Gallagher firm likely will benefit county residents through savings, board chairman Douglas Lengenfelder said.

“We’re going to net a $200,000 savings,” Lengenfelder said. “They’ve already started saving us thousands of dollars.”

The thousands of dollars already saved is in reference to two insurance-related contracts shifted to Gallagher in 2012.

In late May, Lengenfelder and Mark Wissinger named the Gallagher firm as the county’s insurance broker, instead of continuing with an Ebensburg firm headed by Carl “Buddy” DeYulis.

In January 2011, Gallagher bought out Gleason Insurance and Gleason Financial, but Robert A. Gleason and brother Christopher Gleason continued to be associated with the firm.

As with this latest shift, Commissioner Thomas Chernisky, the Democratic minority commissioner, opposed the move. He cited the eight years that DeYulis has been providing good service for the county.

He termed the awards as “hand delivering business,” to Gallagher, “When Ebensburg Insurance has done nothing wrong to lose this business.”

Cambria County insurance again was on the agenda in October when – in another split vote and over the protest of county employees –  commissioners approved a contract with Gallagher Benefit Services Inc., a subsidiary of Arthur J. Gallagher.

At a cost of $100,000, the company took over as health care consultants to the county. That service formerly was provided at no cost by a county-employee-based health care committee.

Lengenfelder said at that time that Gallagher’s services will result in a $300,000 annual savings in health care costs, or there will be a reduction in Gallagher’s fees.

Chernisky wants to see the county shop around by seeking bids for the insurance contracts.

“We’re telling vendors sometimes we shop, sometimes we don’t,” he said.

While the county code calls for the commissioners to seek competitive bids for many purchases, insurance contracts are considered professional services and can be awarded without bids, officials said.

Moving the contracts to Gallagher brings with it decades of insurance experience, Lengenfelder said.

This latest action has caught the attention of Jake Sternberger, a Harrisburg-based blogger who categorized the insurance shuffle as payback for state GOP Chairman Rob Gleason’s work to gain Republican control of the Cambria courthouse with the 2011 election of Lengenfelder and Wissinger.

But county Controller Ed Cernic Jr., a lifelong Democrat, said contract shifts by Republicans  – to likely benefit a company owned by Republicans – doesn’t necessarily have a negative impact on the county.

“There’s politics in everything, and there has been politics when Democrats have taken over in the past,” Cernic said.

 “Is this politics? Yeah.”

He cited an example when Democrats P.J. Stevens and Milan Gjurich gained the majority from Republicans Kathy Holtzman and Wissinger.

A contract for insurance held by the then-Gleason agency was discontinued, Cernic said. Officials determined the contract unnecessary and did not move it to another agency.

“I don’t have a problem with politics as long as the end result benefits the taxpayers. Then I’m all for it,” Cernic said.

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