By: Diane Benjamin
Follow-up to these two stories: https://blnnews.com/2022/06/14/need-accounting-services-hire-the-town-of-normal/ and https://blnnews.com/2022/07/07/normal-and-the-mica-fleece/
What we know:
- Normal has purchased comprehensive insurance through MICA for decades, they don’t bid this insurance because they claim MICA does
- Normal’s Finance director is on MICA’s Executive Committee
- Normal does accounting work for MICA
- The cost for Normal this year is $1,945,934 – PDF page 31: https://www.normalil.gov/ArchiveCenter/ViewFile/Item/4283
How does this compare to what Bloomington pays? I asked Scott Rathbun, Finance Director, what they pay. He sent me this:
Bloomington is not a member of MICA, they hire Arthur J Gallagher LLC to find the best deal. Including the fee Gallagher charged for services, Bloomington is paying $1,269,982 for comprehensive insurance.
First, there is a HUGE difference between what Bloomington and Normal pay. Bloomington is larger than Normal, so it should be the opposite. I know both are partially self-insured.
There is extensive documentation in what Bloomington and Normal provided. I hope someone more familiar with insurance can analyze what both provided and see why Normal is paying almost $676,000 more.
Last year Bloomington paid $1,084,576 for insurance, also through Gallagher. See the minutes at this link: https://cityblm.granicus.com/DocumentViewer.php?file=cityblm_b95f7fb544a4e034a5cb041cbda4dbf9.pdf&view=1
Last year Normal paid $1,897,317. https://www.normalil.gov/ArchiveCenter/ViewFile/Item/3974
Smaller Normal paid $812,741 more than Bloomington in one year.
I realize insurance has A LOT of factors affecting premiums and apples to apples is difficult. I have more information on what MICA pays Normal for doing their accounting, that will be in a future story.
The question right now is why Normal refuses to look for insurance outside of MICA. Gallagher charged Bloomington $41,593 to act as their broker. If the Normal Town Council cared (most don’t), they would demand Normal hire Gallagher just for a quote. Just the payments make MICA looks more expensive. The connections with Town staff make it look like a HUGE conflict of interest.
Normal needs to prove being a member of MICA is being fiscally responsible. Right now it looks like a scam. Remember RIMCO? The difference in cost would cover a lot of deductible if that’s why Normal pays a much higher cost.