TimesLeader.com

Director: Insurance won’t change

While county Housing Authority chairman supports getting proposals, agency executive says current coverage is safe.

By Steve Mocarsky smocarsky@timesleader.com
Staff Writer

While the chairman of the Luzerne County Housing Authority supports seeking proposals for the best insurance coverage, the authority’s executive director said it’s too late in the year.

Besides, Executive Director Dave Fagula said, the authority is safer staying with a non-profit insurance exchange formed specifically for housing and redevelopment authorities and run by authority executive directors – even if it is more expensive.

That agency – the Housing and Redevelopment Insurance Exchange, or HARIE, is managed by attorney Charles Volpe – a close friend of Luzerne County Commissioner Greg Skrepenak.

Asked after last week’s board meeting if the authority should seek insurance proposals for the best deal, given that county commissioners are seeking insurance bids, authority Chairman Jerry Bonner said he’s “all for it.”

“I don’t know if we can just take any average guy (for an insurance agent), because I know … years ago, we could never get insurance, and that’s how we ended up with Volpe,” he said.

The county is seeking proposals for property, inland marina, general liability, automobile, crime and fidelity insurance; the current policies expire Jan. 1.

The county is currently paying $856,000 for property, general liability, automobile, crime, public officials’ liability and equipment breakdown insurance through the Joseph J. Joyce Associates Inc. agency, with coverage provided by HARIE.

Skrepenak has stayed at Volpe’s beach house for free, but Volpe and Skrepenak have emphasized that there’s no question of favoritism because county insurance is bid out.

Fagula said HARIE has a bid waiver from the U.S. Department of Housing and Urban Development, so the authority can buy insurance from the exchange without going out for bid. “From time to time, I’ve tested the waters. We actually got some quotes from some private guys a few years ago, and HARIE matched whatever low quotes we had.”

“We really didn’t get an increase in our insurance last year, so that’s why we’re not really in the market to go back out and to bid the insurance. Our insurance came in and it was pretty much stable,” Fagula said.

Fagula referred a reporter to a January 2007 letter from Volpe explaining to HARIE President Tom Ruddy why HARIE members should not abandon the exchange for lower rates being offered by Eastern Insurance Group.

“As one of the founding members, you’ll remember the premise upon which HARIE was founded by my father and a few desperate housing authorities facing economic disaster,” Volpe wrote to Ruddy.

“My father warned against the low-ball tactics of the insurance industry from carriers who come and go to make a quick buck. These were the same carriers that catastrophically plunged the housing industry into the liability crisis of 1985. You will remember those were the years when housing authorities couldn’t get insurance at all or faced a 300 percent price increase,” Volpe wrote.

Eastern submitted a proposal more than $100,000 lower than HARIE’s in late 2006, only to have the county housing authority offer HARIE another opportunity at the coverage.

The authority accepted HARIE’s second quote of $416,960. The amount was slightly more than Eastern’s quote of $416,039, but far below the $529,958 Fagula calculated as HARIE’s initial quote.

“I do support bidding any service or anything that we can bid. But when it comes to insurance, again, I have to look at what the history was of the private insurers in the housing authority market,” Fagula said.

“Again, one of the things that HARIE has been able to do is to stabilize our insurance costs. They don’t really raise their premiums tremendously,” he said.