MTA contract raises question

PALMER — A former Matanuska Telephone Association board director, a current MTA employee, and the husband of a former MTA executive are all wondering if the cooperative’s bylaws were violated when MTA awarded a local insurance broker a contract while the owner of that brokerage firm was on the MTA board.

Although Combs Insurance Agency Inc. of Palmer and Wasilla has been providing broker services for MTA’s worker’s compensation and vehicle insurance policies since 1980 through Requests for Proposals (RFPs), company president Mike Combs’ tenure on the MTA board of directors from 2001-2009 has some questioning whether his presence on the board had an undue influence on the selection of MTA’s insurance packages.

“Early last year (April 2010), I shared with the MTA board of directors some concerns brought to me by MTA’s members,” former MTA director Chuck Foster states in a document submitted by him to the board during its Jan. 12 special meeting to consider Foster’s status on the board. “Specifically, these concerns allege insurance services being provided by a former seated MTA member of MTA’s board of directors, in apparent violation of MTA’s by-laws (Article 4, Section 7).”

That section of MTA’s bylaws states no board member shall receive compensation for serving the association in any other capacity, other than being paid a certain amount for attending meetings and conferences. The policy states it’s “to assure transparency, competitive bidding and a level playing field for all potential vendors.”

Foster’s letter to the board goes on to say the insurance services provided to MTA by the former director’s company could amount to “hundreds of thousands” of dollars, and possibly millions considering the length of time Combs served on the board.

Foster said last month after resigning from the board that he never heard back from the board or MTA CEO Greg Berberich on the insurance issue or whether it was ever investigated.

“There have to be some checks and balances,” Foster said. “Because of the Carver Model of Governance, the CEO gets away with a lot of things other organizations don’t because no one is minding the hen house except the foxes.”

An MTA lineman who asked to remain anonymous because he’s only a few years from retiring, said he always thought it was strange that the insurance card in his MTA truck says to call Combs Insurance in case of an accident, especially while Combs was serving on the board.

“I scratched my head when that first happened,” the lineman said. “But MTA employees are not allowed to talk to board members about MTA.”

Dan Crawford, CEO of Pippel Insurance and husband of former MTA Marketing Director Sandy Crawford, said this week that he agrees with Foster when it comes to making sure MTA’s members are kept informed of company business — especially since it’s supposed to be a public cooperative.

“I think everyone on the board has lost sight of what a co-op should be,” Crawford said.

Crawford said that although Pippel Insurance hadn’t been providing coverage for MTA since before he joined the company about 25 years ago, he did attempt to try to bid for the contract about a year ago.

“They told me they were too busy,” Crawford said. “I thought we could at least match what Combs was offering.”

But Combs, board director Al Strawn and Berberich said this week that MTA bylaws have not been violated because Combs always disclosed his business connection to the board, as is company policy.

Combs said he thinks Foster is confused about what Combs Insurance actually provides.

“We’re not an insurance company. We never have been,” Combs said Thursday. “We’re a broker. We help companies find insurance coverage from various insurance carriers.”

He said that although Combs Insurance is paid a fee by MTA for being the broker, he doesn’t think that qualifies as a bylaw violation because he’s never hidden that from the board. Plus, he said, he wasn’t the direct broker — the company he works for was.

“We’ve always submitted requests for proposals and competed for the contracts with other companies,” Combs added. “And the MTA board of directors does not select the contract. It’s done through the administration.”

Combs said he doesn’t understand the concern. He said if MTA had to eliminate every local company with ties to MTA from bidding on contracts, it would be difficult to find a local company to do business with.

“One of MTA’s goals is to try to support local business,” Combs said. “Combs Insurance has had a long relationship with MTA and most of it was when I wasn’t on the board.”

Berberich said Thursday that he remembers speaking with Dan Crawford last year about his interest in bidding on the insurance contract.

“I let him know that MTA was not going to go out for RFP on our broker because we had just hired a new CFO and she was very busy getting herself settled in,” Berberich explains in an e-mail to the Frontiersman. “I told Dan we intended to do an RFP in 2011 and I would make sure he was aware.”

Berberich said MTA’s contract staff began the process of developing and processing the RFP in June of 2010 and expects to have that RFP out sometime this month. He added that the Combs contract expires this June.

“According to our contract folks we have had a good response from at least six local vendors, including Pippel Insurance,” he said. “I don’t have the info readily available on the last RFP and who all it was mailed to, but I would expect it was sent to multiple vendors.”

Contact K.T. McKee at kate.mckee@frontiersman.com or 352-2252.