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Aldermen approve controversial consulting deal

July 1, 1993

Issuing a press release the morning of his July 19 media briefing, Rockford Mayor Larry Morrissey (I) made a last-ditch effort to garner support to award a $115,000, 13-month benefits consulting contract to Morrissey friend Ryan Brauns’ Rockford Consulting & Brokerage, Inc. (RCB).

“We’re not just talking about spending money as a measure of whether or not our health plan is working,” Morrissey stated. “It’s ultimately about, ‘Do we have a healthy workforce?’

“We’re talking about an extremely important area of reform and modernization for the City of Rockford organization—and that’s our health care and benefits plan,” Morrissey said, arguing the importance of RCB’s approval. “We simply can’t afford to allow that insurance plan to go bankrupt, or to cost so much from other areas of the city budget that we can’t execute on our responsibilities related to those areas.”

The mayor said City Hall should be run as a business, and RCB will be an important element in achieving that end. Morrissey touted previous success in reaching an agreement with the American Federation of State, County and Municipal Employees (AFSCME) last year, resulting in cost reductions of more than $100,000 for users of the new plan in the first quarter of 2007. Morrissey hopes similar changes can be achieved with police and fire fighters unions.

“What we know is we’re on a path that’s gonna bring fiscal sanity and responsibility to our plan,” Morrissey indicated, saying both employees and taxpayers win. “We’re trying to make sure that, while we’re cutting costs, we’re not decreasing health.”

A second bidder for the benefits consulting contract, Williams-Manny Midwest (formerly Midwest Life & Health Group LLC), under-cut RCB’s bid by $60,000, prompting some aldermen to question why RCB was recommended for the job. Morrissey, however, argued Williams-Manny’s price was lower because their proposal did not include the same services RCB’s offers.

“They may have expertise in brokerage services,” Morrissey indicated, “but we’re not asking just for brokerage services. We’re asking for evaluation of a 3,000-person self-insured plan, and they don’t have the experience.”

Tim Knauf, division president for Williams-Manny, retorted: “Quite frankly, I think both firms are consultants, and both firms are brokers.”

In Morrissey’s opinion, Williams-Manny simply doesn’t fit the bill for this job.

“We went through the references that those vendors gave us,” the mayor reported. “We got less than glowing remarks about the Williams-Manny company, which is unfortunate.”

Knauf disputes his firm’s references would have had anything derogatory to say about Williams-Manny.

“I’m not sure where that came from,” Knauf reported. “We called our references and asked them if there was any connotations or information that they gave to the staff that would have been, as you put it, not glowing about our firm. Not one of our existing clients that were on the reference sheet told us that they had given any negative connotations about the services that our firm provides them at this point.”

Knauf thinks it’s absurd to suggest any firm would provide references that are not 100 percent satisfied with the company’s performance.

“When you compare apples to apples, the Rockford Consulting & Brokerage bid included actuarial services, which our request indicated would likely be required, and it also included double the amount of hours,” Morrissey explained. “When you look at the other bid, it didn’t include those necessary services.”

Morrissey said if you add the cost of services not included in the Williams-Manny proposal, the bid amounts would be comparable.

Knauf indicated the Williams-Manny proposal was simply based on the scope of services provided in the city’s request for proposal (RFP).

“We felt that our bid, proposal and our fees were justified according to the workload that our staff would be committed to the city,” Knauf maintained, adding the city was vague as to its actuarial needs, which the Williams-Manny proposal excluded.

“I didn’t think it was prudent to put that in there and have the city pay for those costs when they weren’t necessary,” Knauf said. “In that particular situation, there was a difference of like $15,000, or something, to my knowledge. I didn’t think that that was warranted.”

Requests for proposals (RFP’s) first went out over a year ago, and the benefits consulting package last saw the council floor in February, but was never voted on. The firm awarded the bid will be charged with the daunting task of restructuring, for the first time in decades, the city’s health benefits plan.

The Finance and Personnel Committee concurred with staff’s recommendation to award the contract to RCB, but the vote has been stalled for various reasons since coming out of committee.

Williams-Manny has now updated its proposal and presented new information to aldermen July 16. Although the RCB deal was on the agenda for a vote that night, Finance and Personnel Committee Chairman Pat Curran (R-2) put the brakes on to allow aldermen a week to review the revised Williams-Manny plan.

Knauf explained, “My concern was just to make sure that everybody knew what we were all about, and then clear up any misconceptions about our team’s ability.”

Apparently in an effort to eliminate any appearance of favoritism, Morrissey pulled staff members out of his proverbial hat for back-up.

The July 19 press release touted pro-RCB comments from Human Resources Director Jessica Jones, Central Services Manager Carrie McCarren, Benefits and Compensation Manager Kim Ryan and City Administrator Jim Ryan—all of whom were among staff present at the briefing.

The mayor was quick to point out: “I was not involved, by the way, in the evaluation of the vendors. I didn’t sit in on the interviews. I didn’t interfere with the process. I asked for staff to make a recommendation. They did that.”

Morrissey added his staff will be the ones ultimately working with the consultant, so their recommendation should speak for itself.

When asked by The Rock River Times to address any appearance of impropriety regarding his friend’s company being awarded the bid, Morrissey responded: “Ryan Brauns happens to be a friend of mine, but what I’ve told our staff…’Go with the vendor that is the best vendor for the job. Make the recommendation independent of that influence…Don’t reward someone because of the relationship that they have, but don’t penalize them, either’.”

Ald. Nancy Johnson (D-8), who has been a vocal opponent of the deal, is accused by Morrissey of “playing politics.”

“You’ve got an alderman leading the charge against it who wouldn’t even meet with our staff to discuss the plan,” said Morrissey, targeting Johnson by name. “I think there’s politics going on, and it’s unfortunate because it puts at jeopardy 3,000 lives—an $18 million budget allocation.”

After making comments to the media, questioning the RCB deal July 16, Johnson fell silent on the issue until reached for a response to the mayor’s remarks before the July 23 city council meeting.

“I didn’t want to engage in a battle of words with the mayor,” Johnson explained. “I thought that, perhaps, his three-page press release singling me out as an opponent of this was inappropriate since I wasn’t the only ‘no’ vote.”

Johnson added, “My opinion was just my opinion and, just because it was different than his, I didn’t really think that having him call it nonsense was very respectful.”

Johnson said she’s since spoken with Morrissey to put the matter behind them.

State Sen. Dave Syverson (R-34) is a broker for Williams-Manny, which only turns the paddles of the rumor mill. Syverson, however, is not directly involved in the benefits consulting package.

“Keep your eyes open,” Morrissey advised reporters. “Monday night’s gonna be very important. That vote is gonna be very instrumental for moving this city forward…If that doesn’t get approved, then guess what? We could be back to square one on a re-evaluation proc

ess of vendors and everything else.”

Without political fanfare or debate, the Rockford City Council voted 9-4 to approve the agreement with RCB July 23. Johnson was joined by aldermen Jeff Holt (D-11), Linda McNeely (D-13) and Carl Wasco (D-4) in voting against the deal.

from the July 25-31, 2007, issue

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