City Manager Paul Sabiston used the incorrect proposal to support First Carolina Care getting the city's insurance business, documents reviewed by rrspin.com today show.

While Sabiston said following the Tuesday meeting the contract council unanimously approved, one submitted by First Carolina Agency of Roanoke Rapids, was not the lowest bid, documents and comments by city officials confirm otherwise.

After lengthy debate during a special meeting Tuesday, council opted to go against Sabiston's recommendation and approve the First Carolina Agency bid.

The First Carolina Agency bid was received by the May 10 deadline, city Finance Officer MeLinda Hite confirmed, as was the original First Carolina Care bid.

First Carolina Agency submitted a proposal for 60/40 coverage while First Carolina Care submitted one for 80/20 coverage.

The initial bid submitted by First Carolina Care would have cost the city $785,507.52, plus commission.

The First Carolina Agency's Blue Cross and Blue Shield proposal will cost the city $705,272 plus a $10,948 commission.

Tuesday, however, a different First Carolina Care proposal was discussed before city council.

Hite said the new First Carolina Care quote was added Tuesday and had not been quoted during a meeting last week when the proposals were pitched to council and department representatives.

Hite said in weighing the bids, "I'm looking at what it costs the taxpayers to fund this benefit. The city is required to cover full time employees and retirees. We went with the lowest cost to the city."

Hite will be reviewing the coverage with First Carolina Agency owner Phil Hux to determine if the city's policy can redistributed to provide affordable costs to employees who choose to have their family, spouses or children covered. "You can't base this on the assumption someone is going to bring a spouse onboard."

In a summary of the issue, which will most likely be delivered to city council, Hite states, "In an effort to control insurance costs and and continue to offer city employees and retirees competitive insurance benefits, the city advertised (a request for proposals) for health insurance coverage."

She notes in the summary, health insurance premiums have been rapidly increasing over the last few years. "The city received two bids in response to their request for proposals."

The bids included levels of insurance coverage, amounts of deductibles, out of pocket expenses and physician co-pay. "We evaluated the proposals received based on the highest level of coverage at the most economical costs to the city and its employees.

"From the finance director's perspective, I have to look at what it will cost the taxpayers to fund this benefit. As outlined in the personnel policy manual, we are required to provide health insurance to our full time employees (of which there are 137) and to our retirees (of which there are 27)."

This year, the summary notes, the city subsidized the premium, the deductible (city pays $2,000 of the $2,500 deductible) and diagnostic, testing (employees are reimbursed up to $300 for testing) in the current year.

"The first phase of the process has been completed, awarding the bid to First Carolina Agency, now we will start the second phase of the process and that is to meet with the agent to ensure affordable insurance coverage if they choose to include their spouse, children or family. We want the best insurance at an affordable cost — we will now sharpen our pencils and work diligently with the agent to ensure that this relationship will be a win-win for employees and the taxpayers."

Council member Suetta Scarbrough, who made the motion Tuesday to go with First Carolina Agency, confirmed a different bid was submitted than originally reviewed. "We set it straight last night."

City Attorney Gilbert Chichester, who also confirmed the proposal was not the same reviewed at last Thursday's presentation, said there was nothing illegal about what happened and council does not have to seek bids for services like insurance.

Chichester said, however, "If you're going to solicit bids, even if it's not required, it seems to me you should follow the guidelines for those proposed, that you should follow the guidance you get at the cutoff date. It's more a business type integrity question."

Hux said he had no comment on the bid switch matter but will work with the city on lowering the cost for family, spouses and children. "I know we can do it."