Port seeks clarity on potential ethics conflict
The Port of St. Helens is slated to either renew its longstanding insurance contract with Hagan Hamilton Insurance Services, or select a new agent of record, but port commissioners say first they need to determine if the contract renewal represents a conflict of interest.
Hagan Hamilton Insurance Services, which has an office in St. Helens, has served as the insurance agent of record for the Port for at least the last 20 years. The agent of record is different from the port's actual insurer, Special Districts Association of Oregon.
SDAO requires its insurance clients to designate an agent of record to help agencies select insurance amounts and determine what level of coverage and what type of policy is needed.
Hagan Hamilton previously operated under a different business name, but the provider has long been the contracted agency for the Port, along with several other public agencies in Columbia County.
Port of St. Helens Commissioner Chris Iverson works as a licensed agent for Hagan Hamilton. Port staff say Iverson does not personally profit off the policy, but some commissioners, namely Commissioner Larry Ericksen, said they wanted to be sure.
Per Oregon law, public officials cannot vote on public contracts if the deal could lead to personal financial gain for that official or their relatives.
When the insurance contract came up for bid this year, four proposals were received, according to the port. One company, WHA, based in Hillsboro, proposes a cheaper commission rate, meaning a potential cost savings for the port, but commissioners were conflicted during a meeting Wednesday, saying they've come to appreciate and rely on the customer service and deep industry knowledge of Commissioner Iverson, who has represented the port in past insurance claims.
Iverson recused himself during Wednesday morning's insurance discussion, and returned afterward for the remainder of the meeting.
"Is Chris [Iverson], as an agent, making money off the products that the port is purchasing?" Commissioner
Ericksen asked the port's finance manager, Bob Gadotti. "I don't want to see him hurt in any way by not doing this, but on the other hand, there is an ethical dilemma I have personally to have a commissioner do work for the port and get paid for that."
Fellow Commissioner Robert Keyser suggested sending the information to the Oregon Ethics Commission for review and advice.
If Iverson does not personally benefit financially from the insurance contract, as port staff suggest is the case, the port could keep Hagan Hamilton without any issues.
Port staff say the competing company could save the port money, but it doesn't offer the same level of experience, or a local office like Hagan Hamilton does.
"The WHA rate could potentially save the port approximatively 5-6 percent in premium costs ($6-$9k), but these savings could be offset by extra time spent by staff bringing the new agent onboard," a staff report from Gadotti states.
"There's something that cannot be discounted, and that's the level of experience," Doug Hayes, the port's executive director, said Wednesday. "If we had an event, say a snowstorm, if someone cannot get out here from Hillsboro ... we may have to pay extra to get someone out here."
A selection committee recommended the contract with Hagan Hamilton be renewed.
Gadotti, after hearing questions and concerns from commissioners, suggested waiting on the contract selection until more details of the potential conflict could be clarified.