SHREVEPORT, La. - A long awaited audit of the controversial switching of insurance coverage for the City of Shreveport early on by the Perkins administration shows major lapses.
Regarding the selection of a new insurance broker, the city's Internal Auditor said, "We found no appropriate process was followed."
The report said the city's risk manager, Evelyn Kelly, told then-interim Chief Administrative Officer Sherricka Jones by email that "the directive came from the current chief adviser to the mayor, who was not a city employee at the time."
That official is Shanerika Flemings, who is Perkins' special adviser. She's seen sitting next to Perkins at council meetings.
The report also said the broker for the current property insurance, Roddrelle Sykes of Dallas, told the internal auditor that he had no prior experience placing municipal property insurance.
As we reported previously, Sykes was a friend of Perkins, and a cousin of Perkins' campaign manager, Josh Williams.
The audit confirms the city wound up paying $622,000 more for $516 million less in property coverage for storms. There were also higher deductibles.
And instead of one policy with full coverage as before, the city wound up switching to seven policies under seven different companies.
What kind of risk did that put the city in? The auditor said they consulted with an experienced insurance consultant to find out.
They looked at a worst case scenario: a severe storm destroying a cluster of high value assets the city owns downtown -- Government Plaza, the Hilton Hotel and Convention Center and the Community Development building. The audit said the city would've faced an out-of-pocket cost of nearly $37 million.
After the internal auditor's preliminary report last spring, the Perkins administration -- at the urging of the City Council -- wound up buying additional property coverage to protect its assets the rest of the year.
Perkins issued a written statement in response to the final audit, saying, "My intent was to inject fairness and competition into a process that lacked both for nearly forty years. It was not handled perfectly."
"We have learned from our mistakes and are ready to continue working on behalf of the citizens of Shreveport,” the mayor continued.
As KTBS reported recently, the Perkins administration has sent a letter of intent to get its property coverage back under its former, local longtime partner, Gallagher & Company.
Among the recommendations, Internal Auditor Leanis Steward wrote that the city should follow rules in its charter and ordinances; and require carriers to have experience in municipal property coverage when it issues requests for bids.