Below are excerpts from a Buffalo News story regarding the Newfane School Board's decision not to legally challenge former School Superintendent James N. Mills’ $1 million whole-life insurance policy.
This issue is offensive on many levels. Firstly, this is the kind of benefit that has driven school taxes to over 60% of our tax liability in Niagara County. Unfortunately, this type of benefit is common. One would think that there would be some level of public outcry over massive benefit packages such as this that are handed out to school administrators. This is also another reason why we don't need a dozen school districts in Niagara County. The City of Buffalo, which is a small city, has more children in its district than all of the districts in Niagara County combined, and they operate under a single administration.
Secondly, why would any of the Newfane Board members vote against pursuing termination of Mills' huge policy? Spending $10,000 to save the taxpayers of the district over $400,000 doesn't seem like an unreasonable risk. Not wanting to pursue it simply looks bad.
Lastly, when members of alleged taxpayer groups are publicly advocating in favor or elected officials getting lifetime health insurance, where is the public outrage over a half a million dollar life insurance policy? Why is the media not calling on school districts to put an end to such extravagance?
The policy will cost the district a total of $519,000 over a 15-year period that began in 2005.
The board gave Mills the policy as part of his 2005 contract, a move that requires the school district to spend $34,610 a year on the premium. Though his contract was to run through the end of 2009, Mills decided to retire Dec. 31, 2006, and took the life insurance benefit with him.
However, on Nov. 27, the board, by a 5-2 vote, quashed a motion to take legal action to kill the policy. Pieszala and member Gretchen DeWitt voted for it. The motion was made after the board had legal research done on the issue but “decided not to pursue it,” Pieszala said, adding that the vote came late at night after an executive session.
“We consulted with the Buffalo law firm Harris Beach, and they basically told us, ‘We are not going to tell you you have a winner here.’ But they felt it was worth pursuing,” Pieszala recently told The Buffalo News.
“I truly believe we could have had an answer to whether we could have been successful for under $10,000. We stood to save about $415,320 in the premiums we wouldn’t have had to pay over the next 12 years if we won. We possibly could have recovered the $103,830 we already paid toward it. I thought it would have been worth a try.”
As a board member, she said she felt it was her duty to investigate and try to recover as much money as possible because “we have a financial responsibility to the residents of this district. So I felt it was worth a try.”
Member David A. Adams said it was not that the other board members felt Mills was entitled to the policy. He said he didn’t feel the district should pay for it either. “We all pretty much agreed in principle that it was wrong for him to have the policy at district expense, and that it all seemed a bit underhanded. But it also appeared that it legally might stand,” Adams said.
He said everything would depend on how the law was interpreted by a judge. “We got several legal opinions, and basically, it was: ‘Well, you have a good argument but . . .,’ and the but was going to cost money and they weren’t guaranteeing anything,” Adams said. “. . . So it became a question of how much money you wanted to keep throwing at it and not win. With the lawyers, there was no, ‘We’ll do this for ten grand and that’s it . . .’
“We were in a no-win situation. At least that’s how I looked at it.”