LAS VEGAS – The Clark County, Nevada school board has agreed to pay $1.65 million to settle a lawsuit that school board members apparently knew they could have avoided.

That comes after the district paid out six figures to remove its former school board president as an individual defendant in the lawsuit, according to the Las Vegas Review-Journal.

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Both financial settlements were paid to Business Benefits Inc., which served as the school district’s health care negotiator from 2011 to 2013, the news report said.

The Clark County district has been grappling with big financial problems for several years, and is currently facing a $67 million budget deficit.

Business Benefits allegedly fell out of favor with the school district after it expressed reservations about a plan that would have allowed the Clark County Education Association – the union that represents the district’s teachers – to be the broker of a proposed health care plan that would have served all of the approximately 40,000 district employees.

The union’s own health insurance company, which formerly provided coverage to the district’s teachers, was already losing a great deal of money at that time and eventually went out of business.

Carlos McDade, general counsel for the school district, warned school board members in Sept. 2013 that “we’re looking at possible damages and things like that if we did terminate (the contract with Business Benefits),” according to the news report.

But in December of that year, school district Superintendent Pat Skorkowski plowed ahead and ordered the termination of the contract, the news report said.

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Erin Cranor, the school board president at the time and a vocal critic of Business Benefits, apparently sent an email to Skorkowski, urging him to make the break with Business Benefits.

As a result Business Benefits sued both the school district and Cranor in May 2014 for breach of contract, and initially sought damages of $3.5 million.

At some point after that the district – allegedly without the knowledge or approval of other board members – sent a settlement check of $100,100 to Business Benefits to remover Cranor as an individual defendant in the lawsuit, according to the Review-Journal.

The school district’s dissatisfaction with the company apparently started after the company did a study on how the district might be able to save money by putting all of its employees under a single health plan.

The teachers union embraced the idea, as long as it could replace Business Benefits as broker of the proposed new insurance plan, presumably with the intent to make money from the deal.

An attorney for Business Benefits told the Review-Journal that Tom DeRoa, president of the company, “was a vocal opponent to a self-funded plan that has union leadership taking control, because experience in the past shows it lacks stability. That’s when he started getting attacked.”