NH News
7:30 am
Mon July 8, 2013

LGC Issues Itself Refund While Coalition Of Towns Denied Voice In Appeal

From the LGC issuing itself a refund to protesting communities being denied a voice in the Supreme Court case, there have been some major developments in the Local Government Center saga.  

Last summer, a hearing officer ordered the LGC to return more than $33 million in illegal surplus to communities in its HealthTrust insurance program.  That’s on top of the LGC’s regular annual refund to customers.  The list of customers getting chunks of premium money back in both repayments is a long one. 

And it includes the LGC, which issued itself more than $260,000 in refunds. 

Professional Firefighters of New Hampshire President Dave Lang is a long-time critic of the LGC. “You see, the LGC HealthTrust charges administration fees to the communities that belong to this risk pool," Lang says. "The health insurance is supplied through the administrative fees that the Local Government Center receives from cities and towns that they add onto their insurance.  So in this case here, once again, we don’t think the LGC’s right.”

LGC Interim  Executive Director George Bald says the refund is fair under the law, which calls for surplus to be returned to political subdivisions.  He says the LGC qualifies under the law, since it’s an entity created for a specific purpose, and is funded by government units.  And the organization is subject to the same Right-To-Know laws as cities and towns. 

Bald says regulators have had the list of refund recipients for the past couple of months, and haven’t said anything about the LGC’s refund.  But he will be talking with the Bureau of Securities Regulation about it this week.  “We’re not talking about a large amount of money, and certainly, if the regulator felt like it would be better if we didn’t do it, then we would stop doing it,” Bald says.

Even as it issues the $33 million refund, the LGC is appealing the order to the state Supreme Court. 

Meanwhile, more than a dozen communities, led by Durham, Peterborough, Northfield and Salem, asked the court to allow them “intervener” status in the case, meaning they would have a voice in proceedings. Once again, money is the issue.  These communities paid inflated premiums at some point during the decade the LGC built up its massive reserves.  But they left before the hearing officer issued his order.  The LGC argues that the order requires them to only return money to communities that were members on the day it came down.   The Supreme Court denied this coalition intervener status. 

The refunds are scheduled to be distributed at the end of August, in line with the order’s September first deadline.  With only a few weeks left, Durham Town Administrator Todd Selig sees the options narrowing.

“Once the funds are returned, the game is over, from our perspective," Selig says.  "The funds would have been distributed to other communities, and those are funds that the taxpayers of Durham contributed to the LGC over many years of faithful membership, and that never should have been retained to begin with.”

Selig says the coalition towns are considering asking the lower court to stay the return of surplus.  That could buy them time to present their case.  Selig estimates Durham could stand to gain—or lose—$50 thousand.  Taking other towns into account, he figures that number rises to at least $200 thousand.