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Entries in Local Government Center (5)

Monday
Dec102012

Twelve Municipalities File Formal Complaint with NH Bureau of Securities Regulation Citing Discriminatory Local Government Center (LGC) Business Practices 

Towns of Durham and Peterborough, NH

PRESS RELEASES

Twelve Municipalities File Formal Complaint with NH Bureau of Securities Regulation Citing

Discriminatory Local Government Center (LGC) Business Practices

12/10/12

 

Dissatisfaction with the New Hampshire Local Government Center’s proposal to “refund” more than $52 million in surplus funds that the NH Bureau of Securities Regulations hearings officer has ordered to be returned to NH municipalities and school districts has prompted a dozen municipalities to file a formal complaint with the NH Bureau of Securities Regulation.

The towns of Peterborough and Durham, along with ten other municipalities (Auburn, Bennington, Canaan, Greenfield, Henniker, Lyndeborough, Northfield, Plainfield, Raymond and Temple), have written a December 7, 2012 letter to Director Glennon of the NH Bureau of Securities pointing out that the LGC’s proposed refund through the issuance of future insurance premium “holidays” to current LGC members will not include those municipalities and school districts that contributed to the creation of the surplus funds, but that have recently left the LGC and taken their insurance business elsewhere.

Peterborough Town Administrator Pam Brenner and Durham Administrator Todd Selig state that the letter to the Bureau of Securities Regulation calls attention to the discriminatory effect of the LGC’s proposed refund that fails to return cash to the former LGC members.  Ms. Brenner and Mr. Selig indicate that there are at least 20 NH municipalities and school districts that are in the same position as Peterborough and Durham: they were members of the LGC when the illegal surpluses were allowed to accumulate, but the reimbursement of a pro rata share of the surplus funds to these former LGC members is not being proposed by the LGC.  This is patently unfair to local taxpayers from these communities whose annual insurance premiums to the LGC were utilized to amass significant illegal reserves by the organization, one of the largest public risk pools in the nation.

The New Hampshire Secretary of State’s Office, through the Bureau of Securities Regulation, argued LGC practices were illegal.  They contended that the LGC was amassing money by overcharging cities, towns, and school districts for health insurance and not returning enough surplus to member communities. Hearing officer Donald Mitchell agreed.  In August 2012, he ordered the LGC to return more than $52 million to communities

The Order: What The LGC Has To Pay Back

$33.2 million from HealthTrust

$17.1 million the Property-Liability pool siphoned from HealthTrust

$3.1 million from Property-Liability for communities that joined after June 14, 2010

Total: $53.4 million

 

Selig, Brenner, and the other municipalities find the notion that communities, and more specifically local taxpayers, cannot receive a refund in cash and that entities have to be a continuing customer of the LGC organization to participate in the surplus refund to be an incredible and outrageous position.  It is patently unfair to local taxpayers.

The municipalities have called upon Director Glennon and the Bureau to investigate this discriminatory refund proposal.  Ms. Brenner and Mr. Selig state that it is common sense that since the LGC had an obligation to perform an audit and an actuarial analysis of the insurance programs, and then refund any surplus funds on an annual basis, the refund of funds should be calculated on an annual basis and credited to the members of these insurance program on an annual basis.  The refund process must both be fair and transparent.  Municipalities, school districts, and their employees were contributors to these insurance programs on an annual basis.  The premiums were calculated on an annual basis, and the contributions to pay for the premiums were made on an annual basis.  Each year, the identity of those municipalities and school districts that were members of the insurance programs changed. 

These municipalities believe that after all of the problems with LGC programs that have been identified by the BSR, is it asking too much to have a plan to refund the surplus to the taxpayers of members communities, by year of participation, in cash?  Is it asking too much to get the refund right so that taxpayers of communities that contributed to the illegal LGC surplus receive their fair share of the ordered refund?

Peterborough, Durham, and the other affected communities await a prompt response from the Bureau of Securities Regulation and the LGC on this important fairness issue.

Wednesday
Oct052011

NH House Leaders Comment on Secretary of State Hearing on Local Government Center Report

CONCORD – House Speaker William O’Brien and Deputy Speaker Pamela Tucker today offered the following statements in response to the first day of public hearings by the Secretary of State’s Bureau of Securities on its report finding against the Local Government Center.

House Speaker William O’Brien

“It is absolutely critical that we always remember that all the money that funds pooled risk groups like the LGC are taxpayer funds.  That’s why the allegations raised by the Secretary of State’s report are so serious and need a full and thorough hearing.  We must get to the bottom of these issues to see if tax dollars were wasted or used inappropriately.  Since pooled risk groups were created and authorized by the legislature, we have a responsibility to provide oversight and make sure that they are operating within the public interest and efficiently.”

Deputy Speaker Pamela Tucker

“The concerns included in the report are exactly why the House formed a special committee to look into these issues.  We need a comprehensive review of the laws that govern these groups and identify if we need to change how they do business.  The House committee will begin work this month, and the members will look at all aspects of the pooled risk insurance groups, including the LGC, and get back to the House to make the appropriate recommendations.  I look forward to finding ways to make sure that we are protecting property taxpayers across the state.”

Saturday
Oct012011

NH House Speaker Announces Members of House Select Committee to Study Local Government Center 

CONCORD – House Speaker William O’Brien today announced the members of the House Select Committee to study issues regarding the New Hampshire Local Government Center (LGC). The committee will be chaired by Rep. Stephen Stepanek, of Milford and includes House members Mary Griffin, of Windham; Frank Sapareto, of Derry; Gary Azarian, of Salem; and Daniel Sullivan, of Manchester. The committee will review the report by the Secretary of State that suggest several improprieties by the LGC and indicates that the organization could owe municipalities up to $100 million. The committee will look at possible changes to laws governing groups like the LCG.

House Speaker William O’Brien

“We need to begin the process of reviewing the issues that the Secretary of State raised in the LGC Report immediately. I am confident that this committee will allow us to get an early start on the process so we have more time to make sure that we can take action next year if we find that we need to change our laws for pooled risk groups, like the LGC. We take the report of New Hampshire’s property taxpayers’ money being mismanaged very seriously. The working families of this state deserve to know where their money is going and to have the confidence that their tax dollars are being used wisely and lawfully.”

Stephen Stepanek

“We are moving forward to look into the report to come up with a proper recommendation to the House and the citizens of New Hampshire. We are committed to determining the details of LGC’s actions and determining how to avoid oversight ambiguity of public and government-sponsored insured risk pools in the future.”

Thursday
Sep152011

NHDP - Hypocrisy Alert: Republican House Speaker Bill O'Brien and Republican Deputy House Speaker Pam Tucker

Concord, NH - During today's session, Republican House Speaker Bill O'Brien and his Deputy Pam Tucker introduced a bill to create a committee to review the Local Government Center with "the same investigative powers as the general court." [Bill Text] But just twelve months ago, both O'Brien and Tucker voted against giving state government investigative powers in this matter.  [Roll Call][Bill Text]

 

"Speaker O'Brien must have been taking a page out of the Mitt Romney campaign playbook," said Harrell Kirstein, press secretary for the New Hampshire Democratic Party.  "He is now co-sponsoring legislation that previously he voted against.  Despite this flip-flop, Speaker O'Brien has been incredibly consistent with one message to the people of New Hampshire, that he cannot be trusted."

 

"The situation with the Local Government Center is a serious issue, and involves millions of dollars of taxpayer money," continued Kirstein.  "But the reasoning behind this legislation is at best unclear and appears to a publicity stunt more than anything.  It sets an unrealistic deadline for the new committee it creates to issue a report.  If O'Brien and Tucker want a do-over, they should be apologizing to voters not introducing redundant bills 12 months late."

Friday
Sep022011

Deputy Speaker Pam Tucker and Senator Ray White Join to Call on Attorney General to Move forward on Receivership for LGC

Taxpayer-funded group admits illegal corporate structure

CONCORD – House Deputy Speaker Pam Tucker and Senator Ray White today joined to call on Attorney General Michael Delaney to move to bring the Local Government Center (LGC) into court-appointed receivership after the taxpayer-funded group admitted that it illegally incorporated itself as Delaware non-profit limited liability companies in 2003.  A report released last month by the Secretary of State’s Bureau of Securities Regulation outlined a number of irregularities and violations of law by the LGC, which handles public employee and retiree health benefits, liability insurance and other services for local communities.  Tucker is the prime sponsor of legislation to review the LGC in the wake of the highly critical state report.

House Deputy Speaker Pam Tucker:

“The admission that LGC was illegally incorporated is one more example why this troubled entity may need more state involvement.  The LGC was created by state law and the legislature through the years should have done a better job of overseeing pooled risk management groups like this.  While we work to do our oversight responsibility and get to the bottom of what’s going on with this group which takes in a tremendous amount of local property tax dollars, the Attorney General should begin the process of moving to put LGC into receivership to ensure that taxpayer funds are protected.”

Senator Ray White:

“As someone who works in the insurance business, I have a lot of unanswered questions about how the LGC operates and where our tax dollars are going.  When this group came to the Senate Commerce Committee to ask for special protection from investigation and oversight, it sent a clear message to me that the legislature needed to take a deeper look into this group, and the Secretary of State’s report began to peel back the layers and showed exactly why we need reform.  The Attorney General should move quickly to get into court for a receiver for LGC so we can begin to rebuild the public’s trust and make sure that our communities can have confidence that they are getting good value for the hard-earned taxpayer funds that they are spending. The integrity of these insurance pools must be safeguarded for their intended purpose.”