Judge refers towns’ suit against LGC to lower court

Last modified: 8/1/2013 9:52:47 AM
The effort by 18 New Hampshire towns to get a portion of a $53.4 million refund that the Local Government Center has been ordered to return to municipalities hit a roadblock last week, when the N.H. Supreme Court denied a motion from Peterborough and 17 other towns to intervene in the case, which pits the LGC against the N.H. Bureau of Securities Regulation.

The 18 towns had all left the LGC — which provides health care and liability insurance to municipalities and school districts — prior to the Bureau of Securities Regulation’s ruling that the LGC repay a portion of its surplus fund balance to members.

The LGC has proposed to issue refunds only to those towns or cities that were members of its health and property liability trusts as of Aug. 16, 2012, the date of the BSR order.

That would exclude Peterborough and other towns, including Bennington, Greenfield, Lyndeborough and Temple, from getting back any money.

In a statement about the court’s denial, Todd Selig, Durham’s town administrator, said the 18 towns are considering filing a Superior Court action to seek relief.

“We’re disappointed with the Supreme Court’s decision, but view it as representing a clear directive to proceed to Superior Court if we desire to argue our case on behalf of local taxpayers,” Selig said.

Peterborough Town Administrator Pam Brenner said Monday that Peterborough should be entitled to an $80,000 refund, of which 20 percent would have gone back to town employees as reimbursement for their contributions to the health insurance program.

“We’re very disappointed in the ruling,” Brenner said. “It’s unfortunate that we can’t seem to break through the politics and make this happen.”

In the press release, Selig said the LGC decision to base the refunds on the date of the BSR order is unfair.

“By ordering the money returned to current members, it created windfalls for some, but inadequate recompense for others. That is, some members will receive an arbitrarily larger share than their contribution, and some an arbitrarily smaller share,” the press release reads. “This situation is inherently inequitable as contributions made to the LGC by the aggrieved towns, contributions which were later found by the BSR to be in excess of that required for insurance purposes and illegally withheld by the LGC, will in effect be returned to other communities.”

The LGC last week sent out letters to members announcing their share of the LGC’s HealthTrust’s return of $33.2 million in surplus funds. That money is to be distributed to members in August.

In the letter, LGC’s Interim Executive Director George Bald noted that the ongoing legal issue could affect the amounts being returned.

“A small number of former HealthTrust members have challenged the distribution set by the order because they failed to qualify for the return of surplus,” Bald wrote. “HealthTrust will follow any future order regarding the system and timing of the distribution. As the legal challenge could affect the distribution, including the amount of your group’s return, we will keep you posted on these developments so you have the best available information on the return and how it may affect your group.”

The local group getting back the most money will be the ConVal School District, which is scheduled for a $674,767 refund in August, according to the LCG numbers.

Antrim will see $23,904 returned, Dublin will get $16,242, Francestown will get $6,020 and Hancock will get $14,538.

Dave Anderson can be reached at 924-7172, ext. 233 or danderson@ledgertranscript.com. He’s on Twitter at @DaveAndersonMLT.


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