SALEM, N.H. — Town Manager Keith Hickey has resigned from the Local Government Center’s board of directors, saying there were too many conflicts between his two positions.
Hickey’s resignation came only days after selectmen voted unanimously to join a dozen other New Hampshire communities in a battle with the center over refunds.
The New Hampshire Bureau of Securities Regulation has ordered the LGC to refund $52 million to communities, including Salem, that participated in the municipal organization’s health insurance pool for public workers and retirees.
The bureau found the LGC violated state law by improperly collecting money and retaining unnecessary surplus funds.
The organization also improperly transferred assets, subsidizing one insurance pool at the expense of the others, the bureau said.
Millions of dollars were spent on unauthorized items, according to the bureau’s report.
The controversy prompted selectmen to consider severing ties with the LGC in August 2011. Selectman Stephen Campbell accused Hickey, hired only five months earlier, of having a conflict of interest because he served on the organization’s board of directors.
Other selectmen, including former member and Chairman Elizabeth Roth, said the former Bedford and Merrimack town manager’s experience as an LGC board member was a key reason why he was hired.
Hickey, who said he has been on the board for about seven years, also served as the LGC’s vice chairman.
But shortly after becoming town manager, Hickey said, he began looking at ways to save money while improving service to the public and town employees.
That included a review of health insurance plans and a switch to those offered by companies such as Cigna because it provided better coverage for the cost.
Selectmen also agreed with Hickey’s recommendation to buy property liability insurance from another company. Salem no longer relies on LGC for any insurance coverage, making it difficult for him to continue serving as a board member, he said.