EagleTribune.com, North Andover, MA

January 21, 2013

Salem fights for $100k owed by LGC

Officials estimate town is owed $100,000

By Doug Ireland
direland@eagletribune.com

---- — SALEM — For several years, Town Manager Keith Hickey was a high-ranking board member for the Local Government Center, providing help to communities across the state.

But now, Hickey is on the other side — joining 13 others towns challenging the center in a reimbursement dispute that’s landed in the state Supreme Court.

He’s fighting on behalf of Salem residents to recover money owed the town. Although Hickey said no formal calculation has been made, he estimates Salem is owed approximately $100,000.

Hickey served on the center’s board for six years, becoming its vice chairman. But he resigned from the board Dec. 14, only days after Salem selectmen voted to join the fight against the center.

Hickey said there were too many conflicts between his two positions. Plus, the town had previously decided to sever ties with the center, obtaining better employee health insurance from another carrier, he said.

Salem and other towns involved in the dispute turned up the heat Thursday when they announced they were intervening in the LGC’s appeal of a decision that forced it to refund $53 million to communities. Salem filed the court motion along with Durham, Northfield and Peterborough.

“The action marks an unfortunate turn of events in which municipal taxpayer funds are now being diverted to litigate the very organization charged with representing the interests of towns and cities across New Hampshire, as well as the public agency charged with regulating it,” Salem and the three other towns announced.

The LGC’s appeal challenges an order by the New Hampshire Bureau of Securities Regulation last summer. The bureau ordered the LGC to reimburse communities that participated in its property liability and health insurance pools.

The LGC’s group insurance pools are intended to help reduce costs for municipalities and school districts in providing coverage to employees and retirees through certain providers.

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.

That’s not all, the bureau reported, millions of dollars were spent on unauthorized items.

The LGC later announced any refunds offered to communities would be limited to those currently enrolled in its insurance programs. That excluded Salem, Durham, Northfield and Peterborough.

LGC executive director Maura Carroll declined to comment on the court motion until after the organization’s attorneys had a chance to review the matter. That won’t be until this week, spokeswoman Laura Simoes said.

“We are in the process of reviewing these materials and talking about this with legal counsel,” Carroll said in a statement. “We’d be happy to make a comment after we’ve had a chance to discuss this with our attorneys and our governing boards.”