Meet the New Local Government Center: Same as the old LGC

The LGC is supposed to institute a slew of changes to meet the requirements of the Final Order. Issued by the hearing officer Donald Mitchell, he found that the LGC had violated provisions of the State Statute (RSA 5B) regulating risk management pools.

Here’s what the LGC said about the separation of their risk pools in a press release dated November 20, 2012: 

Each of LGC’s risk pool programs will now be governed by a separate board of managers and a separate set of bylaws.

Here’s what the LGC actually did. The Health Trust board and the Property and Liability Trust (PLT) board, share board members from the LGC’s board. And while there is a provision in the Trusts’ bylaws that the 2 Trusts can’t share board members, there is no such provision against the LGC board to sit on the Trusts’ boards.

Each Trust is supposed to elect their own Executive Director. Guess who votes on that? That’s right the Trusts’ Boards. And guess who they elected as executive director for the Health and PLT boards? Right again; Maura Carroll who just also happens to be the executive director of the LGC.

Oh it gets better. Remember that RSA 5B doesn’t allow a risk pool to force membership in another organization in order to receive the benefits from a risk pool.  Previous to the Final Order all those who were participants in the risk pools were forced to pay dues to the New Hampshire Municipal Association (NHMA). The Final Order declared that this practice was illegal. The LGC no longer requires those who participate in their risk pools to join the NHMA.

Great. So what’s the problem? When you join a risk pool you are now automatically enrolled as a member of the LGC. There is no opt out clause. And while there are no additional fees to be a member of the LGC, the LGC has to be getting funding from somewhere. 

So here’s a possible scenario. The Trusts’ boards vote to have the LGC perform various ‘administrative duties’ for the Trusts. Of course the LGC is paid for these services. Remember who is on the board of the Trusts. What would happen if an outside party made a bid to perform the same administrative duties for the Trusts. Would the boards of the Trusts (that are made up exclusively of members from the LGC’s board) be able to vote on who to award the contract to, or would there be an obvious conflict?

And it goes on. The LGC in its bylaws assumes control over who can and can’t join a risk pool. This from the LGC Bylaws; Article III; Section 3.6:

SECTION 3.6. Acceptance as a Participant of a Trust by the Executive Director or Directors. The Executive Director has the authority to accept any entity which meets the criteria set forth in Sections 3.4 and 3.5. An entity which does not meet the criteria set forth in Sections 3.4 and 3.5 in the judgment of the Executive Director may request that the decision of the Executive Director be reviewed by the Directors. After conducting such review, the Directors shall decide whether or not the applicant meets the eligibility criteria. The decision of the Directors in this regard shall be final. Any such entity which has been refused the status as a Participant may request a review of such refusal after a period determined by the Directors.

And here’s Section 3.7 giving more control to the LGC over the Trusts:

Effect of Acceptance. Upon becoming a Participant, each Participant agrees to be bound by the provisions and terms of the applicable Operative Documents, any documents required by an Insurer then in effect, the LGC Member Agreement or any other requirements that may be adopted from time to time by the Directors.

If the Trusts are supposed to be independent with their own boards and their own executive directors what in the world is this doing in the LGC Bylaws. And there is similar wording in the Health and PLT Trusts Bylaws. 

Article III; Section 3.6 in both Trusts’ Bylaws states:

SECTION 3.6. Effect of Acceptance. Upon becoming a Participant, each Participant agrees to be bound by the provisions and terms of the applicable Operative Documents, any documents required by an Insurer then in effect, the Application and Participation Agreement, or any other requirements that may be adopted from time to time by the Board of Managers.

So here are the questions:

Why is the LGC still the umbrella organization for the Trusts? 

Why are the board members for the Trusts all members of LGC’s board? 

Why is Maura Carroll executive director for all three entities?

Why isn’t there a clause for Trust participants to opt out of membership from the LGC?

I can think of only two answers. Either the LGC thinks they are a whole bunch smarter then the rest of us and they think we won’t notice how dark it got as they were pulling the wool over our eyes; or they just don’t get it.

There’s more, but that’s for another blog.