Should These Towns be Suing

I’m no fan of the Local Government Center (LGC) and I’ve made that clear in the blogs I’ve written about their recent missteps. But Todd Selig’s op-ed piece in many of the States newspapers claiming the ruling by Hearing Officer Donald Mitchell  is unfair to former LGC member towns and cities just doesn’t pass the smell test. Let’s look at the facts and you can decide if these towns are victims or coconspirators. 

In 2003 the Local Government Center reorganized their operation and over the years there were many missteps. We now know the actions their Board of Directors took to reorganize were illegal. We also now know that actions the Board of Directors took were contrary to New Hampshire laws that regulated risk management pools. We now know that taking money from one Trust and giving it to another Trust was also a big ‘mistake’. We know that you can’t give the real estate assets from one Trust and transfer them to an umbrella organization without compensation. And the big one, you can’t keep surplus funds and use them for future rate stabilization.

The Hearing Officer’s ruling that is being challenged is based on bylaws that state unless you are a current member of the Health Trust you do not share in any distribution of surplus funds. Remembering that for many years the LGC did not return surplus to municipalities that were members of their Health Trust and instead used those funds to lessen the impact of future rate increases for member communities. (As approved by their Board of Directors.)

The hearing officer ruled that there was $33 million in surplus that had to be distributed to Health Trust members. However some towns had left the LGC’s Health Trust and therefore were not eligible for sharing in the distribution of the surplus. The towns say, since we paid into the insurance pool regardless of whether we are still members we should receive a portion of the surplus.

Here’s where it gets interesting. The LGC bylaws that prevent past members from sharing any surplus were never contested by representatives from the towns that are suing. The same representatives from municipalities who approved a transfer of funds from one Trust to another Trust (against the recommendations of the LGC’s former executive director Maura Carroll) are now claiming they are also owed a portion of those funds.

It sure seems like a case of having your cake and wanting to eat it too. They can’t have it both ways.  Just like the LGC claiming the rules they had written and had become state law regulating risk management pools didn’t apply to them, former board members are now claiming bylaws that they either approved or concurred with shouldn’t apply to them. 

There are many facets to the LGC case and one of them revolves around conflict of interest. You have municipal administrators and elected officials purportedly representing their communities who were board members of the LGC. So who were they representing the LGC or the towns they were paid by or elected to represent. We see by the actions of the LGC as approved by their Board of Directors that you can’t serve two masters. All too often LGC Board members approved actions that were contrary to the best interests of their communities.

Now, as they say, the chickens have come home to roost and these communities are claiming the LGC did them wrong. No, the members of the Board of Directors from your towns and cities did you wrong. They placed the interests of the LGC ahead of their own communities. 

As I said at the start, I’m no fan of the LGC. And I’m no fan of many of their bylaws. Their bylaws place too much emphasis on attempting to allow the LGC to monopolize the Health Trust market at the expense of their mission as defined by state law.

So after years of supporting the LGC and their bylaws, these towns claim they were done wrong. They’re right. They were done wrong by those they selected to represent them. They were done wrong by employees and elected officials who placed the well being of the LGC above their own communities. 

Sue because you don’t like the outcome of the Hearing Officers final order? Better yet, how about placing those who represented these communities in stockades - in the public square - for all to see just who it was who placed the LGC’s interests above yours.