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Tuftonboro selectmen get update on Local Government Center


November 03, 2011
TUFTONBORO — The New Hampshire Local Government Center (LGC), a nonprofit organization that serves municipalities throughout New Hampshire, came under fire in 2009 for alleged misappropriation of funds. The legislature subsequently gave the State Bureau of Securities Regulation (BSR) authority to investigate possible violations of the law, which governs public risk pools in New Hampshire.

Tuftonboro's town employees receive a health care plan from the LGC's Health Trust organization, which Selectman Carolyn Sundquist says offers the best option among its competitors, but the board got wind in October that other towns were requesting that LGC return any surplus funds in the health pool reserve that might have been improperly going into the coffers of the workers' compensation fund rather than back to Health Trust.

Concerned, the board fired off a letter to the LGC on Oct. 3.

In response, Merelise O'Connor, Deputy Director for Member Services, came to its regularly scheduled meeting of Oct. 25 with Peter Chapel, Tuftonboro resident and LGC Benefits and Coverage Advisor, to ask for patience as the matter goes through its "due process."

The LGC, formed in 1941 by town and city managers to acquire cost-effective services to municipalities, offers a range of educational opportunities to assist appointed and elected officials serving on town and school boards.

The BSR investigation began with a complaint that the LGC was transferring money from the health insurance pool into the workers' compensation pool. O'Connor told selectmen that other companies have done the reverse, that is transferred money from workers' compensation into the health insurance pool.

Nevertheless, the LGC board, composed of municipal officials who serve voluntarily with no compensation, has voted to transfer those monies to the workers' compensation fund in the form of a loan, a move that should reassure those concerned about any impropriety.

In the meantime, the non-profit organization has been cooperating with the investigation, said O'Connor, without knowledge of the original allegation until a month ago.

In the course of the investigation, the BSR questioned the percentage of money kept in the reserve funds. "We were chagrined to be targeted with the reserve matter," said O'Connor, "when others are much higher." She said that the LGC maintains a reserve of 20 percent, while Primex keeps 50 percent in reserve and School Care follows closely with a reserve of 48 percent.

According to O'Connor, the reserves are set by an actuary, which confirmed that they are sound. "If lower, someone might question whether we could pay."

Public criticism over the last year has put the agency on defense. "We feel like we're being assassinated by the press," said O'Connor. "Our story is complicated and boring." It's easy to get caught up in accusations, but more difficult to plow through the numbers and explanations of a complex issue.

O'Connor has visited around a dozen towns to explain the issues in question and welcomes calls to her by town officials at (800) 852-3358, ext. 310. She told the board that the LGC is -cooperating fully with the BSR and is willing to make changes that may come about in response to the investigation, but it is a slow, time-consuming process.

Selectman Dan Duffy said that he wished her luck and commented that he has enjoyed taking part in the educational offerings of the LGC.

"I'm glad we wrote the letter," said Sundquist. " It's important that you do it (in reference to visiting towns)."

On another matter, that of the school funding formula, the board has invited state representatives to attend the next meeting scheduled for Nov. 7, at 7 p.m., at the Town Offices building. As of press time, David Knox, Betsey Patten and Steve Schmidt had accepted that invitation.

Tiffany Eddy
Martin Lord Osman
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