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Tuesday, August 16, 2011

Municipal lobby group scraps with state over how to repay communities 

CONCORD – The war of legal words between New Hampshire’s leading lobby for cities and towns and state securities officials raged on Monday over how to properly consider allegations the municipal group owes communities more than $100 million.

David Frydman, general counsel for the Local Government Center, said naming a retired judge as a hearing officer is needed to review these claims from the Bureau of Securities Regulations.

An impartial jurist was called for in part because Frydman claimed that the state securities office issued an “inflammatory and prejudicial” press release two months before issuing its final report on LGC’s insurance risk pools.

Mark J. Halloran, LGC’s board chair and a school superintendent in Plymouth, said a full-blown hearing in public is the only way to resolve the matter.

“This closed-door process has been underway for two years, and local governments need to see some closure on this regulatory event,” Halloran said.

But Earle Wingate, staff attorney for securities, said having a retired judge hear the case would cost at least $1,200 a day. That’s too much given the taxpayers will be paying for what could be a lengthy proceeding, Wingate continued.

“We’re sensitive to the fact that all of this is about taxpayer money,” said Wingate, who authored the final report on LGC.

After deciding a former judge was too expensive, state securities officials reached out to get a veteran lawyer with knowledge on risk pool programs only to learn that person once worked for LGC.

Wingate then asked the LGC to provide a list of all lawyers who had worked for it. On Monday, Frydman refused, calling that an invasion of the group’s privacy.

The securities report accuses LGC of overcollecting payments from communities to cover the cost of health care coverage for more than 70,000 public employees and their families. The report maintains that LGC kept a bigger-than-necessary cash reserve.

It also accuses LGC of skimming off money from its health and property liability insurance programs to support the group’s workers compensation program and a strategic plan.

And it found improper that LGC forced cities and towns to pay annual dues to its affiliate New Hampshire Municipal Association to join one of its risk pools.

Wingate said there’s no way to know how long the proceeding before a hearings officer would last.

“It’s difficult to say because we don’t know how many contested issues we are going to have,” Wingate said.

Last Friday, LCG President Maura Carroll released a lengthy letter to all its municipal members asserting it did nothing legally wrong and would not settle on an amount it would pay back to communities, as some critics called for.

“We believe that when all the facts are considered, the conclusions reached will be that LGC acted in the best interests of its members, in compliance with the statute and in a reasonable and responsible way,” Carroll wrote. “Does that mean everyone will agree with every decision the board has made? I doubt that. Does it mean that LGC has never made mistakes? Of course not. But the report asserts that LGC has operated illegally and without regard for its members or their taxpayers. We believe nothing could be further from the truth.”

Kevin Landrigan can reached at 321-7040 or klandrigan@nashuatelegraph.com; also check out Kevin Landrigan (@KLandrigan) on Twitter and don’t forget The Telegraph’s new, interactive live feed at www.nashuatelegraph.com/topics/livefeed.