Portsmouth Press Herald: Seacoast towns, schools on list to receive millions in LGC refunds
By Elizabeth Dinan
CONCORD — The Local Government Center released a list of cities and towns that will receive refunds for overpayments made for the purchase of LGC insurance during 2010 and totalling $33.2 million.
Checks will be mailed Aug. 27 and the refunds are in addition to refunds announced by the LGC in December for surplus paid by municipalities for insurance during the year 2011, according to an announcement by George Bald, the LGC’s interim director.
Portsmouth is the largest LGC customer, paying 1.4 percent of the total insurance pool, and was the first community in the state to petition the LGC for a refund. According to a list released by the LGC, refunds for overpayments made by Portsmouth during 2010 will be in the amounts of $605,346 for health insurance and $38,336.10 for overpayments made for dental insurance.
In December the LGC announced Portsmouth would receive other rebates totalling $643,462 for overpayments it made to the LGC during 2011.
The LGC — a municipal insurance pool funded by taxpayers, retirees and public employees — was ordered last August to refund $52 million to member cities and towns for the overpayments and has until the end of this year to make the refunds. The order was made by hearings officer Donald Mitchell in response to evidence presented by the state Bureau of Securities Regulation and the Secretary of State’s office, which proved the LGC overcharged for insurance and kept the surplus.
The LGC sells health, dental and property liability insurance.
Also included on the LGC’s list as getting refunds for overpayments for health insurance made in 2010 are the following:
• School Administrative Unit 16 in the Exeter area, $1,110,489
• SAU 21 in the Hampton area, $615,928
• SAU 90 in Hampton, $254.111
• Town of Durham, $102.656
• Town of Newmarket, $79,245
• Town of North Hampton, $72,825
• The Local Government Center, $132,171
• Portsmouth Housing Authority, $41,610
• Rockingham County $82,376
• Rye Water District, $4,791
• Town of Greenland, $16,585
• Town of Hampton, $339,388
• Town of Hampton Falls, $20,204
• Town of New Castle, $11,916
• Town of Newington, $62,353
* Town of Exeter, $269,957.10
• Town of Rye, $81,556
• Town of Stratham, $52,424
• Weeks Public Library, Greenland, $1,474
The LGC also announced the following refunds due for overpayment for dental insurance during 2010:
• City of Portsmouth, $38,336.10
• Portsmouth Housing Authority, $2,062.82
• SAU 16, $49,640.23
• SAU 21, $34,678.74
• SAU 90, $11,004.47
• Town of Exeter, $15,087.45
• Town of Greenland, $1,143.69
• Town of Hampton, $17,625.63
• Town of Hampton Falls, $1,144.15
• Town of New Castle, $611.06
• Town of Newington, $3,536
• Town of North Hampton, $4,745.19
• Town of Rye, $5,025.06
• Town of Stratham, $2,561.52
• Weeks Public Library, Greenland, $120.64
Bald’s refund announcement states that the calculations were based on municipalities’ proportional shares of the total 2010 HealthTrust contributions. He also noted that a group of communities, including Durham, has launched a legal challenge regarding the refund distributions because it excludes members who have since left the LGC health pools, but were prior customers.
Those communities, Bald noted, “also asked the court to stay (place on hold) the distribution of the 2010 surplus until their challenge is decided,” Bald wrote to members. “HealthTrust will follow any future order regarding the system and timing of the distribution. As the legal challenge could affect the distribution, including the amount of your group’s return, we will keep you posted on these developments so you have the best available information on the return and how it may affect your group.”
Meanwhile, the group Americans for Prosperity New Hampshire is calling for the LGC rebates being sent to municipalities, to be returned to taxpayers.
“Property taxpayers in communities and school districts that utilize the LGC services have every right to be paid back for the money they were overcharged, and not see those funds used to grow local government,” said Greg Moore, director of AFP-NH. “Our members will be vocal advocates to help them remember that this was taxpayer money that was taken from the wallets of our hard-working families, and that’s exactly where these funds should return.”
Barry Glennon, director of the Bureau of Securities Regulation, said Thursday that the refunds should be returned to the communities that overpaid for insurance and “what they do with it after that is up to them.” Glennon also noted that the LGC is offering the rebates by check, or by so-called premium holidays.
David Lang, president of the state firefighters’ union, spearheaded the LGC refund effort and previously said the refunds would be two to three times greater if the LGC calculated them as ordered by the hearings officer. According to the officer’s order, the LGC must refund the lesser of the following two amounts: all money in excess of 15 percent of insurance claims, or all money in excess of a risk-based capital reserve of 3.0 (three times an actuary’s reserve).
Instead, the LGC announced it will retain a 3.75 risk-based capital reserve, .75 percent greater than the legal order allows. The difference is estimated to be between $5 million and $10 million, Lang said.
The LGC is appealing the hearings officer’s order to the state Supreme Court but is mandated to comply with the refund order in the interim.
In response to the LGC’s notice of appeal, former Attorney General Michael Delaney filed a scathing 33-page objection, stating, “These monies could have been used by towns, cities, counties and school districts to retain or hire needed teachers, firefighters and police officers during a time of economic hardship.”
The LGC last released a list of refund recipients in December 2012.