LGC Head: No 'Magic Wand' to Find Towns' Money

George Bald, the interim executive director of the Local Government Center, told North Hampton selectmen this week that he expects to have answers in the next few months about how the LGC will repay the $52 million it has misappropriated from municipalities across the state.

Bald, who appeared before the North Hampton Select Board on Monday, said he recognizes that North Hampton is looking for a check for its share — roughly $40,000 — of the $33 million inappropriately taken from employee healthcare contributions, along with its share of other misused funds.

Bald there is no "exact date" for when a check will be issued or when the source of all of the money will be found, although he said that his "sincere hope" is to have the issue resolved and have an answer for selectmen by August.

"There are mistakes that were made, and the hope now is to just get things right back on track and do the right thing and have a lot of transparency toward it," said Bald, who added that he's "not ready to give up" on finding a solution. "I don’t have a magic wand, but I’m ever the optimist. I’m doing my best to find a solution to this situation.

"In my career I’ve run into very, very difficult circumstances, and I always believe there’s a route out of it. It may not always be clear, and it may not be a straight line, and most times it's torturous, but I do believe we’ll find a solution."

Selectmen asked Bald, who has been the interim LGC director for three months, to speak Monday in order to provide clarity about an issue that is quickly approaching court-set refund deadlines, the first of which is for the $33 million on Sept. 1.

A group of protestors demanded local employees' shares of the money while holding signs outside Town Hall before Bald's appearance Monday, while selectmen voiced similar requests during their meeting while expressing frustration about the situation.

"The whole thing is a charade as far as I'm concerned, and I'm putting it that way because I find it aggravating" said Selectman Phil Wilson. "I can't see how anyone would lend the LGC $17 million to pay off [the deficit caused by using health trust program funds to support the worker's compensation program]. I'm baffled."

Instead of looking to banks and lenders, Wilson suggested the LGC increase workers' compensation rates to generate the $17 million to repay the debt. He said this would be a fair approach because "now it's time" for the communities that "enjoyed the benefits" of other towns subsidizing their $17 million in coverage "to pay the piper" and help raise the missing funds.

Wilson said this wouldn't be "penalizing" these towns because they didn't contribute to the $17 million to begin with, although Bald disagreed and said that $17 million would be an "astronomical number" for this select group of municipalities to raise. Bald said that's why other steps need to be evaluated first, especially since he said it was a "bad management decision" by the LGC that led to the shortfall, not those communities.

"It would be very, very painful for those communities," said Bald, who said he's already considered Wilson's idea but hasn't settled on it because he needs to recommend more than just "one route" to resolve the issue.

Selectmen commended Bald for appearing before them Monday, with Chairman Jim Maggiore stating that the "willingness" of Bald and other officials to be transparent and find solutions in the wake of the LGC scandal should be the "salient point" the public should take away from Monday's session.

"I appreciate it," said Maggiore. "As Phil said, you're beyond a rock and a hard place. I don't know where that margin is, but you're resting in it."