Local Government Center proposes restructuring
LGC has proposed changing its name back to the New Hampshire Municipal Association — its original name before a 2003 reorganization — and eliminating LLCs that oversee its health insurance, property and liability offerings and municipal advocacy arms. The LLCs were created in 2003 despite LGC being told by the state that it couldn't merge not-for-profit corporations into LLCs, partly because limited liability corporations do not have not-for-profit status in New Hampshire.
"We're doing this to get rid of the LLCs," said LGC interim Executive Director George Bald. "We're doing it to promote more transparency."
At a May 28 meeting, LGC board members had few questions for staff regarding the proposal before setting a public hearing on the proposed changes for June 21. The entire discussion on the proposal, in which the corporate model of LGC would be completely overhauled, lasted slightly more than 15 minutes.
But a part of the plan calls for transferring the assets and liabilities of HealthTrust LLC, Property-Liability Trust LLC and the New Hampshire Municipal Association LLC into corresponding not-for-profit corporations.
Frydman said each of the actions would require a vote of the respective boards of directors after a public hearing was held.
"There is jointly owned real estate worth millions of dollars," he said. "There are insurance contracts with hundreds of New Hampshire political subdivisions, which touch tens of thousands of New Hampshire residents and hundreds of millions of dollars of taxpayer money.
Further, state law and LGC's bylaws each say that, when the LLCs are dissolved, all assets left after debts had been settled must be returned to members. And complicating the proposed transfers is that the money involved is all taxpayer funds. LGC's total operations bring in — and pay out — hundreds of millions of dollars per year.
"It's not like we're transferring assets to another corporation," he said. "We're really just changing from LLCs to (not-for-profit corporations)."
Bald said LGC officials are willing to change the timeline or alter the plan to appease regulators. He said LGC was attempting to complete the process by July 1 so the HealthTrust and Property-Liability Trust fiscal years, which currently operate on a calendar year, could be aligned with "most" of the insurance arms' customers, which operate on July 1 to June 30 fiscal years.
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