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June 16. 2013 10:18PM

Hopkinton opts to drop Local Government Center insurance

With a bitter taste left over from disagreements with the Local Government Center about the highway barn that burned last June, the town has decided to take its business elsewhere for insurance on its buildings.

Last week, the Hopkinton Board of Selectmen voted narrowly, 3 to 2, to switch from risk pool coverage through the Local Government Center to coverage through Primex.

According to Jim O'Brien, chairman of the board, there were several reasons that led to the board's decision, but it was primarily the concern over how LGC dealt with the town after the highway facility burned down last summer that was the real nail in the coffin for the relationship.

The fire, which started in a vehicle parked next to the barn, caused an explosion, which then set another vehicle and the barn itself on fire. The building was deemed a total loss, and Hopkinton, which had been paying premiums on a building assessment of $1 million, learned that LGC had no intention of paying that much, said O'Brien.

Through lengthy negotiations that involved an independent appraisal and an admission from LGC that the organization had been over-assessing highway garages throughout the state for several years, the town and LGC finally settled for a sum of $790,000. Voters in March agreed to fund the remaining cost of the new $1.3 million highway garage.

Though a new building has begun to rise on the site of the old one, the relationship between the town and LGC hasn't recovered, said O'Brien, and the board began shopping around for other options for insurance.

The highway garage isn't the only reason the town has strayed.

"There are several reasons for our decision. Our contract was up on July 1 anyway, so as a board we did our due diligence and contacted other companies to see what our options were," said O'Brien.

And the publicized shakeup at LGC, which led the organization to bring in new leadership, combined with many towns expressing displeasure with the organization over various situations, has raised concerns in Hopkinton, O'Brien said.

"LGC is going through a lot of transition and right now, the town is looking for stability," he said. "We have a viable alternative in Primex, so it made sense to go with them."But the vote was close, said O'Brien. New members of the board showed reluctance to leave LGC, especially with the promise of a possible $12,000 "contribution holiday" on the table from the organization. The holiday, according to LGC, is a means of paying back nearly $20 million in surplus funds the organization must return to municipalities."I think the new members are concerned that if we leave LGC, we won't get that $12,000," said O'Brien. "But I'm not convinced that's true."

nfoster@newstote.com


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