SOUTH PORTLAND – A South Portland man has filed suit against the city of South Portland in Cumberland County Superior Court Jan. 23 regarding the free health insurance given to city councilors.

“My hope is that this won’t cost taxpayers anything, because they’ll concede,” said Albert DiMillo, a retired CPA and occasional Current columnist, who has asked the court to declare the health benefit a violation of South Portland’s city charter.

In 1977, the council took advantage of a 1969 change in Maine law that broadened the definition of “employee” to elected and appointed officials, for purposes of group health insurance policies. Since that time, councilors have received full health care coverage. The city charter, however, fixes the annual compensation for each councilor. Since a 1987 charter revision, that annual stipend has been set at $3,000.

In January 2009, City Attorney Sally Daggett, then newly hired, said that while the charter does fix councilor compensation at $3,000, it does not expressly state that this stipend is to be the “total” value of all compensation, “exclusive of any other benefits.”

“Nobody but an inside attorney could ever pretend ‘compensation’ is an ambiguous term,” says DiMillo.

Councilor Rosemarie De Angelis asked for a second opinion once she became mayor in 2011. In a Nov. 21 memo, attorney William Plouffe, from Portland firm DrummondWoodsum, said that giving councilors health insurance coverage “does not comply with the [$3,000] compensation limit” in the charter. However, given a dearth of relevant case law, Plouffe hedged by adding, “the answer is not free from doubt.”

On Nov. 29, DiMillo sent an email to councilors and City Manager Jim Gailey promising to file suit “within a month” if councilors did not freely relinquish their health insurance. DiMillo also promised to go after current and former councilors for repayment of the cash value of any benefits within reach of Maine’s statute of limitations – a figure he calculated at $183,680.

Since then, DiMillo has not been the only citizen to dog the council over its health benefits. On Dec. 19, Gary Crosby – a commercial property owner, sometime developer and frequent candidate for public office – presented councilors with 131 names signed to a petition demanding they give up their tax-funded health coverage.

“It’s wrong for any sitting legislative body to vote themselves benefits,” Crosby said.

DiMillo shares that conviction, noting that when councilors first gave themselves the benefit, it “maybe cost $100 a month.”

“So, they’ve essentially been giving themselves a raise every year, illegally,” he said Monday.

DiMillo, who is representing himself in the Superior Court case, says he dropped his initial demand for restitution.

Gailey was unavailable for comment Monday or Tuesday. City Finance Director Greg L’Heureux, who ran Monday’s council workshop in Gailey’s stead, declined comment.

Mayor Patti Smith did not seem at all phased by DiMillo’s lawsuit.

“He said he was going to do it and he did it,” she said, with a shrug.

Smith intimated she has no more intention of being rushed to a decision now than Nov. 29, when DiMillo issued his first 30-day ultimatum.

DiMillo claims he “never got any reply” to that letter. But when Crosby presented his petition, Smith announced her intent to conduct a council workshop session centered on the health insurance issue “sometime in February.”

“That’s still the case,” she said Monday evening.

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