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City Council health-care benefit may go to South Portland voters

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City Council health-care benefit may go to South Portland voters

SOUTH PORTLAND — The City Council is poised to put the future of their health-care insurance to voters this November.

The council spent more than an hour in a workshop Monday night debating the insurance benefit, which costs about $70,000 to cover six of the seven councilors.

Questions about council health insurance were raised initially by a resident and more recently during budget discussions by Councilors Maxine Beecher and Jim Soule. Both councilors recommended eliminating the benefit to "share in the pain" of the budget. 

Councilor Linda Boudreau said the insurance has been used in previous elections as ammunition against incumbents and that voters should decide the propriety of the benefit. 

"This has haunted us through the last couple of elections," she said. "Let's have the public discussion about it."

The council has received two memos from city attorney Sally Daggett about the health-care plan. A January memo justified the legality of the insurance since the benefit has been included in the budget since 1977, making it public knowledge. The charter does not define "compensation," but within its context it's taken to mean only the annual stipend, she said. 

Councilors voted in 1977 to allow themselves to buy into the group insurance pool for city employees so they could take advantage of the discounted rate. In 1986, voters changed the City Charter, increasing the council stipend from $1,500 to $3,000.

"If voters thought that $3,000 plus health insurance was too much to provide city councilors, they would have said so by defeating the Charter amendment in 1986," Daggett wrote in her January memo.  

But council health-care expenses are not represented in a separate line item in the City Council budget, but lumped in with expenses for other city employees. 

Councilor Patti Smith said the insurance creates an equity issue, since council compensation is currently defined only in monetary terms. Smith does not take advantage of council health benefits, making her total compensation the $3,000 stipend outlined in the City Charter.

When the value of the health insurance premium is added, the total compensation as of January for a councilor receiving single coverage was about $10,000.

Councilors who buy the family plan make significantly more, according to city Human Resource Director John McGough. The premium for family coverage is currently $15,500, with nearly $3,000 paid by the councilor. The premium for councilors with dependent children is more than $11,000, with a deductible of nearly $1,600. When the annual $3,000 stipend is added, those councilors receive compensation packages of $18,500 and $14,000, respectively. 

"I just want there to be equity," Smith said. 

Smith, who has a background in human resources, suggested the inequity could be solved by offering a reimbursement to councilors who choose not to enroll in the health-care plan. However, Boudreau was concerned about the political consequences of such an arrangement.

"That to me sounds like councilors are getting a raise," Boudreau said. 

Councilor Maxine Beecher said she had spoken to a councilor who served in 1977 about the intent behind allowing councilors to buy in to the city plan. She said the action was intended only for councilors, not their families, and suggested amending the Charter to make that distinction.  

"It just morphed and went further," Beecher said.

Councilors were split about how the candidate pool would be affected if the insurance benefit is reduced.

"I clearly looked at the when I ran for council," Mayor Tom Blake said. "If you want good people, you have to compensate them." 

Councilor Jim Hughes wondered whether eliminating the benefit would would prevent lower income candidates from serving. 

"What we're going to end up with is people who can put a lot of time on the table and not worry about how much money they make," he said. 

The council's longest serving members, Soule, Beecher and Boudreau, said they were not aware councilors received health insurance until they were elected. They argued that serving is essentially a volunteer job. 

"This was never intended to be a full-time job," Boudreau said.

Daggett said in a July 9 memo that the council could increase public awareness about the health benefit by passing an order at the start of each fiscal year outlining the total compensation of each councilor. Another possibility would be to break out the council health-care cost as a separate budget item. Neither of these options would need voter approval.

She said the council could also make a general amendment to the City Charter, allowing the council annually to set its own compensation after public notification and public hearings. Or they could write a specific amendment explicitly adding the health-care benefit. At least 3,125 voters, which is 30 percent of the turnout for the last gubernatorial election, would have to vote in November for such a change to take effect.

During Monday night's discussion, councilors failed to reach a consensus about how to word a referendum question. Councilors will discuss the wording of the referendum question at a July 27 workshop, which will also include an analysis of compensation packages of other elected bodies. 

Unlike small towns where selectmen are also town administrators, South Portland is one of the only cities in Maine known to include councilors in their employee health plans. Portland city councilors, who receive a $9,000 annual stipend, are reimbursed for health-care costs, but the city is self-insured and does not buy into a pool like South Portland.

Assistant City Clerk Karen Morrill said on Wednesday the City Council must have final referendum language approved by early October, 30 days before the Nov. 3 election. The wording would have to be finalized weeks before that, however, if the question is to appear on absentee ballots, which must be ready 45 days before the election.

Randy Billings can be reached at 781-3661 ext. 100 or rbillings@theforecaster.net