SOUTH PORTLAND — City councilors have the right to continue receiving taxpayer-financed health care and the City Charter does not have to be amended to explicitly say insurance is part of their compensation, according to the city attorney.
Sally Daggett, of Jensen Baird Gardner & Henry, said in a Jan. 19 written opinion that taxpayer-financed health care for councilors has been public knowledge since the City Council gave itself the benefit in 1977, but it is not considered compensation in the City Charter. However, Daggett noted that ambiguity remains since compensation is not defined in the Charter.
“There are many possible definitions of the term,” Daggett wrote. “So the context in which the world is used must be examined to interpret its meaning.”
Daggett defined compensation as strictly monetary, because it only suggests a specific dollar amount without a qualifier like “total” or “value of” compensation or compensation “exclusive of any other benefits,” she said.
Colchester Drive resident Albert Dimillo, who has railed against the benefit at council meetings, disagreed.
“I think it’s an extremely weak argument,” said the retired corporate tax accountant, a Maine native who moved to South Portland from Connecticut more than two years ago. “I know very clearly the definition of compensation for tax purposes. Health-care benefits is compensation. It’s exempt from tax, but it’s compensation.”
Dimillo said he plans to seek a referendum on whether residents want to continue to fund health care for councilors.
Daggett said councilors in 1977 were paid an annual stipend of $1,500 when they voted to include themselves in the city’s insurance pool. When voters increased the council stipend to $3,000 in 1986, council health insurance had been part of the budget for nine years, making it public knowledge.
“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.
That may be true, but the benefit for 30 years has been included in the budget as part of the overall spending on city employees, rather than as a more transparent, separate item within the City Council’s budget.
That budget for the current fiscal year is $106,000, and
Dimillo and other South Portland taxpayers have said they were surprised to be paying upwards of $70,000 a year for health insurance for councilors. Newly elected Councilor Patti Smith is the only councilor not receiving the benefit.
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.
Mayor Tom Blake, who last week said the council would hold a workshop about the issue, defended the council health package, saying it’s a necessary perk to encourage quality people to step forward and serve their community.
“If we want good people making difficult decisions we need to compensate them,” Blake said. “Everything the city has done has been done properly.”
Blake pushed back against the claim that councilors only work three or four hours a week. By his own estimate, Blake said he works on city business for about five hours a day, whether it’s attending council or subcommittee meetings, reading and understanding agenda material, or responding to constituent concerns.
“This is not a volunteer position,” he said. “It’s a serious job.”
Without the insurance benefit, Blake, who is a retired firefighter, said he wouldn’t be able to serve on the council, especially since there are incidental expenses of public service, like printer cartridges and gasoline.
Dimillo said he believes that being a city councilor is a volunteer position and people serving for any other reason, such as insurance or financial compensation, may not have the city’s best interest in mind.
He said he does not necessarily want to deprive councilors of health care; he just doesn’t want taxpayers to pay for it. Instead, Dimillo suggested allowing councilors to buy into the city pool so they can get lower rates.
“They shouldn’t get health care for free,” he said. “It’s clear it’s a major reason why (some of) these people are on the council in the first place.”
Dimillo, who took out nomination petitions last year for the School Board but did not run, repeated his interest in running for City Council. If elected, he said, he would not accept any compensation.
“I will not take a penny,” Dimillo said.
When asked when the council would discuss Daggett’s opinion, Blake said councilors had more important business to do. If the issue is taken up up at all, he said, it will mostly likely be discussed during budget talks.

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