SOUTH PORTLAND — A resident has filed a civil lawsuit against the city and its manager over what he claims is an illegal health insurance program for city councilors.

Albert DiMillo Jr.,  of Colchester Drive, filed the lawsuit Monday in Cumberland County Superior Court in Portland, alleging the city violated its charter by offering employee health benefits to councilors.

Article II Section 209 of the City Charter states: “The annual compensation of the councilmen shall be $3,000.” Since 1977, councilors who opt in to the health insurance program have received benefits in addition to their $3,000 annual stipend.

Last year, the city paid more than $50,000 to insure four councilors. If all seven councilors took the benefit, the expense to the city would have been $99,000.

DiMillo is asking the court to stop all payments by the city in excess of the $3,000 limit set in the charter. The city has 20 days to file a response.

City Manager Jim Gailey on Thursday said he had no comment on the lawsuit itself, but did say there wasn’t much he or city staff could do about the health insurance policy.

Budget decisions are the discretion of the council, Gailey said. The council passed the order that gave themselves health care, so only the council or voters can take it away.

“We’re living under a 1977 order of the City Council, the sole legislative body of this community” Gailey said. “That supersedes anything staff can do.

The city has received two dissenting legal opinions on councilor health insurance. The first, a 2009 opinion from the city’s attorney, Sally Daggett, said simply that nothing in the charter “expressly prohibits” the benefit. 

In late November last year, DiMillo warned the councilors that he’d sue if they didn’t discontinue the benefit.

“I’m hoping the city isn’t stupid enough to fight this, but they haven’t proved in the past that they care about taxpayers,” he said Wednesday, referring to the money it would cost the city to defend itself in court.

The city has been dogged by questions about the health insurance benefit for several years, with some residents asking the council to either end the benefit outright or put the issue to a public vote.

Critics have said the system creates inequity on the council, that constantly increasing premiums amount to a yearly raise for councilors who take the benefit and that it’s inappropriate for the council to decide its own compensation.

DiMillo has asked the city to stop paying for the benefit in 2009 and 2011, according to his court filing. The council has opted to maintain the status quo every time.

Three councilors – Maxine Beecher, Tom Blake and Tom Coward – receive city health insurance and are the most strident defenders of the program.

Coward dismissed the 131 residents who signed a petition calling to the end of councilor health insurance as a “few people” bringing up the issue “over and over again.”

Gary Crosby, who circulated that petition and had previously urged DiMillo to hold off on the lawsuit, said now that it’s filed, maybe the city will finally address the issue.

“I hope this encourages them to take it seriously, that it’s not a joke,” he said Wednesday. “I will continue to make an effort to get them to understand (the health insurance is) not appropriate..”

Councilor Rosemarie De Angelis and Mayor Patti Smith have both said the council must take some action. Councilors Jerry Jalbert and Alan Livingston have said the question should be put to a voter referendum.

Last November, William Plouffe, an outside attorney hired by the city to examine the issue, said health insurance benefits are a form of compensation that does not comply with the City Charter. 

Plouffe said the charter clearly takes compensation decisions out of the hands of the council and leaves it with the voters. 

“Since the $3,000 payment is the only compensation contained in Section 209 that is presented to voters, this strongly suggests that the intention is to have the stated dollar payment be the only compensation received by councilors,” he said.

In a December interview, De Angelis said she was so convinced the health benefit is wrong that if a lawsuit did come, she’d urge the city not to fight it. 

“We shouldn’t be expending legal fees to defend us in a lawsuit when I think the other side is right,” she said. “Do we need to spend money defending a position that so many residents think isn’t credible?”

Daggett, Smith and Coward could not be reached for comment after the lawsuit was filed. Smith has previously said she’ll bring the issue up in a council workshop in February.

Mario Moretto can be reached at 781-3661 ext. 106 or mmoretto@theforecaster.net. Follow him on Twitter: @riocarmine.