Health insurance lawsuit settled in South Portland

SOUTH PORTLAND — After months of meeting behind closed doors, the South Portland City Council will conduct a public debate on its controversial health insurance coverage, but only because resident Albert DiMillo Jr. has dropped his lawsuit on the issue.

DiMillo, a columnist for The Current, agreed to a “stipulation of dismissal” agreement “without prejudice and without costs or attorney fees to any party,” on June 28. City Attorney Sally Daggett signed off on the agreement July 2. In a July 11 email to DiMillo, Mayor Patti Smith confirmed the council will discuss the issue at 7 p.m. on Monday, Aug. 13, in a workshop session to be held at the community center on Nelson Road.

DiMillo has argued the health insurance benefit, which can cost up to $8,550 for an individual and more than $17,000 for a full family plan, violates the city charter, which fixes compensation for city councilors at $3,000 each per year.

Almost as soon as he filed the suit in Cumberland County Superior Court Jan. 23, DiMillo offered to drop it if the council would promise in writing to stage a public workshop on the issue. The council refused, instead meeting in executive session five times, allegedly discussing the merits of the health coverage benefit in addition to the suit itself and twice voting behind closed doors to refuse DiMillo’s overtures.

“It’s so insane. It’s like dealing with a bunch of fifth-graders,” DiMillo said on Monday. “The council did not want to put into writing what the mayor promised me verbally. They came back and said, ‘We’ll have the meeting as long as you drop the case. Trust us.’”

“That’s his view,” said Smith, following Monday’s council meeting. “But it’s always been the plan to have a workshop on it.”

However, Smith did acknowledge, “Until the lawsuit was dropped, it wasn’t going to happen.”

The settlement sets up the first public discussion on the benefit since November, when then-Mayor Rosemarie De Angelis solicited an outside opinion on the issue. De Angelis took the benefit during her first term in office, from 2003-2006, but says she grew concerned about it following public outcry during the summer of 2009, even though Daggett argued then that nothing in the charter “expressly states” the $3,000 stipend is the "total" value of all compensation, "exclusive of any other benefits."

South Portland city councilors have received health coverage since 1977, when the council voted to take advantage of a 1969 change in Maine law that broadened the definition of "employee" to elected and appointed officials, for purposes of group insurance policies. Daggett has noted that the insurance benefit was not challenged in 1986 when the charter was amended to double councilor pay from $1,500.

Still, when De Angelis returned to office in late 2009, she declined the coverage and has since called it,  "unfair, unequal and unethical." In a Nov. 21 memo written in response to her call for a second opinion, William Plouffe, from Portland firm DrummondWoodsum, said the benefit "does not comply with the compensation limit" in the charter. However, given a dearth of relevant case law, Plouffe hedged by adding, "the answer is not free from doubt."

At a Nov. 28 meeting, the council voted 4-3 to maintain the status quo. All of those who voted to keep the benefit intact – Maxine Beecher, Tom Blake, Tom Coward and Alan Hughes – were taking advantage of it. Those who voted to end the practice – De Angelis, Smith and Alan Livingston – have declined coverage.

But with Hughes replaced less than a week later by newly elected Gerard Jalbert, who also declined coverage, DiMillo demanded a do-over. In that sense, he was following the lead of legislative candidate Gary Crosby, who hounded the council over the issue through December, submitting a petition with more than 200 signatures.

But DiMillo, a retired CPA who has been a longtime council gadfly on fiscal issues, went a step further, threatening to file suit if Smith did not put the issue back on the table. When his 30-day deadline approached the 60-day mark, DiMillo made good on his promise, and filed suit, representing himself.

DiMillo said the council refused his initial offer to drop the case in exchange for the public workshop he’d originally demanded, then rebuffed him again last month when he upped the ante by demanding a public referendum.

City Manager Jim Gailey has refused comment, explaining at first that the votes were not really votes but “consensus decisions,” and later saying, “I don’t talk about what happens in executive session.” However, De Angelis has acknowledged votes of a sort took place.

“I agree with the discussion on legal strategy being privileged,” she said at a recent meeting, when demanding the council review Maine’s Freedom of Access Act. “But this was a decision, it was a vote that should have taken place in public, so that everyone knows where each councilor stands.”

The revelation of closed-door votes – which also included a separate decision to appeal a suit the city recently lost against former library employee Karen Callaghan – drew a stern rebuke from Mal Leary, president of the Maine Freedom of Information Coalition.

“It’s just ludicrous to say, ‘We reached a consensus.’ How do you know you reached it? At some point you have to count heads,” he said.

Smith has also admitted the council did debate the relative merits of whether or not councilors should continue to receive the insurance benefit, without confining their executive sessions to hearing advise from Daggett in the DiMillo lawsuit.

“I think the suit obviously encompasses that larger question,” she said. “It’s inherent, I’ll put it that way.”

According to Leary, those discussions may also have skirted the law, which limits closed-door talks to the topic at hand, in this case, hearing Dagget’s assessment of the council’s “rights and responsibilities” related to the lawsuit.

Jalbert has said the council chose to fight the suit because it singled out Gailey as a defendant in addition to the city as a whole. The council, he said, felt obligated to “stand behind its leadership.”
For that reason, the council could not honor DiMillo’s request for a public debate on the topic until after the suit went away. “It was felt that any public discussion of the issue could be seen as an admission, of sorts,” Jalbert said.

DiMillo said he chose to drop the suit partly because of the council decision, albeit behind closed doors, to appeal the Callaghan decision, and because, by January, Blake could be the only councilor still enjoying free health coverage.

Beecher is termed out of office and cannot run again, while Coward appears fated for a term as a county commissioner, given that he is unopposed for the November race. Assuming Coward wins his race, he’ll need to resign from the City Council in December, prompting a special election in January to fill his term.

“Hopefully, Blake will be sitting on an island all by himself and at that point and maybe the council will do what’s right,” said DiMillo.

As for the Callaghan appeal, which Gailey said Daggett is now preparing, DiMillo said, “That made it clear to me the city would appeal my case after they lost and therefore the issue would not be settled for at least another year.”

 DiMillo said his hopes are now pegged to the Aug. 13 workshop.

“If we can get a big group of people who are against this to turn out, then perhaps it will put some pressure on them to change things,” he said.

Both DiMillo and Crosby have said they are not necessarily against city councilors receiving health insurance, or some cash payment in lieu thereof. Their only beef, they said, is that no such compensation is mentioned in the charter. That, they said, is where it belongs, and not in a council policy passed 35 years ago and never reauthorized.

Gailey said the city spent $2,513 through June 12 defending against DiMillo’s suit and “no more than $150” since then. DiMillo said fighting the city cost him “less than $1,000.”

But was it worth it?

“Probably not, at the end of the day,” he said. “There doesn’t seem to be anything that makes the City Council pay attention.”