Tipp City’s law director told City Council members Monday there’s nothing in city codes authorizing dental insurance and that council “may have to consider repayment of the dental benefit received.”
Council took no action in response to the legal opinion at its meeting Monday night. Law Director David Caldwell’s legal opinion was sent to members earlier in the day.
City resident Steve Huffman, who this summer questioned the basis for the dental insurance, again addressed council about the legality of the benefit Monday and quizzed each member now receiving the insurance about their intentions.
Huffman earlier this year advocated an end to taxpayer-subsidized health insurance for council members. Council voted this summer to end the insurance effective Jan. 1, 2016, when council’s salary will be increased from $1,000 to $5,000 annually.
The ordinance ending the insurance included dental coverage.
Huffman subsequently returned before council saying he could not find official action authorizing council to receive dental benefits. City officials could not, either. Caldwell said in his opinion that staff researched historical documents and interviewed retired staff.
“It has been discovered that during the early to mid-1990s that the city was self-insured. In a small sampling of employee records, it was also determined that medical and dental coverage was included as one deduction on payroll stubs,” Caldwell wrote. “However, no other documents or information has been discovered to date explaining whether City Council intended to include dental coverage when it passed legislation granting itself medical coverage.”
Caldwell discussed an Ohio Supreme Court position on whether unauthorized compensation should be repaid. The court said there was no legal duty to repay if the compensation was received “in good faith and under color of law.”
His legal opinion was that council members in the past and today “believed in good faith that they were receiving dental insurance along with medical insurance in lieu of asking for higher salaries.”
The second measurement specified by the court required the benefit being received “under color of law” is not supported, in his opinion, Caldwell said.
In explanation, he said: “Color of law refers to an act done under the appearance of legal authorization, when in reality, no such right existed. When section 37.59 (outlining council eligibility for medical coverage) was enacted, the term ‘dental insurance’ may have been left out as a simple oversight, an innocent omission or was deemed unnecessary because it had historically been included in ‘medical insurance’ during the period the city was self-insured. At the present time, however, there is no historical evidence to support this theory. Therefore, it is my legal opinion that the term ‘medical insurance’ … cannot be considered to include ‘dental insurance’ and that the receipt by council members is not ‘under the color of law.’”
Huffman said Monday that, with Caldwell’s opinion, council needed to act. “We have a legal opinion. Going forward, the repayment is another issue. You know today there is no legal basis,” Huffman said.
COUNCIL MEMBERS QUESTIONED
He asked council members receiving dental insurance about “receiving a financial benefit you are not entitled to” and whether they intended to continue receiving that benefit.
“I would like more information,” Mayor Dee Gillis said when asked directly by Huffman. “If I need to pay it back, I will pay it back.”
Council President John Kessler said, “I think you are asking something pretty heavy.” Kessler said the research so far was of records on hand but added he believes more information might be available from talking with past council members about the intent when the insurance section was approved.
“If it’s not in the law, it is not the law,” Huffman said. “We should do the right thing for the taxpayers of Tipp City and not take this benefit.”
Huffman added the issue has been “drawn out enough” so there won’t be a resolution before next month’s election.
Kessler said he is required by his state retirement to take health benefits offered locally. “Don’t expect me to pay it back because I have to take it (insurance offered),” he said during a verbal back and forth with Huffman.
Huffman also questioned Councilman Mike McDermott about his intentions regarding the dental benefits he receives. McDermott said he appreciates Huffman’s diligence and the information provided. “I take a little bit affront to you saying that you brought these things to council and nothing has been done. I think very quickly when you started raising issues regarding health insurance that I worked very hard to make sure that that … ended up on the agenda … and something we voted on to eliminate health care.”
McDermott said before he signed up for the dental insurance, he contacted several previous council members who took the dental insurance. “None of them that I spoke to knew about this particular discrepancy … I think … anyone that’s taken this insurance did not understand … that that benefit was not called out specifically in ordinances,” McDermott said. “I would turn down dental insurance and make sure that we do eliminate that… Be very careful in stating that anyone has tied to obfuscate the law without understanding this was an issue.”
ENDING BENEFIT, REPAYMENT SEPARATE ISSUES
Huffman said he did not imply anyone acted in malice. “We have an opportunity to stop a wrong now is my point,” he said. “I don’t see how the city can continue to pay for that when they know there is no legal payment.”
Repayment is a separate issue, he said.
Huffman also asked Katelyn Berbach about whether she plans to continue taking the city dental insurance. “No I am not,” Berbach said, adding her decision was made when she received Caldwell’s opinion.
Councilman Joe Gibson said a lot of council members wanted to know what the law director had to say before doing anything regarding Huffman’s concerns about the dental insurance. “If there is legislation necessary to resolve this, fix this up, I am all for it,” Gibson said.
“My point is, from today on … the city should stop paying for the dental insurance … Unless you pass a law that says we are going to pay our dental insurance going forward,” Huffman said.
“We will take a look at it,” Gibson said.