SOUTH PORTLAND, Maine — After about two hours of bruised feelings and extended clarifications, city councilors reached a consensus Monday about their compensation and health insurance.

They agreed to have another workshop, scheduled for Aug. 27, to look into how councilors are compensated. The 6:30 p.m. workshop will be held at the South Portland Community Center.

“I am very disappointed we can’t do something here tonight,” Councilor Al Livingston said near the conclusion of the workshop held in City Hall. It was the first workshop since South Portland resident Albert DiMillo Jr. withdrew his lawsuit against the city last month, seeking to end taxpayer-funded health care benefits available to councilors.

At turns humorous, contentious, intractable and snippy, the workshop allowed DiMillo to present an amendment to the city charter regarding compensation and the public to comment on the benefits provided to councilors for 35 years.

“You are not employees of the city and not entitled to health care,” Ocean Street resident Barbara Psichos said in a 30-minute public comment session preceding council discussions.

Walnut Street resident Jill Gorneau saw it differently.

“It’s a small price to pay. I want my councilors happy and doing good things for the city,” she said.

DiMillo filed suit in Cumberland County Superior Court in Portland in January, asking the court to order an end to any compensation paid to councilors above the $3,000 annual stipend that is part of the city charter.

DiMillo proposed increasing council stipends to $5,500 annually while allowing councilors to buy into city health insurance benefit plans at their own expense.

Data provided by City Manager James Gailey and Finance Director Greg L’Heureux show the city currently spends $36,000 to extend health benefits to councilors Tom Coward, Tom Blake, Maxine Beecher and Gerard “Jerry” Jalbert.

Health insurance benefits were first granted to councilors in 1977 at a cost DiMillo estimated to be $1,500 for the entire council. If all seven councilors now took part in family coverage plans, the city would pay nearly $101,000.

Opponents of the taxpayer-funded health care benefit include DiMillo, and Councilor Rosemarie De Angelis, who echoed DiMillo’s arguments about fairness because some councilors getting health care earned more compensation for council work in two months than she does in a year.

After De Angelis termed the benefit “highway robbery,” Coward and Beecher took exception to the notion.

“This is the first time in my life I have been called a highway robber,” Coward said before De Angelis said she had not meant her comments as a personal attack.

Coward, who has a family coverage plan costing the city $14,000 this year, said he saw no reason to change the current compensation of a stipend and available health plans because eliminating the health provision would deter qualified candidates from seeking election.

“I don’t think this is something we need to meddle in,” he concluded.

Coward and Beecher will be leaving the council in December. Beecher cannot seek a fourth three-year term in her District 4 seat because of local term limit laws, and Coward will become a Cumberland County Commissioner. The District 3 seat held by De Angelis is also on the Nov. 6 ballot.

Beecher has opted for single-plan health coverage in her tenure on the council.

“I don’t see myself as unethical,” she said. “I am offended we are singling people out here.”

By the end of the evening, Beecher signalled she favored a gradual phase-out of the insurance benefit, but added an unfavorable impression of how the workshop progressed.

“I’ve sat through a lot of dialogue before, but some of this is way beyond rational,” she said.

By the conclusion of the workshop, Coward was the sole councilor not favoring some method eliminating taxpayer-funded health benefits, but placing the topic on a regular meeting agenda eluded a consensus.

Blake and Coward do pay almost $2,500 annually for their family plans, according to documents presented by Gailey.

Blake proposed establishing a commission to study compensation and Jalbert would not budge from his position that all councilor compensation should be eliminated as soon as Jan. 1, 2013.

Coward and Beecher doubted the question of councilor health benefits had made a great impression on the public because the workshop was attended by about a dozen residents.

The entire cost of councilor compensation amounts to 2 percent of the municipal budget of $28 million and less than 1 percent of the total school and municipal budget of $72 million.

DiMillo noted councilors already earn a stipend three times more than school board members while managing a smaller budget, while De Angelis said councilors get better benefits than city employees working 20 hours a week. In her first term as councilor, she enrolled in the taxpayer-funded plan, but did not when returning to the council three years ago.

A continued sticking point was how long councilors needed to study the question of compensation and how quickly the benefit should be eliminated and voters asked to consider charter changes on compensation.

Coward argued it was up to residents to make changes in compensation. A charter amendment requires a popular vote, but De Angelis reminded the council several times it had the power to eliminate the health care funding on its own.

Jalbert’s refusal to unlink stipends and insurance frustrated De Angelis and Livingston, but was rooted in his belief the council should not decide its own terms of compensation, he said. He also viewed eliminating all compensation, even in phases, as the fairest way of moving forward.

Mayor Patti Smith said she was not sure if the health plans attracted candidates, but agreed it was also a question of fairness regarding compensation and worried about the potential cost of insuring a full council.

“This is a liability going forward,” she said. “I would like to avoid that liability.”