DEMOPOLIS &8212; A grand jury&8217;s indictment of Mayor Cecil Williamson on felony theft charges stretch back more than two years to a controversy over whether or not the city should pay health benefits for the mayor.

According to city statute, the office of mayor is a part-time position that also serves as superintendent of the city water board. As such, the mayor&8217;s total compensation package consists of a salary set by the the water board and the council.

City records show that in December, 2004, the water board set the mayor&8217;s salary at a rate of $1,000 &8220;with no benefits&8221;. The package was passed by a unanimous vote of the board.

In a regular audit of city finances, an independent auditor reported last fall that the city had been paying for Williamson&8217;s health insurance through BlueCross/BlueShield for two years. The audit, which was released in September, 2006, was for the fiscal year ending in 2005.

Williamson told The Times in an Oct. 17, 2006, interview that the auditor was running behind on the process, but that was not uncommon for municipal audits.

Williamson also said she was unaware that she was not to receive health benefits. She said she filled out the insurance enrollment forms when she filled out several other pieces of paperwork that dealt with her being a new employee of the city.

When contacted at city hall yesterday following the indictments, Williamson said her attorney advised her not to comment on the matter.

Former Mayor Austin Caldwell said yesterday that he did not receive health benefits when he was first elected mayor. At that time, the mayor did not serve as superintendent of the water board. Caldwell said that once he was named superintendent of the water board he started receiving health benefits from the city. The former mayor said he paid half of the premiums and the water board paid the other half.

When Caldwell left office, he was drawing a salary of $600 per month from the water board. The total cost of his monthly insurance premium was approximately $450, he said.

In the summer of 2005, Williamson brought to the attention of the water board the fact that they had provided partial payment of benefits for her predecessor. According to minutes from the July 5, 2005, meeting of the water board, the mayor was told that her salary had been raised from the previous $600 per month level paid to Caldwell to $1,000 per month paid to her in part to cover the cost of health care premiums.

In the October, 2006, interview, Williamson told The Times that she refunded the total amount of city funds paid to BlueCross/BlueShield for her insurance. The mayor did not give a total amount refunded.

The audit released last year showed a payment of $7,464 paid to BlueCross/BlueShield for the mayor&8217;s insurance. The premiums were not paid monthly. Records of premium payments from August 2005 until September 2006 were not available at press time. An alderman, who spoke on the condition of anonymity in October, 2006, said the repayment amount was &8220;almost $15,000&8221;.

In the October, 2006, interview, Williamson said she was still receiving the same benefits through the city but that she was now paying the premiums.

On Oct. 6, 2006, City Attorney Rick Manley sent a letter to the Alabama Ethics Commission outlining the findings of the audit. In the letter, which was written on behalf of the council and the mayor, Manley stated that Williamson had in fact paid back the entire amount owed to the city.

In a letter dated Oct. 12, 2006, the Alabama Ethics Commission said in its ruling that the repayment of the money was satisfactory to their investigation. A canvassing of aldermen by The Times in October revealed that the Ethics Commission had not contacted any elected city officials concerning the matter.

District Attorney Greg Griggers said yesterday that he was approached shortly after the findings of the Ethics Commission about pursuing indictments.

The indictments charge that Williamson knowingly and intentionally obtaining city funds for personal use and knowingly obtaining city funds for personal use by deception.

The indictments are expected to be served as soon as today. The mayor is expected to turn herself in to Sheriff Jesse Langley without incident. Griggers said he has already asked that bond be set at the lowest allowable level for the indictments since Williamson is not a flight risk.

Managing editor Gennie Phillips and staff writer Brandon Glover contributed to this report.