After discussion, the Commission voted 4 to 3 (Commissioner Denizac, Commissioner McFall-Conte, and Commissioner Zischkau voted against the motion) for the City to provide reimbursement and expenditures of legal fees to protect both proactively and reactively the City as a government including its employees and its Mayor and those members who wish to be represented in the this motion, Commissioner Treusch, Commissioner Deyette, Vice Mayor Carmolingo and Mayor Mulder where needed from material damages, slanderous or libelous comments or claims and unsubstantiated allegations past, present and future where the Mayor feels is needed and that a report of fees expended be made available to the public so they may see the extent of damage that has been caused.
Here's audio of the Mayor's presentation in favor of the resolution. The proposal was apparently triggered by online criticism of various city officials.
Libel lawsuits by government officials are of course constitutionally permitted, and may prevail if the statements are found to be false and defamatory factual assertions, and the speaker is found to have known the statements were false or to have known that the statements were likely false. There's no First Amendment rule that would bar government agencies from funding such lawsuits. And there's a plausible argument that the lawsuits serve city interests (and thus justify reimbursement) and not just private interests, since libels of city officials may indeed interfere with the effectiveness of city government, and since city officials may have been victimized by the libels -- if they are libels -- because of their government service.
At the same time, this strike me as a bad idea, especially since the city doesn't offer to fund the defense of such libel lawsuits, even though defense of the lawsuits -- especially a successful defense -- may also serve government interests: Speech that accurately criticizes city officials serves city interests, too, by alerting the public to possible malfeasance by government officials. And defending such speech against unfounded libel lawsuits would likewise city interests, by minimizing the deterrence of such speech. (I do not read Florida's limited anti-SLAPP statute as already providing such reimbursement to successful defendants.)
The government's entering the debate, using city funds, in favor of city officials and against citizens who criticize those officials, thus seems to me to be misguided. And one site that is critical of officials argues that it violates the city charter:
(a) Compensation. The Mayor and members of the City Commission shall receive annual compensation, payable bi-weekly, equivalent to average annual salary of the Mayor and Commissioners in the cities within Volusia County. Said compensation shall not include benefits, except medical benefits under the City's group health insurance plan, the premium costs of which shall be fully paid by the members of Commission who elect coverage. Said compensation shall be identified as a line item within the annual budget and shall be automatically adjusted every two years coincident with adoption of the annual budget.
(b) Expenses. The Commission may provide for reimbursement of actual expenses incurred by its members while performing their official duties.