COEUR d'ALENE - The city of Coeur d'Alene is expected to appeal a $3.7 million judgment against its police department in federal court this spring.

City Attorney Mike Gridley said the filing to the U.S. Court of Appeals for the 9th Circuit will be made after post-trial motions, which are scheduled for March 22, have been ruled upon.

One of those motions requests a new trial or an amended judgment.

On Thursday, City Administrator Wendy Gabriel said the city could seek financing through a bond to pay the judgment should it be upheld. The city could ask a judge to deem the expenditure ordinary or necessary, meaning the city could borrow the money without voter approval, which is usually required when municipalities take on debt.

"That's an option for sure," she said. "The law is pretty clear, from what I've seen, that judges view judgments as ordinary and necessary expenditures."

Daniel C. Dixon, a 17-year veteran of the force before his 2009 departure, and his wife, Heidi Dixon, were granted $3.7 million in compensation in October by a federal jury for Daniel Dixon's wrongful termination.

The Dixon case was originally filed in early 2010 following a six-month internal police investigation that led to Dixon's demotion from his lieutenant's position. Police investigators determined Dixon had engaged in conduct unbecoming an officer, concluding Dixon cheated on his time card in order to receive pay for hours he didn't work and falsified another officer's time card as a means to harass and intimidate.

Dixon was demoted to patrol, per city personnel rules. When he did not show up for work following the demotion, he was fired.

Dixon's attorney, Larry Beck, argued the investigation was never warranted, and the jury ruled the demotion was a firing and a wrongful termination.

Beck said Thursday that the city should have told the court in November that it planned to use a bond to pay his clients. Instead, the city stated in affidavits it had the financial means to pay the Dixons after the verdict, but didn't mention a bond.

In December, the court allowed the city to withhold a payment on the verdict - typically a 10 percent down payment of the sum as the appeal process began.

"We're very troubled city officials said under oath, 'We have the funds,"' Beck said. "And now they're saying, 'We have to levy a bond.'"

The affidavit signed by Gabriel states the city's financial status is "stable and solvent" as understood through "budgetary projections, taxes, grants and any other source of income."

Beck said he doesn't see any "reasonable grounds for appeal." Gabriel said the city will consider all of its options before it pays the judgment, should it stand.

Mike Haman, attorney representing the city, was out of town and could not be reached for comment.