COEUR d'ALENE - The city of Coeur d'Alene is officially no longer self-insured.

The City Council voted unanimously this week in favor of entering into an insurance agreement with the Idaho Counties Risk Management Program.

A large reason for the decision to join ICRMP, according to Councilman Dan Gookin, was the award of $3.2 million to former Coeur d'Alene Police Department officer Dan Dixon in a wrongful termination lawsuit against the city.

"It was my desire to move to ICRMP and away from self-insurance," Gookin said. "I think the Dixon case probably convinced a majority of the council that that would also be a good idea. It was kind of a wake-up call, because if something like that happened again, we would have had to go to a tort levy because we don't have cash to pay it. The public would not like that."

Gookin said it is his understanding that the city paid half of the Dixon settlement last year and will pay the remainder this year without the assistance of the insurance company.

"It completely wiped out the self-insurance fund," Gookin said. "It was gone."

Prior to joining ICRMP, Gookin said, the city was self-insured and put $400,000 into an insurance fund each fiscal year.

"They tried to maintain a $2 million balance in that and that was used with the approval of the council," Gookin said. "Legal was authorized to approve settlements up to a certain dollar amount. Anything above that went to council in executive session to see whether we would agree to settle the claims or not."

The city will pay $336,868 to become a member of ICRMP for the upcoming fiscal year. In a report presented to the city council, Interim City Administrator Troy Tymesen wrote that there is an annual renewal process and the ICRMP board's intent is to "keep increases moderate and reasonable."

Gookin added that the city included the cost of ICRMP membership in its budget process and, as of Oct. 1, was using the insurer.

"Coincidentally, right after that we had a fire and two of our street sweepers burned," Gookin said. "So it was like an instant claim."

As part of the agreement, the city rejected ICRMP's offer of additional terrorism coverage.

Through ICRMP, the city's liability insurance limits are $2 million per occurrence and $5 million in total. Coeur d'Alene, along with all other members of ICRMP, has a $5,000 deductible for each incident.

"ICRMP offers many and varied resources for employee training and sample policies to educate and reduce risk," Tymesen wrote in his report.

ICRMP was established under Idaho state code as a pooled insurance and risk-management program. According to Tymesen's report, there are 930 political subdivisions within the state - including counties, cities, school districts, and other special districts - which participate in the program.

Gookin said the move would ultimately benefit taxpayers in Coeur d'Alene, and noted that the annual agreement with ICRMP is already less than the $400,000 the city put into self-insurance each year.

"We are saving a little bit from that," Gookin said.

He said in the bigger picture, eliminating the $2 million fund requires the city council to exercise more fiscal restraint.

"They can't say 'There's a pot of cash sitting there, let's borrow from that,' which has happened," Gookin said. "That is basically off the table."