Cincinnati Stays Self-Insured

Council hoped to save $800,000 by switching to an outside, independent insurance agency for liability insurance. In fact, members budgeted accordingly, voting to put $1 million in the budget for judgments against the city - $800,000 less than originally allocated for 2008.

So now, city financial staff, after looking into the idea, say it's "safe to conclude" that $800,000 in hoped-for savings will not happen.


City Manager Milton Dohoney cautions in a memo that he might be coming back to council some time this year asking for more money to pay for lawsuits and settlements. He said the $1.8 million recommended by the administration to be allocated for judgments was based on history.


This comes after last week's news that the city faces a $1.1 million penalty from the IRS because the Cincinnati Retirement System failed to send 1099 forms to the federal government in 2001, 2002, 2003, 2004 and 2005. Dohoney attributed the mistake to changing personnel and a new computer system.


Lawyers hope to reduce the penalty amount through negotiations with the IRS. But if that doesn't work, Dohoney said the city likely would have to issue judgment bonds to pay for it. City spokeswoman Meg Olberding said the city has to do that for judgment amounts - like the $6.5 million paid in 2006 to the family of Roger Owensby Jr., who died in police custody in 2000 - that are big and/or unexpected.