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CITY OF ROSEVILLE <br />NOTES TO FINANCIAL STATEMENTS <br />DECEMBER 31, 2008 <br />NOTE 5 -OTHER INFORMATION (Continued) <br />A. Risk management (Continued) <br />Estimated recoveries, for example from salvage or subrogation, are another component of the claims <br />liability estimate. The City purchased commercial insurance for claims in excess of coverage provided <br />by the Risk Management Fund and for all other risks of loss. Settled claims have not exceeded this <br />coverage in any of the past three fiscal years. There were no significant reductions in the City's <br />insurance coverage in 2008. <br />Enterprise fund charges and the property tax levy are based on a management estimate of claims history <br />and the amount necessary to maintain catastrophic reserves. The reserves as of December 31, 2008, were <br />$ 1,849,449 and $ 467,998 for the Workers' Compensation Fund and Risk Management Fund, <br />respectively. The claims liability of $ 312,970 and $ 116,555, respectively, reported in both funds at <br />December 31, 2008 are based on the requirements of Governmental Accounting Standards Board <br />Statement No. 10. This statement requires that a liability for claims be reported if information prior to <br />the issuance of the financial statements indicates it is probable that a liability has been incurred at the <br />date of the financial statements and the amount of the loss can be reasonably estimated (IBNR). Changes <br />in the funds' claims liability amount in fiscal 2007 and 2008 were: <br />Risk Management Fund <br />Beginning of Current Year Ending of <br />Fiscal Year Claims and Changes Claims Fiscal Year <br />Liability in Estimates Payments Liability <br />2007 $ 134,636 $ 2 69, 305 $ <br />2008 $ 167,615 $ 11,614 $ <br />236,326 $ 167,615 <br />62,674 $ 116,555 <br />Workers' Compensation Fund <br />B eginni ng of <br />Current Year <br />Ending of <br />Fiscal Year <br />Claims and Changes <br />Claims <br />Fiscal Year <br />Liability <br />in Estimates <br />Payments <br />Liability <br />2007 $ 941261 <br />$ 160,584 <br />$ 120,782 <br />$ 134,063 <br />2008 $ 13 4,0 63 <br />$ 448,884 <br />$ 269,977 <br />$ 312,970 <br />Risk Management Fund <br />Beginning of Current Year Ending of <br />Fiscal Year Claims and Changes Claims Fiscal Year <br />Liability in Estimates Payments Liability <br />2007 $ 134,636 $ 2 69, 305 $ <br />2008 $ 167,615 $ 11,614 $ <br />236,326 $ 167,615 <br />62,674 $ 116,555 <br />