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CITY OF ROSEVILLE,MINNESOTA <br /> NOTES TO FINANCIAL STATEMENTS <br /> December 31, 2014 <br /> factors, such as inflation, changes in legal doctrines, and damage awards. Accordingly, claims are <br /> reevaluated periodically to consider the effects of inflation, recent claim settlement trends (including <br /> frequency and amount of pay-outs), and other economic and social factors. The estimate of the <br /> claims liability also includes amounts for incremental claim adjustment expenses related to specific <br /> claims and other claim adjustment expenses regardless of whether allocated to specific claims. <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 <br /> provided by the Risk Management Fund and for all other risks of loss. Settled claims have not <br /> exceeded this coverage in any of the past three fiscal years. There were no significant reductions in <br /> the City's insurance coverage in 2014. <br /> Enterprise fund charges and the property tax levy are based on a management estimate of claims <br /> history and the amount necessary to maintain catastrophic reserves. The reserves as of December 31, <br /> 2014, were $1,284,508 and $985,674 for the Workers' Compensation Fund and Risk Management <br /> Fund, respectively. The claims liability of $141,594 and $563,913, respectively, reported in both <br /> funds at December 31, 2014 are based on the requirements of Governmental Accounting Standards <br /> Board Statement No. 10. This statement requires that a liability for claims be reported if information <br /> prior to the issuance of the financial statements indicates it is probable that a liability has been <br /> incurred at the date of the financial statements and the amount of the loss can be reasonably estimated <br /> (IBNR). Changes in the funds'claims liability amount in fiscal 2013 and 2014 were: <br /> Workers' Compensation Fund <br /> Beginning of Current Year Ending of <br /> Fiscal Year Claims and Changes Claims Fiscal Year <br /> Liability in Estimates Payments Liability <br /> 2013 $ 99,305 $ 348,186 $222,717 $ 224,774 <br /> 2014 224,774 12,396 95,576 141,594 <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 /> 2013 $ 16,030 $ 432,008 $242,799 $ 205,239 <br /> 2014 205,239 779,847 421,173 563,913 <br /> 60 <br />