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CITY OF ROSEVILLE NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 2001 NOTE 4- DETAILED NOTES ON ALL FLJNDS (Continued) F. Restricted assets The balances of the restricted asset accounts in the enterprise funds are as follows: Customer deposits - Water fund $ 742,964 NOTE 5 - OTHER INFORMATION A. Risk management The City is exposed to various risks of loss related to torts; theft of damage to, and the deshuction of assets; errors and omissions; injuries to employees and natural disasters. During the fiscal years of 1980 and 1987, the City established a Workers' Compensation Fund and a Risk Management Fund, respectively (intemal service funds) to account for and fmance its uninsured risks of loss. Under this program, the Worker's Compensation Fund provides coverage up to a maximum of $300,000 for each claim. The City purchases excess loss coverage from the Workers' Compensation Reinsurance Association, a nonprofit organization established by Minnesota State Statutes. The Risk Management Fund provides comprehensive general liability and comprehensive automotive liability up to the statutory maximum of $1,000,000. The City retains the risk of the first $50,000 of each occurrence with an annual maximum exposure of $150,000. The City gurchased commercial insurance for claims in excess of coverage provided by the Risk Management Fund and for all other risks of loss. Settled claims have not exceeded this coverage in any of the past three fiscal yeazs. There were no significant reductions in the City's insurance coverage in 2001. Enterprise fund charges and the property tax levy aze based on a management estimate of claims history and the amount necessary to maintain catastrophic reserves. The reserves as of December 31, 2001, were $ 1,831,024 and $ 984,656 for the Workers' Compensation Fund and Risk Management Fund, respectively. The claims liability of $ 54,657 and $ 14,000, respectively, reported in both funds at December 31, 2001 are based on the requirements of Governmental Accounting Standards Board Statement No. 10. This statement requires that a liability for claims be reported if information prior to the issuance of the financial statements indicates it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss can be reasonably estimated. Changes in the funds' claims liability amount in fisca12000 and 2001 were: 55