AG 2009 11 16 - Laserfiche WebLink

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Cabarrus County, North Carolina Notes to the Financial Statements For the Fiscal Year Ended June 30, 2009 On July 1, 2004, the County chose to establish aSelf-Insured Health Insurance Fund (an internal service fund) for risk associated with the health insurance plan. The Health Insurance Fund is where assets are set aside for claim settlements. A premium is charged to each fund that accounts for full-time employees plus this benefit is also offered to retired employees who meet specific criteria. The total charge to each fund is based on actual calculated cost which includes but not limited to fixed cost, mature claim cost, expected monthly liability and the number of projected employees who will be covered by insurance. The uninsured risk retention per claim is $100,000 with an aggregate stop loss of 125%. This coverage is for claims incurred and paid in 12 months. The benefits covered are medical MH/SA Pharmacy and Vision. A liability for a claim is established if information indicates that it is probable that a liability has been incurred at the date of the financial statements and the amount of the loss is reasonably estimable. The current claims liability for fiscal year ended June 30, 2009 is shown at right. Self-Insured Health Insurance 6/30/2009 Unpaid claims, beginning of fiscal year $ 145,397 Incurred claims 5,096,129 Claim payments 15,118.883) Unpaid claims, end of fiscal year 122 y{y{ 4_ F Y 6/30/2008 $ 185,433 4,600,254 X4,931.084) 14 7 In accordance with G.S. 159-29, the County's employees that have access to $100 or more at any given time of the County's funds are performance bonded through a commercial surety bond. The Director of Finance and Tax Collector are each individually bonded for $100,000 each. The remaining employees that have access to funds are bonded under a blanket bond for $100,000. The County carries commercial coverage for all other risks of loss including flood loss. There have been no significant reductions in insurance coverage from the previous year and settled claims have not exceeded coverage in any of the past three fiscal years. The Alliance is exposed to various risks of loss related to torts, theft of, damage to, and destruction of assets, errors and omissions, and natural disasters. The Alliance has property, general liability, auto liability, workers' compensation and medical malpractice liability coverage through an outside agent. 2. Contingent Liabilities The County has received proceeds from several federal and state grants. .Periodic audits of these grants are required and certain costs may be questioned as not being appropriate expenditures under the grant agreements. Such audits could result in the refund of grant moneys to the grantor agencies. The amount, if any, of such refunds cannot be determined at this time although management believes that such amounts would be immaterial. No provision has been made in the accompanying financial statements for the refund of grant funds. At June 30, 2009, the County was a defendant in various lawsuits. Although the outcome of these lawsuits is not presently determinable, it is the opinion of the government's counsel that resolution of these matters will not have a material adverse effect on the financial condition of the government. In the Fall of 2009, the City of Kannapolis plans to being issuing "project development financing" bonds in an amount not to exceed $30,000,000 to provide funding for all or a portion of the costs of certain public infrastructure improvements related to the development of the North Carolina Research Campus. The North Carolina Research Campus is owned by Castle and Cooke. The County has agreed to consider providing assistance to this development project. By resolution adopted on November 19, 2007, the County authorized the execution and delivery of an interlocal agreement with the City of Kannapolis. That interlocal agreement has not been completed nor approved by the Board of Commissioners. Pursuant to a draft interlocal agreement, the County will agree to pledge a portion of the annual ad valorem property taxes received by the County on the incremental value of the property in the Development Financing District in support of the project development financing bonds issued by the City of Kannapolis, but not in excess of the "Maximum County Contribution Amount" in each year. The Maximum County Contribution Amount for a year is the lesser of (i) 100% of the net incremental ad valorem tax revenues collected on behalf of the County within the Development Financing District in such year and (ii) 50% of the net 64 Attachment number 3 G-8 Page 338