Annual report of the Town of Hampton, New Hampshire

TOWN OF HAMPTON, NEW HAMPSHIRE
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998
C. Deferred Compensation Plan
The Town offers its
employees a deferred compensation plan created in accordance with Internal
Revenue Code Section 457. The plan, available to all employees, permits the employees to defer
a portion of their salary until future years. The deferred compensation is not available to employees
until termination, retirement, death, or unforeseeable emergency. The plan assets and a
corresponding liability to employees for deferred compensation is recorded in an agency fund. Plan
assets are reported at fair market value. The plan is administered by an independent company, and
the Town remits all compensation deferred to this administrator for investment as requested by the
participant employees.
D. Cafeteria Benefit Plan
Effective June 1,
the IRS code.
health insurance.
1995, the Town implemented a cafeteria benefit plan pursuant to section 125 of
Under this plan, eligible employees may direct a contribution made by the Town for
All regular full-time and part-time employees employed on a regular and continuous basis, including
certain contractual employees, are eligible to participate in this plan. Temporary and casual
employees are not eligible. The plan year adopted by the Town begins on January 1 and ends on
December 31 of the following year.
E. Postemployment Healthcare Benefits
The Town does not provide postemployment healthcare benefits except those mandated by the
Consolidated Omnibus Budget Reconciliation Act (COBRA). The requirements established by
COBRA are fully funded by employees who elect coverage under the Act, and no direct costs are
incurred by the Town.
NOTE 6 - SUMMARY DISCLOSURE OF SIGNIFICANT CONTINGENCIES
A. Liti gation
There are various claims and suits pending against the Town which arise in the normal course of
the Town's activities. These claims range between $3,000,000 and $4,000,000. Any settlements
and the related effect on the financial position of the Town, if any, cannot be determined at this
time. The Town has established a reserve for contingency of $750,000 for the aforementioned
matters.
B. Grants
Amounts received or receivable from grantor agencies are subject to audit and adjustment by grantor
agencies, principally the Federal government. Any disallowed claims, including amounts already
collected, may constitute a liability of the applicable funds. The amount of expenditures which may
be disallowed by the grantor cannot be determined at this time although the Town expects such
amounts, if any, to be immaterial.
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