Comprehensive Annual Financial Report 2012 - Kettering City ...

KETTERING CITY SCHOOL DISTRICT
Notes to the Basic Financial Statements
For the Fiscal Year Ended June 30, 2012
NOTE 14 - CAPITAL LEASE COMMITMENTS
The District was party to two technology leases (computer equipment) that meet the criteria of a capital
lease as defined by Statement of Financial Accounting Standards No. 13, “Accounting for Leases,” which
defines a capital lease as one which transfers benefits and risks of ownership to the lessee. The costs of
the leased assets are accounted for in the Governmental Activities Capital Assets and the related liabilities
in the Governmental Activities Long-Term Liabilities. The original costs of the assets under capital lease
are $1,155,270 for the technology equipment. The leased assets are recorded as furniture, fixtures and
equipment within the Capital Asset Footnote. The District paid off the leases during fiscal year 2012.
NOTE 15 - RISK MANAGEMENT
The District is exposed to various risks of loss related to torts, theft of, damage to, and destruction of
assets, errors and omissions, injuries to employees and natural disasters. During fiscal year 2012, the
District contracted with Ohio Casualty through Brower Insurance Agency for general liability insurance
with a $1,000,000 per occurrence limit and a $2,000,000 aggregate. Property is protected by Ohio
Casualty through Brower Insurance Agency and holds a $5,000 occurrence deductible.
The District's vehicles are insured under a policy by Ohio Casualty through Brower Insurance Agency
which carries a $500 deductible and a $1,000,000 combined single limit on any accident.
The District has earthquake ($5,000,000 limit) and flood ($5,000,000 limit) insurance with Ohio Casualty
through Brower Insurance Agency.
The District has a $10,000,000 limit umbrella policy with Ohio Casualty through Brower Insurance
Agency.
Settlement of claims have not exceeded insurance coverage during the last three years. Also, there have
been no significant reductions in insurance coverage during the fiscal year.
The District pays the State Workers' Compensation System a premium based on a rate per $100 of
salaries. This rate is calculated based on accident history and administrative costs.
The District provides life insurance and accidental death and dismemberment insurance to most
employees through Sun Life Insurance Company. Beginning January 1, 2011 the District became selfinsured
for medical/surgical benefits.
The District has a Section 125 Plan for employee liabilities arising in connection with the Employee
Benefits Self-Insurance Program. This program is also accounted for as an Agency Fund. The District
records liabilities for the Employee Self-Insurance Fund for incurred but not reported claims, which
represent employee out-of pocket expenses processed but not paid.
DRAFT - 54 - 12/18/2012