comprehensive annual financial report - City of St. Petersburg

CITY OF ST. PETERSBURG, FL
NOTES TO THE FINANCIAL STATEMENTS
SEPTEMBER 30, 2010
NOTE 19 – RISK MANAGEMENT – (Continued)
$300,000 per occurrence as of October 1, 2011 and that increase applies to claims on or after that date.
The City obtained an actuarial valuation of the outstanding claims as of September 30, 2010.
Property Damage:
The City has established an account to fund the premium on the property insurance policies that cover
City facilities on a blanket basis. The unrestricted net assets of the Insurance Fund would be used to fund
the damages under the insurance deductibles.
Workers’ Compensation:
The City is self insured for all Workers’ Compensation benefits as defined by State Statute. The funding
is provided by charges to the various departments of the City based on payroll and the workers’
compensation rates as defined in the State classification codes. The Workers Compensation rates are
charged by payroll class and claims. These are reviewed annually by the Bureau of Self Insurance,
Division of Workers’ Compensation, Department of Labor and Employment Security, State of Florida.
Non incremental claims adjustment expenses are included as part of the liability for claims. The City
obtained an actuarial valuation of the outstanding claims as of September 30, 2010.
Group Medical:
The City is fully insured for group medical coverage. On April 1, 2010, the City contracted with United
Health Care for the group medical insurance plan. The plan is funded by employee contributions and by
City contributions. The City contributions are allocated to the different funds of the City based on
employee participation in the plan.
Life Insurance – Public Safety Officers:
Florida State Statutes require the employer of any public safety officer under 70 years of age, who, while
on duty, is killed or injured resulting in death within 180 days of the injury, to pay a $50,000 death benefit
to the officer’s designated beneficiary. In addition, thru the collective bargaining agreement, the city has
agreed to provide life insurance, at no cost to the employee, in an amount equal to annual base pay
rounded to the nearest thousand dollars for officers, sergeants and lieutenants.
The City provides life insurance in the amount $35,000 for fire captains and fire district chiefs.
The City also provides a short term disability program for management employees as a supplement to the
extended illness leave program. The City is self-insured for these liabilities.
Operating funds are charged premiums, based on risk for workers’ compensation; employee participation
for health and life insurance; loss experience for general and auto liability and the premium portion of
insured risks by the Insurance Internal Service Fund. The claim liabilities were determined by an
actuarial valuation using a discount rate of 4.5%. Non incremental claims adjustment expenses are
included as part of the liability for claims. Estimated claims liabilities for all self-insured risks are
reported as accrued claims in the Insurance Fund which includes an estimate for incurred but not reported
claims.
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