Comprehensive Annual Financial Report - St. Tammany Parish ...

ST. TAMMANY PARISH GOVERNMENT
Notes to the Financial Statements 2010
Fire Protection District No. 1 entered into a cooperative endeavor agreement with the City of Slidell on August 13, 2003
whereby the District receives use of the City’s communication system and radios. Under the agreement, beginning July 1,
2004, the District was obligated to make ten annual payments of $55,179 for a total of $551,791 for its share of the system
and radios. Additionally, the District is required to make annual payments for maintenance beginning July 1, 2005. The
first three payments were set at $14,208. Beginning July 1, 2008, the payment will be based on the City’s renegotiated
maintenance contract. The financial statements include an asset and an obligation for the district’s share in the system.
The asset will be amortized over 10 years. Amortization for the year ended December 31, 2010 is $55,179 and the balance
due is $165,538. The maintenance contract expense will be expensed annually.
Fire Protection District No. 13 borrowed $147,690 on August 27, 2004 at an interest rate of 5.00% from a bank secured
by a fire truck with a carrying value of $115,572. The note requires annual payments of $24,891 beginning May 1, 2005
and with the final payment on May 1, 2011. The balance due as of December 31, 2010 is $23,776, which is current.
Community Disaster Loans
Payments of principal and interest on the loans were deferred until the end of the original five-year term. Fire Protection
District No. 1 has been forgiven of this loan, while all other agencies reported herein are awaiting a decision on their
appeals of the denial of forgiveness. Payment terms included are those re-negotiated with FEMA prior to the end of the
original five-year term.
V. OTHER INFORMATION
A. Risk Management
The Parish is covered for its liability exposures by several policies of insurance with varying self-insured retentions (SIR)
and/or deductibles. These policies provide the Parish with an excess layer of coverage in order to limit its potential
exposure. Overall, the minimum limit per occurrence for any parish related liability exposure is $1,000,000, including
those claims filed under worker’s compensation. The general and auto liability policies each have a $100,000 SIR, per
occurrence; employee benefit plans administration liability has a $100,000 SIR each wrongful act. During 2010, the
Parish’s maximum liability exposure within the self-insured retentions was $750,000 for general, auto and employee
benefit plans administration. The worker’s compensation liability has a $300,000 SIR per accident; and a $25,000 SIR
applies for each wrongful act to both the public entity employment practices liability and the public entity management
liability.
Risks of loss are accounted for and financed through internal service funds. The financial statements reflect an accrual for
this maximum exposure, net of claims paid, of $2,553,250. Under the Parish’s worker’s compensation policy, the
maximum exposure through the period ended December 31, 2010 was $1,129,307. The financial statements reflect an
accrual of $84,153 for worker’s compensation claims, and management believes this amount is adequate to cover all open
claims and known incidents at December 31, 2010. The liabilities for claims under the Parish’s self-insurance funds are
based primarily on actual estimates of the amounts needed to pay prior and current year claims and to establish a reserve
for incurred but not reported claims.
Changes in the aggregate liabilities for claims in 2009 and 2010 were as follows:
2009 2010
Unpaid claims, beginning of year $2,637,403 $2,637,403
Incurred claims 311,858 268,341
Claim payments (311,858) (268,341)
Unpaid claims, end of year $2,637,403 $2,637,403
Of the $2,637,403 in unpaid claims, $584,153 is considered current and $2,053,250 is considered long-term.
B. Related Party Transactions
Primary Government and St. Tammany Parish Sheriff’s Office
In 1998, the primary government issued general obligation sales tax bonds in the amount of $18,900,000 in order to
finance an addition to the St. Tammany Parish Jail and to fund the operations of the jail. During 2006, the Parish issued
refunding bonds in the amount of $12,275,000 in order to take advantage of lower interest rates. These issues are funded
by a one-quarter of one (1%) percent sales tax. The Parish entered into an intergovernmental agreement (the Agreement)
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