California Comprehensive Annual Financial Report - City of Temecula

City of Temecula
Notes to Financial Statements (Continued)
Note 6:
Long-Term Liabilities (Continued)
Claims Payable
The claims liability of $377,483 is included in the internal service funds in the fund financial
statements and is reported as a liability for governmental activities in the government-wide
financial statements.
Compensated Absences
The outstanding liability for compensated absences earned at June 30, 2009, was
$2,295,340. This liability represents the total unpaid vacation and compensation time
earned by employees of the City in its governmental activities which is primarily liquidated
from the general fund and internal service fund.
Note 7:
Insurance Programs
The City is exposed to various risks of loss related to torts, theft, damage and destruction of
assets, errors and omissions, road and walkway design hazards, vehicle accidents, and
natural disasters for which the City maintains various insurance programs. The City has
entered into contracts to supervise and administer these programs.
General Liability
The City is self-insured for General and Auto Liability claims up to $150,000. For amounts
in excess of $150,000 and up to $10,000,000 per occurrence with an aggregate coverage
of $10,000,000, the City has purchased insurance coverage.
Workers Compensation
The City maintains workers compensation insurance coverage through the Travelers
Insurance Company.
Settled claims have not exceeded any of the City's coverage amounts in any of the last
three fiscal years and there were no reductions in the City's coverage during the year
ended June 30, 2009.
Liabilities are recorded when it is probable that a loss has occurred and the amount of the
loss can be reasonably estimated. Liabilities include an amount for claims that have been
incurred but not reported (IBNR). The liability for claims and judgments is reported in the
appropriate Internal Service Fund. An amount for current claims payable is calculated
based on the current year expenses and the remainder is shown as noncurrent claims
payable.
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