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CITY OF MYRTLE BEACH, SOUTH CAROLINA NOTES TO FINANCIAL STATEMENTS June 30, 2010

Beginning Balance Claims Incurred and Change in Estimate Claim Payments Ending Balance

2010

2009

2,950,022 $ 1,039,788 (1,285,085) 2,704,725

$

2,312,043 1,405,363 (767,384) 2,950,022

$

$

The City established the Health Insurance Fund, an internal service fund, to account for and finance employee medical claims. The Health Insurance Fund provides coverage for claims up to $100,000 per employee per year. The City purchases commercial insurance for claims in excess of $100,000. Settled claims have not exceeded the City’s commercial coverage in any of the past three years.

The Health Insurance Fund allocates the costs of providing claims servicing and claims payment to other funds by charging them a “premium” based on estimates of the amounts needed to pay prior and current claims. At June 30, 2010, the Health Insurance Fund has a claim liability of $495,045, which is based on the requirements of Governmental Accounting Standards Board Statement No. 10. A summary of changes in the Health Insurance Fund’s claims liability during the years ended June 30, 2010 and 2009 follows:

2010

2009

Beginning Balance Claims Incurred and Change in Estimate Claim Payments Ending Balance

$

$

323,868 $ 6,529,300 (6,358,123)

495,045

$

735,643 4,808,784 (5,220,559) 323,868

The City is also self-insured for unemployment benefits. Claims are administered by the South Carolina Employment Security Commission and are then reimbursed by the City. No liability has been accrued at year-end for potential claims, as they are expected to be minimal.

Note 17 - COMMITMENTS

On September 15, 1992, the City entered into a base lease agreement and a facilities lease agreement with the Myrtle Beach Public Facilities Corporation (the Corporation). Under the base lease agreement, the Corporation leased from the City land and existing convention center improvements for the sum of one dollar annually. The Corporation completed the construction of the new addition to the convention center and the improvements to the facilities in existence. The Corporation funded the costs through the issuance, on October 7, 1992, of certificates of participation in the aggregate amount of $20,925,000. Under the facilities lease agreement, the Corporation is leasing the convention center facilities back to the City. The Corporation utilizes the lease receipts to fund the debt service for the certificates of participation.

The facilities lease agreement was subsequently amended on April 1, 2010 as a result of the advance refunding of the certificates of participation, series 1992. A schedule of the remaining lease payments provided for in the amended facilities lease agreement, as of June 30, 2010, follows. The amounts provided for each year are sufficient to fund the required debt service on the certificates of participation.

Year Ending June 30, 2011 2012 2013 2014 2015 2016 - 2017

  • -

    65 -

$

$

1,198,818 1,682,700 1,681,450 1,689,850 1,680,650 3,382,400 11,315,868

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