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Indian River County, Florida
<br />Board of County Commissioners
<br />Notes To Financial Statements
<br />Year Ended September 30, 2014
<br />NOTE 19 - RISK MANAGEMENT - Continued
<br />General Liability, Property, Worker's Compensation and Medical — Continued
<br />The claims liability of $8,226,545 reported at September 30, 2014, is based on the requirements of
<br />generally accepted governmental accounting standards, which require that a liability for claims be
<br />reported if information prior to the issuance of the financial statements, and the amount of the loss, can
<br />be reasonably estimated. Estimates for claims incurred but not reported are actuarially determined and
<br />recorded. Based on the actuary's report, $3,181,891 will be liquidated over the next twelve months.
<br />Changes in the fund's claims liability amount during the current and prior three fiscal years are as
<br />follows:
<br />Balance at Claims Balance
<br />Fiscal Year and Changes Claims at Fiscal
<br />Beginning in Estimates Payments Year End
<br />2010-2011 $ 7,899,000 $ 12,901,425 $ (12,923,425) $ 7,877,000
<br />2011-2012 7,877,000 13,967,831 (13,770,831) 8,074,000
<br />2012-2013 8,074,000 14,396,726 (14,396,726) 8,074,000
<br />2013-2014 8,074,000 16,860,869 (16,708,324) 8,226,545
<br />Included in the charges to other funds is an amount to fund future catastrophic losses not actuarially
<br />determined; and at September 30, 2014, unrestricted net position of $23,730,587 has been designated for
<br />this purpose. The Board has elected to accrue the larger of the discounted liability or undiscounted
<br />liability. At September 30, 2014, the undiscounted liability was the greater of the two amounts. The
<br />discount rate used in the calculation was 2.5 percent.
<br />NOTE 20 - COMMITMENTS AND CONTINGENCIES
<br />A. Litigation
<br />Various suits and claims are currently pending against the Board. It is impossible for the Board to
<br />accurately quantify the exposure involved given the jury's latitude in assessing compensatory and
<br />punitive damages, and the court's latitude in awarding attorney's fees. The Board intends to vigorously
<br />defend against these lawsuits and believes it has a good chance of prevailing on their merits.
<br />The Board is contingently liable with respect to lawsuits and other claims incidental to the ordinary
<br />course of its operations. In the opinion of management and based on the advice of legal counsel, the
<br />ultimate disposition of lawsuits will not have a material adverse effect on the financial position of the
<br />Board.
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