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in with is what they come out with. If the payroll goes up, you pay more on Worker's Comp; if it goes down, you get a reduction, and it is the same on General Liability. It is based purely on exposure. Mr. Tobey of Gallagher -Bassett emphasized that audits and rebates are totally different and claimed that Mr. Cotrell's statement that rates don't change is totally incorrect. Worker's Comp is state regulated; the Department -of Worker's Comp has an 18% increase which the county will be paying on in the next 4-5 months; and he believed that based on premiums and modification factors, we would be looking at a $94,000 audit. He continued to discuss anticipated raises in state rates over the next few years and stressed that under a self-insurance program, his company is not subject to state rates. Mr. Cotrell pointed out that their fund is self-insured, and they do not have to adopt the Workmen's Comp rates; they can elect to keep the existing rates. He advised that if your policy is in force, you do not pay on rates that may have changed while the policy is in force, and at renewal, the League may or may not adopt the new rates. Chairman Scurlock believed Mrs. Tillman is saying there is a $200,000 savings if we go with her approach. He asked if you can simply say that for partial self-insurance you have a potential to save $200,000. He realized there is a risk associated with that. Acting Administrator Collins stated that you might save 1/4 million if you experience no losses. If you experience average losses, it will cost about the same; and if we have catastrophic losses where we have to assume the whole deductible, then it will cost about $300,000 more. Board members continued to compare figures, and argument continued between representatives of the FLorida League of Cities and Gallagher -Bassett re an audit. 59 NOV 1199 BOOK 7 FA 1,1 59.