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Indian River County, Florida
<br />Board of County Commissioners
<br />Notes To Financial Statements
<br />Year Ended September 30, 2017
<br />NOTE 16 - RISK MANAGEMENT - Continued
<br />General Liability, Property, Worker's Compensation and Medical — Continued
<br />The claims liability of $8,255,000 reported at September 30, 2017, is based on the requirements of
<br />generally accepted governmental accounting standards, which require that a liability for claims be
<br />reported if information is available prior to the issuance of the financial statements, and the amount of
<br />the loss, can be reasonably estimated. Estimates for claims incurred but not reported are actuarially
<br />determined and recorded. Based on the actuary's report, $2,763,000 will be liquidated over the next
<br />twelve months.
<br />Changes in the fund's claims liability amount during the current and prior three fiscal years are as
<br />follows:
<br />Included in the charges to other funds is an amount to fund future catastrophic losses not actuarially
<br />determined; and at September 30, 2017, unrestricted net position of $30,558,437 has been designated for
<br />this purpose. The Board has elected to accrue the larger of the discounted liability or undiscounted
<br />liability. At September 30, 2017, the undiscounted liability was the greater of the two amounts. The
<br />discount rate used in the calculation was 2%.
<br />NOTE 17 - COMMITMENTS AND CONTINGENCIES
<br />A. Litigation
<br />Various suits and claims are currently pending against the Board. It is impossible for the Board to
<br />accurately quantify the exposure involved given the jury's latitude in assessing compensatory and
<br />punitive damages, and the court's latitude in awarding attorney's fees. The Board intends to vigorously
<br />defend against these lawsuits and believes it has a good chance of prevailing on their merits.
<br />The Board is contingently liable with respect to lawsuits and other claims incidental to the ordinary
<br />course of its operations. In the opinion of management and based on the advice of legal counsel, the
<br />ultimate disposition of lawsuits will not have a material adverse effect on the financial position of the
<br />Board.
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<br />Balance at
<br />Claims
<br />Balance
<br />Fiscal Year
<br />and Changes
<br />Claims
<br />at Fiscal
<br />Beginning
<br />in Estimates
<br />Payments
<br />Year End
<br />2013-2014
<br />$ 8,074,000
<br />$ 16,860,869
<br />$ (16,708,324)
<br />$ 8,226,545
<br />2014-2015
<br />8,226,545
<br />17,188,927
<br />(17,237,952)
<br />8,177,520
<br />2015-2016
<br />8,177,520
<br />17,953,550
<br />(17,618,550)
<br />8,512,520
<br />2016-2017
<br />8,512,520
<br />16,364,331
<br />(16,621,851)
<br />8,255,000
<br />Included in the charges to other funds is an amount to fund future catastrophic losses not actuarially
<br />determined; and at September 30, 2017, unrestricted net position of $30,558,437 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, 2017, the undiscounted liability was the greater of the two amounts. The
<br />discount rate used in the calculation was 2%.
<br />NOTE 17 - 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.
<br />314
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