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<br />CITY OF LA PORTE, TEXAS <br />Notes to the Financial Statements <br />September 30, 2008 <br /> <br />8. Risk Management - Continued <br /> <br />Activity during the year included: <br /> <br />Revenues: <br />Charges to divisions <br />Charges to employees <br />Charges to retirees <br />Total revenues <br /> <br />$3,413,336 <br />421,805 <br />83,330 <br />3,918,471 <br /> <br />Expenses: <br />Personnel expenses <br />Other expenses <br />Claims administration <br />Claims incurred <br />Re-insurance premiums <br />Total health services expenses <br /> <br />381,875 <br />796,192 <br />210,117 <br />3,805,967 <br />268,203 <br />$ 5,462,354 <br /> <br />Included in the claims paid amount is $677,000 for incurred but not reported claims. <br /> <br />Settled claims have not exceeded insurance coverage in any of the previous four fiscal years. Estimates of <br />claims payable and of claims incurred but not reported at September 30, 2008 are reflected as liabilities of <br />the Intemal Service Fund. Because actual claims liabilities depend on such complex factors as inflation, <br />changes in legal requirements and damage awards, the process used in computing claims liability is an <br />estimate based on historical claims. Analysis of claims liability for the fiscal years 2006, 2007 and 2008 are <br />as follows: <br /> <br /> Beginning Current Payment End of <br /> of Year Year for Year <br /> Accrual Estimates Claims Accrual <br />Fiscal Year 2006 $304,387 $2,750,136 $ 2,647,873 $ 406,650 <br />Fiscal Year 2007 406,650 2,441,585 2,338,683 509,552 <br />Fiscal Year 2008 509,552 3,805,967 3,638,519 677,000 <br />Risk Pool <br /> <br />The City is a member of the Texas Municipal League Intergovernmental Risk Pool, an unincorporated <br />association of 1,860 political subdivisions of the State of Texas. The Pool contracts with a third party <br />administrator for administration, investigation and adjustment services in the handling of claims. All loss <br />contingencies, including claims incurred but not reported, if any, are recorded and accounted for by the <br />Pool. <br /> <br />70 <br />