05 Audit for FY01-02 - Laserfiche WebLink

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City of Paris, Texas Notes to Financial Statements (Continued) September 30, 2002 Other Information (Continued) C. Water Sales The City has contracts extending for several years to sell treated and untreated water to five entities. Total water sales under these contracts to these entities during the year ended September 30, 2002, were approxi- mately $2,355,000. D. civic Center Contract The City is a party to a contract with the Chan~ber of Commerce of Lamar County, Inc. whereby three-sevenths of the hotel/motel tax is to be dedicated to a fund to be used for improving, enlarging, equipping, repairing, operating, or maintaining a civic center. The contract provides that the Chamber of Commerce of Lamar County, Inc. will operate the civic center through Septen~ber 30, 2005. E. Postemploy~nent Benefits Other Than Pensions The City has in effect a plan adopted by City Council resolution in 1990 whereby persons who retire before age sixty-five will be provided health care coverage until they become sixty-five. The City's contributions are financed on a pay-as-you-go basis and for the year ended September 30, 2002, the cost was $57,000 for nineteen retired employees. An additional thirty-six employees were eligible for this benefit. F. Risk Management The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. The City purchases insurance coverage from commercial insurers and participates in risk pools to limit risk of loss in these areas. The risk pools maintain adequate protection from catastrophic losses to protect their financial integrity. Aggregate protection is also maintained to ensure that the City shall at no time be assessed. The City's contributions are limited to the rates calculated under the agreement. There has been no significant reduction in insurance coverage during the year ended Septer~ber 30, 2002. There have been no settlements in excess of insurance coverage in any of the prior three fiscal years. The City has established the Employee Insurance Internal Service Fund to account for a partially self-funded group comprehensive health care program for all employees and approximately 386 employees are covered. Under the program, the City has contracted with insurance companies to process employee claims and provide reinsurance for annual individual coverage exceeding $50,000. Should the program be terminated, the amount payable for unreported claims is estimated at $187,000. All funds of the city participate in the program and make payments to the Employee Insurance Internal Service Fund based on 32