Budget Message / Highlights - Metropolitan Water Reclamation ...

METROPOLITAN WATER RECLAMATION DISTRICT OF GREATER CHICAGO
2009 BUDGET
RESERVE CLAIM FUND
Description of Fund, Purpose, and Operation
The Reserve Claim Fund is the MWRD’s self-insurance fund. It
is maintained at an appropriation level adequate to meet potential
liabilities. The fund is capable of providing coverage for those
risks that can be expected to be encountered, and being able to
pay such claims without exposing the agency to financial risk
that could curtail normal operations of protecting the public
health, safety, and welfare.
A property tax levy of 0.5 cents per $100 of equalized assessed
valuation provides funds for this purpose. The accumulation of
funds, per Illinois State Statute, is not to exceed .05 percent of
the equalized assessed valuation (EAV), or approximately $78.0
million. Resources are accumulated in this fund to the extent that
revenue from the annual tax levy, personal property replacement
tax, and investment income on the fund balance is reduced by
the payments of claims.
The policy set by the Board of Commissioners is to accumulate
a reserve fund balance towards the statutory limit and to levy at
the statutory limit. This policy is similar in function to insurance
company reserves. The estimated 2008 year-end fund balance is
$53.6 million and the projection for 2009 is $66.1 million.
The appropriation for the Reserve Claim Fund is not designed to
be spent during any one budget year. The available fund balance
plus new revenue to be received must be appropriated each year
to authorize the MWRD to fund emergencies and to settle large
claims or lawsuits. Designation is also provided for accounts
payable and other contingent liabilities. For 2009, accounts
payable and other liabilities are estimated at $4.3 million. The
designation for liabilities is reviewed and adjusted on an annual
basis.
The fund is appropriated in two line items, Account 601090
(Employee Claims) and Account 667220 (General Claims and
Emergency Repair and Replacement Costs Over $10,000).
Account 601090 is for the payment of workers' compensation
and other MWRD employee claims while Account 667220 is
used to pay general claims or judgments against the MWRD as
well as emergency repairs or replacements of MWRD facilities.
The District staff makes considerable efforts to control claim
expenditures by implementing aggressive safety training
programs and returning workers to work as soon as possible.
55.5
RESERVE CLAIM FUND APPROPRIATIONS
Millions
$80
Transfer of excess investment
$70
income from the Capital
Improvements Bond Fund
67.5
$60 Transfer of a
56.7
designation for
$50 liabilities from the
Corporate Fund
$40
$30
$20
$10
$0
Millions
$70
$60
$50
$40
$30
$20
$10
$0
Millions
$10
$8
15.0 17.0 30.0 31.0 33.0 35.0 41.7
00 01 02 03 04 05 06 07 08 09
Est. Proj.
RESERVE CLAIM FUND BALANCE
(BUDGETARY BASIS END OF YEAR)
Statutory Limit
Budget Year 2009
$78.0 million
16.5 18.0 32.9 33.3 34.9 37.3 41.0
53.5 53.6
RESERVE CLAIM FUND EXPENDITURES
9.4
7.9
66.1
00 01 02 03 04 05 06 07 08 09
Est. Proj.
8.1
$6
$4
4.7
3.1
2.9 3.0
3.8
4.4
4.9
$2
$0
00 01 02 03 04 05 06 07 08 09
Est. Proj.
419
419