(A) Categories of internal services funds. The city's risk management function is primarily controlled and accounted for in four internal service funds: Health Benefits Fund; Workers' Compensation Fund; Heart and Hypertension Fund; and Liability Fund.
(B) Objectives of internal services funds. Internal services fund are designed to provide goods and services on a cost-reimbursement basis. The goal of an internal service fund is to measure the full cost of providing goods or services for the purpose of fully recovering that cost through fees or charges.
(C) Accrual basis of accounting for internal services funds. The internal services funds utilize the accrual basis of accounting. Under the accrual basis, revenues are recognized as earned and expenditures are recognized when incurred. Each of the city's internal service funds shall utilize the services of actuaries and/or third party administrators to establish the estimated amount of liability associated with the risk retention activity. The City's Risk Manager and the RMAS shall review the estimates on an annual basis. The operating policies and specific elements of the four internal service funds are detailed in the separate sections of this manual.
(Ord. passed 4-7-2003)