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HUDSON CITY SCHOOL DISTRICT
SUMMIT COUNTY, OHIO

NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE FISCAL YEAR ENDED JUNE 30, 2015

NOTE 10 - COMPENSATED ABSENCES

The criteria for determining vacation and sick leave benefits are derived from negotiated agreements and
State laws. Classified employees working 11 or 12 months per year are entitled to an annual vacation, with
pay, based on length of service in the District. Accumulated unused vacation time is paid to employees
upon termination of employment. Teachers and administrators working fewer than ten months per year do
not earn vacation time. Teachers, administrators and classified employees earn sick leave at the rate of one
and one-fourth days per month. Sick leave may be accumulated for an unlimited number of days. For both
certified and classified employees, payment is made at retirement for accumulated sick leave and is
determined by taking one-fourth of the first 144 days and adding to that one day for every eight days in
excess of 144 days to a maximum of 36 additional days of severance. Maximum severance in total is 72
days. See Note 1.J. for further detail on the financial reporting of the District’s compensated absences.

NOTE 11 - RISK MANAGEMENT

A. General Insurance

The District is exposed to various risks of loss related to torts, theft, damage to or destruction of assets,
errors and omissions, employee injuries, and natural disasters. The District has a comprehensive
property and casualty policy with deductibles that vary from $0 to $50,000 depending on the type of
coverage. The District’s vehicle liability insurance policy limit is $5,000,000 with a $500 collision
deductible. All Board Members, administrators and employees are covered under a District liability
policy. The limits of this coverage are $5,000,000 per occurrence and $7,000,000 in aggregate.
Settled claims have not exceeded this commercial coverage in any of the past three years. There was
no significant reduction in coverage from the prior year.

B. Fidelity Bond

The Treasurer is covered under a surety bond in the amount of $50,000. Selected other employees are
covered for faithful performance in the District’s property and casualty liability policy for $100,000,
subject to a $1,000 deductible.

C. Employee Health Insurance

The District has elected to provide employee medical and prescription benefits through a self-
insurance program. The District maintains a self-insurance internal service fund to account for and
finance its uninsured risk of loss in this program. This plan provides a medical plan with a $400
family and $200 single deductible. A third party administrator reviews and processes all claims for
payment. Medical Mutual of Ohio is the claims administrator for medical and prescription claims.
The District provides fully insured dental coverage through Delta Dental of Ohio preferred provider
organization. Employees are offered two plan options, a High and a Low plan. Both plans have a $25
deductible per person annual deductible capped at $50 per family. The District purchases stop-loss
coverage for the medical/prescription coverage of $125,000 per individual and $9,226,775 in the
aggregate.

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