HELP financial statements for year ended April 30, 2015
and Independent Auditors' Report
April 30, 2015 and 2014
High-Level Excess
Liability Pool
Basic Financial Statements
Page
PRINCIPAL OFFICIALS 3
INDEPENDENT AUDITORS' REPORT 4 - 5
MANAGEMENT'S DISCUSSION AND ANALYSIS 6 - 10
BASIC FINANCIAL STATEMENTS
Statements of Net Position 11
Statements of Revenues, Expenses, and Changes in Net Position - Budget
and Actual 12
Statements of Cash Flows 13
Notes to the Financial Statements 14 - 21
REQUIRED SUPPLEMENTARY INFORMATION (Unaudited)
Ten-Year Claims Development Information 23 - 25
SUPPLEMENTARY INFORMATION
Term III and Term II
Combining Statement of Net Position 27
Combining Statement of Revenues, Expenses, and Changes in Net Position 28
CONTENTS
David Erb, Mount Prospect Chairman
Christine Tromp, Elk Grove Village Secretary
Eric Burk, Village of Deerfield Treasurer
April 30, 2015
High-Level Excess Liability Pool
PRINCIPAL OFFICIALS
-3-
Management's Responsibility for the Financial Statements
Auditor's Responsibility
(Continued)
High-LevelExcessLiabilityPool'smanagement is responsibleforthepreparationandfairpresentation of these
financialstatements in accordancewithaccountingprinciplesgenerallyaccepted in theUnitedStates of America.
Management is alsoresponsibleforthedesign,implementation,andmaintenance of internalcontrolrelevant to the
preparationandfairpresentation of financialstatementsthatarefreefrommaterialmisstatement,whetherdue to
fraud or error.
An auditinvolvesperformingprocedures to obtainauditevidenceabouttheamountsanddisclosures in the
financialstatements.Theproceduresselecteddepend on theauditor'sjudgment,includingtheassessment of the
risks of materialmisstatement of thefinancialstatements,whetherdue to fraud or error.In makingthoserisk
assessments,theauditorconsidersinternalcontrolrelevant to theentity'spreparationandfairpresentation of the
financialstatements in order to designauditproceduresthatareappropriate in thecircumstances,but not forthe
purpose of expressing an opinion on theeffectiveness of theentity'sinternalcontrol.Accordingly,we express no
suchopinion.An auditalsoincludesevaluatingtheappropriateness of accountingpoliciesusedandthe
reasonableness of significantaccountingestimatesmadebymanagement,as well as evaluatingtheoverall
presentation of the financial statements.
We believethattheauditevidence we haveobtained is sufficientandappropriate to provideabasisforouraudit
opinion.
INDEPENDENT AUDITORS' REPORT
Members of the Board of Directors
High-Level Excess Liability Pool
Deerfield, Illinois
We haveauditedtheaccompanyingstatements of netposition,statements of revenues,expensesandchanges in
netposition-budgetandactual,andstatements of cashflows of High-LevelExcessLiabilityPool,as of andfor
theyearsendedApril30,2015and2014,andtherelatednotes to thefinancialstatements,whichcollectively
comprise High-Level Excess Liability Pool's basic financial statements, as listed in the table of contents.
Ourresponsibility is to express an opinion on thesefinancialstatementsbased on ouraudit.We conductedour
audit in accordancewithauditingstandardsgenerallyaccepted in theUnitedStates of America.Thosestandards
requirethat we planandperformtheaudit to obtainreasonableassuranceaboutwhetherthefinancialstatements
are free from material misstatement.
Report on the Financial Statements
Members of the Board of Directors
High-Level Excess Liability Pool
Mount Prospect, Illinois
Opinion
Other Matters
Required Supplementary Information
Other Information
Deerfield, Illinois
August 19, 2015
(Continued)
MILLER, COOPER & CO., LTD.
Certified Public Accountants
Ourauditwasconductedforthepurpose of forming an opinion on thefinancialstatementsthatcollectivelycomprise
theHigh-LevelExcessLiabilityPool'sbasicfinancialstatements.Theotherschedules,listed in thetable of contents
as supplementaryinformation,arepresentedforpurposes of additionalanalysisandare not arequiredpart of the
basicfinancialstatements.Suchinformation is theresponsibility of managementandwasderivedfromandrelates
directly to theunderlyingaccountingandotherrecordsused to preparethebasicfinancialstatements.Such
informationhasbeensubjected to theauditingproceduresapplied in theaudit of thebasicfinancialstatementsand
certainadditionalprocedures,includingcomparingandreconcilingsuchinformationdirectly to theunderlying
accountingandotherrecordsused to preparethefinancialstatements or to thefinancialstatementsthemselves,and
otheradditionalprocedures in accordancewithauditingstandardsgenerallyaccepted in theUnitedStates of America.
In ouropinion,thesupplementaryinformation is fairlystated in allmaterialrespects in relation to thebasicfinancial
statements as a whole.
In ouropinion,thefinancialstatementsreferred to abovepresentfairly,in allmaterialrespects,thefinancialposition
of High-LevelExcessLiabilityPool,as of April30,2015and2014,andtheresults of itsoperationsandcashflows
for the years then ended, in accordance with accounting principles generally accepted in the United States of America.
Accountingprinciplesgenerallyaccepted in theUnitedStates of Americarequirethatthemanagement'sdiscussion
andanalysis on pages6through9andten-yearclaimsdevelopmentinformation on pages22through24bepresented
to supplementthebasicfinancialstatements.Suchinformation,although not apart of thebasicfinancialstatements,
is requiredbytheGovernmentalAccountingStandardsBoardwhoconsiders it to be an essentialpart of financial
reportingforplacingthebasicfinancialstatements in an appropriateoperational,economic,or historicalcontext.We
haveappliedcertainlimitedprocedures to therequiredsupplementaryinformation in accordancewithauditing
standardsgenerallyaccepted in theUnitedStates of America,whichconsisted of inquiries of managementaboutthe
methods of preparingtheinformationandcomparingtheinformationforconsistencywithmanagement'sresponses to
ourinquiries,thebasicfinancialstatements,andotherknowledge we obtainedduringouraudit of thebasicfinancial
statements.We donot express an opinion or provideanyassurance on theinformationbecausethelimitedprocedures
do not provide us with sufficient evidence to express an opinion or provide any assurance.
High-Level Excess Liability Pool
Management’s Discussion and Analysis
FOR THE YEAR ENDED APRIL 30, 2015
-6-
Management of the High-Level Excess Liability Pool (HELP) offers this narrative overview and analysis
of the financial activities of HELP, for the fiscal year ended April 30, 2015. We encourage readers to
consider the information presented here in conjunction with HELP’s financial statements and notes to the
financial statements, to enhance their understanding of HELP’s financial performance.
HIGH-LEVEL EXCESS LIABILITY POOL – OVERVIEW
HELP is a public entity risk pool established by fifteen municipalities, in Illinois, to provide excess
liability coverage (Currently $13,000,000 of coverage after a $2,000,000 self-insured retention). HELP
was organized on April 1, 1987 with an initial term of 11 years through April 30, 1998. The agreement
was extended for a second term that ran through April 30, 2008. A third term was approved to further
extend the agreement through April 30, 2018. Thirteen municipalities make up the pool’s membership for
Term III. The purpose of the pool is to act as a joint self-insurance pool for the purpose of seeking the
prevention or lessening of liability claims for injuries to persons or property or claims for errors and
omissions made against the members.
HELP is governed by a Board of Directors which consists of one appointed representative from each
member municipality. Each Director has an equal vote. The officers of HELP are appointed by the Board
of Directors. The Board of Directors determines the general policies of HELP; makes all appropriations;
approves contracts; adopts resolutions providing for the issuance of debt by HELP; adopts bylaws, rules,
and regulations; and exercises such powers and performs such duties as may be prescribed in the Agency
Agreement or the bylaws.
During this fiscal year, there were 13 member municipalities taking part in Term III: Village of Arlington
Heights, Village of Deerfield, City of Des Plaines, Elk Grove Village, Village of Glenview, Village of
Hoffman Estates, Village of Lincolnshire, Village of Mount Prospect, City of Park Ridge, Village of
Skokie, Village of Streamwood, City of Wheaton, and the Village of Winnetka. Two additional members
who terminated their membership at the conclusion of Term II, Village of Chicago Ridge and Village of
Oak Lawn, are still liable for any claims that arose during the Term II period but have not yet been
reported at this time.
The following discussion provides an assessment by management of the current financial position, results
of operations, cash flow and liquidity, and changes in financial position for HELP. Information presented
in this discussion supplements the financial statements, schedules, and exhibits of the 2015 Annual
Financial Report.
FINANCIAL POSITION
Total assets for HELP decreased from $11,974,068 to $8,378,195 as a result of a large settlement against
a member that was paid in 2015. Assets are comprised of cash, cash equivalents, investments, and account
receivables.
The HELP investment portfolio consists of $2,712,947 of common stocks held in the form of an equity
index fund and $5,665,248 invested in money market funds held through The Illinois Funds and the
Illinois Metropolitan Investment Fund.
High-Level Excess Liability Pool
Management’s Discussion and Analysis
FOR THE YEAR ENDED APRIL 30, 2015
-7-
FINANCIAL POSITION (Continued)
Total liabilities consist primarily of a claims reserve totaling $3,230,000, a decrease of $4,420,000 from
the prior year.
Net position increased from $4,324,068 to $5,145,556 as a result of the current year member
contributions and decrease in the claims reserve.
Table 1
Statement of Net Position
2015 2014
Current Assets
Cash, cash equivalents, and
investments
$ 8,378,195
$ 11,571,361
Accounts receivable - 402,707
Total Assets $ 8,378,195 $ 11,974,068
Current Liabilities
Claims reserve
Accounts payable
$ 3,230,000
2,639
$ 7,650,000
-
Total Liabilities
3,232,639
7,650,000
Total Net Position
5,145,556
4,324,068
Total Liabilities and
Net Position $ 8,378,195 $ 11,974,068
RESULTS OF OPERATIONS
Total operating revenues for 2015 were $989,811, an increase from $900,600 in 2014. The entire amount
of operating revenues came from member contributions. The amount of the member contributions from
year to year is determined annually at a regular Board of Directors meeting. The increase in member
contributions was in line with HELP’s long term plan to increase surplus as a result of the negative claim
experience over the past two years.
Total operating expenses, net of reinsurance reimbursements decreased from $7,164,745 to a benefit of
$65,424. This was due to lower claims expenses in 2015 and amounts received from the reinsurance
provider. Excluding claims expense from the total; operating expenses were essentially flat year to year.
High-Level Excess Liability Pool
Management’s Discussion and Analysis
FOR THE YEAR ENDED APRIL 30, 2015
-8-
RESULTS OF OPERATIONS (Continued)
Table 2
Changes in Net Position
2015 2014
Total Operating Revenues $ 989,811 $ 900,600
Total Operating Expenses, Net of
Reinsurance Reimbursements
(65,424)
7,164,745
Total Nonoperating Revenues 248,413 424,408
Member distributions
Member contributions
(4,100,000)
3,617,840
-
-
Increase (Decrease) in Net
Position 821,488 (5,839,737)
Net Position
Beginning of Year 4,324,068 10,163,805
End of Year $ 5,145,556 $ 4,324,068
BUDGETING HIGHLIGHTS
The fiscal year for HELP runs from May 1 through April 30. The annual budget is approved at the first
quarterly meeting of the calendar year, prior to the start of the fiscal year. For fiscal year 2014/2015, the
annual budget was approved on March 21, 2014. There were no amendments to the original 2014/2015
budget. Table 3 below reflects the original budget and actual revenues and expenses for HELP.
High-Level Excess Liability Pool
Management’s Discussion and Analysis
FOR THE YEAR ENDED APRIL 30, 2015
-9-
BUDGETING HIGHLIGHTS (Continued)
Table 3
HELP Annual Budget
Fiscal Year 2014/2015
Original Budget Actual
Operating Revenues
Member Contributions $ 982,311 $ 989,811
Total Operating Revenues 982,311 989,811
Operating Expenses
Expenses, net of reinsurance
reimbursements
2,485,000
__(65,424)
Total Operating Expenses 2,485,000 (65,424)
Nonoperating Revenues
Unrealized Gains - 310,768
Investment income <loss> 170,000 (62,355)
Total Nonoperating Revenue 170,000 248,413
Income (Loss) Before Contributions and
Distributions
Member distributions
Member contributions
Decrease in Net Position
-
-_
$ (1,332,689)
(4,100,000)
3,617,840
$ 821,488
CASH FLOW AND LIQUIDITY
Cash flow from operating, investing, and financing activities decreased due to claims paid and member
distributions to two former members.
FACTORS BEARING ON THE FUTURE
External factors potentially having an impact to the financial stability and functioning of HELP include
adverse claims activity and adverse pooling legislation. HELP pooled coverage attaches above
$2,000,000. A single large claim or catastrophic event with multiple claimants could shrink reserves or
result in a supplemental payment from its members. Measures are in place at member organizations that
work to minimize the likelihood and impact of adverse claims on the pool. Adverse pooling legislation is
anything that works against sound practices of insurance pools such as set enrollment periods or
minimum membership commitments. HELP’s legal counsel and insurance consultant have been proactive
in reviewing the by-laws in the event adverse pooling legislation is passed.
High-Level Excess Liability Pool
Management’s Discussion and Analysis
FOR THE YEAR ENDED APRIL 30, 2015
-10-
REQUEST FOR INFORMATION
This financial report is designed to provide a general overview of HELP’s finances for all those with an
interest. Questions concerning any of the information provided in this report or requests for additional
financial information should be addressed to Mr. Eric Burk, Finance Director, Village of Deerfield, 850
Waukegan Road, Deerfield Illinois 60015.
BASIC FINANCIAL STATEMENTS
ASSETS 2015 2014
CURRENT ASSETS
Cash, cash equivalents, and investments $8,378,195$11,571,361
Accounts receivable -402,707
Total assets $8,378,195$11,974,068
LIABILITIES AND NET POSITION
CURRENT LIABILITIES
Claims reserve $3,230,000$7,650,000
Accounts payable 2,639 -
Total liabilities 3,232,6397,650,000
NET POSITION
Unrestricted 5,145,5564,324,068
Total liabilities and net position $8,378,195$11,974,068
The accompanying notes are an integral part of these statements.
High-Level Excess Liability Pool
STATEMENTS OF NET POSITION
April 30, 2015 and 2014
-11-
BudgetActualBudgetActual
Operating revenues
Member contributions $982,311$989,811$900,600$900,600
Total operating revenues 982,311989,811900,600900,600
Operating expenses
Risk management consultants 40,00040,50039,00039,500
Excess insurance 400,000276,582400,000270,582
Attorneys' fees
Case review 10,00021,01510,00038,875
Corporate matters 12,0006,43912,0005,774
Auditing fees 15,0009,85015,0009,610
Surety bonds 2,000 -2,000 -
Meeting expenses 2,000 -2,0002,370
Membership dues 4,0002,4304,0002,518
Office supplies -308 -308
Actuary fees -5,250 --
Claims expense, net of reinsurance
reimbursements (See Note E)2,000,000(427,798)3,000,0006,795,208
Total operating expenses, net of
reinsurance reimbursements 2,485,000(65,424)3,484,0007,164,745
Operating income (loss)(1,502,689)1,055,235(2,583,400)(6,264,145)
Nonoperating revenues
Unrealized gains -310,768 -406,657
Investment income (loss)170,000(62,355)220,00017,751
Total nonoperating revenues 170,000248,413220,000424,408
Income (loss) before contributions
and distributions $(1,332,689)1,303,648$(2,363,400)(5,839,737)
Member distributions (4,100,000) -
Member contributions 3,617,840 -
INCREASE (DECREASE) IN NET POSITION 821,488 (5,839,737)
Net position
Beginning of year 4,324,068 10,163,805
End of year $5,145,556 $4,324,068
The accompanying notes are an integral part of these statements.
2015
High-Level Excess Liability Pool
STATEMENTS OF REVENUES, EXPENSES, AND
Years Ended April 30, 2015 and 2014
CHANGES IN NET POSITION - BUDGET AND ACTUAL
2014
-12-
2015 2014
Cash flows from operating activities
Cash received from members $989,811$900,600
Cash paid to suppliers (362,374)(369,537)
Claims paid (3,586,856)(4,247,915)
Net cash used in operating activities (2,959,419)(3,716,852)
Cash flows from investing activities
Investment income (loss)(62,355)17,751
Net cash provided by (used in) investing activities (62,355)17,751
Cash flows from financing activities
Member distributions, net of Term III contributions (482,160)-
Net cash used in financing activities (482,160)-
DECREASE IN CASH AND CASH EQUIVALENTS (3,503,934)(3,699,101)
Cash and cash equivalents
Beginning of year 9,169,18212,868,283
End of year $5,665,248$9,169,182
Reconciliation
Cash and cash equivalents $5,665,248$9,169,182
Investments 2,712,9472,402,179
Total cash, cash equivalents, and investments $8,378,195$11,571,361
Reconciliation of operating loss to net cash used in
operating activities
Operating income (loss)$1,055,235$(6,264,145)
Adjustments to reconcile operating loss to net
cash provided by operating activities
Accounts receivable 402,707(402,707)
Accounts payable 2,639 -
Claims reserve (4,420,000)2,950,000
Net cash used in operating activities $(2,959,419)$(3,716,852)
Supplemental noncash investing activities
Change in market value of investments $310,768$406,657
The accompanying notes are an integral part of these statements.
High-Level Excess Liability Pool
STATEMENTS OF CASH FLOWS
Years Ended April 30, 2015 and 2014
-13-
1.
Years Member Pool Pool Total
Ended Risk OccurrenceExcess Risk
April 30,Responsibility LimitCoverage Financed
1988 $1,000,000 $1,000,000 $-$2,000,000
1989-1994 1,000,000 5,000,000 -6,000,000
1995-1996 1,000,000 5,000,000 5,000,000 11,000,000
1997-1999 1,000,000 2,000,000 8,000,000 11,000,000
2000 1,000,000 2,000,000 10,000,000 13,000,000
2001 1,000,000 2,000,000 12,000,000 15,000,000
2002 1,000,000 3,000,000 8,000,000 12,000,000
2003 1,000,000 3,000,000 7,000,000 11,000,000
2004 2,000,000 3,000,000 7,000,000 12,000,000
2005-2013 2,000,000 4,000,000 6,000,000 12,000,000
2014-2015 2,000,000 4,000,000 9,000,000 15,000,000
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
High-Level Excess Liability Pool
NOTES TO THE FINANCIAL STATEMENTS
Years Ended April 30, 2015 and 2014
Thefinancialstatements of theHigh-LevelExcessLiabilityPool(thePool)havebeenprepared in conformitywith
accountingprinciplesgenerallyaccepted in theUnitedStates of America(GAAP),as applied to thistype of
governmententity.TheGovernmentalAccountingStandardsBoard(GASB)is theacceptedstandard-settingbody
forestablishinggovernmentalaccountingandfinancialreportingprinciples.Themoresignificant of thePool's
accounting policies are described below.
In evaluating how to definethePoolforfinancialreportingpurposes,managementhasconsideredallpotential
componentunits.Thedecision to includeapotentialcomponentunit in thereportingentitywasmadeby
applyingthecriteriasetforthbyGASB.Basedupontheapplication of GASBcriteria,thereare no potential
componentunits to beincluded in thePool'sreportingentity.ThePool is defined as ajointventureunderthese
standards.
Reporting Entity and its Services
ThePoolwasorganized on April1,1987.TheTerm II agreementexpired on April30,2008,andwasextended
foranotherten-yearterm(Term III),with an expirationdate of April30,2018.Thepurpose of thePool is to
act as ajointself-insurancepoolforthepurpose of seekingtheprevention or lessening of liabilityclaimsfor
injuries to persons or property or claimsforerrorsandomissionsmadeagainstthemembersandotherparties
includedwithinthescope of coverage of thePool.Theamount of coverageprovided to themembersbythe
Pool for subsequent years is as follows:
-14-
High-Level Excess Liability Pool
NOTES TO THE FINANCIAL STATEMENTS
Years Ended April 30, 2015 and 2014
1.
% Share % Share
Assets,Assets,
Liabilities,CumulativeLiabilities,Cumulative
and Net Contributions and Net Contributions
12.65 % $ 804,801 11.65 % $ 2,784,342
* - - 2.51 600,646
3.72 236,450 3.52 841,004
11.05 702,956 9.90 2,365,731
8.23 523,969 7.61 1,819,670
9.53 606,283 7.42 1,774,167
10.04 638,859 8.04 1,921,762
2.51 159,883 1.67 398,217
8.31 529,044 7.32 1,750,396
* - - 9.25 2,210,513
6.21 395,383 5.76 1,376,666
10.25 652,577 9.53 2,278,434
5.25 334,133 4.41 1,054,527
8.06 512,623 7.42 1,772,513
4.19 266,454 3.99 952,517
100.00 % $6,363,415 100.00 % $23,901,105
City of Des Plaines
Village of Skokie
Village of Streamwood
Term III
Village of Glenview
City of Park Ridge
Thefollowingwerepercentages of sharesandcumulativecontributionsforthemembers of thePool as of April
30, 2015:
Reporting Entity and its Services (Continued)
EntitiesjoiningthePoolmustremainmembersforaminimum of tenyears.Entitiesapplyingformembership in
thePoolmay do so on approval of atwo-thirdsvote of theBoard of thePool.Underwritingandrate-setting
policieshavebeenestablishedafterconsultationwithactuaries.Membersaresubject to asupplemental
contribution in the event of deficiencies.
Village of Arlington Heights
Village of Hoffman Estates
Elk Grove Village
Village of Chicago Ridge
*TheVillage of ChicagoRidgeandtheVillage of OakLawnterminatedtheirmembershipsafterTerm II and
are not covered under Term III.
City of Wheaton
Village of Winnetka
Village of Oak Lawn
Term II
Village of Deerfield
Village of Lincolnshire
Village of Mount Prospect
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
-15-
High-Level Excess Liability Pool
NOTES TO THE FINANCIAL STATEMENTS
Years Ended April 30, 2015 and 2014
1.
2.Fund Accounting
3.Basis of Accounting
4.
DuringtheyearendedApril30,2015,thePooldistributed$4,100,000fromTerm II.Amountscontributed
to Term III totaled$3,617,840andtheremaining$482,160wasdistributed to theVillage of ChicagoRidge
and the Village of Oak Lawn.
Reporting Entity and its Services (Continued)
The Pool provides risk management services to its member municipalities,a)
ThePooloperates as asingleproprietaryfund,morespecifically asan enterprisefund.Proprietaryfundsare
used to accountforactivitiessimilar to thosefound in theprivatesector,wherethedetermination of netincome
is necessary or useful to soundfinancialadministration.Servicesfromsuchactivitiesareprovided to outside
parties. Its operations are such that:
Members fund the Pool to cover the costs of providing such services.
Budgets
Budgetsareadopted on abasisconsistentwithGAAP.AnnualbudgetsareadoptedforthePool.Allannual
budgets lapse at fiscal year-end.
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
and
The accounting and financial reporting treatment applied to a fund is determined by its measurement focus.
Theaccrualbasis of accounting is utilizedbyproprietaryfundtypes.Underthismethod,revenuesarerecorded
when earned and expenses are recorded at the time liabilities are incurred.
b)
Allproprietaryfundsareaccountedfor on aflow of economicresourcesmeasurementfocus.Withthis
measurementfocus,allassetsandallliabilitiesassociatedwiththeoperation of thesefundsareincluded in the
statement of netposition.Proprietaryfund-typeoperatingstatementspresentincreases(e.g.,revenues)and
decreases (e.g., expenses) in total net position.
-16-
High-Level Excess Liability Pool
NOTES TO THE FINANCIAL STATEMENTS
Years Ended April 30, 2015 and 2014
5.
6.
7.
8.
9.
Forpurposes of thestatement of cashflows,thePoolconsidersallhighlyliquidinvestmentswithamaturity of
three months or less, when purchased, to be cash equivalents.
Investments
Use of Estimates
Member Contributions
MembercontributionsaredeterminedeachyearbytheformulaapprovedbytheBoard of Directorsand as
defined in HELP'sby-laws.Thepoolcontributionformula is based on amember'srevenues,miles of streets,
full-timeequivalentemployeesandtotalnumber of statelicensedvehiclesandfirevehicles.Contributionsare
earned in the membership year to which they apply.
Cash Equivalents
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Claims Reserve Liabilities
ThePoolestablishesclaimsreserveliabilitiesbasedupon an estimate of theultimatecost of claimsthathave
beenreportedbut not settledand of claimsthathavebeenincurredbut not reported.Thelength of timefor
whichsuchcostsmustbeestimatedvariesdepending on theindividualfactsandcircumstances.Adjustments to
claims reserve liabilities are charged or credited to expense in the period in which the adjustments are made.
Investmentsarecarried at fairvalue.Thereportedvalue of thepool is thesame as thefairvalue of thepool
shares. Investments in mutual funds are stated at share price which is substantially the same as fair value.
In preparingfinancialstatements,management is required to makeestimatesandassumptionsthataffectthe
reportedamounts of assetsandliabilities,thedisclosure of contingentassetsandliabilities at thedate of the
financialstatements,andthereportedamounts of revenuesandexpensesduringthereportingperiod.Because
thefinalresolution of potentiallylargeclaimsagainstthePool is uncertain,managementbelievesthatactual
results could differ materially from those estimates.
-17-
High-Level Excess Liability Pool
NOTES TO THE FINANCIAL STATEMENTS
Years Ended April 30, 2015 and 2014
NOTE B - LEGAL COMPLIANCE AND ACCOUNTABILITY - BUDGETS
1. Permitted Deposits and Investments
Fair ValueLess than 1Equities
The Illinois Funds $2,949,735 $2,949,735 $-
Illinois Metropolitan Investment Fund 2,715,5132,715,513 -
Mutual Fund - Equities 2,712,947 -2,712,947
Total cash, cash equivalents and investments $8,378,195 $5,665,248 $2,712,947
Type
Thebudgetincludesinformation on thepastyear,currentyearestimates,andrequestedamountsforthenextfiscal
year.
NOTE C - DEPOSITS AND INVESTMENTS
Theproposedbudget is presented to thegoverningbodyforreview.Thegoverningbodymayaddto,subtract
from, or change amounts, but may not change the form of the budget.
ThePool'sinvestmentpolicy is morerestrictivethanstatestatutes.ThePool'sdepositsandinvestmentsare
limited to approvedbanksandspecificallyauthorizedinvestmentsincludingbonds,notes,bills,andotherfull
faithandcreditU.S.Governmentsecurities,mortgage-backedsecurities,theIllinoisFunds(StateTreasurer-
Managedinvestmentpool),IllinoisMetropolitanInvestmentFund(IMET)(short-termlocalgovernment
investmentpool),corporatebonds,andfixedincomeandequitysecurities(withcreditrisklimited to 45%of
the portfolio).
Maturities (In Years)
Thebudgetmaybeamendedbyamajorityvote of theBoard.No amendmentswerepassedfortheyearsended
April 30, 2015 or April 30, 2014.
As of April 30, 2015, the Pool had the following cash, cash equivalents and investment maturities.
-18-
High-Level Excess Liability Pool
NOTES TO THE FINANCIAL STATEMENTS
Years Ended April 30, 2015 and 2014
1. Permitted Deposits and Investments (Continued)
Fair ValueLess than 1Equities
The Illinois Funds $4,387,015 $4,387,015 $-
Illinois Metropolitan Investment Fund 4,782,1674,782,167 -
Mutual Fund - Equities 2,402,179 -2,402,179
Total cash, cash equivalents and investments $11,571,361 $9,169,182 $2,402,179
2.
3.
As of April 30, 2014, the Pool had the following cash, cash equivalents and investment maturities.
Type
Credit Risk
Maturities (In Years)
During2015,thePoolmade an adjustment to write-offcertainIMETinvestmentstotalingapproximately
$77,000. The write-off is included in investment income. There were no write-offs during 2014.
ThePool'sinvestmentpolicydoes not limitinvestmentmaturities as ameans of managingitsexposure to fair
valuelossesarisingfromincreasinginterestrates.Theobjective is to maintainacoreportfoliowithmaturities
in the one-to-three-year range.
As of April30,2015,TheIllinoisFundsMoneyMarketFundwasrated AAAm byStandard&Poor's.The
IllinoisFunds is not registeredwiththeSEC.TheIllinoisFunds is sponsoredbytheStateTreasurer in
accordancewithstatelaw.Thefairvalue of thepositions in TheIllinoisFunds is thesame as thevalue of The
IllinoisFundsshares.IMETwasestablished asan activelymanagedinvestmentfundforIllinoisunits of local
governmentandforotherofficialcustodians of publicfunds.TheFund is managed so as to maintainastable
$1.00shareprice.As of April30,2015,theIMETinvestmentswererated AA byStandard&Poor'sandAaa
by Moody's.
NOTE C - DEPOSITS AND INVESTMENTS (Continued)
Interest Rate Risk
-19-
High-Level Excess Liability Pool
NOTES TO THE FINANCIAL STATEMENTS
Years Ended April 30, 2015 and 2014
4.
5.
NOTE C - DEPOSITS AND INVESTMENTS (Continued)
It is thepolicy of thePool to diversifyitsinvestmentportfolio.Investmentsshallbediversified to eliminatethe
risk of lossresulting in overconcentration in asecurity,maturity,issuer,or class of securities.ThePool's
investmentpolicyrequiresthePool to diversifyitsinvestmentsbyinvestmenttype.Diversificationby
investmenttype is as follows:Bonds,notes,bills,andotherfullfaithandcreditU.S.Governmentsecurities-
100%maximum;mortgage-backedsecurities-30%maximum;theIllinoisFunds-100%maximum;Illinois
MetropolitanInvestmentFund(IMET)-100%maximum;corporatebonds-30%maximum;andfixedincome
and equity securities - 40% maximum.
Concentration of Credit Risk
Custodial Credit Risk
For an investment,custodialcreditrisk is theriskthat,in theevent of thefailure of thecounterparty,thePool
will not beable to recoverthevalue of itsinvestments or collateralsecuritiesthatare in thepossession of an
outside party. As of April 30, 2015, the Pool's investments were in compliance with their policy.
Thereareseveralclaimsandlegalactionspendingagainstmembers of thePool.Managementandtheirlegal
counselbelievethatcertainactionsagainstthememberscouldresult in losses to thePool.Except as discussed in
Note E,no additionalamountshavebeenrecorded as lossesbecauseunfavorableoutcomesare not probableand
cannot be reasonably estimated.
NOTE D - CONTINGENT LIABILITIES - LITIGATION
-20-
High-Level Excess Liability Pool
NOTES TO THE FINANCIAL STATEMENTS
Years Ended April 30, 2015 and 2014
2015 2014
Unpaid claims and claims adjustment expenses at the beginning of the
fiscal year $ 7,650,000 $ 4,700,000
Incurred claims and claims adjustment expenses
Provision for insured events of the current fiscal year 780,000 700,000
Increases (decreases) in provision for insured events of prior fiscal years (1,613,144) 6,497,915
Total incurred claims and claims adjustment expenses (833,144) 7,197,915
Payments
Claims and claims adjustment expenses attributable to insured events
of the current fiscal year - -
Claims and claims adjustment expenses attributable to insured events
of the prior fiscal year 3,586,856 4,247,915
Total payments 3,586,856 4,247,915
Total unpaid claims and claims adjustment expenses at the end of the
fiscal year $ 3,230,000 $ 7,650,000
NOTE F - SUBSEQUENT EVENT
Claimsexpense,as reported on theStatement of Revenues,ExpendituresandChanges in NetPosition-Budget
and Actual, is net of reinsurance reimbursements totaling $2,060,821 and $0 for 2015 and 2014, respectively.
ManagementhasevaluatedsubsequenteventsthroughAugust19,2015,thedatethesefinancialstatementswere
available to beissued.Managementhasdeterminedthat no events or transactionshaveoccurredsubsequent to the
statement of net position date that require disclosure in the financial statements.
As discussed in Note A,thePoolestablishesaliabilityforbothreportedandunreportedinsuredevents,which
includesestimates of futurepaymentsforbothclaimsandlossesandrelatedclaimsadjustmentexpenses.The
schedulebelowpresentsthechanges in theclaimsreservefortheyearsendedApril30,2015and2014,
respectively.
NOTE E - CLAIMS RESERVE LIABILITIES
-21-
REQUIRED SUPPLEMENTARY INFORMATION
(Unaudited)
Ten-Year Claims Development Information
High-Level Excess Liability Pool
REQUIRED SUPPLEMENTARY INFORMATION
April 30, 2015
Thetable on thefollowingpagesillustrates how thePool'searnedrevenuesandinvestmentincome
compare to relatedcosts of lossesandotherexpensesassumedbythePool as of theend of each of thelast
fiscaltenyears.Therows of thetablearedefined as follows:(1)Thislineshowsthetotal of eachfiscal
year'srequiredcontributionsandinvestmentrevenues,net of excessinsurance.(2)Thislineshowseach
fiscalyear'sotheroperatingcosts of thepool,includingoverheadandclaimsexpense not allocable to
individualclaims.(3)ThislineshowsthePool'sincurredclaimsandallocatedclaimsadjustmentexpenses
(bothpaidandaccrued)as originallyreported at theend of thefirstyear in whichtheeventthattriggered
coverageunderthecontractoccurred(calledpolicyyear).(4)Thissection of tenrowsshowsthe
cumulativeamountspaid as of theend of successiveyearsforeachpolicyyear.(5)Thissection of ten
rowsshows how eachpolicyyear'sincurredclaimsincreased or decreased as of theend of successive
years.Thisannualreestimationresultsfromnewinformationreceived on knownclaimsandreevaluation
of existinginformation on knownclaims,as well as emergence of newclaims not previouslyknown.(6)
Thislinecomparesthelatestreestimatedincurredclaimsamount to theamountoriginallyestablished(line
3),andshowswhetherthislatestestimate of claimscost is greater or lessthanoriginallythought.As data
forindividualpolicyyearsmature,thecorrelationbetweenoriginalestimatesandreestimatedamounts is
commonlyused to evaluatetheaccuracy of incurredclaimscurrentlyrecognized in lessmaturepolicy
years. The columns of the table show data for successive policy years.
-23-
Ten-Year Claims Development Information (Continued)
2006200720082009
1. Required contributions
and investment revenues
Direct earned $2,377,597 $2,741,042 $1,346,104$1,006,549
Excess insurance (345,468)(371,772)(373,109)(321,981)
Net earned 2,032,1292,369,270972,995684,568
2. Unallocated expenses 42,27163,20452,72356,511
3. Estimated incurred claims and
expense, end of policy year - - - -
4. Paid (cumulative) as of:
End of policy year - - - -
One year later - - - -
Two years later - - - -
Three years later - - - -
Four years later - - - -
Five years later - - - -
Six years later - - - -
Seven years later - - 4,000,000
Eight years later - -
Nine years later -
5. Reestimated incurred claims
and expense:-
End of policy year - - - -
One year later - - - -
Two years later - - - -
Three years later - - - -
Four years later - - - 100,000
Five years later - - 1,500,000 -
Six years later - - 5,000,000
Seven years later - - -
Eight years later - -
Nine years later -
6. Increase in estimated incurred claims
and expense from the end of the
policy year - - - -
April 30, 2015
Ten-Year Claims Development Information
High-Level Excess Liability Pool
REQUIRED SUPPLEMENTARY INFORMATION
-24-
201020112012201320142015
$921,911$915,654$906,732$921,534$918,351$927,456
(318,482)(275,421)(277,170)(275,591)(270,582)(276,582)
603,429640,233629,562645,943647,769650,874
58,43655,74159,27779,59698,95585,792
- - - - 700,000 780,000
- 2,000,000 - - - -
- 2,000,000 - - -
- 2,000,000 - -
- 2,000,000 -
- 2,000,000
-
- - - - 700,000 780,000
- - - 1,000,000 1,500,000
- - 400,000 400,000
- 250,000 250,000
200,000 200,000
100,000
100,000 200,000 250,000 400,000 800,000 -
-25-
SUPPLEMENTARY INFORMATION
ASSETS Term IIITerm IITotal
CURRENT ASSETS
Cash, cash equivalents, and investments$4,101,701$4,276,494$8,378,195
Total assets $4,101,701$4,276,494$8,378,195
LIABILITIES AND NET POSITION
CURRENT LIABILITIES
Claims reserve $2,730,000$500,000$3,230,000
Accounts payable 1,655 984 2,639
Total liabilities 2,731,655500,9843,232,639
NET POSITION
Unrestricted 1,370,0463,775,5105,145,556
Total liabilities and net position $4,101,701$4,276,494$8,378,195
High-Level Excess Liability Pool
TERM III AND TERM II
COMBINING STATEMENT OF NET POSITION
April 30, 2015
-27-
Term IIITerm IITotal
Operating revenues
Member contributions $989,811$-$989,811
Total operating revenues 989,811 -989,811
Operating expenses
Risk management consultants 20,25020,25040,500
Excess insurance 276,582 -276,582
Attorneys' fees
Case review 8,57112,44421,015
Corporate matters 3,3373,1026,439
Auditing fees 4,9254,9259,850
Membership dues 2,430 -2,430
Office supplies 154 154 308
Actuary fees 2,6252,6255,250
Claims expense, net of reinsurance reimbursements (419,823)(7,975)(427,798)
Total operating expenses, net of
reinsurance reimbursements (100,949)35,525(65,424)
Operating income (loss)1,090,760(35,525)1,055,235
Nonoperating revenue
Unrealized gains 99,754211,014310,768
Investment income (loss)(25,334)(37,021)(62,355)
Total nonoperating revenue 74,420173,993248,413
Income before contributions and distributions1,165,180138,4681,303,648
Member distributions -(4,100,000)(4,100,000)
Member contributions 3,617,840 -3,617,840
INCREASE (DECREASE) IN NET POSITION4,783,020(3,961,532)821,488
Net position
Beginning of year (3,412,974)7,737,0424,324,068
End of year $1,370,046$3,775,510$5,145,556
Year Ended April 30, 2015
High-Level Excess Liability Pool
TERM III AND TERM II
COMBINING STATEMENT OF REVENUES, EXPENSES, AND
CHANGES IN NET POSITION
-28-