1997 CAFR - Laserfiche WebLink

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CITY OF RAMSEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31,1997 Note 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) G. ,special Assessments Special assessments represent the financing for public improvements paid for by the benefitting property owners. These assessments are recorded as receivables upon certification to the County. The corresponding revenue from the delinquent (unremitted) and deferred (certified but not yet levied) special assessments receivable is deferred until the year in which it becomes available (collected within 60 days of year-end). H. Inventory In Governmental Funds, the amount of inventory on hand is not material and is thus considered an expenditure when purchased. The Water and Sewer Enterprise Fund inventory includes water meters accounted for on a lower of cost (first-in, first-out) or market basis. I. Prop. Plant. and Equipment 1. General Fixed Assets Account Groun -Fixed assets are valued at historical or estimated historical cost. No depreciation has been provided on general fixed assets. The costs of property, plant, and equipment are accounted for as current expenditures of the governmental fund types in the year purchased. The City has elected not to record infrastructure fixed assets in its accounting records. Interest incurred during construction of fixed assets is not capitalized. 2. Proprietary Fund Twe -Fixed assets of the Proprietary Funds aze stated at cost, estimated cost, or, in the case of contributions, at fair market value at the time received. Depreciation has been provided using the straight-line method over the estimated useful lives of assets, as follows: Building 50 years Improvements 20 - 50 years Machinery and equipment 5 - 10 years Distribution systems 50 years J. Long-Term Obligations For long-term obligations, only that portion expected to be financed from expendable available resources is reported as a fund liability of a governmental fund. The remaining portion of such obligations is reported in the General Long-Term Debt Account Group. K. The City compensates employees upon temunation for unused vacation leave at the current rate of pay times the lesser of the employee's unused vacation leave or the vacation leave earned during the two years immediately preceding the employee's termination date. City employees are entitled to sick leave at the rate of one day for each calendar month of full-time service, to a cumulative total determined by the applicable labor agreement or the City Code. Terminating employees are paid for unused sick leave in accordance with the prevailing agreement or Code up to a maximum of one-third of the their unused sick leave at their current rate of pay. All compensated absences are paid out of the General Fund and the Economic Development Authority Fund. Employee compensation for vacation and sick leave accrued through December 31, that is payable from available expendable resources, is shown as an expenditure and established as a short-term liability. Long-term liabilities for compensated absences are recorded in the General Long-Term Debt Account Group. -13-