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CITY OF RAMSEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31,1997 Note 13. Note 14. FLEXIBLE BENEFIT PLAN (continued) Before the beginning of the plan year, which is from January 1 to December 31, each participant designates a total amount of pre-tax dollars to be contributed to the plan during the year. At December 31, the City is contingently liable for claims against the total amount of participant's annual contributions to the health and dental care portion of the plan, whether or not such contributions have been made. The City serves as trustee and handles all plan record keeping. The plan is included in the fmancial statements as an Expendable Trust Fund. All plan property and income attributable to that property is solely the property of the City, subject to the claims of the City's general creditors. Participants' rights under the plan are equal to those of general creditors of the City in an amount equal to eligible expenses incurred by the participants. The City believes that it is unlikely that it will use the assets to satisfy the claims of general creditor's in the future. RESERVES AND DESIGNATED FUND EQUITY The following reservations of fund equity have been made at December 31, 1997: General Fund - Fundbalance reserved for prepaid items $ 22,576 Water Utility Fund- Contributed capital reserved for future construction $ 1,511,503 Sewer Utility Fund- Contributed capital reserved for future construction $ 351,876 The General Fund reservation for prepaid items is made because prepayments, which aze included in other assets, are not current fmancial resources. The Water and Sewer Fund reservations aze for future construction and is from assessments for elevated water storage and future oversizing of water and sewer lines. The following designations of unreserved fund equity have been made at December 31, 1997: General Fund - Compensated absences Working capital Debt Service Funds - 1995A Improvement Bonds Capital Project Funds - 1998 Street Maintenance Program $ 182,291 1,610,135 $ 1,792,426 $ 2,162 $ 171,511 -27-