1990 CAFR - Laserfiche WebLink

Home

CITY OF RAMSEY, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 1990 Note 10. DEFERRED COMPENSATION PLANS The City offers its employees three deferred compensation plans created in accordance with Internal Revenue Code Section 457. The plans permit employees to defer a portion of their salary into future years. The deferred compensation is not available to employees until termination, retirement, death, or unforeseen emergency. The amounts of compensation deferred under the plans, all property and rights purchased with those amounts, and all income attributable to those amounts are solely the property and rights of the City, subject to the claims of the City's general creditors. Participants' rights under the plans are equal to those of general creditors of the City in an amount equal to the fair market value of the deferred account for each participant. It is the City's belief that they have no liability for losses under the plans but do have the duty of due care that would be required of ordinary prudent investor. The City also believes that it is unlikely that it will use the assets to satisfy the claims of general creditors in the future. The three trustees used by the City are The Minnesota State Deferred Compensation Plan, Kemper Investor Life Insurance Company, and United Resources Insurance .Services Incorporated. Assets of the plans are held by the trustees and are reflected in these statements as Agency Funds at market value. Note 11. RESERVES AND DESIGNATED FUND EQUITY Fund balance or retained earnings in various funds has been reserved or designated. The following reservations of the fund equity have been made at December 31, 1990: General Fund - Reserved for prepaid expenses S 66,246 Water and .Sewer Fund- Future construction S 233,458 The General Fund reservation for prepaid expenses is made because prepayments are not current financial resources. The Water and Sewer Fund reservation for future construction is from assessments for elevated water storage and future oversizing of water and sewer lines. -30-