2008-06-25 CC Packet - Laserfiche WebLink

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CITY OF CENTERVILLE, MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 2007 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED Property, plant and equipment of the City are depreciated using the straight-line method over the following estimated useful lives: Assets Useful Lives in Years Land improvements Other improvements Buildings and improvements System improvements/infrastructure Machinery and equipment Vehicles Other assets 4 to 25 10 to 20 10 to 50 20 to 50 3 to 20 3 to 10 3 to 15 Compensated Absences It is the City's policy to permit employees to accumulate earned but unused paid time off benefits to a maximum of 176 hours. All paid time offpay is accrued when incurred in the government-wide and proprietary funds. A liability for these amounts is reported in governmental funds only if they have matured, for example, as a result of employee resignations and retirements. Union employees are allowed severance equal to their unused compensatory time. In governmental fund types the cost of these benefits is recognized when payments are made to the employees. Long-term Obligations In the government-wide fmancial statements, and proprietary fund types in the fund fmancial statements, long-term debt and other long-term obligations are reported as liabilities in the applicable governmental activities, business- type activities or proprietary fund type statement of net assets. Beginning January 1,2003, for governmental funds, bond premiums and discounts, as well as issuance costs, are deferred and amortized over the life of the bonds using the straight-line method. Bond issuance costs are reported as deferred charges and amortized over the term of the related debt. In the fund financial statements, governmental fund types recognized bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other fmancing sources. Premiums received on debt issuances are reported as other fmancing sources while discounts on debt issuances are reported as other fmancing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Fund Equity In the fund fmancial statements, governmental funds report reservations of fund balance for amounts that are not available for appropriation or are legally restricted by outside parties for use for a specific purpose. Designations of fund balance represent tentative management plans that are subject to change. -27-