Notes to Financial Statements

asset (Right to Use Asset) is recognized on the government-wide Statement of Net Position. The present value of lease payments are discounted based on the incremental borrowing rate determined by the City.

Unearned Revenue

Unearned revenues represent revenues collected in advance of services performed and will be recognized when the services are rendered. Unearned revenues also represent prepaid grants, revenues will be recognized when the expense/expenditure occurs.

Compensated Absences

The City maintains a policy that permits employees to accumulate earned but unused vacation and sick pay benefits that will be paid to employees upon separation from City service if certain criteria are met. These benefits, including their related taxes and retirement costs, are classified as compensated absences.

Vacation and sick leave benefits are provided to non-temporary full-time and part-time employees who regularly work 19 hours/week or more. Accrued vacation is paid to employees when taken or upon separation of employment, other than retirement. Accrued vacation is paid to the employee’s beneficiary(s) upon death. Police Lieutenants may elect to be paid each year for one-half of their accrued unused vacation balance at the end of each calendar year. The value of unused vacation accumulated by City employees is accrued as expense when incurred in proprietary funds and the entity-wide financial statements. In the governmental fund statements, only the amount that normally would be liquidated with expendable available financial resources is accrued as current year expenditures and therefore compensated absences are recognized only when they mature. Unless it is anticipated that compensated absences will be used in excess of a normal year’s accumulation, no additional expenditures are accrued.

Sick leave is paid to employees when taken and the cost is recognized when payment is made. Employees that have reached the specified minimum funding standard may not have funds paid to VEBA above that dollar amount. Rather, they receive cash payment for remaining sick leave balances in their final pay. Employees who separate for reasons other than retirement receive no cash payment for accrued, unused sick leave. See the separate discussion of the VEBA on page 58

Unamortized Bond Premiums

and Discounts

Bond premiums and discounts related to long-term debt are being amortized over the life of the debt, principally by the effective interest method. Notes payable and revenue bonds payable in the governmentwide and proprietary fund financial statement are shown net of unamortized premiums/discounts. Premiums/ discounts related to general long-term debt in the governmental fund financial statements are recorded as expenditures or other financing sources when paid or received and, therefore, are not accounted for in subsequent periods.

Deferred Compensation

The City has two deferred compensation plans. The first is available to regular employees other than sworn police officers and the second for regular sworn police officers including Lieutenants, Commanders and the Chief. Employees may make voluntary contributions to the plans within the dollar limits allowed by the Internal Revenue Service Code Section 457. The City makes a non-elective contribution for sworn police officers of 6.2% base salary each plan year; Lieutenants are matched at 3.5%; Commanders are matched at 7.5% and the Chief is matched at 8%. The City also matches the contribution of general employees other than senior managers, up to a maximum of 2%. Senior managers are matched up to 4%. The City matches contributions made by department heads up to 4.5% of salary per plan year. The City makes a non-elective contribution for Fire Fighters in the amount of 6.2% as long as they are contributing a minimum of 1% into the PERSI Choice 401(k) plan. The City contributed a total of $2,449 to both deferred compensation plans during the year ended September 30, 2022.

The City has no liability for losses under the plan but the Administrative Board does have fiduciary responsibility