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Sick leave is earned at the rate or 12 days per year by permanent, full-time employees. Unused sick leave may be accumulated from year to year. However, unused sick leave is paid up to a maximum of 65 days upontermination.

At June 30, 2007, employees of the City had accumulated$694,305 in leave privileges, computed in accordance with GASB Statement No, 16,

K. Long-Term Debt

The accounting treatment of long-term debt depends on whether the assets are used in governmental fund operations or proprietary fund operations and whether they are reported in the government-wide or fund financial statements.

All long-term debt to be repaid from governmental and business type resources are reported as liabilities in the government-wide statements. The long-term debt consists primarily of bonds and special assessment payables.

Long-term debt for governmental funds is not reported as liabilities in the fund financial statements. The debt proceeds are reported as other financing sources and payment of principal and interest reported as expenditures. The accounting for proprietary fund long- term debt is the same in the fond statements as it is in the government-wide statements.

L. Equity Classification

In the government-wide statements, equity is classified as net assets and displayed in three components:

  • 1.

    Invested in capital assets, net of related debt - Consists of capital assets including restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those assets.

  • 2.

    Restricted net assets - Consists of net assets with constraints placed on the use either by

    • (1)

      external groups such as creditors, grantors, contributors, or laws or regulations of other governments; or (2) law through constitutional provisions or enabling legislation.

3. Unrestricted net assets - All other net assets that do not meet the definition of "restricted" or "invested in capital assets, net of related debt".

In the fund statements, governmental fund equity is classified as fund balance. Fund balance is further classified as reserved and unreserved, with unreserved further split between designated and

undesignated. statements,

Proprietary fund equity is classified the same as in the government-wide

M. Use of Estimates

The preparation of the financial statements in conformity with accounting principlesgenerally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly,actual results could differ from those estimates.

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