06-24-2024 CC Agenda Packet - Laserfiche WebLink

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City of Orono, Minnesota Notes to the Financial Statements December 31, 2023 Note 1: Summary of Significant Accounting Policies (Continued) Compensated Absences Certain City employees earn personal time off, vacation, compensation time, and sick leave at various rates based on longevity. These compensated absences are paid to an employee leaving in good standing, at their current rate of pay, with the exception of sick leave in which one-half is paid to the departing employee. 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. For the most part, the General fund is typically used to liquidate governmental compensated absences payable. Postemployment Benefits other than Pensions Under Minnesota statute 471.61, subdivision 2b, public employers must allow retirees and their dependents to continue coverage indefinitely in an employer-sponsored health care plan, under the following conditions: 1) Retirees must be receiving (or eligible to receive) an annuity from a Minnesota public pension plan, 2) Coverage must continue in a group plan until age 65, and retirees must pay no more than the group premium, and 3) Retirees are able to add dependent coverage during open enrollment period or qualifying life event prior to retirement. All premiums are funded on a pay-as- you-go basis. The liability was determined, in accordance with GASB Statement No. 75, at January 1, 2021. The General fund is typically used to liquidate governmental other postemployment benefits payable. Long-term Obligations In the government-wide financial statements, and proprietary fund types in the fund financial 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 position. The recognition of bond premiums and discounts are amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable bond premium or discount. Bond issuance costs are reported as an expense in the period incurred. In accordance with federal s follow the arbitrage requirements. In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. Pensions For purposes of measuring the net pension liability, deferred outflows/inflows of resources, and pension expense, information about the fiduciary net position of the Public Employees Retirement Association (PERA) and additions except that PERA For this purpose, plan contributions are recognized as of employer payroll paid dates and benefit payments and refunds are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value. For the most part, the General fund is typically used to liquidate governmental pension liabilities. 57 ObliObligationsgationsObliObli In the governmentIn the government-wide financial statements, and proprietary fund types in the fund financial statements, longwide financial statements, and proprietary fund types in the fund financial statements, long -term debt and other longand other long--term obligations are reported as liabilities in the applicable governmental activities, businessobligations are reported as liabilities in the applicable governmental activities, business -type activities, or proprietary fund tactivities, or proprietary fund type statement of net position. ype statement of net position. The recognition of bond premiums and discounts are The recognition of bond premiums and discounts are amortized over the life of the bonds uamortized over the life of the bonds using the straightsing the straight-line method. line method. Bonds payable are reported net of the applicBonds payable are reported net of the applicable bond premium or discount. premium or discount. Bond issuance costs are reported as an expense in the period incurred. Bond issuance costs are reported as an expense in the period incurred. In accordance with federal In accordance with federal s follow the arbitrage requirements.s follow the arbitrage requirements. 92