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City of Orono, Minnesota <br />Notes to the Financial Statements <br />December 31, 2024 <br /> <br />Note 1: Summary of Significant Accounting Policies (Continued) <br />Compensated Absences <br />Certain city employees earn personal time off, vacation, earned compensation time and sick leave at various rates based <br />on longevity. These compensated absences are paid to an employee leaving in good standing, at their current rate of pay <br />and current status of union contracts. Employees with at least three years, but less than twelve years, of full-time service <br />will receive 1/3 of their accumulated sick leave. Employees with 12 years or more will receive ½ of their accumulated sick <br />leave. The City has recorded an additional amount for GASB 101 based on expected sick usage. <br />Postemployment Benefits other than Pensions <br />Under Minnesota statute 471.61, subdivision 2b, public employers must allow retirees and their dependents to continue <br />coverage indefinitely in an employer-sponsored health care plan, under the following conditions: 1) Retirees must be <br />receiving (or eligible to receive) an annuity from a Minnesota public pension plan, 2) Coverage must continue in a group <br />plan until age 65, and retirees must pay no more than the group premium, and 3) Retirees are able to add dependent <br />coverage during open enrollment period or qualifying life event prior to retirement. All premiums are funded on a pay-as- <br />you-go basis. The liability was determined, in accordance with GASB Statement No. 75, at January 1, 2021. The General <br />fund is typically used to liquidate governmental other postemployment benefits payable. <br />Long-term Obligations <br />In the government-wide financial statements, and proprietary fund types in the fund financial statements, long-term debt <br />and other long-term obligations are reported as liabilities in the applicable governmental activities, business-type <br />activities, or proprietary fund type statement of net position. The recognition of bond premiums and discounts are <br />amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable bond <br />premium or discount. Bond issuance costs are reported as an expense in the period incurred. In accordance with federal <br />s follow the arbitrage requirements. <br />In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond <br />issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. <br />Premiums received on debt issuances are reported as other financing sources while discounts on debt issuances are <br />reported as other financing uses. Issuance costs, whether or not withheld from the actual debt proceeds received, are <br />reported as debt service expenditures. <br />Pensions <br />For purposes of measuring the net pension liability, deferred outflows/inflows of resources, and pension expense, <br />information about the fiduciary net position of the Public Employees Retirement Association (PERA) and additions <br />uciary net position have been determined on the same basis as they are reported by PERA <br />except that PERA For this purpose, plan contributions are recognized as of employer payroll <br />paid dates and benefit payments and refunds are recognized when due and payable in accordance with the benefit terms. <br />Investments are reported at fair value. For the most part, the General fund is typically used to liquidate governmental <br />pension liabilities. <br /> <br />59 86