Annual Financial Report 12/31/1982

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CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 1982 Note 3 - METROPOLITAN WASTE CONTROL COMMISSION During 1970, the Metropolitan Waste Control Commission (M.W.C.C.) was organized to provide for consolidation of the sanitary sewer collection, treatment and disposal in the seven county metropolitan area surrounding Minneapolis and St. Paul. Previously, these operations were maintained by the city governments on an individual or collective basis. When the M.W.C.C. was formed, existing interceptor sewer lines and treatment facilities were transferred from the cities to the M.W.C.C. in exchange for future credits. The M.W.C.C. bills the City annually based upon estimated volume and budgeted costs. These billings are later adjusted when actual volume and actual costs are determined. The adjustment to actual is generally determined in the suc- ceeding calendar year and payable, by the City, in the second succeeding calen- dar year. The City follows the accounting policy of recognizing these charges as an expense of the sewer utility operation in the year for which they are billed (for estimated billings) and in the year the adjustments are determined (for adjustments from estimated to actual billings). Note 4 - ACCRUED SICK AND VACATION PAY The City does not record the liability for vacation and sick pay earned by employees as such benefits accrue, but rather charges expenditures when employees take vacations or use sick time. Generally accepted accounting prin- ciples do not require the accrual of liability for vacation or sick pay in the City's funds. Accrued sick pay totaled approximately $59,000 at December 31, 1982. Vacation pay accumulations at December 31, 1982 totaled approximately $3,500. No vacation carryover was approved as of December 31, 1982. Note 5 - RETIREMENT PLANS The City participates in contributory pension plans through the Public Employees Retirement Association (P.E.R.A) under Minnesota Statutes Chapter 353 which substantially covers all employees except those qualifying as temporary or seasonal employees or employees covered by other plans. The P.E.R.A. plan is administered by the State and coordinated with the Federal Social Security Retirement Plan. State Statute requires the City to fund current service pen- sion costs as it accrues. Prior service costs are being amortized over a period of 40 years and funded by payments determined as a percentage of gross wages paid by all participating employers. The amount of unfunded prior ser- vice costs attributed to individual reporting entities is not determinable. City contributions for 1982 is shown below. Description 1982 P.E.R.A. $ 33,862 F.I.C.A. 12,661 Totals $ 46,523