Annual Financial Report 12/31/1986

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1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 CITY OF LINO LAKES, MINNESOTA Page 13 of 19 NOTES TO FINANCIAL STATEMENTS December 31, 1986 Note 2 - DETAIL NOTES ON ALL FUND AND ACCOUNT GROUPS (Continued) DEFERRED REVENUE Deferred revenues occur when asset recognition criteria has been met, and revenue recognition criteria has not been met. Deferred revenue as of December 31, 1986 consists of the following: Park dedication fees not collected (Note 2) Grant advances (state portion of LAWCON) COMPENSATED ABSENCES $ 5,060 21,491 $26,551 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 a liability for vacation or sick pay in the City's Funds because no carryover was approved by Council. Vacation pay accumulation at December 31, 1986 totaled approximately $3,655. Sick pay accu- mulated at December 31, 1986 totaled approximately $95,000. RETIREMENT PLANS The City participates in the Public Employees Retirement Fund and the Police and Fire Fund Pension Plans as administered by the Employees Retirement Association (PERA) under Minnesota Statutes Chapters 353 and 356, which is a cost sharing multiple - employer Public Employee Retirement System (PERS). This plan covers substantially all employees except those qualifying as temporary or seasonal employees. The City's current year covered payroll and total current year payroll for all employees is $547,411 and $590,149, respectively. A summary of plan eligibility requirements is available at PERA. Such retire- ment terms are governed by State Statute. In general, the Association provides defined retirement benefits based on a member's average salary for any five successive years of allowable service, age, and years of credit at termination of service. In addition, the retire- ment program provides benefits to members upon disability and to survivors upon death of eligible members. Retirees have a variety of annuity options available for payment of benefits. The amounts of annuity (retirement benefits) are based on the following for- mulas: BASIC MEMBERS - 2% of the average salary over the highest five successive years on which deductions were paid for each of the first 10 years and 2 -1/2% of said "average salary" for the period thereafter.