Annual Financial Report 12/31/1991

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CITY OF LINO LAKES, MINNESOTA NOTES TO FINANCIAL STATEMENTS December 31, 1991 Page 15 of 18 The MWCC 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 succeeding calendar year and payable by the City in the second succeeding calendar 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 8 RECONCILIATION OF CONTRIBUTED CAPITAL Changes to contributed capital during the year are as follows: Depreciation Beginning Capital on Contributed Ending Balance Contributions Assets Balance Water and sewer $5,906,860 $24,133 ($127,358) $5,803,635 Note 9 CAPITAL LEASE The following is a schedule of future minimum lease payments under the capital lease: Year Phone Systems 1992 $3,010 1993 753 Total 3,763 Less amount representing interest 350 Present value of minimum lease payments $3,413 Note 10 DEFERRED COMPENSATION PLAN The City offers its employees a deferred compensation plan created in accordance with Internal Revenue Code Section 457. The deferred compensation plan is offered by the International City Managers Association. The plan, available to all employees, permits them to defer a portion of their salary until future years. The deferred compensation is not available to the employees until termination, retirement, death or an unforeseeable emergency. All amounts of compensation deferred under the plan, all property and rights purchased with those amounts, and all income attributable to those amounts, property or rights are (until paid or made available to the employee or other beneficiary) solely the property and rights of the City (without being restricted to the provisions of benefits under the plan), subject only to the claims of the City's general creditors. Participants' rights under the plan are equal to those of general creditors of the City in an amount equal to the fair market value of the deferred account for each participant.