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CITY OF ST. ANTHONY ' NOTES TO FINANCIAL STATEMENTS DECEMBER 31 , 1999 ' Note 1 . Significant Accounting Policies, continued M. Property, Plant and Equipment Property, plant and equipment of all funds and component units are stated at his- ' torical cost or estimated cost if actual cost not available. Donated fixed assets are valued at their estimated fair value on the date received. Fixed assets acquired or constructed by governmental funds are recorded as expendi- , tures 'in these funds. These general fixed assets are not capitalized in individual governmental funds but rather are reported in the General Fixed Assets Account Group. No depreciation has been provided for on general fixed assets. The City has elected ' not to report public domain, or infrastructure, fixed assets consisting of streets, roads, bridges, curbs and gutters, sidewalks and similar items as general fixed assets, since such assets are .immovable and of value only to the City. , Fixed assets of proprietary funds are recorded at cost in their respective funds. Depreciation of all exhaustible• fized assets is charged as an expense against opera- tions. Depreciation has been provided over the estimated useful lives of the assets ' using the straight-line method. Estimated useful lives of such assets are: Land Improvements 10-20 Years ' Buildings and Structures 15-40 Years Distribution and Collection System 15-50 Years Furniture, Fixtures and Equipment 5-10 Years N. Compensated Absences. City employees are entitled to vacation pay based upon length of employment. In addi- tion, the City has established a severance pay policy for nonunion employees. This policy provides for severance payments upon termination of employment based on accu- mulated sick leave accrued, subject to certain conditions and specified maximums. Severance pay policy for union employees is governed by individual union contracts. Vested vacation and sick leave for all City employees is recorded as an expenditure or expense as benefits accrue to employees. For governmental funds the accrued lia- bility for compensated absences is transferred and recorded as an expense in the Employee Benefit Fund. The accrued liability related to proprietary funds is also recorded in this fund; however, the corresponding expense is recorded in each of ' the enterprise funds as incurred. It is the City's intention to maintain a level of funding for a portion of the liability associated with governmental fund-types. 0. Deferred Revenue Deferred revenues arise when a potential revenue does not meet both the "measurable" and "available" criteria for recognition in the current period. Deferred revenues , also arise when resources are received by the City before it has a legal claim to them or when grant monies are received prior to the incurrence of qualifying expenditures. In subsequent periods, when both revenue criteria are met, or when the City has a legal claim to the resources, the liability for deferred revenue is eliminated and revenue is recognized. -18- '