Laserfiche WebLink
<br />NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) <br /> <br />If sick leave and vacation are not used by the employee or paid out during the term of employment, <br />compensation is payable to the employee at the time of retirement. Such compensation is calculated at <br />the employee's prevailing rate at the time of retirement or termination. Whereas vacation is compensated <br />at 100% of accumulated hours, sick leave is compensated at 50% of accumulated hours at retirement <br />depending upon varying restrictions of the bargaining units. Upon termination only accrued vacations <br />are compensated. Each year an adjustment to the liability is made based on pay rate changes and <br />adjustments for the current portion. The general fund is primarily responsible for the repayment of the <br />governmental portion of the compensated absences. <br /> <br />Individual proprietary funds are responsible for the repayment of the liability attributable to their <br />respective funds. <br /> <br />F. <br /> <br />Cash and Cash Equivalents <br /> <br />The City pools cash resources from all funds in order to facilitate the management of cash. The balance <br />in the pooled cash account is available to meet current operating requirements. Cash in excess of current <br />requirements is invested in various interest-bearing accounts and other investments for varying terms. <br /> <br />In accordance with GASB Statement No. 40, Deposit and Investment Disclosures (Amendment ofGASB <br />No. 3), certain disclosure requirements for Deposits and Investment Risks were made in the following <br />areas: <br /> <br />. <br /> <br />Interest Rate Risk <br /> <br />Credit Risk <br />0 Overall <br />0 Custodial Credit Risk <br />0 Concentrations of Credit Risk <br /> <br />. <br /> <br />In addition, other disclosures are specified including use of certain methods to present deposits and <br />investments, highly sensitive investments, credit quality at year-end, and other disclosures. <br /> <br />In accordance with GASB Statement No. 31, Accounting and Financial Reporting for Certain <br />Investments and for Extemal Investment Pools, highly liquid market investments with maturities of one <br />year or less at time of purchase are stated at amortized cost. All other investments are stated at fair <br />value. Market value is used as fair value for those securities for which market quotations are readily <br />available. <br /> <br />The City participates in an investment pool managed by the State of California titled Local Agency <br />Investment Fund (LAIF) which has invested a portion of the pooled funds in Structured Notes and Asset- <br />Backed Securities. LAIF's investments are subject to credit risk with the full faith and credit of the State <br />of California collateralizing these investments. In addition, these Structured Notes and Asset-Backed <br />Securities are subject to market risk as to the change in interest rates. <br /> <br />Cash equivalents are considered amounts in demand deposits and short-term investments with a maturity <br />date within three months of the date acquired by the City and are presented as "Cash and Investments" in <br />the accompanying Basic Financial Statements. <br /> <br />G. <br /> <br />Inventories <br /> <br />Inventories are stated at moving average cost. The cost is recorded as an expenditure at the time an <br />individual inventory item is consumed. As inventories must be maintained at a certain level, a reserve for <br />inventories is set aside in the general fund balances. Consequently, these reserved funds are not available <br />for appropriation. <br /> <br />33 <br />