2002 Comprehensive Annual Financial Report

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CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) Estimated ~~~'~~ I;, ~ ~ Useful Life _ _ ~ , , , , (Years) Buildings and improvements $ 50,000 Straight-Line 20 to 30 Equipment 5,000 Straight-Line 5 to 20 Roads -collectors and residential 3,000,000 Straight-Line 40 to 50 Water collection systems 500 Straight-Line 6 to 100 Wastewater distribution and collection systems 1,000 Straight-Line 6 to 100 The government has not implemented retroactive reporting of its infrastructure as of December 31, 2002. For depreciated assets, the cost of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase of capital assets of business-type activities is included as part of the capitalized value of the assets constructed. The total interest expense incurred by the government in its business-type activities during the current year was $2,375,393. Of the amount $5,910 and $56,754 was included as part of the cost of capital assets under construction in connection with the water utility's elevated tank and with the wastewater utility's share of the new public works service center, respectively. 7. Compensated Absences a. Sick Leave -City employees earn eight days sick leave per year after one full year of employ- ment. Sick leave may accumulate to a maximum of ninety days for policemen, one hundred days for firemen, sixty days for teamsters, and sixty-five days for all other employees. Accumulated sick leave is paid to firemen upon termination of employment atone-half their current pay rate. Accumulated sick leave is also paid to policemen upon retirement at a rate of one-half the corporal's rate of pay up to a maximum of sixty days. Employees under the teamsters' contract may receive $25 for each accumulated sick leave day at the time of retirement. b. Vacation Leave -City employees earn vacation leave at rates from nine totwenty-eight days per year based upon the number of years of service. Vacation leave does not accumulate from year to year. Unused vacation leave is paid to employees upon termination of employ- ment. Employees earn vacation leave during the year to be used the following year. c. Compensatory Leave -Policemen and firemen have accumulated overtime-compensatory leave for a variety of reasons. d. Personal Leave -City policemen earn personal leave at the rate of seven days per year. Personal leave does not accumulate from year to year. Unused personal leave may be rolled into sick leave. City employees under the teamster contract can use their sick leave for personal leave. A liability is recognized in the government-wide financial statements and proprietary fund types for sick leave of firemen, unused vacation leave for City employees, and for compensatory leave for policemen and firemen. 33