2004 Comprehensive Annual Financial Report

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CITY OF SOUTH BEND NOTES TO FINANCIAL STATEMENTS (Continued) The City has not implemented retroactive reporting of its infrastructure as of December 31, 2004. 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. 7. Compensated Absences a. Sick Leave — primary government employees earn sick leave at the rate of two - thirds days for each completed month of service. 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, to policemen, and to team- sters, upon termination of employment, at one -half their current pay rate, at a rate of one -half the corporal's rate of pay up to a maximum of sixty days, and $25 for each accumulated sick leave day, respectively, at the time of retirement. b. Vacation Leave — primary government employees earn vacation leave at rates from nine days to twenty -eight days per year based upon the number of years of service, employee classifi- cation, and hire date during the first year of employment. Vacation leave does not accu- mulate from year to year, except in instances where special cases are approved. Employees earn vacation leave during the year to be used the following year. Unused vacation leave is paid to employees upon termination of employment. c. Personal Leave — primary government policemen earn personal leave at the rate of seven days per year. Personal leave does not accumulate from year to year. Unused personal leave maybe rolled into sick leave. City employees under the teamster contact can use their sick leave for personal leave. d. Compensatory Leave — Policemen and firemen have accumulated overtime - compensatory leave for a variety of reasons. A liability is recognized in the government -wide financial statements and proprietary fund types for sick leave and for compensatory leave of firemen and policemen, and for unused vacation leave all other City employees. 8. D.R.O.P. Payable Pursuantto Indiana Statute, certain City policemen and firemen are eligibeforthe deferred retire- ment option plan (D.R.O.P.). Active policemen and firemen who are eligible to retire before December 31, 2007, can declare their retirement date and then receive a lump sum at retirement based on pension factors. The lump sum amounts for those who have declared are recognized as D.R.O.P. payable. The liability is recognized net of a 50% reduction which is the minimum that the State will reimburse in the following year. 33