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TOWN OF DEBEQUE, COLORADO <br />NOTES TO FINANCIAL STATEMENTS - continued <br />December 31, 2004 <br />NOTE A- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued <br />Property taxes are levied and collected on behalf of the Town by various counties and are reported as <br />revenue when received by the County Treasurers. <br />Restricted Assets <br />Certain investments in the Town's Water Fund have been shown as restricted because their use is <br />maintained in a separate account and is restricted by a loan covenant with the state of Colorado. <br />Capital Assets <br />Capital assets, which include property, plant, and equipment are reported in the applicable <br />governmental or business-type activities columns in the government-wide financial statements. <br />Capital assets are defined by the government as assets with an initial individual cost of more than <br />$500 and an estimated useful life in excess of three years. Such assets are recorded at historical cost <br />or estimated historical cost if purchased or constructed. The costs of normal maintenance and repairs <br />that do not add to the value of the asset or materially extend assets lives are not capitalized. <br />Property, plant and equipment of the Town is depreciated using the straight line method over the <br />following estimated useful lives: <br />Infrastructure 40 years <br />Buildings 40 years <br />Equipment 3 - 10 years <br />Compensated Absences <br />A Town employee may accrue up to 15 days of vacation, 240 hours of compensatory leave, and 40 <br />days of sick leave. The Town pays a terminating employee for all accumulated vacation time and <br />one-fourth of accumulated sick leave. Accumulated unpaid vacation and sick pay are accrued when <br />incurred in Proprietary Funds. In Governmental Fund Types, that portion of accumulated unpaid <br />vacation and sick pay which is estimated to be current is accrued in the governmental fund with the <br />remainder, if any, being a reconciling item between the fund and government-wide presentations. <br />Long-term Obli atg ions <br />In the government-wide financial statements, and proprietary fund types in the fund financial <br />statements, long-term debt and other long-term obligations are reported as liabilities in the applicable <br />governmental activities, business-type activities, or proprietary fund type sta.tement of net assets. <br />Prope . Taxes <br />Property taxes attach as an enforceable lien on property as of January 1. Taxes may be paid in two <br />equal payments. To avoid penalties, the first half must be paid before March 1, and the second half <br />must be paid on or before June 15. Alternatively, the taxes may be paid in full by April 30. All <br />15 <br />