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i <br /> G. Long-Term Obligations <br /> The government reports long-term debt of governmental funds at face <br /> value in the general long-term debt account group. Certain other <br /> governmental fund obligations not expected to be financed with current <br /> available financial resources are also reported in the general long-term <br /> debt account group. Long-term debt and other obligations financed by <br /> proprietary funds are reported as liabilities in the appropriate funds. <br /> H. Accrued Employee Benefits <br /> Town employees are granted vacation and sick leave in varying amounts. <br /> Upon retirement, termination, or death, certain employees are compen- <br /> sated for unused sick and vacation leave which is (subject to certain <br /> limitations) at their then current rates of pay. The cost of this unused <br /> sick and vacation leave, which is expected to be paid from future finan- <br /> cial resources, is accounted for as a liability of the general long-term <br /> debt account group for governmental fund types. <br /> 1. Fund Eauity <br /> Reservations of fund balance represent amounts that are not appropri- <br /> able or are legally segregated for a specific purpose. Reservations of <br /> retained earnings are limited to outside third-party restrictions. Desig- <br /> nations of fund balance represent tentative management plans that are <br /> subject to change. <br /> I <br /> J. Encumbrance Accountinq and Reporting <br /> Encumbrance accounting is employed in governmental funds. Encum- <br /> brances (e.g., purchase orders, contracts) outstanding at year end <br /> are reported as reservations of fund balances and do not constitute <br /> expenditures or liabilities. <br /> K. Nonexpendable Trust Funds <br /> The accompanying general purpose financial statements do not report <br /> statements of revenues, expenses and cash flows for nonexpendable j <br /> trust funds since there was no fiscal year 1996 activity. <br /> L. Memorandum Only- Total Columns <br /> Total columns on the general purpose financial statements are captioned <br /> as "memorandum only" because they do not represent consolidated fin- <br /> ancial information and are presented only to facilitate financial analysis. <br /> The columns do not present information that reflects financial position, <br /> results of operations, or cash flows in accordance with generally accepted <br /> 11 <br />