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ISHERBURNE-WRIGHT COUNTY CABLE COMMUNICATIONS COMMISSION II <br /> NOTES TO FINANCIAL STATEMENTS <br /> IDECEMBER 31, 2007 <br /> INOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) <br /> I Operating Revenues and Expenditures <br /> Operating revenues result from exchange transactions associated with the principal activity <br /> of the Commission, which is the administration and enforcement of the cable <br /> I communications systems franchise. Operating expenditures are defined as expenses <br /> directly or indirectly related to, or incurred in support of the cable communications systems <br /> franchise. <br /> IRevenue from investment earnings is reported as non-operating revenues. <br /> I Revenues from PEG capital fees are restricted for use for expenditures for property, plant <br /> and equipment associated with PEG access. Expenditures for property, plant and <br /> equipment assets exceeded the PEG capital fees for the year ended December 31, 2007. <br /> As such no amount of cash fund balances are reserved or restricted as to use at <br /> IDecember 31, 2007. <br /> Risk Management <br /> I The commission is exposed to various risks of loss related to torts; theft of, damage to and <br /> destruction of assets; errors and omissions; and natural disasters. The Commission's <br /> member cities provide insurance coverage through their respective insurance programs. <br /> NOTE 2 DEPOSITS <br /> IThe Commission maintains deposits at financial institutions which are authorized by the . <br /> Commission Board. All such depositories are members of the Federal Reserve System. <br /> ICustodial Credit Risk— Custodial credit risk is the risk that in the event of a bank failure; the <br /> Commission's deposits may not be returned to it. The Commission does not have a deposit <br /> Ipolicy for custodial credit risk and follows Minnesota Statutes for deposits. <br /> Minnesota statutes require that all deposits with financial institutions be protected by <br /> insurance, surety bond, or collateral. The market value of collateral pledged must equal <br /> I110% of deposits not covered by insurance or corporate surety bonds. <br /> Authorized collateral include: U.S. government treasury bills, notes, or bonds; issues of a <br /> I U.S. government agency; general obligations of a state or local government rated "A" or <br /> better; revenue obligations of a state or local government rated "AA" or better; irrevocable <br /> standby letter of credit issued by a Federal Home Loan Bank; and time deposits insured by <br /> I a federal agency. Minnesota statutes require securities pledged as collateral be held in <br /> safekeeping in a restricted account at the Federal Reserve Bank or at an account at a trust <br /> department of a commercial bank or other financial institution not owned or controlled by the <br /> Idepository. <br /> The Commission's cash balances at December 31, 2007 include deposits of $355,409. <br /> I <br /> I <br />