5.3. ERMUSR 04-12-2016 - Laserfiche WebLink

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ELK RIVER MUNICIPAL UTILITIES ELK RIVER,MINNESOTA NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31,2015 Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES-CONTINUED The Utilities reports the following major proprietary funds: The Electric fund accounts for the electric distribution operations. The Water fund accounts for the water distribution system. C. Assets,liabilities,deferred outflows of resources,deferred inflows of resources and net position Cash and cash equivalents The Utilities' cash and cash equivalents are considered to be cash on hand,demand deposits and short-term investments with original maturities of three months or less from the date of acquisition. Cash balances from all funds are pooled and invested,to the extent available,in certificates of deposit and other authorized investments.Earnings from such investments are allocated on the basis of applicable participation by each of the funds. The Utilities may also invest idle funds as authorized by Minnesota statutes,as follows: 1. Direct obligations or obligations guaranteed by the United States or its agencies. 2. Shares of investment companies registered under the Federal Investment Company Act of 1940 and received the highest credit rating,rated in one of the two highest rating categories by a statistical rating agency,and have a final maturity of thirteen months or less. 3. General obligations of a state or local government with taxing powers rated"A"or better;revenue obligations rated"AA"or better. 4. General obligations of the Minnesota Housing Finance Agency rated"A"or better. 5. Obligation of a school district with an original maturity not exceeding 13 months and(i)rated in the highest category by a national bond rating service or(ii)enrolled in the credit enhancement program pursuant to statute section 126C.55. 6. Bankers' acceptances of United States banks eligible for purchase by the Federal Reserve System. 7. Commercial paper issued by United States banks corporations or their Canadian subsidiaries,of highest quality category by at least two nationally recognized rating agencies,and maturing in 270 days or less. 8. Repurchase or reverse repurchase agreements and securities lending agreements with financial institutions qualified as a"depository"by the government entity,with banks that are members of the Federal Reserve System with capitalization exceeding$10,000,000,a primary reporting dealer in U.S. government securities to the Federal Reserve Bank of New York,or certain Minnesota securities broker-dealers. 9. Guaranteed Investment Contracts(GIC's)issued or guaranteed by a United States commercial bank,a domestic branch of a foreign bank,a United States insurance company,or its Canadian subsidiary,whose similar debt obligations were rated in one of the top two rating categories by a nationally recognized rating agency. Investments for the Utilities are reported at fair value. 127