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ELK RIVER MUNICIPAL UTILITIES
<br /> ELK RIVER,MINNESOTA
<br /> NOTES TO THE FINANCIAL STATEMENTS
<br /> DECEMBER 31,2015
<br /> Note 2: DETAILED NOTES ON ALL FUNDS-CONTINUED
<br /> • Concentration of Credit Risk. Is the risk of loss attributed to the magnitude of a government's investment in a
<br /> single issuer.According to their investment policy the Utilities' portfolio maturities shall be staggered to avoid
<br /> undue concentration of assets in any one type of instrument.
<br /> • Interest Rate Risk. Is the risk that changes in interest rates will adversely affect the fair value of an investment.
<br /> According to their investment policy the Utilities'will stagger maturities to avoid undue concentration of assets
<br /> at a specific maturity sector.
<br /> B. Capital assets
<br /> Capital asset activity for the year ended December 31,2015 was as follows:
<br /> Beginning Ending
<br /> Balance Increases Decreases Balance
<br /> Capital assets not
<br /> being depreciated
<br /> Land $ 361,303 $ 48 $ - $ 361,351
<br /> Construction in progress 815,710 1,650,484 (2,276,188) 190,006
<br /> Total capital assets
<br /> not being depreciated 1,177,013 1,650,532 (2,276,188) 551,357
<br /> Capital assets being depreciated
<br /> Land improvements 23,389 - - 23,389
<br /> Buildings 3,674,600 29,815 - 3,704,415
<br /> Machinery and equipment 3,218,436 419,949 (220,258) 3,418,127
<br /> Infrastructure 73,233,475 3,232,782 - 76,466,257
<br /> Total capital assets
<br /> being depreciated 80,149,900 3,682,546 (220,258) 83,612,188
<br /> Less accumulated
<br /> depreciation for
<br /> Land improvements (14,453) (936) - (15,389)
<br /> Buildings (1,578,405) (110,884) - (1,689,289)
<br /> Machinery and equipment (1,636,356) (154,879) - (1,791,235)
<br /> Infrastructure (29,843,671) (2,786,770) 113,959 (32,516,482)
<br /> Total accumulated
<br /> depreciation (33,072,885) (3,053,469) 113,959 (36,012,395)
<br /> Total capital assets
<br /> being depreciated,net 47,077,015 629,077 (106,299) 47,599,793
<br /> Business-type activities
<br /> capital assets,net $ 48,254,028 $ 2,279,609 $ (2,382,487) $ 48,151,150
<br /> 133
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