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ELK RIVER MUNICIPAL UTILITIES ELK RIVER, MINNESOTA NOTES TD FINANCIAL STATEMENTS DECEMBER 31, 2009 AND 2008 Note ~: SUMN~ARY ®F SIGN~F~CANT ACC~iJNTING P~LXCIES a C~NT1fNUE~ 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 thixteen 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, S, Bankers' acceptances of United States banks eligible for purchase by the Federal Reserve System. 6. 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, 7. Repurchase or reverse repurchase agreements and securities lending agreements with financial institutions qualified as a "depositary" by the government ezatity, with banks that are members of the Federal Reserve System with capitalization exceeding $10,000,000, a prhnary repo~•ting dealer in U.S. government securities to the Federal Reserve Bank ofNew York, ar certain Minnesota securities broker-dealers. 8. Guaranteed investment contracts ~GIC's) issued or guaranteed by a United States camrnercial 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 ofthe top two rating categories by a nationally recognized rating agency. Investments for the Utilities are reported at fair value. Accounts Receivable Accounts receivable include amounts billed for services provided before year end, The Utilities has established a reserve for uncollectible accounts which is adjusted annually based on the receivable activity, No substantial losses from present receivable balances are anticipated. A summary of the uncollectible account balances at December 3I, 2009 and December 31, 2008 is as follows; Increase 2009 2008 (Decrease) Electric $ 7$,750 $ 78,750 $ water 26,250 26,250 Total ~ 105,000 ~ X05,000 ~ _~I.