5.1. ERMUSR 04-13-2010 - Laserfiche WebLink

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ELK RIVER MUNICIPAL UTILITIES ELK RIVER, MINNESOTA NOTES TG FINANCIAL STATEMENTS DECEMBER 31, 2009 AND 2008 Note 1: SUNIMA,RY ®~' S~GNII~ SCANT .ACC`~UNTXNG P~L~C~ES - C~NT~NUED Compensated Absences All vacation benefits can be carried over from year to year and will be payable upon termination. Sick leave can be accumulated to a maximum of 9b0 hours from year to year. Upon terminatian or retirement, employees will have 5D percent of unused sick leave, up to a maximum of 800 hours, converted to cash and deposited into their Post Health Care Savings account. The liability for vacation and sick pay is reported as a liability in the respective funds at year end, Net .Assets Net assets represent the difference between assets and liabilities, Net assets are displayed in three components; a. Invested in capital assets, net of related debt ~ Consists of capital assets, net of accumulated depreciation reduced by any outstanding debt attributable to acquire capital assets, b, Restricted net assets w Consist of net assets restricted when there are limitations imposed on their use through external restrictions imposed by creditors, grantors, laws or regulations of other governments, c, Unrestricted net assets -All other net assets that do not meet the definition of "restricted" or "invested in capital assets, net of related debt". Comparative Data and Reclassifications Comparative total data for the prior year have been presented in the selected sections of the accompanying financial statements in order to provide an understanding of changes in the Utilities' financial position and operations. Also, certain amounts presented in the prior year data have been reclassified in order to be consistent with the cu.~•rent year's presentation. Note 2: DETAILED NOTES ®N .ALL ~`UND~ A~ Deposits and fnvestments Custodial credit risk for deposits and investments is the risk that in t1~e event of a bank failure, tl~e Utilities' deposits and u~vestments may not be returned or the Utility will not be able to recover collateral securities in the possession of an outside party. In accordance with Minnesota statutes and as authorized by the Commission, the Utility maintains deposits at those depository banks, all of whicl~ are members of the Federal Reserve System. Minnesota statutes require that all Utility deposits be protected by insurance, sul•ety band or collateral. The market value of collateral pledged must equal 110 percent of the deposits not covered by insurance or bonds, Authorized collateral in lieu of a corporate surety bond includes. United States gove~~unent Treasury bills, Treasury notes, Treasury bonds; o Issues of United States government agencies and inst~u~nentalities as quoted by a recognized industry quotation service available to the govez~am.ent entity; General obligation securities of any state or local government with taxing powers which is rate "A" or better by a national bond rating service, or revenue obligation securities of any state or local government with taxing powers which is rated "AA" or better by a national bond rating service; _~~_