Laserfiche WebLink
<br />2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) <br /> <br />E. Phvsical Facilities and Deoreciation <br /> <br />Capital assets, which consist of a water production and distribution system, are shown at <br />original cost. Interest paid during construction of facilities, if any, is also included in this <br />cost. Depreciation has been provided for the Authority's water production and distribution <br />system using the straight-line method over a 30-year estimated useful life. <br /> <br />3. CASH AND CASH EQIDV ALENTS <br /> <br />Cash and cash equivalents represent the Authority's equity interest in the City's consolidated cash <br />and cash equivalents account consisting of demand accounts and short-term investments with <br />maturity at date of purchase of three months or less. State statutes require that all funds in <br />depository institutions be covered by federal depository insurance and/or be secured in the manner <br />provided by law for security of funds. Cash and cash equivalent balances held by the City were <br />entirely covered by federal depository insurance or security as required at September 30, 2009. <br /> <br />At year-end, a portion of the Authority's cash was restricted as follows: <br /> <br />Restricted for retirement of current debt service liabilities <br />and reserve requirements per bond covenants <br /> <br />$ <br /> <br />740,456 <br /> <br />Total restricted cash <br /> <br />$ <br /> <br />740,456 <br /> <br />4. TEMPORARY INVESTMENTS <br /> <br />Temporary investments represent the Authority's equity interest in the City's investment pool. <br /> <br />The carrying amount for temporary investments at September 30, 2009, was $1,387,593 and <br />includes the recognition of a gain of $1,409, which represents the difference between the book <br />value and quoted market value of the temporary investments. <br /> <br />Interest Rate Risk <br /> <br />The Authority's investment policy specifies that the maximum stated maturity, from the date of <br />purchase for any individual investment may not exceed five years and the maximum weighted <br />average maturity may not exceed two years. At year-end, the Authority's weighted average <br />maturity of the investment portfolio was as follows: <br /> <br />Investment Type <br /> <br />Weighted Average <br />Maturity (Days) <br /> <br />Federal Home Loan Mortgage Corporation <br />Federal National Mortgage Association <br /> <br />870 <br />548 <br /> <br />Portfolio weighted average maturity <br /> <br />708 <br /> <br />(continued) <br /> <br />11 <br />