01-15-1991 Meeting - Laserfiche WebLink

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• i ,,= .;~ LA PORTE AREA WATER AUTHORITY Notes to Financial Statements (b) Basis of Presentation -Fund Accounting The operations of the Authority are recorded in an enterprise fund. Enterprise funds are used to account for operations (a) that are financed primarily through user charges, or (b) where the governing body has decided that determination of net income is appropriate. The enterprise fund is a proprietary fund type. (c) Basis of Accounting The Authority maintains an accounting system in accordance with the requirements of the Texas Department of Water Resources' Water District Accountine Manual. (d) Cash Equivalents For purposes of the statements of cash flows, the Authority considers cash held in demand accounts and all short-term investments with a maturity at date of purchase of three months or less to be cash equivalents. (e) Construction-in-progress The Authority, in conformity with requirements of the Texas Water Commission, capitalizes during construction all costs incurred for construction of facilities, the issue and sale of bonds, attorney's fees, interest and some administrative expenses until acceptance or use of the revenue-producing facility has occurred. Interest capitalized during 1990 and 1989 totaled $743,384 and $18,982, respectively. (3) Cash and Temporary Investments The Authority holds its cash and temporary investments separately in each of its funds. Following is a description of the Authority's investment policies and the n~pes of insurance and collateral maintained on cash and temporary investments. Statutes o~ the State of Texas and policies mandated by the Authority's Board of Directors authorize the Authority to invest only in obligations of the U.S. Treasury, certificates of deposit issued by local financial institutions or money market accounts with local financial institutions. -. As of September 30, 1990 and 1989, the ~4nthority had total cash and temporary investments of $2,169,054 and $3,770,803, respectively. Of this total $169 and $5,014, was covered by federal depository insurance and $2,168,885 and $3,765,789, respectively by collateral held at the Federal Reserve Bank at Houston and in third-party banks' trust departments in the Authority's name. Temporary investments included $500,598 and $286,489 of pooled investments with the Authority's oversight unit, the City of La Pone. (Continued)