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SOUTHEASTERN COLORADO WATER CONSERVANCY DISTRICT <br />NOTES TO FINANCIAL STATEMENTS <br />DECEMBER 31, 2005 <br />NOTE 1 -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Cont'd.) <br />E. CASH, CASH EQUIVALENTS AND INVESTMENTS <br />Cash and cash equivalents consists of interest and non-interest-bearing demand deposits and money market <br />mutual funds held at a brokerage. Investments include U.S. agency securities that are reported at fair value <br />based on quoted market prices. Any related unrealized gain or loss is included as part of investment income. <br />F. CASH EQUIVALENTS <br />For purposes of the statement of cash flows, all highly liquid investments, if any, with a maturity of three <br />months or less when purchased are considered cash equivalents. <br />G. PROPERTY TAXES <br />Property taxes were levied on December 13, 2005 based on the assessed value of property as certified by the <br />County Assessors by the previous October 10. Assessed values are a percentage of actual values. A <br />reevaluation of all property must be made every two years. The last reevaluation date was January 1, 2003 for <br />the 2002 base year specified by state law. <br />The taxes levied on December 13, 2005 reflect 2005 property taxes that will be collected in 2006 by the <br />County Treasurers in each county within the District's boundaries. Taxes collected by each Treasurer are <br />remitted to the District on a monthly basis. These taxes are due January 2, 2006 and may be paid in two <br />installments (February 28 and June 15) or they may be paid in full April 30. Taxes not paid in accordance <br />with this schedule accrue interest and penalty charges and are subject to liens if not paid by November. <br />H. PREPAID ITEMS/DEFERRED REVENUE <br />Prepaid items represent payments made for expenditures to be charged to a future accounting period. The <br />prepaid contract obligation reported in the governmental activities and the general fund are also reported as <br />unearned or deferred revenue since the collection of the funds occurs prior to the accounting period for which <br />it is effective. <br />I. ADVANCES TO OTHER FUNDS <br />In the governmental fund financial statement, the long-term portion of the advance to other fund is equally <br />offset by a fund balance reserve account to indicate they do not represent available spendable resources in the <br />governmental fund. <br />-20- <br />