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Center of Colorado Water Conservancy District Notes to Financial Statements December 31, 2009 NOTE A — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 7. Net Assets, Restrictions Thereon and Reservation of Fund Balance - continued legislation or as required by outside parties such as creditors and /or lenders. As reserved fund balance, these amounts are not available for appropriation in the current period for ordinary operations, and as a restriction of net assets they are similarly available only to finance specified activities. At The unreserved general fund balance indicates the portion of fund equity available for appropriation in future periods. Likewise, unrestricted net assets can be used to ance government -wide activities in future periods. In situations where an "emergeno, expense as defined in enabling legislation would be incurred, the District in ds i apply any available unrestricted resources. NOTE B - CASH DEPOSITS, EQUIVALENTS and RELA R Checking and Money Market Accounts: At December 31, 2009, the general fund's operating checking " -pcco contained IC). In addition, the District's deposits are held at a comme subject to The Public Deposit Protection Act (PDPA). Under this CJew St ute, public entities such as the District are required to place funds in an "eligi lic d ository" which are banks certified by the Colorado State Banking Bo ertified banks must pledge and deliver to an escrow institution, approve (late I iian amount equal to 102% of the uninsured public deposits held by the ank. ' th event the certified bank becomes insolvent the collateral is liquidated t imbur the public entities for any loss in excess of FDIC insurance. In addition to the two operati nal b k ccounts, the general fund maintained cash equivalent balances with TR T- PRIME. COLOTRUST, a /k/a Colorado Local Government Liquid A money market fund established solely for governmental entitle o o statute. Governmental entities pool surplus funds in COLOTRUST. Ive m ber Board of Trustees, elected by the fund participants, is responsible for he management of COLOTRUST. has Iment o funds -PRIME and PLUS +. The PRIME fund invests in U.S. d agencies. Both funds are rated AAAm from Standard and ng agency. Shares in COLOTRUST are equal in value to $1.00 each. ted custodial bank provides safekeeping and depository services to facilitate s ns between participating governmental entities and COLOTRUST. I addition, MBIA Inc. -the parent company of an investment advisor to COLOTRUST- as issued a guarantee to protect COLOTRUST participants against losses of principal during the term of their investment in COLOTRUST and upon liquidation of funds. Therefore, MBIA Inc. will pay COLOTRUST the amount of any realized losses which result in a material decline in the constant $1 net asset value per share. MBIA's guarantee is effective so long as its subsidiary continues as investment advisor and administrator. 13