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Little Thompson Water District <br /> Notes to Financial Statements <br /> December 31, 2009 <br /> Note 1 -Summary of Significant Accounting Policies <br /> Form of Organization <br /> Little Thompson Water District (the "District") is organized under the provisions of Section 32-1-305 (6) <br /> C.R.S. It is a quasi-municipal corporation and a political subdivision of the State of Colorado with all <br /> powers thereof which includes the power to levy taxes against property within the District. <br /> Reporting Entity <br /> For financial reporting purposes, management has considered all potential component units. The District <br /> meets the criteria of an"other stand alone government." <br /> Basic Financial Statements <br /> The District is a special-purpose government engaged only in business-type activities. As such,enterprise <br /> fund financial statements are presented. <br /> Basis of Accounting <br /> Proprietary funds are accounted for on a flow of economic resources measurement focus. With this <br /> measurement focus, all assets and all liabilities associated with the operation of this fund are included on <br /> the statement of net assets. Revenues and expenses are recorded in the accounting period in which they <br /> are earned or incurred, and they become measurable. Total net assets are segregated into amounts <br /> invested in capital assets, net of related debt,restricted for debt service and loan reserves,and unrestricted <br /> net assets. Proprietary fund-type operating statements present increases(e.g., revenues) and decrease <br /> (e.g., expenses) in net total assets. Proprietary funds are used to account for activities similar to those <br /> found in the private sector,where the determination of net income is necessary or useful to sound financial <br /> administration. <br /> Budgets and Budgetary Accounting <br /> An annual budget and appropriation resolution is adopted by the Board of Directors in accordance with the <br /> State Statutes. The budget is prepared on a basis consistent with generally accepted accounting <br /> principles except that capital asset additions and principal payments are budgeted as expenditures and <br /> debt proceeds are budgeted as revenues. <br /> 1. On or about October 15, the District staff submits to the Board of Directors a proposed <br /> operating budget for the fiscal year commencing the following January 1. The <br /> operating budget indudes proposed expenditures and the means of financing them. <br /> 2. Public hearings are conducted at regular Board meetings to obtain taxpayer <br /> comments. <br /> 3. Prior to December 15, the budget is legally adopted by the Board of Directors. <br /> 4. Unused appropriations lapse at the end of each year. <br /> The total appropriated expenditures for the District is $7,094,857 including a supplemental appropriation <br /> reduction in the amount of$344,000. <br /> Cash and Cash Equivalents <br /> For purposes of the statement of cash flows, the District considers all highly liquid investments purchased <br /> with an original maturity of three months or less to be cash equivalents. <br /> Investments <br /> The District's investments in marketable debt and equity securities are carried at fair value plus accrued <br /> interest with net appreciation or depreciation on investments included in earnings on investments. <br /> Amounts invested in certificates of deposit,with original maturities of greater than three months,are carried <br /> at fair value, induding accrued interest. <br /> 13 <br />