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<br /> <br /> <br /> Paris Economic Development Corporation <br /> (A Component Unit of the City of Paris, Texas) <br /> Notes to Financial Statements (Continued) <br /> September 30, 2009 <br /> <br /> Note 2: Summary of Significant Accounting Policies (Continued) <br /> B. Assets, Liabilities, and Net Assets (Continued) <br /> <br /> 2) Restr cted Assets and Fund Balance Reserves <br /> <br /> Certain resources set aside for repayment of revenue bonds and related interest are <br /> classified as restricted assets on the balance sheet because their use is limited by applicable <br /> bon covenants. The Debt Service Fund is used to accumulate resources for debt service <br /> payments over the next twelve months. Governmental funds report reservations of fund <br /> balances for amounts that are not considered a current financial resource. <br /> The Reserve Fund is accumulated for the purpose of retiring the last of any bonds as they <br /> become due or for debt service when the Debt Service Funds are insufficient. <br /> 3) Lan Development Cost - Industrial Park <br /> <br /> PE has acquired land and added improvements to develop an industrial park which is to <br /> be divided and sold to businesses wanting to locate their facilities in such an area. Land <br /> and dded improvements are not depreciated because they are expected to be sold and are <br /> not used in PEDC's ongoing activities. <br /> 4) Use of Estimates <br /> <br /> The reparation of financial statements in conformity with accounting principles generally <br /> accepted in the United States of America, requires management to make estimates and <br /> assumptions that affect the reported amounts of assets and liabilities at the date of the <br /> financial statements and the reported amounts of revenues and expenses during the reporting <br /> period. Actual results could differ from those estimates. <br /> 5) Excess of Expenditures Over Appropriations <br /> Forte year ended September 30, 2009, expenditures exceeded budgeted amounts in the <br /> General Fund in Insurance and Bonds ($4,834), Special Service Fees ($26,540), All Utilities <br /> ($266), Personnel Compensation ($27,603), Equipment ($1,019), and Principal ($184). <br /> Note 3: Deposits and Investments <br /> <br /> PEDC mainta s accounts in several financial institutions. At September 30, 2009, the carrying <br /> amount of demand deposits and certificates of deposit was $907,639 and the bank balance was <br /> $922,285, which was covered by federal depository insurance in the amount of $643,017 leaving <br /> $279,268 which was exposed to custodial credit risk since all deposits were not insured. <br /> Note 4: Public Funds Investment Pools <br /> <br /> Public funds vestment pools in Texas (Pools) are established under authority of the Interlocal <br /> Cooperation Act, Chapter 79 of the Texas Government Code, and are subject to the provisions of the <br /> Public Funds Investment Act (the Act), Chapter 2256 of the Texas Government Code. In addition to <br /> other provisions of the Act designed to promote liquidity and safety of principal, the Act requires <br /> Pools to: 1) have an advisory board composed of participants in the Pool and other persons who do <br /> <br /> <br /> <br /> 5 <br />