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LOWER RUM RNER WATER MANAGEMENT ORGANIZATION <br />NOTFS TO FINANCIAL STATBviIIdTS <br />Note 1. Nature of the (k;anirerinn <br />The Organi7ation is a waterslied msnagement organization wluch has been created to fiilfill the <br />requiremenu and purposes of Minnesota Statutes 103B.201 to 103b.251. The purpose of such an <br />organization as defined by Minnesota Statutes 103b.201 is to; "protect, preserve and use natwai <br />surface and ground water storage and reteation systems in order to (a) reduce to the geatest practical <br />extent the public capital expenditures necessary W con4ol excessive volumes andrates of ruuofF, (b) <br />protect and improve sur£ace and ground water quality, (c) prevent flooding and erosion from surface <br />flows, (d) promote ground water recharge, (e) protect and enhance fvsh andwildlife habitat andwater <br />recreational facilities, and (~ secure tl~e other benefits associated with the proper management of <br />surface and ground water." <br />The cities ofAndover, Anoka, CoonRapids and Ramsey formedthe Organi~arion byexecuting a joint <br />powers agreement in accordance with Minnesota Statute 103B.211 dated July 15, 1985. <br />Note 2. CurtLmarv of cien~ficant acrnLntinE olici c <br />TLe accompanying summary of significant accaunting policies is presented to assist the reader in <br />understanding the Org~ization's fmancial statements. The Financial statements are representalions <br />of the Oroan~on's management which is responsible for their integrity and objectivity. <br />Cash equivalents - forpurposes of the statement of cash flows, the Organization wnsiders all highly <br />liquid investrnenu with a mahmty of three months or less when purchased to be "cash equivalenu". <br />Income taxes - As a joint powecs watushed manag~ent organization, the Organi7ation is exempt <br />from both Federal and Minnesota income taxes. Accordingly, no provision for income ta~ces is <br />included in these financial statements. <br />Note 3. Certificates of d~osit <br />Certi£icates of deposits aze carried at cost plus accmed interest. Certificates of deposit were entirely <br />covered by federal depository insucance. The Organi~ation's ,deposits are categorized as to risk in <br />Category 1 which includes inveshnents that are insured held by the Organization. <br />-5- <br />