FY 2005 MWMC Annual Financial Statements

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METROPOLITAN WASTEWATER MANAGEMENT COMMISSION NOTES TO FINANCIAL STATEMENTS 3une 30, 2005 and 2004 NOTE A -SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -Continued The estimated useful lives agree with those used for cost analysis purposes as required by federal regulations. They are as follows: Plant and buildings 10 - 40 years Machinery and equipment 5 - 15 years Interest is capitalized. on assets acquired with tax exempt debt. The amount of interest .capitalized is calculated by offsetting interest expense incurred from the date of the borrowing until completion of the project with interest earned on invested proceeds over the same period. Accumulated Unpaid Vacation. Sick Pay and Other Benefit Amounts Accumulated unpaid vacation, sink and compensatory time are reported aslong-term liabilities. 8. Use of Estimates it in preparing the Commission's financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 9. Risk Manaeement MWMC is exposed to various risks of loss related to torts, theft of, damage to, and destruction of assets. MWMC carries commercial insurance for such risks of loss. Settled claims resulting from these risks have not exceeded commercial insurance coverage in any of the past three fiscal years. 10. Net Assets Net assets represent the difference between assets and liabilities. Net assets are categorized by availability.. Total net assets at June 30, 2005 equal $96,014,696. Total net assets at June 30, 2004 equal $93,824,631. NOTE B -INTERGOVERNMENTAL AGREEMENTS In accordance with the MWMC service agreement dated July 14, 1983 and updated on April 19, 2001, the City of Eugene is responsible for the operations of the regional sewage facilities. The agreement obligated MWMC for costs incurred by the City in operating and maintaining the regional sewage facilities. These costs include employee benefits for City of Eugene employees. The interagency payable at June 30, 2005., for operation and maintenance costs incurred by the City is $1,407,188($1,221,110 for 2004).- The total costs charged to MWMC for the year ended June 30, 2005 were $8;683,637 ($8,673,3,32 for 2004). _ The City of Springfield, in accordance with the MWMC service agreement dated July 14, 1983 and updated April ~~, ~ 19, 2001, provides the technical, financial and administrative support services to MWMC. Costs charged to ~ ' MWMC for the years ended June 30, 2005 and 2004 were $2,175,569 and $1,796,371, respectively and include employee benefits for City of Springfield employees. 15