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<br />NOTE 1. <br /> <br />NORTH METRO TELECOMMUNICATIONS COMMISSION <br />NOTES TO FINANCIAL STATEMENTS <br /> <br />NATURE OF ACTIVITIES AND SIGNIFICANT ACCOUNTING <br />POLICIES <br /> <br />Nature of Activities: <br /> <br />The general purpose of the Commission is to award, administer and enforce a <br />cable conmmnications franchise in member municipalities located in the North <br />Central region of the Twin Cities County in Minnesota. The Commission also <br />administers and operates the cable television access functions of the franchise. <br /> <br />The commission, being established by the joint powers agreement, is considered a <br />governmental entity and as such is exempt from state and federal income taxes. <br /> <br />Measurement Focus, Basis of Acconnting and Basis of Presentation: <br /> <br />The Commission has adopted Governmental Accounting Standards Board <br />(GAS B) Statement No. 34, Basic Financial Statements and Management's <br />Discussion and Analysis for State and Local Governments, which establish the <br />financial reporting standards for all state and local government entities. <br /> <br />The accompanying financial statements have been prepared using the economic <br />resources measurement focus and the accrual basis of accounting and reflect <br />transactions on behalf of the Commission, the repOliing entity. The Commission <br />accounts for its operations as an enterprise fund. Operating revenues and <br />expenses result ii-om administering and enforcing the cable communications <br />franchise and operating the cable television access function. All other revenues <br />and expenses are reported as non-operating revenues and expenses. <br /> <br />The Commission has adopted the option to apply only those Financial Accounting <br />Standards Board (F ASB) statements and intellJretations issued after November <br />30, 1989 that do not conflict with or contradict GASB pronouncements. <br /> <br />Cash and Cash Equivalents and Investments: <br /> <br />For the purposes of cash flows, the Commission considers all highly liquid debt <br />instmments with an original maturity of three months or less to be cash <br />equivalents. <br /> <br />Investments are reported at fair market value and consist 0 f the Minnesota Money <br />Market fund (4M). The 4M fund investments are exempt from Govenunental <br />Accounting Standards Board Statement No.3 reporting requirements. <br /> <br />The Commission has reported all investment income as non-operating revenue in <br />the Statement of Activities. <br /> <br />P.10\ <br />