2012 Budget - South Suburban Parks and Recreation

South Suburban Park and Recreation District
Summary of Significant Financial Policies
Pooled Cash and Investments
The District follows the practice of pooling cash and investments of all funds to maximize
investment earnings. Except when required by trust or other agreements, all cash is
deposited to and disbursed from a single bank account. Cash in excess of immediate
operating requirements is pooled for deposit and investment flexibility. Net investment
income is allocated periodically to the participating funds based upon each fund’s average
equity balance in total cash.
Investment Policy
The investment policy of the District is to minimize credit and market risks while
maintaining a competitive yield on its portfolio. Accordingly, all deposits are either insured
by federal depository insurance or collateralized. Allowable investments include U.S.
Government Securities and Agencies, Repurchase Agreements, Commercial Paper, Money
Market Funds, Time Certificates of Deposit, and Local Government Investment Pools. The
maturities of the investments generally range from 30 days to one year, with the average
maturity being six months. Investments must have a maturity date that is less than three
years.
Capitalization Policy
The following is the approved capitalization policy of the South Suburban Park and
Recreation District:
The following definitions of capital expenditures are provided to ensure uniform
reporting by all departments.
Capital Expenditures - A capital expenditure is any physical resource that benefits a
department for more than three years and has a unit cost in excess of $5,000 for
equipment and $50,000 for improvements. Capital expenditures include funds
expended for land, water rights, building and improvements, improvements other than
buildings, and equipment.
Land - Land includes the direct cost of acquisition, legal fees, site preparation costs
and the cost of demolishing unwanted structures on the land. Costs incurred to obtain
easements are considered services and other changes.
Water Rights - Water rights includes the direct cost of acquisition, legal and
engineering fees related to the development and augmentation of water rights. All
other costs, including legal and engineering fees incurred for the protection of water
rights are considered services and other charges.
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