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• Footnotes
NOTE 1: SUMMARY OF ACCOUNTING POLICIES
The Minnesota State Agricultural Society is charged with the conduct
of the annual State Fair and the management of the State Fairgrounds,
as outlined by Chapter 37 of Minnesota Statutes. The financial activities
of the Society are accounted for as an enterprise fund which operates
in a manner similar to a private business enterprise. Accordingly, the
accompanying financial statements are presented on an accrual basis.
The Society's accounting practices conform to generally accepted
accounting principles as prescribed by the Governmental Accounting
Standards Board (GASB).
Private-sector standards of accounting and financial reporting,
including Financial Accounting Standards Board (FASB) Statements
and Interpretations, Accounting Principles Board Opinions, and
Accounting Research Bulletins issued on or before November 30, 1989,
generally are followed in the financial statements to the extent that
those standards do not conflict with or contradict GASB guidance.
This report includes the Minnesota State Fair Foundation financial
statements. Although a legally separate organization, the foundation is
considered a component unit of the Society given its resources entirely,
or almost entirely benefit the Society, the Society is entitled to these
resources, and the resources are significant to the Society's operations.
Enterprise funds distinguish operating from non-operating items.
Operating revenues and expenses result from providing services or
producing and delivering goods in connection with the enterprise
fund's principal operations. Operating expenses for enterprise funds
include the cost of sales and services, administrative expenses and the
depreciation of capital assets. All other revenues and expenses are
reported as non-operating items.
Compensated absences consist of employee vacation and sick leave
benefits. These benefits are determined based on a formula with a
maximum number of hours accumulated and are payable upon death,
termination, or retirement. Compensated absences are reported as
non-current liabilities.
Costs of newly acquired assets are capitalized and written off as
depreciation charges over their estimated useful lives. Purchases over
$2,000 are capitalized. Depreciation is computed by the straight-line
method. The provision for depreciation is calculated based on the
following lives:
Electrical system 30 years
Fence & Fixtures 20 years
Gas distribution system 30 years
Land improvements 20 to 30 years
Personal Property 5 or 10 years
Sewer system 20 years
Structures 20 to 50 years
Water distribution system 20 to 50 years
Equity is classified as net assets and is presented in three components:
1. Invested in capital assets, net of related debt - consists of capital
assets, net of accumulated depreciation and any outstanding debt
that is attributable to the purchase, construction or improvement of
those assets.
2. Restricted net assets - consists of net assets with constraints or
restrictions placed on their use by external groups or through
enabling legislation.
3. Unrestricted net assets - consists of all other assets that do not
meet the criteria of restricted or invested in capital, net of related
debt.
NOTE 2: CASH AND CASH EQUIVALENTS
The Society cash balance is invested in deposit accounts and
government obligation funds invested exclusively in short-term
government securities that the Society considers to be cash
equivalents. Minn.Stat. Sec 118A.03 requires that deposits by
municipalities, including public corporations, be secured by depository
insurance, or a combination of depository insurance and collateral
security. The statute further requires that total collateral computed at its
fair market value b,e at least 10 percent more than the amount on
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deposit in excess of any uninsured portion at the close of the business
day. On October 31, 2008, the Society had short-term investments of
$4,714,223. Of that total, $4,079,881 was invested in repurchase
agreements, $621,023 was invested in certificates of deposit and
$13,319 was invested in U.S. Treasury and agency obligations.
Cash and Cash Equivalents of the Minnesota State Agricultural
Society for the years ending October 31:
Cash Equivalents - Restricted 2008 2007
Building Account $ 448 $ 446
Debt Service Account 1,352,359 874,755
Debt Service Reserve Account 873,405 873,405
Construction Account 13.319 12,865
Total Restricted Cash Equivalents 2,239,531 1,761,471
Cash Equivalents - Unrestricted 5,505,283 6,287,713
Total Cash Equivalents $ 7.744.814 $ 8,049,184
Restricted cash equivalents represent funds restricted in application by
enabling legislation or by revenue bond sale covenant requirements.
NOTE 3: PROPERTY, STRUCTURES, UTILITIES &
EQUIPMENT
Capital assets are recorded at cost and depreciated using the straightline
method over the useful life of the related asset. Costs of
improvements and renovations that add to the original value or materially
extend the useful life of the related asset, are capitalized and written off
as depreciable over their remaining estimated useful life.
Increases Decreases
NOTE 4: LONG-TERM OBLIGATIONS
Bond Payable
Note Payable
Net Increase
(decrease)
Beginning
Balance
11/01/07
2008
Current Long-term
$445,000 $8,730,000
460.000 3.680,000
905,000 12,410,000
$15,000 $(905,000)
Ending
Balance
10/31/08
Capital assets,
not being
depreciated:
Land $2,503,439 $2,503,439
Capital assets,
being depreciated:
Land
Improvements 61,474,821 7,307,002 (102,000) 68,679,823
Utility Systems 9,183,285 546,206 9,729,491
Personal Property 1,393,514 121,870 (238,741) 1,276,643
Total Capital
Assets,
being
depreciated 72,051,620 7,975,078 (340,741) 79,685,957
Less accumulated
depreciation for:
Land
Improvements (29,073,605) (1,853,019) 4,080 (30,922,544)
Utility Systems (4,736,552) (304,507) (5,041,059)
Personal Property (924,912) (192,697) 238,741 (878,868)
Total
accumulated
depreciation (34,735,069) (2,350,223) 242,821 (36,842,471)
Total
capital assets,
being
depreciated, net 37,316,551 5,624,855 (97,920) 42,843,486
Total capital
assets, net $39,819,990 5,624,855 (97,920) $45,346,925
2007
Current Long-Term
$430,000 $9,175,000
460,000 4,140,000
890,000 13,315,000
During 2003, the Minnesota State Agricultural Society issued State Fair
Revenue Bonds, Series 2003 in the amount of $11,110,000. Proceeds
from this bond series were used to provide funds to make capital
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