Directors' Message - Lewis County IDA

NOTES TO FINANCIAL STATEMENTS - CONTD.
MAY 31, 2005

B. Cash:

The Agency's investment policies are governed by state statutes. The Agency's monies must be deposited in FDIC-insured commercial banks or trust companies located within the state. The Agency is authorized to use demand and time accounts and certificates of deposit. Permissible instruments include U. S. Treasury bills.

Collateral is required for demand and time deposits and certificates of deposit for all deposits not covered by Federal deposit insurance. Obligations that may be pledged as collateral are obligations of the United States and its agencies and obligations of the state and its municipalities and school districts.

Deposits are valued at cost or cost plus interest and are categorized as either:

1. Insured or collateralized with securities held by the entity or by its agent in the entity’s name;

2. Collateralized with securities held by the pledging financial institution’s trust department or agency in the entity’s name; or

3. Uncollateralized. (This includes any bank balance that is collateralized with securities held by the pledging financial institution, its trust department, or agent but not in the entity’s name.)

Total financial institution (bank) balances at May 31, 2005 per the banks were $1,078,794. These deposits are categorized as follows:

(1) (2) (3)
$123,947 $954,847 $ ---

C. Rent Agreement:

The Agency pays monthly rent to Jim Arvanites for occupied office space. The monthly rent is $500 per the terms of an agreement between the Agency and Mr. Arvanites. Effective April 1, 2004 the monthly rent increased to $525 per month. Either party shall give 60 days written notice to terminate the agreement.

D. Notes Receivable:

	2005	2004
On December 2, 2004, //////////////////////// borrowed $500,000. The note provides for monthly payments of $5,334, including interest at one eighth of one percentage point less than the prime lending rate, but not to exceed 6.5% at any time. The interest rate at May 31, 2005 is 5.125%. These payments began April 1, 2005. The term of the note is ten years. The note is secured with a mortgage on the property.	$489,397	$ ---

A note receivable with the ///////////////////////////////////////dated November 6, 2003 was issued for a principal amount of $91,430 plus interest at 6.5% for a period of ten years. The note was advanced in two installments. The note provided for monthly payments of $1,039 including interest. The note was paid in full in June 2004.	---	$89,154

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