04.07 Consider BLADC's 2002 & 2003 Audit

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BRAINERD LAKES AREA DEVELOPMENT CORPORATION NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 2003 AND 2002 NOTE 4 LONG TERM DEBT AND INVESTMENT IN MCCF During the year ended September 30,2003, the Organization entered into a participation agreement with Minnesota Community Capital Fund(MCCF). MCCF was created for the purpose of developing,funding, and operating a new finance program to encourage economic development. Members of MCCF will be able to originate loans of up to ten times the amount they invest with the fund to assist projects in their communities. Concurrent with this agreement, Crow Wing County transferred $78,363 in Revolving Loan Fund (RLF)dollars to the Organization. Of this amount,the Organization invested$50,000 with MCCF as a Class B member. This$50,000 investment is refundable to the Organization, upon request, after three years from the date of investment. The remaining$28,363 has been retained by the Organization in the form of a reserve account to be used to offset costs associated with individual projects that participate in the MCCF finance program. Crow Wing County retains ownership of the$50,000 investment,plus any unused reserve funds. NOTES DEFERRED REVENUE As of September 30,2003 and 2002, deferred revenue consisted of the following: 2003 2002 Local government support contracts $22 $ NOTE 6 DESIGNATED NET ASSETS As of September 30,2003 and 2002, Board designated net assets consisted of the following: 2003 2002 Contributed capital $78,318 $78,318 Venture capital 40,000 40,000 Interest earnings 123.518 117.914 Total $Z4= $2:= Contributed capital represents the amount of cash received from the investors of Build Brainerd, Inc.,a dissolved development corporation. These funds were transferred to Brainerd Lakes Area Development Corporation upon the dissolution of Build Brainerd, Inc. and have been designated by the board of directors for future use. Venture capital represents amounts designated by the board of directors for use in funding a venture capital program. �.. Interest earnings represents the unused accumulated interest earned on the above designated net assets. Designated net assets are invested in certificates of deposit of varying maturities. (See Note 2).