CENTRAL INTERSTATE LOW-LEVEL
RADIOACTIVE WASTE COMMISSION
Financial Statements
June 30, 1998 and 1997
(With Independent Auditors' Report Thereon)
Notes to financial statements
June 30, 1998-1997
The Central Interstate Low-Level
Radioactive Waste Commission (Commission) was established in 1984 by an
interstate compact among the states of Arkansas, Kansas, Louisiana, Nebraska
and Oklahoma with consent of Congress through the Omnibus Low-Level Radioactive
Waste Interstate Compact Consent Act. The purpose of the Commission is
to carry out the mandate of the Central Interstate Low-Level Radioactive
Waste Compact by providing for and encouraging the safe and economical
management of low-level radioactive wastes within the compact region.
The Commission is an instrumentality
of the compact member states and as such, is exempt from Federal and state
income taxes under Section 115 of the Internal Revenue Code.
(2) Summary of Significant
Accounting Policies
Property and Equipment
Property and equipment consists
of furniture, fixtures and equipment recorded at cost. Depreciation is
calculated on a straight-line basis over the estimated useful lives of
the assets which is currently three to five years.
Restricted Assets
The source of the project fund
is from six major generators which are providing funding for the low-level
radioactive waste disposal project under an agreement with the Commission
(see note 4). The six major generators are Arkansas Power and Light
Company, Gulf States Utilities Company, Louisiana Power and Light Company,
Nebraska Public Power District, Omaha Public Power District and Wolf Creek
Nuclear Operating Corporation. The agreement specifies the project funds
provided by the major generators are to be used only to reimburse US Ecology,
Inc. (US Ecology) for project costs incurred as defined in Section 4.01
of the Commission's contract with US Ecology. The use of interest earned
on the project fund is not restricted.
Use of the rebate fund is restricted
to payment of certain costs incurred to establish the low level waste facility
or mitigate the impact of low level radioactive waste disposal facilities
on the State of Nebraska.
The Commission has agreed to guarantee
payment by US Ecology of certain licensing activity costs incurred by the
State of Nebraska. Related to this guarantee, the Commission is obligated
to create and maintain a segregated restricted account with a balance of
$1,000,000 for a guarantee fund, if needed, for payment of the State of
Nebraska's licensing expenses and payments to its contractors in the license
application and review process, should US Ecology default on prelicensing
payments to the State of Nebraska. On July 12, 1996, the Commission
transferred $600,000 to the guarantee fund from rebate funds. The major
generators also deposited $400,000 in the Commission guarantee fund on
July 12, 1996. Commission management believes that presently no circumstances
exist to cause the use of monies in the guarantee fund for payment of licensing
costs incurred by the State of Nebraska. At the end of the prelicensing
period, when the license decision is final, the guaranty provisions expire.
When that date approaches and any remaining anticipated costs of the licensing
activities are determined and paid, the $400,000 balance in the guarantee
fund shall be released to the major generators. The remaining $600,000
may then be used by the Commission for any legal purpose.
The interest income earned on the $400,000 deposited in the guarantee fund by the major generators is remitted directly to the major generators. The interest income earned on the remaining $600,000 is periodically transferred to the rebate fund.
The Commission
applies all applicable Financial Accounting Standards Board Statements
and Interpretations, Accounting Principles Board Opinions, and Accounting
Research Bulletins except for those that conflict with or contradict Government
Accounting Standards Board's (GASB) pronouncements.
Use of Estimates
Management of the Commission has
made a number of estimates and assumptions relating to the reporting of
assets and liabilities to prepare these financial statements in conformity
with generally accepted accounting principles. Actual results could differ
from those estimates.
Reclassification
Certain balances from 1997 have
been reclassified to conform with the current year presentation.
(3) Cash and Certificates of Deposit
At June 30, 1998 and 1997, the
Commission had cash and certificates of deposit of $2,142,481 and $2,127,974,
respectively. The bank balances at June 30, 1998 and 1997 were substantially
the same. At June 30, 1998, administrative, community improvement and project
funding accounts included demand deposits of $38,582 covered by FDIC deposit
insurance and $769,387 invested in short-term federal investment trust
accounts backed by the full faith of the federal government. At June 30,
1998, $100,000 of rebate fund certificates of deposit were covered by FDIC
deposit insurance and the remaining $1,234,512 were collateralized by government
securities/agencies held in joint custody at the federal reserve, by the
pledging bank, in the Commission's name.
(4) Contractual Agreements
The Commission has an agreement
with US Ecology for the design, development, construction, operation and
eventual decommissioning of a facility for the disposal of low-level radioactive
waste. The agreement specifies eight project phases from identification
of a host state and preparation of a siting plan to closure and post closure
of the facility.
Current funding for the siting,
licensing, development and construction of the facility is being provided
by six major generators under separate agreement and, in part through equity
contributions from US Ecology. Equity contributions were accomplished by
US Ecology through credits on billings to the Commission for the facility.
The Commission entered into the agreement to provide necessary funding
for the project with the major generators.
(5) Lease
Rent expense under an operating lease for office space was $35,380 and $35,218 for the years ended June 30, 1998 and 1997, respectively. The future minimum rental payments under this lease are as follows:
For the year ended June 30:
1999 $ 28,840
2000 $19,227
