WSP09799

• File Number: 8131.600
• Description: Southeastern Colorado Water conservancy District - SECWCD
• State: CO
• Basin: Arkansas
• Water Division: 2
• Date: 3/18/1998
• Title: 1997 Annual Report - Southeastern Colorado Water Conservancy District
• Water Supply Pro - Doc Type: Annual Report

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SOUTHEASTERN COLORADO WATER CONSERVANCY DISTRICT
SELECTED NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997

NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES

The Southeastern Colorado ;.lacer Conservancy District (the District) was created in
1958 under Colorado Statutes to manage water resources of the Arkansas river basin
and to function as the legal agency for the administration of the Fryingpan-Arkansas
project and contracting agent with the federal government for repayment of
reimbursable costs of the project. The more significant of the District's accounting
policies are described below.

A. The Financial Reportinq Entitv For financial report~ng purposes, the
District. includes, if applicable, component units in its financial
statements based upon financial accountability. No component units have
been included in the financial statements since no entity meets the criteria
for inclusion.

B. Fund Accountinq/Basis of Accountinq The accounts of the District are
organized on the basis of funds and account groups, each of which is
considered a separate accounting entity. The general fund utilizes the
modified accrual basis of accounting wherein revenues are recognized when
measurable and available, while expenditures are recognized when the
liability is incurred.

c.

Budqet and Budqetarv Accountinq - The budget adopted by
is prepared in accordance with state statutes, is
modified accrual basis of accounting.

the District, which
prepared using the

D. Investments 4 Investments represent U. S. Treasury notes and are reported at
amortized cost.

NOTE 2 4 CONTRACT OBLIGATIONS

The provisions of the contract between the District and the U.S. government stipulate
that the District is responsible for repayment of a portion of the costs of the
Fryingpan-Arkansas reclamation costs. The total estimated repayment obligation of
the District is approximately $126 million, which includes certain operating and
maintenance costs. The repayment period is for 40 years with an extension of 10
years if necessary.

The District has also contracted with the U.S. government to repay approximately $63
million of costs incurred by the U.S. government in the construction of the Fountain
Valley conduit which is operated by the Fountain Valley Authority (the Authority). A
related contract with the Authority provides that the Authority .....il1 pay an annual
conveyance service charge to the District in an amount equal to the payment due to
the U.S. government. Terms of the contract provide that the District IS not
responsible for payment in the event of default by the Authority.

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