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<::) ~ . ) .... ~ M:o. W SElEGED NOTES TO FINANCIAL STATEMENTS SOUTHEASTERN COLORADO WATER CONSERVANCY DISTRIG DECEMBER 31, 1990 NOTE A - SIGNIFICANT ACCOUNTING POLICIES The District was created under Colorado State Statutes in 1958 to manage water resources. of the Arkansas. Ri~r Basin and to function as the legal taxing agency for the administration of the Fryingpan-Arkansas Project and contracting agent with the federal government for repayment of reimbursable costs at the project. The District levies property tax on portions of a nine county area within the District boundaries_ 1. ReportinR Entity - For {rnancial reporting purposes, Southeastern Colorado Water Conservancy District includes all funds, account groups and other en!ilies which are controlled by, or dependent on, the District. Control by or dependence on the District is determined on the basis of ;unding. administrati\.e control and re5ponsibility for re!>Ources. No other entities meet the criteria for inclusion in the District's financial stalements. 2. fund Accountinll: - 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 account. ing, recognizing r~nues when they are measurable and available, and expenses when incurred. NOTE B - CONTRACT OBLIGATIONS The contract between the District and the United States for partial repayment of the costs of the Fryingpan-Arkansas Reclamation project provides that the District will repay approximately $127 million of the estimated $485 million total project costs, in addition to certain operating and maintenance costs. The repdyment period is for 40 ~ars with an extension of 10 years if necessary. Annual payments are due in an amount approximating 90% of the prior ~ar's tax levy of the District. The most recent information available to the District rewals a scheduled remaining total obligation. including operaling and maintenance costs, of SI16.032,666 as of September 30, 1990. The District has also contracted with the United States to reM appro....imately $46 million of com incurred by the United States in construction of the Fountain \alley Conduit. Under a relaled contract with the Fountain Valley Authority, the Authority will pay an annual conveyance service charge to the District in an amount equal to the payment due to the United Stales. The 1991 charge of $991,911 which was ff"Cei..ro by the District and in turn remilled to the United States prior to December 31, 1990, has tx>en deferred to 1991. The District has not recei..ro information regarding the remaining obligation under the contract. NOTE C - KANSAS-COlORADO lAWSUIT 12 The District is cooperating with the State of Colorado in defending a lawsuit involving water users within the District boundaries. The action seeks no monetary damages. but the District expects significant resources 10 be el:pended in the form of legal and engineering fees until the matter is resol....ro.