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09/12/2006 TUE 16:08 FAX 7192545150 LAVNCD Fax -�-�-� Peter Nichols <br />LOW ER ARKANSAS VALLEY WA7ER CONSERVANCY DISTRECT <br />NOTES TO FINANCIAL STATEMEN7S <br />;': <br />� <br />,.: <br />i <br />�, <br />i <br />i_�: <br />I <br />i <br />i <br />i <br />I <br />�� <br />NOTE 4 — CAPITAL ASSETS <br />Business-Type Ac#Ivities — Capital Assets Not Being Depreciated: <br />Water & Land <br />Options <br />Water Shares <br />Total <br />NOTE 5 — NO7E PAYABLE <br />Beainnina <br />$ 157,760 <br />1.225,105 <br />�c_;• <br />Increases <br />$ 0 <br />785,7fi5 <br />�_� <br />Decreases <br />$ 0 <br />0 <br />$ 0 <br />Endina <br />$ 157,760 <br />2.010.870 <br />� <br />[�o2iio2s <br />The notes were issued for the purchase of water rights. The notes are callateralized by the water rights <br />and bear interest at the rate of 3% per annum. The notes mature as follows: <br />Princi�al Interest Total <br />2005 $ 245,609 $ 28,070 $ 273,679 <br />2006 201,477 20,702 222,179 <br />2007 207,522 14,657 222,179 <br />20Q8 213,747 8,432 222,179 <br />2009 67.312 2.0'19 69.331 <br />Total $ 935.667 $ 73.880 $ 1.009.547 <br />The following is a summary of activity for the notes payable of the business-type activities for the year <br />ended December 31, 2004 <br />Beginning Balance $ 70Q,000 <br />New Notes Issued 367,515 <br />Payments 131 848 <br />Ending Balance $�? <br />Due Within One Year � 245.609 <br />NOTE 6 - AMENDMENT ONE <br />Colorado voters passed an amendment to the State Constitution, Article X, Section 20, which has several <br />limitations, including revenue raising, spending abilities, and other specific requirements of state and local <br />govemments. <br />The entity's financial activity provides the basis for calculation of limitations adjusted for aliowable <br />incresses tied to inflation and local growth. <br />Fiscal year spending and revenue limits are determined based on the prior years' spending adjusted for <br />inflation and local growth. Revenue in excess of the limit must be refunded unless the voters approve <br />retentian of such �evenue. <br />Fiscal year spending is generally defined as expenditures plus reserve increases with certain exceptions. <br />In effect, it has been generally interpreted that flscal year spending approximates nonexempt revenue or <br />. receipts. Spending excludes spending from certain revenue and financia� sources such as federaf funds, <br />gifts, property, sales, fund transfers, damage awards, and fund resenres. <br />The Amendment requires, with certain exceptions, voter approval prior to imposing new taxes, increasing <br />tax rates, increasing a m111 levy above that for the prior year, extending an expiring tax, or implementing a <br />tax policy change directly causing a net tax revenue gain to any local govemment. <br />PAGE 12 <br />