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� <br /> � � Swan's Nest Metropolitan District <br />Notes to Financial Statement� <br />December 31, 2008 <br />� <br />6. Risk Management <br />The District is exposed to risk of loss re{ated to torts; theft af, damage to, <br />, and destruction of assets; errars and omissions; injuries to employees; <br />natural disasters; and liabilities of various types. The District participated <br />in the Colorado Special Districts' Property and Liability Pool far coverage <br />� of these risks of loss. Premiums paid to the Poo1 have been reported as <br />insurance expense and prepaid expenses in the financial statements. Na <br />settlements have exceeded insurance coverage in each of the past three <br />, years. The District does not know its percentage share of the joint <br />venture. <br />ln the event that aggregated losses incurred by the Pool were to exceed <br />amaunts recoverable fram reinsurance contracts and capital and surplus <br />accumulated by the Pool, the Pool could require additional contributions <br />from Pool members. The audited financia! statements of the Pool are <br />available from the Special District Association of Colorado: <br />225 E 16 Ave., Suite 1120 <br />Denver, CO 80203 <br />(303) 863-1733 <br />7. <br />8. <br />Rela#ed Party Transactions <br />Beginning in 2008 a board member's wife does same of the office work for <br />the District and the office of the District is in the board member's home. 1n <br />addition, the District reimburses board member expenses. The District <br />made payments of $6,492 and $7,800 in 2008 and 2007, respectively. <br />Tax, Spending and Debt Limi#ations <br />Colorado voters passed an amendment to the State Constitution, Article <br />K, Section 20, known as the Taxpayer's Bill of Rights (TABOR) which has <br />several limitations, including revenue raising, spending abilities, and other <br />specific requirements of state and locat governments. The amendment is <br />cornplex and subject to judicial interpretation. The District be{ieves it is in <br />compliance with the requirements of the amendment. The District has <br />held an election to exempt itself from the TABOR amendment obligations, <br />however, the District has Emergency Reserves as required by Article X, <br />Section 20 af the Constitution of the State of Colorado of $1,769 and <br />$2,000 for 2008 and 2007, respectively. <br />11 <br />