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Little Thompson Water District
<br /> Notes to Financial Statements
<br /> December 31, 2009
<br /> Note 8-Pension Plan
<br /> The District has adopted a defined contribution pension plan administered by Colorado County Officials
<br /> and Employees Retirement Association which provides pension benefits for all full time employees. In
<br /> a defined contribution plan, benefits depend solely on amounts contributed to the plan plus investment
<br /> earnings. The total payroll was $1,875,547 and $1,723,075 for the years ended December 31, 2009
<br /> and 2008, respectively, and covered payroll was $1,401,220 and $1,414,538 for the years ended
<br /> December 31, 2009 and 2008, respectively. All employees are eligible to participate in the plan after
<br /> they have been employed for one year and worked for a minimum 32 hours per week or 1,000 hours per
<br /> year.
<br /> The District and its employees each contribute an amount equal to 5% of the employees' annual base
<br /> salary or wage. Employees become vested in District contributions at the rate of 20%per year and are
<br /> fully vested after five years.
<br /> The District contributed$70,061 and$70,727 to the plan for covered employees during the years ended
<br /> December 31,2009 and 2008, respectively.
<br /> Note 9-Termination Benefits
<br /> In December 2009,the District committed to a reduction in workforce resulting in the termination of two
<br /> employees. As part of the termination benefits the District made cash payments to these employees in
<br /> January 2010 based upon the length of service with the District. The cost of these payments,$112,770,
<br /> is reported in the Statement of Net Assets as a current liability and in the Statement of Revenues,
<br /> Expenses and Changes in Net Assets as an expense.
<br /> Note 10 - Risk Management
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<br /> The District is exposed to various risks of loss related to torts, thefts of, damage to, or destruction of
<br /> assets; errors or omissions; injuries to employees, or acts of God. The District maintains commercial
<br /> insurance to mitigate these risks of loss. Settled claims have not exceeded this commercial coverage in
<br /> any of the past three fiscal years.
<br /> Note 11 -TABOR Compliance
<br /> In November 1992, Colorado voters passed an amendment(Amendment One)to the State Constitution
<br /> (Article X, Section 20) which limits the revenue raising and spending abilities of state and local
<br /> governments. The limits on property taxes, revenue, and "fiscal year spending" include allowable
<br /> annual increases tied to inflation and local growth in construction valuation. Fiscal year spending, as
<br /> defined by the amendment, excludes spending from certain revenue and financing sources such as
<br /> federal funds, gifts, property sales,fund transfers, damage awards, and fund reserves(balances). The
<br /> amendment requires voter approval for any increase in mill levy or tax rates, new taxes, or creation of
<br /> multi-year debt. Revenue earned in excess of the"spending limit"must be refunded or approved to be
<br /> retained by the District under specified voting requirements by the entire electorate.
<br /> The amendment also requires local governments to establish emergency reserves to be used for
<br /> declared emergencies only. Emergencies, as defined by the amendment, exclude economic
<br /> conditions, revenue shortfalls, or salary or fringe benefit increases. These reserves are required to be
<br /> 3%or more of fiscal year spending(excluding bonded debt service). The District is an Enterprise Fund
<br /> and has no TABOR revenues and therefore has not set aside any monies for emergencies as defined by
<br /> TABOR.
<br /> The District believes it is in compliance with the provisions of TABOR. However, TABOR is complex
<br /> and subject to interpretation. Many of its provisions will require judicial interpretation.
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