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W and Sanitation Distric <br /> Winter Park Water an District <br /> NOTES TO FINANCIAL STATEMENTS <br /> (continued) <br /> December 31, 2010 and 2009 ' <br /> includible compensation in accordance with Section 457 of the Internal Revenue Code. <br /> The District matches 100% of the first 5% of the employees' contributions. The <br /> contributions for each employee vest immediately. The employees may withdraw <br /> funds from the plan as allowed under IRC Section 457. Plan provisions and <br /> contribution requirements are established and may be amended by the District Board <br /> of Directors. In accordance with Internal Revenue Code Section 457(b), all plan assets <br /> and income are held in trust for the exclusive benefit of the participants and their <br /> beneficiaries. The District utilizes this plan in place of social security. <br /> During the years ended December 31, 2010 and 2009, employees' contributions <br /> totaled $44,024 and $26,839, respectively, and the District's matching contributions <br /> totaled $15,683 and $14,561, respectively. <br /> Note 7— Risk management ' <br /> The District is exposed to various risks of losses related to torts; theft of, damage to <br /> and destruction of assets; errors and omissions; injuries to employees and natural <br /> disasters. The District carries commercial insurance for these risks of loss, including <br /> workers compensation and employee health and accident insurance. Settled claims <br /> resulting from these risks have not exceeded commercial insurance coverage during <br /> the past three fiscal years. <br /> Note 8 —Tax, spending and debt limitations ' <br /> Article X, Section 20 of the Colorado constitution, commonly known as the Taxpayer's <br /> Bill of Rights (TABOR) contains tax, spending, revenue and debt limitations which <br /> apply to the State of Colorado and all local governments. <br /> Enterprises, defined as government-owned businesses authorized to issue revenue <br /> bonds and receiving less than 10% of annual revenue in grants from all state and local <br /> governments combined, are excluded from the provisions of TABOR. While the <br /> District receives more than 10% of its revenue from government sources, the District's <br /> management believes a significant portion of its operations qualifies for this exclusion. <br /> Spending and revenue limits are determined based on the prior year's fiscal year <br /> spending as adjusted for allowable increases for inflation and local growth. Fiscal year <br /> spending is generally defined as expenditures plus reserve increases with certain <br /> exceptions. Revenues in excess of the fiscal year spending limit must be refunded <br /> unless retention of such revenue has been approved by the voters. <br /> TABOR requires local governments to establish emergency reserves. These reserves <br /> must be at least 3% of fiscal year spending (excluding bonded debt service). Local <br /> governments are not allowed to use the emergency reserves to compensate for <br /> economic conditions, revenue shortfalls or salary or benefit increases. <br /> 22 , <br />