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I <br /> Management's Discussion and Analysis (unaudited) <br /> As of and for the Years Ended December 31, 2010 and 2009 <br /> notes payable combined by about $1.91 million. Further debt information is available in the notes to <br /> the financial statements (see pages 22 to 26). <br /> ECONOMIC AND OTHER FACTORS <br /> The economy of the region surrounding the District has grown and diversified over the last several <br /> decades. During the period from 2008 through 2010, the effects of the national economy have <br /> resulted in a slowdown primarily in the natural gas and construction industries and this has resulted in <br /> an overall weakness in the local area's economy. Somewhat offsetting this slowing trend, the <br /> desirability of this area as a place to live has resulted in an increase in industrial, recreational and <br /> service related businesses over the same period of time. The number of water tap sales, county <br /> building permits (see page 43) and subdivision development reflect this major slowdown in growth. <br /> Notwithstanding this slowdown, the District is continuing to plan for future growth with the continued <br /> emphasis on upgrading of the treatment and distribution systems. The determination of future water <br /> needs and the purchase and development of additional water rights and water sources continue as a <br /> priority for the District. <br /> In November 1992, the voters of Colorado approved Amendment 1, commonly known as the <br /> Taxpayer's Bill of Rights (TABOR), which added a new section 20 to Article X of the Colorado <br /> Constitution. (See Note I to the financial statements on page 27). Under TABOR, the District cannot <br /> receive over 10% of its revenues from taxes and remain an enterprise under state law. Enterprise <br /> status under state law allows the District to remain exempt from many of the provisions of TABOR. <br /> Over the period from 2005 to 2008 the District reduced its tax mill levy from 2.0 mills to 0.5 mills in <br /> ' order to ensure that the District receives less than 10% of its revenue from taxes and thus maintains <br /> its enterprise status under TABOR and to become less dependent on tax revenue. The District <br /> continued to assess 0.5 mills in both 2009 and 2010. <br /> FINANCIAL CONTACT <br /> The District's financial statements are designed to present financial statement users (water users, <br /> taxpayers and creditors) with a general overview of the District's finances and to demonstrate the <br /> District's accountability. If you have any questions concerning this report or need additional financial <br /> information, please contact the Finance Department, Ute Water Conservancy District, P. O. Box 460, <br /> Grand Junction, Colorado 81502. <br /> I <br /> I <br /> I <br /> 1 <br /> I <br /> I <br /> Ute Water Conservancy District 7 <br />