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PENROSE W A TER DISTRICT
<br /> 340 Grant Street :.mmi Penrose,CO 81240
<br /> 6. Source of Supply and Related Party Transactions
<br /> Source of Supply
<br /> The District's source of water supply is provided by use of water from Beaver Park Water, Inc. (Beaver Park), a
<br /> Colorado non-profit mutual ditch and reservoir company, under a water agreement dated March 6, 1990 and
<br /> amended in 1997. The agreement runs to December 31,2020 and provides for review and negotiations between the
<br /> parties concerning the rates charged by Beaver Park every 5 years. Delivery is realized via the Brush Hollow
<br /> Reservoir supply canal that is owned by Beaver Park. The reservoir, also owned by Beaver Park, has a dual
<br /> purpose: Primarily to supply irrigation water for local area agriculture,and secondarily to serve as an alternate raw
<br /> water supply for the District. (The District gets most of its raw water from stream flow.)
<br /> Related Party Transactions
<br /> Many of the residents of the District are also shareholders in Beaver Park. From time to time members of the Board
<br /> of Directors of the District or their relatives may own shares in Beaver Park and may serve as officers or directors of
<br /> Beaver Park. The District does not have a policy forbidding board members of the District from serving as board
<br /> members of Beaver Park Management of the District believes that the shares owned by members of its Board of
<br /> Directors were an insignificant number of the total shares outstanding of Beaver Park. As of December 31, 2011
<br /> two directors of the District had close relatives serving on the 5 member board of Beaver Park. During 2011 and
<br /> 2010 the District paid approximately $178,819 and$160,234 respectively to Beaver Park.In addition during 2010
<br /> the District entered into a water storage contract with Beaver Park in which the District purchased 500 acre feet of
<br /> storage space in Brush Hollow reservoir for$2,500,000.This agreement was completed in 2011.
<br /> 7. Changes in capital assets
<br /> The following is a summary of changes in capital assets for the year ended December 31,2011:
<br /> Balance,
<br /> Beginning of Balance,End of
<br /> Description Year Additions Deletions Year
<br /> Capital assets not being depreciated:
<br /> Water rights $ 1,454,687 $ - $ - $ 1,454,687
<br /> Water storage rights - 2,549,145 - 2,549,145
<br /> Land and rights of way 38,198 - - 38,198
<br /> Capital assets being depreciated:
<br /> Buildings and Improvements 56,890 - - 56,890
<br /> Water Treatment Plants 2,148,981 29,126 - 2,178,107
<br /> Distribution System 2,638,116 - - 2,638,116
<br /> Other Equipment 251,756 - - 251,756
<br /> Total capital assets being depreciated at cost 5,095,743 29,126 - 5,124,869
<br /> Less accumulated depreciation (3,239,810) (141,553) - (3,381,363)
<br /> Net capital assets being depreciated $ 1,855,933 N/A N/A $ 1,743,506
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