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PENROSE W A TER DISTRICT <br /> 340 Grant Street Penrose,CO 81240 <br /> 9. Commitments and Contingencies <br /> Raw Water Project <br /> As noted in other footnotes above the District is involved in a raw water project that involves the purchase of water <br /> rights on the Arkansas River, water storage space in Brush Hollow Reservoir, the construction of ground water <br /> wells, and the construction of a water pipeline. The District currently estimates the cost at approximately <br /> $9,714,000. To fund this project the District has secured financing,in the form of a loan,from the Colorado Water <br /> Conservation Board in the amount of$8,844,570. The remainder of the funds(approximately $869,000)will have <br /> to come from the District. <br /> Risk Management <br /> The District is exposed to various risks of loss from torts; theft of, damage to, and destruction of assets; business <br /> interruption; errors and omissions; employee injuries and illnesses; and natural disasters. Commercial insurance <br /> coverage is purchased for claims arising from such matters. Settled claims have not exceeded this commercial <br /> coverage in any of the three preceding years. <br /> TABOR Amendment <br /> Colorado voters passed an amendment to the State Constitution, Article X, Section 20, also known as the Tax <br /> Payers Bill of Rights (TABOR) Amendment or Amendment 1, which has several limitations, including revenue <br /> raising, spending abilities, and other specific requirements for state and local governments. The amendment is <br /> complex and subject to judicial interpretation. The District believes it is in compliance with the requirements of the <br /> amendment. However, the District has made certain interpretations of the amendment's language in order to <br /> determine its compliance. <br /> 17 <br />