C150052 Feasibility Study

• Contract/PO #: C150052
• Contractor Name: Tunnel Water Company, The
• Contract Type: Loan
• Water District: 3
• County: Larimer
• Bill Number: EIA
• Loan Projects - Doc Type: Feasability Study

TUNNEL WATER COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS
November 30, 1999 and 1998

1. Siqnificant Accountinq Policies

Nature of activities Tunnel Water Company is a nonprofit mutual
irrigation corporation. The company was formed to develop a vast
network of irrigating canals for agricultural purposes. The Company
receives revenues based upon assessments of water shares owned, which
are used to improve and maintain the various irrigating properties.

Propertv and eouipment Property and equipment are stated at
historical cost. The company's policy is to capitalize expenditures
for property and equipment in excess of $250. Property and equipment
is depreciated using the straight-line method over the fol:'owing
estimated lives:

Reservoirs and ditches
Buildings
Furniture and fixtures
Transp~rtation equipment
Machinery and equipment

90 years
40 years
8-10 years
8-10 years
8-10 years

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Cash flows For purposes of the statement of cash flows, the Company
considers all highly liquid investments with a maturity of three
months or less to be cash equivalents.

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Estimates The preparation of financial statements in conformity with
generally accepted accounting principles requires the use of
management's estimates.

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Financial Statement Presentation Tunnel Water Company has adopted
Statement of Financial Accounting Standards (SFAS) No. 117, "Fir.ancial
Statements of Not-far-Profit Organizations". Statement No. 117
establishes standards for general purpose external financial
statements of not-far-profit organizations and requires a statement of
financial position, a statement of activities and a statement of cash
flows. The Company is also required to report information regarding
its financial position and activities according to three classes of
net assets: unrestricted net assets, temporarily restricted net
assets, and permanently restricted net assets.

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2.

Related Party Transactions

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Assessment income for the years ended November 30, 1999 and 1998
includes $30,000 and $33,000 of assessments, respectively, on stock
held by Water Supply & Storage Company, Inc. Water Supply & Storage
Company owns two-thirds of the Company's outstanding stock.

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