BOARD00022 ‎(2)‎

• Board Meeting Date: 9/19/2006
• Description: CF Section - Revisions to Existing Loans - Beaver Reservoir Company - Reservoir Rehabilitation
• Board Meetings - Doc Type: Memo

Page I of2

Feehan, Tim

From: [e-mail]
Sent: Thursday, August 31,200610:22 AM
To: Feehan, Tim
Cc: [e-mail]
Subject: Beaver Reservoir Co. loan Contract No. C150190 -Increase in funds

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Tim:
So that our request for additional loan funds can be addressed in the September meeting, I am
providing this discussion and information in support of the request of Beaver Reservoir Co. for an
increase in the amount of loan funds available for the Company under the above Contract. I have been
waiting for months for the engineer and contractor to provide their written information in support of this
request and am now going forward, without their specific documentation, with the request for increased
loan proceeds. I am asking for the loan to be increased by 20% since my understanding is that such an
increase can be approved without a full application, justification and hearing, which would require a
request for more than 20% of the current loan to be scheduled for November, 2006. In the interest of
having an earlier decision, since the project will be commencing soon and be completed much earlier
than November, I am making the d! ecision for the Company to request the 20% increase.
The Company has been trying to get these projects completed for the past 2 to 3 years. I know that 2
years ago the contractor got moved in but the weather turned to winter almost immediately and he didn't
get any of the project completed. We did have most of the materials for the outlet valve delivered,
although some of it was delivered so late that we couldn't have gotten it installed in any event that year.
So, we regrouped, made some ajustments in scheduling, such as draining the reservoir sooner, last year,
and the contractor moved in and began the project in the Fall of2005. He had to build a road down into
the reservoir and first did earthwork that needed done to repair the liner positioning, moving earth and
the liner back to its original position. He also found additional problems with the liner that needed
attention and that caused the work to take more time than was planned. When he and we recognize! d
that the extra time involved with the earthwork was going to put us at a critical weather situation at the
end of the project schedule, we decided not to tear up the outlet valve and find ourselves unable to
complete it and have a functioning valve. Instead, the contractor worked on the existing valve and
hydraulic controls, getting them to work better and more reliably, buttoned up the work that had been
accomplished and pulled out before the winter weather caused any problems. As a result, we still have
most ofthe valve project left to do and we may have more earthwork this year, possibley involving more
liner work in the event of slippage, and most likely because the road that was built last year will need re-
established after the affects of the reservoir being filled this year and then drained down, causing some
erosion and earth movement in the soils of the reservoir. The contractor commented last winter that he
expected the additional time of cons! truction and the additional work that was discovered to be needed
woul d likely result in an "additional $30,000 project costs". For those reasons, we find the Company in
need of additional financing to be able to pay all the project costs. Since we could increase the loan by
more than $25,000 by increasing the amount by 20% and since I understand that such a request can be
addressed more quickly, without having to be put on the November agenda, I am requesting a 20%
increase of the above loan Contract amount and ask that it be addressed by the Board at its September
meeting. The Company will make arrangements to cover any additional project costs that exceed the
amount of loan increase approved, either through additional assessments to stockholders or by locating
another source for grant money or a small, short term loan.
Thankyou for your assistance and consideration, particularly for working with me in the effort to get
the request in at the last minute, understanding our needs, our efforts and the difficulties we have
experienced in getting to this point in the projects and the working relationships we have with the

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8/31/2006