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"a._. generated by the Stonnbergers on an annual basis are pledged to the Lower Logan Well Users. The Lower Logan Wells Users managed all their members well depletions and provide augmentation water to allow their members to continue pumping their wells. The Lower Logan Well Users recently received their conditional water decree for their augmentation plan in January of 2005. In the fall of2002 the Stromberger's hired the seIVices of Brent Nation, P.E., of Nation Engineering SeIVices, to complete a feasibility study to construct a well augmentation/recharge project. This study was completed in November of2002, identifying a new water right to be acquired up to 35 cfs with an average annual yield of 6,500 acre-feet. Below is a brief summary of the major project elements and their estimated cost as presented in the original feasibility study: 1. Drill Recharge/Augmentation Wells 2. Wells and Installation 3. 5280-ft. 18-inchPVC Pipeline 4. 14,405-ft. 21-inch PVC Pipeline 5. Pipeline Installation . 6. Electricity for Wells 7. Excavation Recharge Ponds 8. Contingency 9. Planning, Surveying, and Design $63,000 $105,000 $38,500 $151,500 $29,500 $14,500 $3,000 $50,000 $5,000 Total: $460,000 The estimated total cost of the project at the time of construction was $460,000, as summarized above. During construction of the project, however, various line items experienced cost overruns. These various cost overruns are summarized in detail on the attached spreadsheet prepared by the Stromberger Land and Cattle Company. The project has been completed and is currently operational. The total cost of the completed project is $525,517, which is $65,517 more then the original cost estimate, or approximately a 14.2% more then the originally scoped project. The main reason for the cost overrun was increasing 7,000-ft. of 21-inch pipe to 24-inch pipe. The pipe size was increased to 24-inch to maximize the 10,000 GPM output achieved at one of the recharge wells at the river. The increased pipe size resulted in larger valves and fittings along the 7,000- ft. of pipe, which was at a higher cost as well. The increased capacity of the well, with the increased pipe size, allows the Strombergers to maximize their acre-foot pumping output to the recharge ponds, during critical times when there is no call on the river. Based on the additional costs as presented above, the Stromberger Land and Cattle Company is requesting a loan increase of $59,000, which meets their available collateral for the project, as discussed in more detail below. The remaining additional construction cost to complete the project is being covered by the Strombergers. 2