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<br />Below is a brief summary of the major project elements and their estimated cost as presented in th~ <br />original cost estimate, compared with the actual construction costs: <br /> <br />Item Description <br /> <br />Ori2:inal Cost Est <br /> <br />Actual Const, Cost <br /> <br />1. Drill Recharge Well <br />2. 6,000-ft. 18-inch PVC Pipeline, <br />Electric, and Pipeline Appurtenance <br />3. Recharge Ponds Construction <br />4. Highway Bore <br />5. Planning, Surveying, and Design <br />6. Contingency <br /> <br />$66,000 <br />$111,000 <br /> <br />$61,045 <br />$184,513* <br /> <br />$3,000 <br />$15,000 <br />$5,000 <br />$15,000 <br /> <br />$0 <br />$47,892 <br />$3,888 <br />$7,662 <br /> <br />Total: <br /> <br />$215,000 <br /> <br />$305,000 <br /> <br />* Cost includes an additionall,500-ft. of 18-inch PVC Pipe. <br /> <br />The two main items identified above that increased significantly during construction where the 181 <br />inch PVC Pipe, and the highway bore. Given the sharp increase in energy costs, and the addition qf <br />1,500-ft. of pipe to complete the system, the original cost of installing the pipe and appurtenance h~1 <br />increased from $111,000 to $184,513. Additionally, the completed highway bore was $32,89 <br />more then the original estimated cost of $15,000. The increased cost for the highway bore w <br />attributed to the liability insurance coverage that the Contractor was required to have by Unio~ <br />Pacific ~ailroad, and the cost of Union Pacific Railroad personnel to oversee the project durin~ <br />constructIOn. ! <br /> <br />I <br />I <br />The project is 85% complete and is anticipated to be operational by January of2006. The total co~t <br />of the completed project is now $305,000, which is $90,000 more then the original cost estimate, ~r <br />approximately 42% more then the originally scoped project. I <br /> <br />Based on the additional costs as presented above, the Buffalo Farm Water Development ~s <br />requesting a loan increase of$81,000. 1 <br />I <br />~~~ I <br />Due to additional work not programmed in the original cost estimate and unforeseen variations i:P. <br />cost for specific items during construction, the overall cost of the project has increased by <br />approximately 42% or $90,000. Staffhas inspected the improvements in the field and has reviewe~ <br />the detailed cost summary provided by the owner and finds the additional expenses to be justifiabl~, <br />given the significant increases in pipe, steel, fuel, and concrete costs over the past 6-months. ! <br />I <br />i <br />The amended loan amount for Buffalo Farms Water Development will be $277,245 ($274,500 f~r <br />project costs and $2,745 for the 1 % Loan Service Fee), at the present interest rate of 2.25 % for 2~- <br />years. The new annual payment will be $19,104, which includes the 10% reserve requiremen~. <br />The Company's current loan of $195,435 has an annual payment of $13,333, which includes tile <br />10% reserve requirement. <br /> <br />2 <br />