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<br />The main cost overruns associated with the project was damage caused by heavy rains; dewatering
<br />efforts and the subsequent bypass ditch constructed to managed inflows into the reservoir, and
<br />project location. These items cost the Company an additional $75,000 in muck excavation,
<br />regrading efforts, remobilization, and $100,000 in bypass ditch construction. Therefore, the actual
<br />cost to construct the project was approximately $385,000. The original cost estimate of $142,800,
<br />significantly underestimated the time, effort, and cost to complete the project, given its location and
<br />complexity.
<br />
<br />Discussion
<br />
<br />Due to additional work not programmed in the original cost estimate, weather conditions, project
<br />location, and unforeseen variations in cost for specific items during construction, the overall cost of
<br />the project has increased significantly. The Company is requesting an increase of $355,000
<br />($351,485 for project costs and $3,515 for a 1% origination fee), to its current loan authorization
<br />$155,035, to cover 90% of the total cost ofthe project.
<br />
<br />The total amended loan amount for the Company would be $510,035 (504,985 for project costs and
<br />$5,050 for a 1% origination fee), at their original rate of 2.5 % for 30-years. The new annual
<br />payment will be $26,805, which includes the 10% reserve requirement. The Company's current
<br />loan of$155,035 has an annual payment of$8,148, which includes the 10% reserve requirement.
<br />
<br />Financial Analysis
<br />
<br />Table 2 shows a summary of the financial aspects of the project for the amended loan request. A
<br />CWCB Loan of $510,035 would have an annual debt service obligation of $26,805 ($24,368 for
<br />annual loan payment and $2,437 for the 10% reserve funding) for the loan terms of 2.5% for 30-
<br />years. The total debt service obligation represents a cost of $16.54 per acre-foot for the reservoir
<br />storage.
<br />
<br />Table 2. Financial Summary of Project
<br />
<br />Items Current Amended
<br /> Reauest Request
<br />Total Project Cost $171,845 $560,369
<br />CWCB Loan (90% of Total Project Cost + 1% Loan Fee) $155,035 $510,035
<br />CWCB Annual Loan Payment $7,407 $24,368
<br />CWCB Annual Loan Obligation (including 10% reserve) $8,148 $26,805
<br />Annual Assessment for Project Only (based on 1,600 shares) $5.09/share $ 16.75/share
<br />Annual Project Cost! AF Adjudicated (based on 1,620AF) $5.02/ac-ft. $ 16.54/ac-ft.
<br />
<br />Prior CWCB Loan History:
<br />November 1992 CWCB loan contract for $42,000 for feasibility study (0% for 30 years)
<br />October 1995 CWCB loan contract for $373,000 at 3% for 40 years ($343,000 project and $30,000
<br />existing FmHA loan)
<br />May 2000 CWCB loan contract amendment consolidating both loans totaling $415,000 (2.733% for
<br />40 years)
<br />November 2007 current balance on this loan is $356,263.
<br />
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