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<br />. ., <br /> <br />. <br /> <br />. <br /> <br />. <br /> <br />The estimated final cost is $219,925 higher than the engineer's estimate of$I,389,000. <br />A cost adjustment of this magnitude (about 16 percent) is somewhat more than might be <br />expected for this type of project but is not excessive given the original construction, the <br />site conditions and the availability of materials. <br /> <br />The LCWUA is requesting an additional $200,000 on the existing $1,250,000 <br />Construction Fund loan to assist in paying for the additional costs. This would result in an <br />amended loan amount of$I,450,OOO, which is about 90 percent ofth;: estimated final <br />project cost. Section 1. (2) of SB 97-008 allows that loans made by the Colorado Water <br />Conservation Board may be increased or decreased as may be justified. by "reason of <br />changes in the plans for a project due to changes in material quantities beyond contract <br />limits." <br /> <br />The recommended lending rate would be 3.75 percent for 30 years as approved by the <br />Board in January of this year for the existing loan. Security for the loan will continue to <br />consist of Carl Smith Reservoir and associated water rights as well as a pledge of <br />revenues. <br /> <br />Financial Analvsis <br /> <br />In addition to an increase in the amount of the Construction Fund loan for the project, the <br />LCWUA is intending to borrow $155,000 from a commercial bank for the settlement of <br />lawsuits resulting from the failure of the dam. A revised financial analysis was prepared <br />by Smith Geoteclmical to reflect the financial impact of both the additional costs of <br />construction as well as the $155,000 loan. That analysis indicates that the assessment for <br />stored water will have to be increased from the current level of $15 per share to about $27 <br />per share in 2000 and then to about$22 per share for several years thereafter. <br /> <br />Recommendation <br /> <br />Staff recommends that the Board approve an increase of $200,000 in the Construction <br />Fund loan to the Leroux Creek Water Users Association for the Carl Smith Dam <br />rehabilitation project for a total amended loan amount of$I,450,000 at 3.75 percent for <br />30 years. Staff further recommends that the increase in the loan amount be contingent <br />upon the adoption of a resolution by the shareholders of the Association approving the <br />amended loan and increasing the per share assessment to a level adequate to pay all <br />anticipated operation and maintenance expenses, debt service on all loans and any <br />required payments to reserve funds. <br /> <br />Cc: Tom Alvey, LCWUA <br />Duane Smith, Smith Geotech. <br />Steve Cann, AGO <br />Linda Bassi, AGO <br /> <br />3 <br />