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<br />. ' <br /> <br />The CWCB has legislative authority to loan up to $373,000 for 100% of the _ <br />project construction costs. To date, approximately $309,000 has been advanced ,to the .. <br />Beaver Reservoir Company (BRC) by the CWCB for this project, including <br />approximately $22,000 of contingency funds for a 1995 "emergency" repair of several <br />dam sinkholes, <br /> <br />The "Interest During Construction" estimate, based on past and future advances <br />on this loan is approximately $9,585.46, as shown in the attached spreadsheet. As <br />outlined in our contract, this re-payment is due one month after substantial completion of <br />the project. <br /> <br />Ootions <br /> <br />The CWCB staff has considered the following options for the BRC to finance <br />these overruns: <br /> <br />1. Rely on the construction contract provisions cl"iming the cost overruns are the <br />responsibility of the general contractor, Famsworth Construction. <br /> <br />2. Raise annual shareholder assessments above the estimated assessment required for the <br />loan payments and acquire conventional bank financing to finance the overruns. tit <br /> <br />3. Request an inCrease to the CWCB loan through an amendment to the current CWCB <br />Construction Fund Bill (5B 97-008). <br /> <br />4. Request an increase to the CWCB loan through legislative authority, given to the <br />CWCB, to increase the loan amount based on unforeseen changes in field conditions. <br /> <br />5. Request the CWCB provide financial relief through deferments of annual loan <br />payments. <br /> <br />Discussion <br /> <br />Given the many financial variables and physical unknowns still associated with <br />the successful completion of this project, it would be impossible for the Beaver Reservoir <br />Company and CWCB staff to make a well informed estimate of the total overruns until <br />the project is completed in mid-summer 1997. <br /> <br />Based on the February 7 meeting, the option of calling liquidated damages or a <br />claim against Famsworth Construction is unacceptable to all the parties involved and <br />could further delay the project and increase the project costs. We support this attitude of tit <br />cooperation between the owner and contractor. <br /> <br />1- <br />