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<br />" <br /> <br />BACKGROUND <br /> <br />e <br /> <br />In 1995 the BRC requested approximately $22,000 of the project contingency <br />funds for a temporary repair of several dam sinkholes, The repair of the sinkholes was <br />not intended to be part of the original loan, However, those repairs enabled the BRC to <br />operate the reservoir during the 1995 water season, <br /> <br />The original project was the rehabilitation of the Beaver Reservoir Dam southeast <br />of Paonia along the East Fork Minnesota Creek in Gunnison County, The project <br />consisted of overexcavating and backfilling several sinkholes along the upstream dam <br />face and abutments, and recontouring the upstream abutments to a flatter slope. A 60- <br />mil high-density polyethylene geo-membrane liner was placed over the upstream dam <br />face and abutments and covered with 2 feet of basin material to seal the repairs. Minor <br />repairs were also made to the hydraulic outlet gate, Construction commenced in <br />September 1996, and after a labor dispute delay and winter weather related delays was <br />completed November 1,1997. <br /> <br />Project cost overruns of approximately $30,000 resulted from additional <br />construction observation and engineering time (required due to the delays) and a minor <br />field change order to construct lateral berms as erosion mitigation devices. The BRC <br />decided however not to exercise their option of claiming damages against the General <br />Contractor for the labor related overruns. This decision by the BRC expedited the work <br />and enabled the project to be completed without further contractor disputes or work _ <br />stoppages. However, it also added to the total project cost ,., <br /> <br />DISCUSSION <br /> <br />During the construction phase of this project, it was clear that cost overruns would <br />occur based on the labor delays associated with the placement of the polyethylene liner. <br />Since the project contingencies were significantly depleted at that time, a February 24, <br />1997 letter was written to the BRC (attached) by CWCB staff recommending several <br />strategies for solving the project's financial shortfalls. The critical recommendations <br />were: <br /> <br />. Impose the share assessments for the authorized loan as outlined in the August 1995 <br />Beaver Reservoir Rehabilitation Feasibility Study prepared by Golder Associates, <br />Inc, <br />. Inform the shareholders of the possibilities of future higher assessments, <br />. Establish a "reserve account" in order to accommodate future project cost <br />contingencies. <br />. Investigate securing additional funds to cover all cost contingencies associated with <br />project completion, over the CWCB loan amount, through conventional bank <br />financing as soon as possible, <br /> <br />e <br />