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<br />Brent Nation, P,E" of Nation Engineering Services, completed the feasibility study for the project in
<br />Aprilof2004,
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<br />Below is a brief summary of the major project elements and their estimated cost as presented in the
<br />original cost estimate:
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<br />1. Drill Recharge Well
<br />2, Refurbish Existing Recharge Well
<br />3. 4,500-ft,21.inchPVCPipeline
<br />4, 2,200.ft, 12-inch PVC Pipeline
<br />5, Pipeline Appurtenance
<br />6, Recharge Ponds Construction
<br />7, Land Purchase ( 105 acres)
<br />8, Electrical
<br />9, Planning, Surveying, and Design
<br />10, Contingency
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<br />$46,000
<br />$10,000
<br />$75,600
<br />$15,400
<br />$30,000
<br />$15,000
<br />$119,500
<br />$9,000
<br />$6,750
<br />$41.000
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<br />Total:
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<br />$368,250
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<br />The estimated total cost of the project at the time of construction was $368,250, as summarized
<br />above, During construction of the project, however, various line items experienced cost overruns
<br />and cost savings. These various cost overruns and savings are summarized in detail on the attached
<br />spreadsheet prepared by Guenzi Fanns,
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<br />The project has been completed and is currently operational. The total cost of the completed
<br />project is $429,648, which is $61,398 more then the original cost estimate, or approximately a 17%
<br />more then the originally scoped project.
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<br />The two main reasons for the cost overruns was the well drilling and the electrical work. The final
<br />cost of completing the new well and refurbishing the old was $90,702, which was $34,702 more
<br />then the engineer's estimate, The added cost was due to a low initial engineer's estimate and
<br />having to drill an added 240- ft, to achieve the desired well capacity, The final cost of providing
<br />power to the two wells was $23,887, which was $14,887 more then the engineer's estimate, These
<br />two items, combined wit1. a..J. additional cost of $11,809 for miscella.lleous fittLTlgs and concrete
<br />work, accounted for the total project cost overrun of$61,398,
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<br />Based on the additional costs as presented above, the Guenzi's are requesting a loan increase of
<br />$17,261, which meets their available collateral for the project, as discussed in more detail below,
<br />The remaining additional construction cost to complete the project is being covered by the Guenzis,
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<br />DISCUSSION
<br />Due to additional work not programmed in the original cost estimate and unforeseen variations in
<br />cost for specific items during construction, the overall cost of the project has increased by
<br />approximately 17% or $61,398, Staffhas inspected the improvements in the field and has reviewed
<br />the detailed cost summary provided by the owner and finds the additional expenses to be justifiable
<br />and within the normal parameters for this type of construction,
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