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<br />" <br /> <br />. <br /> <br />. <br /> <br />. <br /> <br />We estimate an additional $1.00 per share, for ten years, for every $10,000 over <br />the budget may need to be assessed each shareholder, We suggest that you refer'to the <br />Beaver Reservoir Rehabilitation Feasibility Study prepared by Golder Associates, Inc, for <br />information regarding annual assessments, reserve accounts, loan payments and other <br />financial planning parameters associated with this project. <br /> <br />By the time the project is complete, and the fInal costs determined, it will be too <br />late to include this request in the 1997 Construction Fund Bill. <br /> <br />A loan increase based on. the CWCB authority to increase the origina1loan based <br />on a change in fIeld conditions does not apply in this case because the problem is a labor <br />dispute rather than a change in fIeld conditions. <br /> <br />Also, the current CWCB policy is to finance projects at a 75% level with the <br />remaining 25% cost being the responsibility of the project sponsor. Since the existing <br />loan is a 100% loan, the CWCB, when contemplating additional funding requests from <br />BRC, will be looking for a local cost share as well as credits to a "reserve account" as <br />prescribed in the August 1995 Beaver Reservoir Rehabilitation Feasibility Study prepared <br />by Golder Associates, Inc.. The origina1loan also did not provide for the costs associated <br />with the emergency 1995 sinkhole repairs which were eventually removed as part of the <br />1996 construction project. <br /> <br />The CWCB may not look favorably on increasing the loan amount or deferment <br />of payments unless the BRC has already increased assessments. <br /> <br />Recommendation <br /> <br />Based on the above discussion of the options it is our recommendation the BRC, at its <br />earliest convenience: <br /> <br />· Impose the share assessments for the authorized loan as outlined in the above <br />referenced feasibility study. <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 />· Continue to work clos~ly with the State Engineer's Office in monitoring spring <br />runoff. <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 />