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<br />
<br />Below is a brief summary of the major project elements and their estimated cost as presented in the e
<br />original cost estimate, compared with the actual construction costs:
<br />
<br />Item Description
<br />
<br />Oril!inal Cost Est.
<br />
<br />Actnal Con st. Cost
<br />
<br />1. Drill Recharge Well
<br />2. 6,000- ft. l8-inch PVC Pipeline,
<br />Electric, and Pipeline Appurtenance
<br />3. Recharge Ponds Construction
<br />4. Highway Bore
<br />5. Planning, Surveying, and Design
<br />6. Contingency
<br />
<br />$66,000
<br />$lll,OOO
<br />
<br />$3,000
<br />$l5,000
<br />$5,000
<br />$15.000
<br />
<br />$6l,045
<br />$l84,513*
<br />
<br />$0
<br />$47,892
<br />$3,888
<br />$7.662
<br />
<br />Total:
<br />
<br />$215,000
<br />
<br />$305,000
<br />
<br />* Cost includes an additionall,500-ft. of18-inch PVC Pipe.
<br />
<br />The two main items identified above that increased significantly during construction where the l8-
<br />inch PVC Pipe, and the highway bore. Given the sharp increase in energy costs, and the addition of
<br />1,500- ft. of pipe to complete the system, the original cost of installing the pipe and appurtenance has
<br />increased from $lll ,000 to $l84,513. Additionally, the completed highway bore was $32,892
<br />more then the original estimated cost of $15,000. The increased cost for the highway bore was a
<br />attributed to the liability insurance coverage that the Contractor was required to have by Union ..
<br />Pacific Railroad, and the cost of Union Pacific Railroad personnel to oversee the project during
<br />construction.
<br />
<br />The project is 85% complete and is anticipated to be operational by January of2006. The total cost
<br />of the completed project is now $305,000, which is $90,000 more then the original cost estimate, or
<br />approximately 42% more then the originally scoped project.
<br />
<br />Based on the additional costs as presented above, the Buffalo Farm Water Development is
<br />requesting a loan increase of $8l ,000.
<br />
<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 42% or $90,000. Staff has 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 />given the significant increases in pipe, steel, fuel, and concrete costs over the past 6-months.
<br />
<br />The amended loan amount for Buffalo Farms Water Development will be $277,245 ($274,500 for
<br />project costs and $2,745 for the 1 % Loan Service Fee), at the present interest rate of2.25 % for 20-
<br />years. The new annual payment will be $19,104, which includes the 10% reserve requirement.
<br />The Company's current loan of $l95,435 has an annual payment of $13,333, which includes the
<br />10% reserve requirement.
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