BOARD02564

• Board Meeting Date: 11/15/2005
• Description: CF Section - Changes to Existing Loans - Buffalo Farms Water Development, LLC - Augmentation Project
• Board Meetings - Doc Type: Memo

10/05/2005 16:46

9702064458

KROSS

PAGE 01

"

/' '

. .

Buffalo Fanns Water
Development, LLC

c....__..._anI....Aditl
lIII33~1,JNU1lrMt, FartCalh, G080S25
1EI97Oa18112!1
....b"J.. 0'""'_

e

1'143C1lZ,MIIIht,COIIJ741

October 5, 2005

Mr. Tim Feehan, P.E.
Colorado Water Conservation Board
1580 Logem Street - Suite 750
Denver, CO 80203 FAX: [phone]

RE: Requestfor Increased Loan Amount, Contract No. C150191

To Whom It May Concern:

The Managers of Buffalo Farms Water Development, LLC met this past week to
discuss the completion of our water augmentation project located near Merino,
Colorado. We believe that the project will be completed by early January 2006.
Permitting issues with the Union Pacific Railroad and materials acquisition problems
caused delays in the construction schedule. A summary ofthe costs incurred to date
for the project, and an estimate to complete the work is provided. The actual costs
are greater than the budget by a total of $90,000 1;he reasons for the_cost Increase!) a
are summarized below: ._
a. The major cost increase Is associated with the cost Increases for 18" PVC.
pipe, due to recent price Increases in all petroleum-based products. In
addition, the original estimate included 6,000 linear feet of PVC pipe, but
actual measurements now Indicate the need for about 7,500 linear feet of
PVC pipe. The actual and estimated costs for PVC pipe and pipeline
appurtenances dramatically increased from $111,000 to $169,500.
b. The other major cost increase is associated with boring under the highway
and Union Pacific Railroad. The contractor costs were significantly greater
because of the liability insurance coverage required by the UP and also
the additional oversight required to meet UP requirements for construction.
The costs for boring under the highway increased from $15,000 to
$47,892.
c. A cost savings of $3,000 will be achieved because the construction cost
for the recharge ponds have been borne by the individual landowners.
d. We believe that a smaller contingency remains appropriate at this final
stage of the project.
In Appendix 1 to the Loan Contract, Section 7, the present value of the property
pledged as collateral for the loan is valued at $231,000. The individual Members of
Buffalo Farms Water Development, LLC are willing to pledge additional collateral, if
necessary, as follows: 5-acre lot including a modular house located in the NE1/4 of
Section 26, T6N, R54W of the 6lh P.M., Logan County, Colorado (about 400 yards
from the irrigation well constructed for this project) and a recorded security interest in _
The Western Sugar Cooperative: including one (1) share of common Stock _