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<br />a project due to differing or uriforeseen site conditions, errors, or omissions in the plans and <br />specifications, changes instituted by regulatory agencies, or changes in material quantities beyond <br />contract limits ". Unforeseen site conditions, design modifications, and additional work not <br />programmed in the original cost estimate of the project, has required work that increases the total <br />estimated cost of the project and therefore justifies Cedar Mesa Ditch and Reservoir Company's <br />requested $50,000 increased loan request. <br /> <br />FINANCIAL/COLLATERAL <br /> <br />The amended loan amount for the Cedar Mesa Ditch and Reservoir Company will be <br />$150,000, at an interest rate of 2.75 % for 30-years. Their new annual payment will be $7,407.66. <br />The Company's current loan of $100,000 has an annual payment of $4,938.44. The Company's <br />current annual assessment of $25 per share will ne~ to be increased to $40 per share to cover the <br />increased debt. <br /> <br />As security for the loan the Cedar Mesa Ditlih and Reservoir Company will pl~ge revenues <br />backed by assessment covenant and the project itself. The Cedar Mesa Ditch and Reservoir <br />Company owns Cedar Mesa Reservoir. The reservoir lies on Forest Service property with use <br />granted under the 1891 Department of Interior Act. This security is in compliance with Colorado <br />Water Conservation Board Policy No.5 (Collateral). <br /> <br />CONCLUSION: <br /> <br />Based on our review of the original feasibility cost projections, the supporting <br />documentation provid~ by the Cedar Mesa Ditch and Reservoir Company of additional cost <br />occurred to-date, inspection of the site, and overall financial strength of the Company, staff finds the <br />request~ loan increase of $50,000 to be economically, financially, and technically sound. <br /> <br />STAFF RECOMMENDATIONS: <br /> <br />Staff recommends that the Board approve lII1 increase of $50,000 from the Construction <br />Fund for the Cedar Mesa Reservoir Project for the Cedar Mesa Ditch and Reservoir Company. The <br />additional $50,000 increment of funding would be for 30-years at a lending rate of2.75% The total <br />funding level for this project would amount to $150,000, or 76% of the total project costs. As <br />collateral for the loan, the C~ar Mesa Ditch and Reservoir Company pl~ges assessment revenues <br />backed by an assessment covenant and the project itself. <br /> <br />Staff further recommends that the following conditions be met prior to entering into a <br />contract for the additional loan increment of funding: <br /> <br />1. That the Cedar Mesa Ditch and ReservQir Company increase their annual assessments <br />from $25 per share to' $40 per share starting in 2003. <br /> <br />. <br /> <br />, <br />e <br /> <br />e <br /> <br />2. Any collateral pledged for the loan shall be free of all liens and encumbrances. <br /> <br />3, The CWCB Construction Fund loan shall have parity status with any existing debt or a <br />the Company with respect to a pledge of revenues. ., <br /> <br />4. The loan increase shall be contingent upon all standard contracting provisions of the <br />Colorado Water Conservation Board. <br /> <br />4 <br />