LRPC December 2020

Well, we are finally approaching the completion of our USDA contract, with Closeout estimated to occur on January 15, 2021. To give some perspective on the time and commitment this took, the USDA loan was approved December 27, 2016, Engineering & Design started in June 2017 and Construction in September 2018. In the end, a tremendous amount of hard work and coordination by all contractors, lenders, BLSMWC management and staff, board members and legal counsel, resulted in a successfully executed 4+ year project. As mentioned last month, the final construction completion and USDA project closeout dates were delayed by approximately 4‐6 weeks in order to finish several extra project tasks requested by BLSMWC, remaining construction change orders, obtain final county approvals, and complete all required USDA documentation. Although the delays increased our total interim loan interest, overall we are very pleased with the beneficial added scope tasks we were able to complete within our total USDA allocation. A breakdown of the total final costs covered within our USDA allocation, are as follows:

• • MC Engineering (Engineering & Construction Management Services) ‐ $2,240,140
  • Mozingo Construction Inc. (Construction Contract) ‐ $9,049,852
  • BLSMWC Meter, Transmitter, PRV & Sample Station Purchases ‐ $603,127
  • Co‐Bank Interim Loan Interest ‐ $332,881
  • Total USDA Costs Covered ‐ $12,226,000

  As explained in previous Bubblers, during the 4+ year life of the USDA project, BLSMWC covered the cost for engineering, material purchases and interim loan interest from our operating budget reserves in order to reduce the interest payments required up to the end of construction. At this point, BLSMWC has been reimbursed $1.243M of the engineering costs. At USDA closeout, BLSMWC will be reimbursed for the remaining engineering costs, as well as accumulated material purchases and interest costs, amounting to $1.933M. The Board of Directors has approved that $802,000 of the reimbursements be allocated to a restricted account for our Reserves Fund Policy. In addition, $146K of our reimbursement dollars will be set aside and allocated to fund 5 USDA related tasks not able to be completed within the USDA timeframe or budget, as well as $127K to pay off our office mortgage, which was a USDA requirement at close. The end result, as we conclude the USDA Project, our BLSMWC operating budget and reserves are financially very strong. Over the next few months, further analysis and planning of our long term Asset Management Plan funding will need to be factored into our reserves, and will be the Long Range Planning Committee focus.