LRPC March 2021
The USDA Project is officially complete! Project construction was completed mid‐January and the final closing/recording date of our USDA loan occurred on January 20th. In the final USDA total allocation of $12.226M, the cost breakdown was 74% for construction, 18% for engineering and construction management, 5% to cover BLSMWC purchased parts including all the new meters, and 3% to cover interim loan interest. Based on weather delays and additional scope tasks at the request of BLSMWC, the construction effort was extended from an initial plan of 18 months to 27 months, however, key decisions along the way produced some very beneficial results as shown below.
Within our total USDA allocation, we were able to include 9 additional new scope tasks at the request of BLSMWC totaling over $691K that significantly benefited the overall system developments.
Based on a board decision at the start of construction, we financed over $2.5M of the engineering, purchased parts and loan interest for 2+ years from our operating account. This produced an interim loan interest savings of 18% from our initial estimates.
The expenses we covered during construction resulted in a reimbursement from USDA at close of $1.921M. This allowed for internal BLSMWC distributions of $802K to a Restricted Reserves Fund, $546K to a Capital Asset Reserve Fund and $574K back into our Operating Account to offset a portion of our USDA improvement expenditures. We also paid off our office mortgage at close of escrow.
In December 2020, based primarily on the winter weather and the decision to avoid an extended construction completion date, 4 USDA tasks estimated at $136K were put on hold until 2021 spring or summer, and plan to be funded from our reimbursement. We have also contracted with MC Engineering to complete the mapping and GIS database, to include all new construction and create a GIS-based printed map book. This will provide complete and accurate data on the age and location of all components within our total updated system. In closing, as mentioned in the last Bubbler, over the next few months further analysis and planning of our long term Asset Management Plan funding options will be the Long Range Planning Committee focus.