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Letter from KID attorney Laurence Kogan to KID board members regarding special C Flume meeting

6/20/16

Dear Board Members,
 
The contents of the recent June 15, 2016 correspondence addressed to Chairman Cheyne from Reclamation representative Brian Person reflects the Bureau's making of unauthorized additional unilateral post-execution changes to the C Flume Replacement financing agreement that render this contract inadequate for C Flume Replacement Project needs.  
 
Due to these changes, the District will be unable to afford the all-in cost of the C Flume Replacement Project.  It is therefore, not necessary to convene a special meeting at this time to reaffirm the contract for Reclamation's benefit.
 
The District will be unable to afford this Project because of the following:
 
1) the BOR is unwilling to guarantee funding on the Project for more than $5.5 million of the $7.45 million promised in the contract;
 
2) the BOR is now requiring the District to pay the first $1.71 million of financing (to Adkins) prior to BOR disbursement of the $5.5 million;
 
3) the low bid is likely to exceed the $8.5 million quoted (most low bids are not insubstantially (10-20%) underbid); and
 
4) the all-in Project cost of the C Flume Replacement Project (including both construction and other costs, including Reclamation analyses) is likely to exceed $10 million.
 
Indeed, it is my professional opinion, based on a review of the circumstances (the Bureau's behavior) leading up to this Board's execution of said contract on May 31, 2016, that the District entered into such contract under duress and false pretense, with the Bureau making certain untrue representations to the Board that led Board Chairman Cheyne and other Board members to conclude that they had no choice but to sign the contract at such time.  It is a clear principle of contract law that if a contract is entered into under duress and false pretense, it may be treated as void ab initio (as of its signing).
 
As each of you is aware, I clearly communicated this point to Messieurs Murillo, Manzo, Barajas, Palmer and Person during my BOR Sacramento meeting of June 7, 2016 and in my June 17, 2016 written reply correspondence to Mr. Person.
 
If you have any questions or comments, please don't hesitate to contact me.
 
Best Regards,
 
Larry
The Kogan Law Group, P.C.
100 United Nations Plaza
Suite #14F
New York, NY 10017
(o) (212) 644-9240
(c) (609) 658-7417
www.koganlawgroup.com
 
This email transmission, including the information contained within and accompanying it, is intended ONLY for the person(s) or organization(s) to which this transmission is addressed and may be of a confidential and/or legally privileged nature. Please delete this message and all accompanying attachments, or immediately contact the sender or The Kogan Law Group, P.C. at <info@koganlawgroup.com> if you have received this message in error. Unintended transmission shall not constitute waiver of the attorney-client or any other privilege.
 
--------- Original Message --------- Subject: June 23rd, special meeting
From: "Linda Seater" <kidlinda@fireserve.net>
Date: 6/17/16 4:50 pm
To: amberknoll@msn.com, cackadac2c@aol.com, gcarcf@aol.com, mountlakifarmsra@aol.com
Cc: "Lawrence Kogan" <lkogan@koganlawgroup.com>, "NATHAN RIETMANN" <nathan@rietmannlaw.com>

  Good afternoon:
 
 Please see attached Notice and Agenda regarding a 10 a.m. Thursday, June 23rd special meeting held at KID's headquarters located at 6640 KID Ln, KFalls.
  
 Linda

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