Laserfiche WebLink
comment,OSMRE explained that"[t]he bond amount, in order to be sufficient to assure <br /> completion of the reclamation plan by the regulatory authority, must include administrative costs <br /> to the regulatory authority."20 Thus, the total bond amount determined should incorporate <br /> certain costs to the State regulatory authority, such as overhead and profit,on the chance that the <br /> bond is forfeited and the State regulatory authority becomes responsible for completing the <br /> reclamation plan. <br /> In order to elucidate State interpretation of bonding requirements and standardize line-item bond <br /> cost calculations, DOGM developed its internal technical guidance document Tech-007. Upon <br /> reviewing DOGM's cost estimate procedures as a result of the WEG citizen complaint, PSD's <br /> internal technical findings indicated that the direction provided in Tech-007 for cost estimate <br /> calculations was sound and innovative overall. However, PSD's technical findings also <br /> identified questions regarding DOGM's cost calculation practices where the State appeared to <br /> deviate from the guidance provided in Tech-007. Specifically,PSD's findings noted that: <br /> Variability exists between equipment operating costs for similar pieces of equipment in the <br /> cost estimates completed for different mines within six months of each other. <br /> D Equipment productivity calculations were omitted from an earthwork cost estimate. <br /> Equipment productivity information is integral to estimating earthwork costs. <br /> n Revegetation units costs were inconsistent with(20% Iower than) R.S. Means values. <br /> Where local costs were used, those costs were inconsistent between mines and <br /> documentation to support those cost amounts was not always available. <br /> ➢ Structure demolition costs were based upon mixed-material urban building demolition, and <br /> were reduced by 50% to account for structures without walls. These values are likely not <br /> representative of demolition of specialized mine structures in remote rural environments <br /> and appear to be based on the lowest available unit costs. <br /> Demolition costs do not include overhead and profit despite direction in Tech-007 to do so. <br /> General inconsistencies and potential mistakes in demolition calculations. <br /> Altogether, the technical findings state that these discrepancies could result in a cost estimate and <br /> resultant bond amount that is lower than that required to complete the reclamation plan in the <br /> event of bond forfeiture. This is in conflict with the guidance provided in Tech-007 and the <br /> regulatory mandate to ensure sufficient bond is held for each mine. Generally, PSD determined <br /> that departure from Tech-007 guidance led to non-conservative assumptions and unit costs. <br /> OSMRE acknowledges that primacy states are responsible for determining the reclamation bond <br /> amounts. If, after OSMRE-DOGM discussions are held, it is determined that cost estimate <br /> calculations can be improved,OSMRE will assist DOGM in this process. <br /> CRITERIA FOR RESOLUTION: Following clarifications and changes made to Tech-007 <br /> and notification to operators, DOGM will implement improved practices and methods to ensure <br /> adequate reclamation cost estimates. <br /> ACTION SEQUENCE: <br /> 0 DFB and DOGM will conduct an in-person meeting to review and discuss PSD's <br /> m Id. <br /> 10 <br />