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3 <br />As previously determined, surface water at the Original Pit 1 [Specifical y, Area C <br />and portions of Area B] will be backfilled to the pre-1981 stature of 53.0 64 acres <br />[per your approval of 16 September 1996, attached]. Subtracting the approved <br />pre-1981 water from the measured acres of surface water evident in J ne 1996, <br />approximately 16.7218 acres will be backfilled, including all of Are C, and <br />portions of Area B, at the Original Pit 1 area [refer to attached maps]. It is likely <br />that this will be accomplished by 1 November 1997. If so, this will leave a surplus <br />of water available from the Rademacher-Hayseed Well. At that time [or hen total <br />areas of backfill are equal to or greater than 12.5 acres] the entire 25. acres of <br />intended pond area [South of the existing Dakolios pond] can be extract d. <br />Varra Companies, proposes that adjustments be made Annually [s ecifically, <br />November 30th of each year] to the reported surface acreage of water [including <br />updated depletion determinations] in order to document expected de reases in <br />the acreages reported under Table 1. A local aerial provider flies this rea each <br />September/October. It is our intent to remeasure all site features, ut lizing the <br />same previously approved methods, to assure a well do umented <br />adjustment/accounting of all water under consideration in this rep rt. This <br />reporting method has already been approved by the DMG for Annual eporting <br />for both Dakolios and Pit 1, and should enhance the confidences of the ivision of <br />Water Resources, the State Engineer, and the Water Commissioner as ell. <br />Given approval of these determinations, all water necessary for ontinued <br />extraction at the Dakolios and Pit 1 operations [not including the Pit 1/A endment <br />2 area] will be accounted for. Excavation can then proceed without th need to <br />include backfilling costs in the DMG Financial Warranties for these opera ions. <br />If Varra Companies is to avoid the meatgrinder of having to account for ackfilling <br />costs to the DMG, we will need your help. Originally, the DMG allowed s time to <br />complete this concern for Pit 1, based upon a 120 day commitment, co mencing <br />at the time of confirmation from your Office of the status of pre-1981 wa er on the <br />Original Pit 1 area [refer to correspondence from Varra Companies, I c. of 15 <br />August 1996, attached]. This commenced upon the date of your comes ondence <br />of i6 September 1996, confirming 53.0764 acres of pre-1981 water. <br />Theoretically, Varra Companies, should have until 16 November 1996 o finalize <br />this information for your office, followed by an additional 60 days for your <br />response. Unfortunately, the DMG inspection report of 12 September 1 9i~ [FYI, <br />not received by our office until this week. Monday 21 October 1996], i tends to <br />pursue the inclusion of the cost of backfilling the existing Dakolios North pond into <br />the site financial warranty without [assumed] the immediate manifesto ion of an <br />approved augmentation plan. <br />While apparently inconsistent with the Division's posture relative to Pit 1, perhaps <br />there is some internal miscommunication. Regardless, as a compa and as <br />Correspondence a[ Friday 25 October 1996 from Varra Companies, Inc. <br />Bill McIntyre, Colorado Division of Water Resources <br />