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5. FW Cost Reduction - On Site Disoosah DMG stated in No. 5 of its adequacy letter, <br />"Upon further review of the Climax reclamation cost estimate, at no time did the Division agree <br />to use a unit cost of $0.13 per cubic foot including the Cost of concrete demolition. " Henderson <br />does not disaeree with this statement upon further examination of DMG's worksheets for <br />Climax. The Climax worksheets show a unit cost range from $0.109/tuft. (No. 7 Shaft <br />Compressor House) to $0.1877/cu.ft. (not $0.1755 per DMG) for Open Pit Offices. Only two <br />of these buildings -New Storke Dry and No. 7 Shaft Compressor House -are on the high end of <br />the unit costs. A number of the Climax buildings on the list, including the two mentioned, have <br />been demolished, and real-world demolition numbers developed. When Climax`b\~id these two <br />projects, the numbers from five contractors ranged from $0.0281/cu.ft. to $0.1759/cu.ft. with the <br />average being $0.095/cuR These numbers included the cost of concrete demolition and burial <br />onsite. IYl~'bt; the unit costs in DMG's Climax worksheets either are $0.1266 or $0.145/cu.ft. <br />Climax bird out b million cubic feet of demolition work, including the two buildings discussed <br />herein, and the overall/a erv age t`t~om the five contractors, includin¢ rubblizine and burvine <br />foundations was $0.13/cu:ft-These real-world costs at the Climax mine combined with <br />experiences at other operations serve to support Henderson's belief that the $0.13/cu.ft. cost for <br />mine building structural demolition includin¢ rubblizing and burial of foundations is more than <br />adequate for the FW. Handbook values from Means and others, and CERCES computer models <br />do not account for two important and well regarded (in the construction/demolition business) <br />factors: (1) all mine and mill sites have valuable salvageable materials to offset demolition costs, <br />and (2) handbook numbers do not include adequate accounting for the "economies of scale" in <br />large demolition/reclamation projects such as that for Henderson. <br />Interestingly, Henderson contacted Cripple Creek and Victor Gold Company's Cresson facility <br />to see how their building demolition costs are handled in their FW. Henderson learned that <br />Cresson building demolition is based on volume only with a range of $0.17 - $0.] 9/cu.R. They <br />do not have line items for rubblizing foundations or for hauling them elsewhere. Apparently, <br />they are buried in place as slabs and foundations. <br />Although, as stated, Henderson strongly believes that $0.13/cu.R including foundation <br />demolition is adequate and easily defensible, Henderson reexamined the rationale for the Climax <br />mine demolition costs and how those costs were computed. This reexamination involved the <br />attachments to the adequacy letter pertaining to final determination of the Climax FW for the cost <br />of demolition of buildings and structures. The following five points are of note: <br />1. Costs for concrete demolition and disposal are consolidated for all structures on <br />worksheet c5b (2nd bullet on Attachment #5). <br />2. It is DMG's position that concrete foundations must be rubblized or at least <br />fractured prior to covering with clean fill (5th bullet on Attachmem #5). <br />3 <br />