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PARCEL. I~ZAURO, HULTIN & SPAANSZ'2?A, P.G. <br />Ms. Catherine W. Begej <br />October 23, 1989 <br />Page 2 <br />Rockcastle approached both equipment dealers and contract <br />operators to obtain actual ownership and operating costs. Enclosed <br />with this letter you will find an estimate of $52.00 per hour <br />ownership and operating cost for the 631E from Fabco Equipment Co. <br />of Madison, Wisconsin. Aring Equipment Company Inc. of Butler, <br />Wisconsin estimates an ownership and operating cost of $98.48 per <br />hour for an equivalent Komatsu W523S-1. The difference between the <br />two estimates is reflected in the exclusions noted in the Fabco <br />letter. These estimates are generally consistent with those <br />provided to you earlier from Tricon Kent Co. of Castle Rock, <br />Colorado. Mr. Robert Sherman of The Rockcastle Company has also <br />obtained rates of $120 per hour for the 631E (including fuel and <br />operator) from two Denver equipment contractors, Kelley Trucking <br />and Ames Construction. We believe the information provided with <br />this letter combined with that previously supplied reflects <br />substantial evidence that a cost estimate of $100-$120 per hour is <br />realistic and readily attainable from local contractors and <br />accordingly, should be used in the reclamation cost calculation. <br />Reclamation Bids. <br />Previously Rockcastle provided you a bid from Native <br />Excavating dated May 22, 1989 which reflected a total price for <br />moving 542,000 yards of dirt of $379,400 assuming .70 per yard unit <br />costs ("the Native bid"). This number is substantially below the <br />costs estimated by your staff and indicate that the necessary <br />reclamation can be accomplished within the current bond amount. <br />In a recent telephone conversation you framed a number of questions <br />generally concerning details of the bid and to what extent it <br />reflected on-site conditions (i.e. haul distances, bank vs. loose <br />yardage). I have confirmed that the Native bid was developed on <br />the basis of an on-site inspection of actual field conditions by <br />Native representatives and assumes attaining the post mining <br />configuration required by the approved reclamation plan. We are <br />currently attempting to confirm the duration of the bid and its <br />potential availability to CMLRD. Notwithstanding that issue, we <br />note that the Native bid reflects yet another piece of evidence in <br />your possession that the actual reclamation costs are substantially <br />lower than those proposed by your office, and in fact are generally <br />consistent with the current bond amount. <br />Please incorporate this letter and the enclosed information <br />into the administrative record of this proceeding. I look forward <br />to meeting with you to discuss further the reclamation cost issue. <br />