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C-S1-019 2005 Midterm Review
<br />May 5, 2005
<br />disposal sites. In all, the difference in coal waste disposal leads to an increase in liability of
<br />$99,810.00.
<br />The final significant discrepancy between the Division and PAP estimates deals with
<br />miscellaneous reclamation tasks and the mobilization/demobilization of equipment. The Division
<br />includes numerous tasks that aze not included in PAP estimate. These include site maintenance,
<br />pond cleaning and pumping water out of the pits prior to backfilling. These missed tasks add
<br />$219,935.00 to the liability. There is also (obviously) no equipment mobilization or
<br />demobilization asseciated-with-these-missed-tasks-irt-the FOP estimate-The-insrease3n-liability
<br />for additional mob/demob is $39,848.00. A fmal general item is the job superintendent. State of
<br />Colorado contracting rules require that a superintendent be on site for the entire reclamation
<br />project. A job superintendent costs $36.25/hour. The Division has estimated that it will take
<br />5,541.57 hours to complete the reclamation at the Colowyo Coal Mine. The PAP estimate is
<br />lower by 1,688 hours. Basically, the PAP estimate identifies the one piece of equipment with the
<br />most hours (the D l0R dozer) and used that number for the number of hours it would take to
<br />complete the project. The Division does not believe that this is correct as there will be some
<br />leading and lagging reclamation activities that do not require a dozer. Overall, this difference
<br />leads to a $61,173.00 increase in liability.
<br />There is one more area where liability has increased (although it is not a deficiency in the PAP
<br />estimate) and that is in the indirect costs (liability insurance, performance bond, Division
<br />administration, etc.). Because the indirect costs are a percentage of the direct costs, as the direct
<br />costs increase, so do the indirect costs. The PAP estimate carries direct costs at $15,610,286.00
<br />and indirect costs as $3,418,330.00 (21.90% of direct costs). The Division has estimated its
<br />direct costs at $27,112,981.00 and its indirect costs are estimated at $5,921,875.00 (21.84% of
<br />direct costs). This leads to a liability increase of $2,503,545.00 based solely on indirect costs.
<br />The following chart illustrates the liability increases based on direct costs, indirect costs and total
<br />liability amount.
<br />
<br />Estimate
<br />Direct Costs
<br />Indirect Costs
<br />Total Liabili Induect % of
<br />Duect
<br />
<br />DMGEstimate $27,112,981 $5,921,875 $33,034,856 21.84%
<br />PAP Estimate $15,610,286 $3,418,330 $19,171,621 21.90%
<br />
<br />Difference (increase)
<br />$11,502,695
<br />$2,503,545
<br />$13,863,235
<br />Please advise the Division if Colowyo would like to exercise the opportunity for an informal
<br />conference on such an adjustment.
<br />Item 50 Page 35, and corresponding bond requirement. Please validate that the variances
<br />approved for delay in contemporaneous reclamation associated with highwall mining in the
<br />pits, placement of over- and inter-burden from the West Pit into the East Pit reclamation,
<br />and the stockpiling of overburden and delay in closure of the Section 16 Pit have not
<br />accumulated grading, placement of topsoil, and seeding work in excess of that described in
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