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• 3 <br /> As previously determined, surface water at the Original Pit 1 [Specifically, Area C <br /> and portions of Area B] will be backfilled to the pre-1981 stature of 53.0764 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 June 1996, <br /> approximately 16.7218 acres will be backfilled, including all of Area 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 when total <br /> areas of backfill are equal to or greater than 12.5 acres] the entire 25.0 acres of <br /> intended pond area [South of the existing Dakolios pond] can be extracted. <br /> Varra Companies, proposes that adjustments be made Annually [specifically, <br /> November 30th of each year] to the reported surface acreage of water [including <br /> updated depletion determinations] in order to document expected decreases in <br /> the acreages reported under Table 1. A local aerial provider flies this area each <br /> September/October. It is our intent to remeasure all site features, utilizing the <br /> same previously approved methods, to assure a well documented <br /> adjustment/accounting of all water under consideration in this report. This <br /> reporting method has already been approved by the DMG for Annual Reporting <br /> for both Dakolios and Pit 1, and should enhance the confidences of the Division of <br /> Water Resources, the State Engineer, and the Water Commissioner as well. <br /> Given approval of these determinations, all water necessary for continued <br /> extraction at the Dakolios and Pit 1 operations [not including the Pit 1/Amendment <br /> 2 area] will be accounted for. Excavation can then proceed without the need to <br /> include backfilling costs in the DMG Financial Warranties for these operations. <br /> If Varra Companies is to avoid the meatgrinder of having to account for backfilling <br /> costs to the DMG, we will need your help. Originally, the DMG allowed us time to <br /> complete this concern for Pit 1, based upon a 120 day commitment, commencing <br /> at the time of confirmation from your Office of the status of pre-1981 water on the <br /> Original Pit 1 area [refer to correspondence from Varra Companies, Inc. of 15 <br /> August 1996, attached]. This commenced upon the date of your correspondence <br /> of 16 September 1996, confirming 53.0764 acres of pre-1981 water. <br /> Theoretically, Varra Companies, should have until 16 November 1996 to 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 1992 - [FYI, <br /> not received by our office until this week. Monday 21 October 19961, intends 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 manifestation 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 company and as <br /> Correspondence of Friday 25 October 1996 from Varra Companies,Inc.to <br /> Bill McIntyre, Colorado Division of Water Resources <br />