2009-02-20_GENERAL DOCUMENTS - M1985001

• Permit No: M1985001
• IBM Index Class Name: GENERAL DOCUMENTS
• Doc Date: 2/20/2009
• Doc Name: Phone conversation with Operator
• From: Wally Erickson
• To: File
• Email Name: WHE
• Media Type: D
• Archive: No

STATE OF COLORADO
DIVISION OF RECLAMATION, MINING AND SAFETY
Department of Natural Resources
1313 Sherman St., Room 215
COLORADO
Denver, Colorado 80203 t o N 0F
D
Phone: [phone] RECLAMATION
FAX: [phone]
RECED MINING
-&-
SAFETY
DATE: February 20, 2009 FEB 2 3 2000
Bill Ritter, Jr.
Division of Reclamation, Governor
TO: File, M-1985-001, General Documents Mining and Safety Harris D. Sherman
Executive Director
FROM: Wally Erickson Ronald W. Cattany
Division Director
Natural Resource Trustee
RE: Phone Conversations with Operator,
J & J Pit(?ermit No. M-1985-001:
During the afternoon of February 19, 2009, 1 received a phone call from Jim Helmericks of Glacier
Gravel Products, permit holder and operator of the J & J Pit. Mr. Helmericks indicated a problem
with his $5,000 financial warranty, in the form of an irrevocable letter of credit posted by Sandco.
The problem, according to Mr. Helmericks, lay with Sandco and/or the bank, who no longer want
to honor the bond. Mr. Helmericks alleged a breach of contract on the part of Sandco and the
bank. He argued that the bond is irrevocable, and Sandco and the bank are obligated to maintain
the bond until such time as he chooses. Mr. Helmericks proposed it was the Division's
responsibility to make the bank and/or Sandco honor the bond. Alternately, the Division must call
the bond and change the LOC into a cash bond on behalf of Glacier Gravel Products. Mr.
Helmericks stated that he had discussed the issue with Senator Ellen Roberts, Esq., who agreed
with him entirely.
I informed Mr. Helmericks that I found his interpretation of the term "irrevocable", and of the
Division's responsibilities, unique. I characterized the contractual issue between Sandco and
Glacier Gravel Products as a non-jurisdictional issue for the Division. The statute clearly places
the responsibility of bonding with the permit holder.
Mr. Helmericks disagreed. He insisted on an interpretation of "irrevocable" to mean his bond was
indelible and he should never have to replace it. He insisted that if the Division allowed Sandco
and/or the bank off the hook the Division would be sidestepping its responsibility and passing the
burden inappropriately to him. Mr. Helmericks reiterated that he possessed considerable legal
support for his position.
I encouraged Mr. Helmericks to discuss the issue with the Division's financial warranty expert,
Ms. Elizabeth Taliaferro.
Mr. Helmericks indicated that he had attempted to do such but Ms. Taliaferro had mis-interpreted
the statute and was sidestepping her responsibilities. He indicated that Ms. Taliaferro had stated
that the Division could not forfeit the bond without first taking his permit.
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Mined Land Reclamation Denver - Grand )unction - Durango Active and Inactive Mines