1994-07-28_GENERAL DOCUMENTS - C1981017

• Permit No: C1981017
• IBM Index Class Name: GENERAL DOCUMENTS
• Doc Date: 7/28/1994
• Doc Name: Confirmation of Resources Chapter 11 plan and receipt sale of a number of assets
• Permit Index Doc Type: General Correspondence
• Media Type: D
• Archive: No

Cheryl A. Linden
July 28 , 1994
Page 3
be entered into directly by the Division pursuant to the
requirements of the Procurement Code, C.R. S. § 24-101-101 et sea.
Resources has no cash to independently fund any
reclamation contracts, since all cash in now in the possession of
either the Creditors' Trust or the Division. As a result of your
letter, Resources has called off contractors on work which was to
have begun this week. The Division' s new position discards months
of preparation by Resources, and insures that little progress will
be made in the 1994 reclamation season.
At this point, Resources has two preliminary comments
about your letter, and a number of immediate concerns .
Application of the Procurement Code
First, Resources disputes your assertion that the state
Procurement Code applies . C.R.S . § 24-101-105 (1) applies the
Procurement Code to "publicly funded contracts entered into by all
governmental bodies of the executive branch of this state . " As
your letter notes, the Procurement Code does not define "publicly
funded. " Your letter argues that mine reclamation "is for the
benefit of the public" and therefore that the funds being used are
public funds .
Resources contends that a contract is "publicly funded"
when the source of funding is public funds, e .g. , taxes, fees, etc .
In contrast, the reclamation of Resources' mine is being funded
with private funds generated from the liquidation of Resources'
property.
In the case of the Rockdust Plant sales proceeds, the
proceeds were pledged to secure the reclamation bond. In the case
of other liquidation proceeds, the proceeds are made available to
the Division by the terms of the confirmed Chapter 11 Plan.
Specifically, Section 4 . 3 . 2 of the Plan provides that certain net
proceeds from sales of other assets shall be paid to the Mined Land
Reclamation Board (the "MLRB" ) . These funds "shall constitute
forfeited bonds within the meaning of C.R.S . § 34-33-124 (4) , shall
be held by the MLRB, and shall be expended pursuant to Section
4 . 3 .4 of the Plan. "
C.R. S. § 34-33-124 (4) states that "proceeds of forfeited
bonds shall be available to the division and shall be used by the
division for reclamation of the area covered by the bond. " There
is nothing which indicates that when private funds become
"available" to the Division, such funds become public funds .
Accordingly, Resources believes that the Procurement Code does not