1995-06-27_GENERAL DOCUMENTS - C1981017

Home Browse Search

FROM :NATURAL 303 866 5128 1995.06-27 13:01 #221 P.07l08 Cheryl A. Linden June 27, 1995 Page 6 Due to the substantial snowpack the ground was still covered and quite wet. If the DMG has its contractor start work before the ground dries, this will have considerable effect on the sediment being deposited into the ponds. -- The DMG's bid package of last Fall (which was later abandoned) called for the construction of ditches which would, have routed flows from both the Sutey pile and the areas above the Sutey pile to the two ponds above Discharge Point 021. These ponds were not designed for such flows and the DMG' s plan, had it been carried out, could have resulted in non-- compliance with the CDPS permit . Despite the fact that the DMG's activities impact the CDPS permit, your letter takes the view that "the Division . . . is not responsible for the NPDES [CDPS1 permit held by the debtor. We think that statement is contradicted by the DMG's own bid documents, which, among other things, require the DMG' s contractors to "maintain the areas until all work on the entire contract has been completed and accepted. Maintenance will consist of the repair of areas damaged by erosion . . . or other causes. " Your letter argues that the Creditors' Trust has another source of funds to pay for costs of pond maintenance, by using funds which are held for Class 6 environmental remediation under the Chapter 11 Plan. Although Class 6 specifically includes "monitoring and treatment of water discharging from the mine, " as you point out, this applies more clearly to bio-monitoring than to remediating sediment resulting from the reclamation project. I am enclosing an itemization of Class 6 environmental expenses which have been incurred to date (I believe that this previously was provided to Amelia Whiting in your office) . The accounting shows that from the Plan's effective date in July 1994 through April 1995, $41,289 of expenses have been incurred for removal of hazardous wastes, removal of asbestos, bio--monitoring, and Department of Health permit fees. Additional sums have been expended for a stream impairment study. Looming over all of these expenses is the possible claim of the Department of Health for pre- petition penalties, which was originally thrown out by the District Court and then remanded by the Court of Appeals for further administrative proceedings. My understanding is that the amount of the penalty could be as high as $180, 000. Such a penalty is expressly included within the definition of Class 6 claims. The enclosed .accounting of Trust revenues shows that the total amount of funds which have accumulated to pay Class 6