_GENERAL DOCUMENTS - C1981017 (228)

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To: Susan McCannon From: Larry Routten ; MEMORANDUM Subject: Citizen Complain at Coal Basin Date: April 15, 1998 Here's a synopsis of what I have found regarding the latest citizen complaint which was forwarded to us from the OSM. OSM has asked that we provide input for them to incorporate into their response to the citizen who filed the complaint. I told Henry would try to respond this week. The complaint is that DMG is not attempting to recoup project management costs incurred with reclamation at Coal Basin from Mid- Continent Resources. The complaint includes an opinion that DMG is weakening its position in court by failing to include project management costs in its accounting of remaining reclamation costs which was provided to the Pitkin County District Court earlier this year. The complainant asks that OSM, 1 .) require DMG to report the cost to date of managing the Coal Basin reclamation project to OSM, 2.) require DMG to include project management costs in its cost accounting, 3.) prepare its own cost estimate and, 4.)file its own personal liability suit against MCR and its owners. Apparently, when DMG was preparing to file suit against MCR and its owners, a decision was made not to pursue recover y of administrative costs involved in reclamation of the site. After speaking with Mike Long, Cheryl Linden, Steve Renner and Diana Heyer, no one seems to be aware of any specific legal prohibition against the use of forfeited bond funds for administrative costs. DMG has never used forfeited funds to pay for administrative costs in the past, except at forfeited hard rock mines. Here is what the Act and the regulations say about this topic. As usual, the Act is pretty general. 34-33-1 13(1)(bond amounts) of the Act reads, "The amount o f the bond shall be sufficient to assure the completion of the reclamation plan if the work had to be performed by the Board...". 34-33-214(4) (bond forfeiture)of the Act reads, "Proceeds of forfeited bonds shall be available to the office and shall be used by the office for reclamation of the area covered by the bond". The rules are more specific. Rule 3.02.2 (bond amounts)says the amount of bond shall be based upon, among other things, "The additional estimated costs to the Board which may arise from applicable public contracting requirements or the need to bring personnel and equipment to the permit area after its abandonment by the permittee to complete the reclamation plan" and "All additional estimated costs necessary, expedient, and incident to the satisfactory completion of the requirements identified in 3.02." 0