_GENERAL DOCUMENTS - C1981017 ‎(228)‎

• Permit No: C1981017
• IBM Index Class Name: GENERAL DOCUMENTS
• Doc Name: Bid Documents ‎(IMP)‎ TDN 98-140-116-001
• Permit Index Doc Type: General Correspondence
• Media Type: D
• Archive: No

DIVISION OF MINERALS AND GEOLOGY STATE OF COLORADO
Department of Natural Resources PM,
1 313 Sherman St., Room 215
Denver,Colorado 80203
Phone-[phone]
FAX [phone] i01A
DEPAPUMENT OF
June 8, 1998 NATURAL
RESO
Rod Romer
Mr. Jim Fulton Governor
James S Lochhead
Office of Surface Mining Reclamation and Enforcement Executive Director
1999 Broadway, Suite 3320 Michael B Long
Division Director
Denver, CO 80202-5733
RE: Michael Mechau's March 24, 1998 "Citizen Complaint" Regarding the Coal Basin
Mine
Dear Mr. Fulton:
The Division of Minerals and Geology has reviewed Mr. Michael Mechau's letter dated March
24, 1998 that was sent to Richard Seibel of your office and, subsequently forwarded to this
office for our review and comment. We appreciate the opportunity to comment on Mr.
Mechau's letter. The Division's responses to what we understand Mr. Mechau's concerns to be
are as follows.
In general, Mr. Mechau is concerned that the Division has not recovered all allowable project
management costs associated with reclamation of the Coal Basin Mine from forfeited bond
funds. The Division believes it has followed an appropriate course of action, according to its
statutory and regulatory authority, to recover the reclamation costs for the Coal Basin Mine
from forfeited bond funds and to secure the maximum amount of on-the-ground reclamation
with the funds available.
During the permitting process for the Coal Basin Mine and other coal mines in Colorado, the
Division estimates the cost to the State of reclaiming planned mine disturbance should the
permittee not perform the reclamation. The dollar amount of the performance bond is based
on this estimate of reclamation liability. Two of the line items in those cost estimates are
engineering/contract preparation and project management expenses. Typically the Division
estimates engineering/contract preparation costs at 4.25% of the construction contract amount.
An estimate for the number of project management hours which may be required is also made.
These two items were specifically accounted for when the required bond amount for the Coal
Basin Mine was determined. They amounted to approximately $153,000 in the Coal Basin cost
estimate.