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�R <br /> Jim Fulton <br /> June 8, 1998 <br /> Page 2 <br /> At the time MCR filed for bankruptcy, the Division's cost estimate for the bond was <br /> approximately $3 million. Under MCR's liquidation plan, the Division is to receive that <br /> amount in cash and services. <br /> In the Pitkin County lawsuit, MCR requested the Division to provide an accounting of its best <br /> estimate of the cost of completing reclamation. The Division provided such an accounting, last <br /> January. <br /> Mr. Mechau accurately states that the two administrative costs described above were not listed <br /> as separate line items in the cost accounting provided to the Pitkin County Court earlier this <br /> year. The assets currently being distributed to the Division by the bankruptcy trustee could be <br /> directed towards contract preparation and project management costs. We have not chosen to <br /> direct any funds in that manner, however. Rather we have directed the liquidation funds to <br /> acquisition of on-the-ground reclamation. Our intention is to continue that approach into the <br /> future until completion of the Coal Basin project. <br /> Directing 100% of the bond forfeiture proceeds to on-the-ground reclamation at Coal Basin <br /> requires that contracting and project management costs be paid for with normal program funds, <br /> including federal grants and State funding sources. Our grant and budget requests since 1993 <br /> have clearly stated, that a portion of program funds would be used to pay salary, travel, <br /> operating and capital expenses directly associated with our reclamation work at the Coal Basin <br /> site. <br /> In the event proceeds from the bankruptcy liquidation prove to be insufficient to fund <br /> necessary reclamation, other legal remedies are still available for the Division to pursue funds <br /> from responsible parties. As explained in our March 30, 1998 response to Mr. Mechau's <br /> previous complaint, the December 27, 1996 Colorado Court of Appeals ruling left open the <br /> possibility of pursuing additional funds against the agents of MCR should funds through the <br /> liquidation plan prove insufficient to conduct necessary reclamation. <br /> I hope the explanation above is helpful in responding to Mr. Mechau's letter. For your <br /> information, I have included a copy of the appropriate page of the Coal Basin bond estimate, <br /> which clearly lists the contract and project management cost estimates. I apologize for the <br /> extremely poor quality of the copy. This is, unfortunately, the best copy available. However, <br /> due to the poor copy quality I have also included a typewritten version of the germane portions <br /> of the estimate. Please let me know if you have any further questions and, please keep me <br /> informed of OSM's thoughts on this matter. <br />