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This is commendable. A 5 percent contingency is very modest. Normally, <br /> inflation, change orders, and unanticipated costs exceed 5 percent. Most <br /> budgets contain contingencies in excess of 5 percent, with some going as high <br /> as 20 percent. The contingency line item in a budget I prepared during 1998 for <br /> a reclamation project was 15 percent. <br /> Maintenance Line Item in the Budget <br /> The Federal and State Surface Coal Mine Reclamation Acts and <br /> Regulations require a 10 year "maturation period" for reclaimed lands in areas <br /> that receive less than 26 inches average annual precipitation and a 5 year <br /> maturation period for reclaimed land in areas that receive more than 26 inches <br /> of precipitation before total bond release can be considered. The DMG <br /> anticipates that this site will require 10 years of maintenance and is budgeting <br /> approximately $13,000 per year ($130,000 total) for this task. <br /> I agree that yearly maintenance for some years is appropriate and <br /> important, but believe that $13,000 per year will be insufficient monies to <br /> accomplish this task. One major precipitation event, such as a 25 or 50 year <br /> event, might easily create damage that would cost $50,000 to $100,000 to <br /> repair in this highly erosive basin. Post reclamation problems (if any) will <br /> probably be more severe and more numerous soon after reclamation is <br /> completed. I think a more realistic estimate for maintenance would be $30,000 <br /> per year for the first five years, then perhaps $13,000 per year for the next 3 to 5 <br /> years, plus some inflation and administrative and travel costs. I believe an <br /> additional $100,000 for this line item is needed. <br /> Method of Estimating Future Costs <br /> The DMG is estimating most future expenditures by averaging the unit <br /> costs from the three lowest bids for the same work done at this site in previous <br /> years. <br /> 3 <br />