Permissive Permitting

Behind closed doors, coal port review proceeds

Wednesday, January 8, 2014

Two days before Christmas, developers of the coal port at Cherry Point were granted their fourth extension from Whatcom County for the unpermitted clearing and destruction of wetlands that took place in 2011.

In July 2011, 9.1 acres were bulldozed, 15-foot-wide corridors were cleared of trees and vegetation, an archaeological site was damaged, and 1.2 acres of wetlands were filled and buffers destroyed. The activity of the owner, Pacific International Terminals, Inc., was found to violate federal, state and county laws.

As a result, Whatcom County Planning fined Pacific International Terminals $2,000 for the violations and ordered the developer to get “retro-active” permits.

The State Department of Natural Resources (DNR) issued a “Notice to Comply” with the Forest Practices Act. According to the DNR, that agency “does not require a retroactive permit.” DNR did not collect any fees for the permit application and no fines were levied; DNR did require reforestation of the cleared area by March 31, 2014.

The U.S. Army Corps of Engineers determined the filling of 1.2 acres of wetlands was a violation of Federal law and directed Pacific International Terminals to “do no further work in wetlands at this site.” As reported in Indian Country Today Media Network on Jan. 2, 2014, the “Army Corps of Engineers is now working on finalizing… [an] agreement…which…will serve as a retroactive permit. The Lummi Nation refused to sign the memorandum or accept the $94,500 that was offered as mitigation.”

RESources, based in Bellingham, brought suit against Pacific International Terminals (PIT) for the illegal filling of wetlands in violation of the Clean Water Act. In July 2013, PIT agreed to pay $1.6 million in penalties and fees to settle the suit.

The most significant consequence from these violations came from citizen-based suits. Had it not been for a citizen walking their dog, the violations may have never been discovered.

The retroactive permits are meant to address mitigating the damage caused by the clearing. However, when the work was stopped, not all of the geotechnical investigation the coal port developers wanted to complete had been accomplished.

The extension of the land disturbance permit granted two days before Christmas, as well as the three previous extensions, appear to be in conflict with county ordinance that authorize the county “to grant one extension of 180 days” for land disturbance permits.

Why the county authorized four extensions of the permit is unclear. Three of the four letters sent to PIT approving the extension made clear that the authority was to grant just one extension of 180 days. Yet, like clockwork, the County would issue extensions every 180 days or so.

The minimal fine and additional extensions are not the only favorable rulings the developer has enjoyed from Whatcom County.

When the coal port developers cleared more than 5,000 board feet of timber without a permit, they violated the State Forest Practices Act. A meeting was held on Aug. 12, 2011 with developers, DNR and Whatcom County staff. At that meeting, the developer stated “conversion of the site” was not their intent. Both DNR and Whatcom County accepted that statement despite the fact that a permit to create the coal port was already submitted with plans to operate within three years.

Had a Forest Practices Application been submitted, it would have revealed that the property was located in a designated urban growth area. Forest practices in urban growth areas are Class IV forest practices, and a conversion can be avoided only when the landowner signs a commitment not to convert for 10 years or has a timber harvest plan approved by Whatcom County.

Pacific International Terminals did not sign a 10-year commitment or get a harvest plan approved; their intent is to convert the property into a multimodal terminal that will store and export 54 million metric tons of commodities, mostly coal.

Had this information been disclosed at the time, the DNR would have considered the clearing a conversion, a fact that DNR might now recognize. If “the area lies within an Urban Growth Area… any FPA’s would indeed be classified as a Class 4 General,” stated Doug Lancaster, Forest Practices Coordinator for the DNR’s Northwest Region in a Jan. 3 email.

The coal port developers benefitted from the 2011 ruling on land conversion. The County Deputy Prosecuting Attorney wrote to his clients, Planning and Development Services, that “imposition of a moratorium under state and county law” was not advised. Had he advised otherwise, the county would have been required to place a six-year development moratorium on the property.

A six-year development moratorium requires review of all permits to be suspended; new applications cannot be accepted; a forest conversion application must be submitted; and all permits or approvals for development must be denied.

The effective date for a development moratorium is when the unpermitted forest practices were first documented. That date was July 19, 2011 for the violations at the Gateway Pacific Terminal site.

Had the six-year development moratorium been put in place, Whatcom County could not have accepted the revised project and shoreline permits on March 16, 2012, the scoping of the EIS would not have commenced, and any permit approvals would have to be denied.

Not all landowners have received similar favorable treatment. Between October 2005 and February 2009, a “Notice of Moratorium” was filed on more than one hundred parcels at the County Auditor’s office. The notice describes the six-year development moratorium that had been issued for the property pursuant to county regulations. Recording of these notices stopped in 2009 due to budget cuts.

Meanwhile, following issuance of the Scoping Summary Report on March 29 of last year, work has been underway to prepare the Environmental Impact Statement (EIS).

Public agencies are responsible for the independent analysis of projects in an EIS, and for ensuring that the public will be able to participate in the environmental review process. A third-party consultant, CH2M Hill, was selected to facilitate this analysis. Whatcom County agreed to be the agency responsible for contracting for those services and getting reimbursed for the costs.

On June 5, 2012, this unique arrangement between the agencies, developer and consultant was presented to the Whatcom County Council. This was the first time the public had an opportunity to weigh in on what they believed was a fair process that would not burden county taxpayers.

Whatcom County Executive Jack Louws told the County Council that he “desires that they be as open and transparent as possible” when it came to the coal port EIS process and consultant contracts.

That evening, the County Council approved a contract with CH2M Hill for $961,703; the Council also instructed that the public be provided an expanded scoping period of 120 days. Since that time, Executive Louws has entered into three contract amendments with CH2M Hill totaling $889,507.

The public has largely been unaware that these contract amendments have taken place. None of the amendments were submitted to the County Council. The County’s website for Gateway Pacific Terminal Project correspondence says “Correspondence concerning contracts, deliberative drafts…are not included.” No correspondence has been updated since June 20, 2013.

The public’s interest in closed-door discussions is nothing new. Starting in November of 2010, the State facilitated a process called the Multiagency Permit Team (MAP) for the coal port project. The team, composed of public agencies and the applicants, along with the applicants’ attorney, met outside the glare of public scrutiny.

When the county signed the reimbursement agreement for the EIS, it memorialized a process for meetings and conference calls between the applicant, the consultant and the public agencies. The public had no access to these discussions, and the amount of influence the developer has on the public agency is left unchecked.

The limited access of the public, and unlimited access by the developer, raises concerns that the EIS is neither the independent analysis, nor the open and transparent process, that is required and promised for this project. The only way to obtain the correspondence is through a Public Records request, which could take at least four weeks to fulfill.

The next step in the EIS process is critical. Based on the Scoping Summary Report, a Draft EIS is prepared and presented to the public for comment. Only 30 days are required for public comment on the Draft EIS, so the Scope of Work for those services is critical to public participation.

But first, CH2M Hill needs a contract to pay for their services and the lead agencies need an agreement to get reimbursed for those services and the costs of the agencies.

For “the last couple of months,” according to Whatcom County, they have been negotiating new contracts with CH2M Hill for preparation of the Draft EIS. These contracts also involve cost-reimbursement agreements with Pacific International Terminals. According to the County planner in charge of the project, the “contract amendment won’t be in front of Council for approval…The public will be given an opportunity to review the amended contract once the Executive has signed the document.”

County rules require any contracts in excess of $20,000 be reviewed and approved by the County Council. The county administration is avoiding council approval under the presumption that the agreements do not require the use of county funds, and the “reimbursement compensation for the county employees” is not changed from the original approval by the County Council.

The compensation reimbursement reviewed by the County Council in June 2012 was met with skepticism by County Council members. Council member Carl Weimer, who won re-election this past November by an overwhelming margin, observed “the people of Whatcom County will subsidize this effort in the amount of $200,000 or $300,000.” Weimer was “interested in changing the contract to include the cost for indirect costs, which the county normally builds into contracts.”

County Planning staff observed that “the reimbursement agreement is voluntary and the proponent is not required to pay for the services under existing law.”

Cost recovery is voluntary because County Planning and Development Services, and a receptive County Council, reduced the fees in the fall of 2010 that the Gateway Project would have to pay.

County Planning eliminated the hourly charge for services in favor of a flat fee. The assumption was that the County would spend just 20 hours reviewing the application and another 20 hours on the EIS; all other costs would have to be borne by the taxpayers unless the developer entered into a “voluntary” agreement.

After hearing concerns pertaining to recoup of time and expenses, and potential attorney fees, Executive Louws, in a Nov. 30, 2012 email, said he would “definitely take this into consideration” while expressing confidence that the County was “able to professionally analyze the data we are receiving”.

Since those initial contracts were signed, Whatcom County has billed for less than $60,000 of services. In comparison, the Department of Ecology has recovered $149,000 for their time spent on the Gateway Pacific Terminal EIS.

Not included in any of the county billings were reimbursement of time spent by county attorneys or other administrative staff. Despite the fact that impacts of coal trains on road crossings is a major concern about the project, records show that County engineering and transportation staff spent fewer than five hours reviewing the project, resulting in reimbursement of only $365.

The red carpet appears to have been rolled out for the coal port project by county administration. Minimal fines, reduced permit fees and charges for services, and beneficial interpretations of county ordinances, has universally benefitted the developer and limited the public’s interest.

The only gain that the public received was the extended 120-day scoping period, a gain achieved when the public had an opportunity to publicly voice their concerns.

One of the crucial decisions that will happen next is whether the developer will exert their influence to limit the public’s opportunity to review and comment on the Draft EIS. State law requires only 30 days, with an option to extend it another 15 days.

Many believe the County Council elections in the fall of 2013 were a referendum on the coal port. However, handling the review of the project and EIS is under the direction of the administration, not the Council. Whether the administration and Executive Louws will improve accountability and transparency on this project will be determined by their actions in the coming months.

David Stalheim is a former planning director for Whatcom County. He has filed an appeal of county administrative actions and will seek a development moratorium for the Gateway Pacific Terminal project.

SVCR Don McLean
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