Costs of New Era Mine

by Robin Huffman, BEC Advocacy Director and Rich Meyers of Dry Creek Coalition of Butte County

Now that the court has issued decisions, estimates can be made more closely as to what the gentlemen on the Board of Supervisors – Supervisors Yamaguchi, Connelly, and Josiassen at the time – are costing the county taxpayers for failing to adequately consider the impact of the New Era Mine on the environment even as the operators were wreaking havoc in the neighborhood in the Dry Creek / Cherokee Canal Watershed in the Butte Valley area.

Violations by Butte County and New Era Mine

The neighbors of New Era Mine formed Dry Creek Coalition when, in March 2007, new operators, North Continent Land and Timber Company, began muddying up Dry Creek as they denuded 12 of the 18 acres of the New Era Mine property. The mine was originally permitted as a small “mom and pop” operation in 1982 and had operated sporadically for a few years and then became idle for the last 15 years.

In December 2007, reacting to complaints from neighbors, Butte County, Department of Conservation- Office of Mine Reclamation, and Central Valley Regional Water Quality Control Board made inspections of the site and issued Notices of Violation and a Clean-up and Abatement Order.

North Continent appealed the County Notice of Violation to the Planning Commission and, when the Planning Commission agreed with staff, went on to appeal to the Board of Supervisors. In August 2008, on a 3/2 vote the 3 “boys” voted to allow the mine to operate under the 1982 permit and reclamation plan, ignoring advice from OMR spokesman, Steve Streeter (the county planner in 1982), our Attorney Keith Wagner, and their own County Counsel.

BEC joined Dry Creek Coalition, hired Keith Wagner, of Lippe, Gaffney and Wagner LLP, and sued Butte County and North Continent for violation of California Environmental Quality Act (CEQA) and State Mining and Reclamation Act (SMARA). After prevailing in an illegal attempt at intimidation from North Continent in Sacramento Court (a $1million Strategic Lawsuit Against Public Participation), BEC and DCC went on to win the CEQA and SMARA suit in Butte County Court. In December Judge Benson gave Butte County 90 days to rescind their August resolution; in March the Board did so and directed staff to start the process to reclaim the site. Also in March the OMR issued an “Order to Comply” directing North Continent (NC) to take a number of actions, including providing a reclamation plan. On April 15 the State Mining andGeology Board will hold a hearing to decide if NC is trying to comply with the issues on the “Order”. Butte County is waiting for the Board to issue their decision in order to coordinate the dates specified for NC to comply with the various requirements.

Soon after the judge issued his Statement of Decision in October (finalized and recorded in December) NC pulled all of their equipment off the site. In December, in response to orders from CVRWQCB, they finally spread some straw over the disturbed area to help prevent erosion. To date North Continent Land and Timber has not submitted or obtained a reclamation plan. New Era Mine remains a huge open pit that appears to have been abandoned and continues to affect Dry Creek and the downstream neighbors. The neighbors want the land restored, but it remains to be seen who will be held accountable if the company finds a way to back out of their financial and environmental responsibilities.

Estimated Costs to Butte County Taxpayers

1. The County received a $25K deposit from North Continent in July 09 for the cost of the defense of our CEQA Writ of Mandate. As of December County had spent $38K, and this figure has likely grown by about $10K since then. In his declaration for the Motion for Fees, Deputy County Counsel stated that they have had no success collecting any more from NC so this cost is somewhere between $13K and $25K.

2. An estimate of the number of hours that Butte County Department of Development Services and County Counsel have invested in this project is difficult to know. It is far from over as DDS is planning on another trip to Sacramento to a SMGB hearing about NC.

3. Butte County Superior Court just ruled that Lippe, Gaffney, Wagner LLP are to receive $144,075 for their fees to represent us in this case. This in addition to $2,652 awarded for costs (filing fees, document preparation, etc.). The county is required to go after NC to pay, pursuant to the indemnification agreement NC signed in August 2008. NC has recently denied their responsibility under this agreement.

4. Cost out of pocket for the county is approximately $167,000 (assuming $19K for the county’s defense costs, $144K attorney fees, and $2.7K costs). This will likely come out of the general fund. North Continent has yet to pay as required, and may not have any unencumbered assets with which to collect payment. The only known asset is the $270K financial assurance for reclamation, held jointly with the Office of Mine Reclamation and Butte County. OMR is moving to seize these funds for reclamation of the site.

If cost of reclamation exceeds $270K, which OMR seems to think it may, the County will likely be out those costs also.

Costs to the Neighbors

Dry Creek Coalition has spent in excess of $102,000. This breaks down to:

1. $22K in the County administrative process: Attorneys, Hydrology report, Steve Streeter declaration and appearance, Consultation with various experts, etc.).

2. $80K spent for Keith Wagner’s representation in court and before SMGB and CVRWQCB. They expect to receive a percentage of this from the judge’s award. Mr. Wagner represented DCC and BEC for a greatly reduced fee because of the environmental impacts this case represented. As part of this agreement he will collect closer to his “Market Rate” or normal fee out of the Judge’s award for “Fees.” A good share of this $80K was spent petitioning various agencies and is not recoverable. This petitioning, however, was a vital part of our victory.

When this is all over and done DCC members will have spent over $50,000, which they will likely never recover.

Cleanup and Costs

The March 11 Order to Comply requires many things from NC, the main one being a hearing before the State Mining and Geology Board in Sacramento on April 15, incurring more costs to the DCC and to the County.

The Notice of Violation said there is an “imminent threat to the public or environment”. According to a recent note from Philip Woodward, Senior Engineering Geologist of the Central Valley Regional Water Quality Control Board, “the ponds are being managed by an on-site caretaker to prevent overflow, however they do need maintenance and the site needs to be stabilized against erosion, especially since the mine is shut down. I will be issuing a Notice of Violation to the owner/operator in the near future. I am working with Butte County and Office of Mine Reclamation to get the site stabilized.”

It is estimated that the misjudgment of Supervisor Yamaguchi and Supervisor Connelly cost the taxpayers of Butte County at least $167,000 so far, plus untold hours of staff time, and the site isn’t reclaimed yet.

Supervisor Dolan and Supervisor Kirk voted for the New Era Mine to get a new permit, which would have required New Era Mine to follow environmental law.

A third vote with Dolan and Kirk would have saved the county tax payers a lot of time and money, would have protected the Dry Creek watershed and environment, and would have saved the neighbors and concerned citizens of Butte County a lot of trouble in protecting their properties from a misguided mining operation.

From the Spring 2010 issue of the Environmental News.