DEQ-CFW_00070555

December 17, 2007
Ms. Hannah Stallings
SPEA Coordinator
NCDENR-DWQ
1617 Mail Service Center
Raleigh, North Carolina 27699-1617
Dear Ms. Stallings;
The Lower Cape Fear Water & Sewer Authority (the Authority), has authorized Hobbs,
Upchurch & Associates, P.A.(HUA) to prepare Version 4 of the Environmental Assessment for
the Bladen Bluffs Regional Surface Water System (BBRSWS) in response to the comments in
your memorandum of November 19, 2007.
As a prelude to preparing a response, the Authority circulated these comments to its
Environmental Counsel, Special Counsel and General Counsel in addition to a review by the
engineering firms of Hobbs, Upchurch & Associates, Camp, Dresser & McKee and McKim &
Creed, PA.
The comments received from the Division of Water Quality (DWQ) where unlike comments
from the North Carolina Wildlife Resources Commission, NCDENR Natural Heritage Program,
Department of Cultural Resources, NC Department of Transportation, NCDENR Division of
Water Resources or the US Army Corps of Engineers, which were focused, precise, technical
and provided useful direction for the project.
The April 11, 2006 scoping meeting was framed with an understanding of the EMC's call for the
project and the immediate benefit it would bring to the region, both in the near term and the long
term. The Authority recognizes the reviewer's late entry into the process, which may account for
some degree of misunderstanding of the direction provided to the applicant in developing the EA
and the basis that all parties were proceeding toward.
The memorandum comments fail to fully recognize Smithfield Packing Company's (SPC)
relationship with the Authority as a customer and as a partner. The Authority, as the applicant is
attempting to comply with EMC and DWQ directives
There are many statements of opinion within the memorandum that causes the Authority and its
team great concern and fails to capture the value of the project, such as the following:
Lower ape Fear Watery Sewer Authoril
1107 New Pointe Blvd, Suite 17
Leland, North Carolina 28451
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PhD 910.383,1919 fax 910,383,1949
www.lctwasa.org
DEQ-CFW 00070555

#7 "it is suspect whether the 4-County Region will ever benefit from this project".
It would appear that DWQ has missed one of the most critical aspects of the project, i.e., shifting
a major groundwater user of approximately two (2) million gallons per day from the aquifer to
surface water is in of itself a significant benefit to the region, one which was acknowledged by
the Cooperative Agreement executed between the Environmental Management Commission, the
Division of Water Resources and the Lumber River Council of Governments on October 14,
2004. It directed that "by February 2006, Smithfield Foods, Inc is expected to develop a plan
for sustainable water sources either acting alone or in partnership with Bladen County and
possibly with other users." Thus, the creation of the Bladen Bluffs Regional Surface Water
System, a partnership to transfer groundwater users to a surface water use alternative was
developed. Pursuant to the Cooperative Agreement, a joint letter dated February 27, 2006, by
the Authority and SPC, was provided to Mr. E. Leo Green, Jr., Chairman of the Water Allocation
Committee with the EMC indicating the plan's concept, which included this reference, "these
facilities will serve to supply treated water to SPC and regional users." Almost two years later,
the BBRSWS is the same concept as illustrated in that plan. A Capacity Use designation may be
placed upon this region if a project such as the BBRSWS is not developed.
Additional statements of opinion continue in that same comment section. For example:
"this project becomes progressively more questionable, it increasingly appears that the sole
planned benefactor of this SWTP will be SPC with the surrounding municipal areas all but
forgotten".
Even if this was a valid statement, once again, the entire region benefits from a 2 MGD
withdrawal from the aquifer being redirected to surface water as noted above. Consider another:
"Also, with SPC continuing its holding rights to the property, it is questionable whether this
project will ever reach its full potential or if future phases will be severely impeded because it
(SPC) will deem future expansion not to be cost-effective".
In addition to the Authority and SPC executing a Memorandum of Understanding in January,
2006 and a Project Development Agreement in October, 2006 the parties have executed a
Ground Lease in October of 2007, which states, in Section 6.4, "Landlord acknowledges that
Tenant does not waive by the execution of this Lease, the power of eminent domain that it
possesses. Tenant agrees that any condemnation action to take the Leased Premises and the
Easements shall encompass the entire Project and shall be diligently pursued and done on a "fast
track" basis, to the extent consistent with then applicable law". Since the Authority is not in the
timber business or agriculture business it does not seem appropriate to exercise its powers until
the project is at least permitted.
DEQ-CFW 00070556

Or, consider the comment in item #3 "it seems that SPC is preordaining its own exclusive
NPDES and/or nonpoint discharge increase'.
The SPC NPDES was renewed'on July 15,.2007. SPC currently, recycles approximately 1 million
gallons of wastewater per day.; SPC's water reuse system complies with its NPDES permit
which limits groundwater withdrawals to annual average of 1.875 MGD and limits wastewater
discharge to a monthly average of 3.0 MGD. The BBRSWS will have its own NPDES permit
unrelated to SPC's NPDES permit o' foutfall:
The Authority's Board of Directors;, representing a five -county regiori, has not only approved the
ivrnTt t1;P PICA_ anc3 the'CTrciund T ease. but'also the Reclassification to for Services to
for Service ;to HITA and the Preliminary Engineering Report Contract to CDM at a
date .of $014,000:00. 'These actions were undertaken on a regional basis in direct ri
Environmental Management Commission'sman' date to provide a sustainable water
this. region. The Authority isa, regional wholesaler of surface raw water and this p�
for the Authority to be a regional wholesaler of treated surface water:
In the view of the Authority's team it appears this edition of DWQ's comments were too strident,
opinionated and editorializing. We could illustrate other excerpts. These apparently
unresearched opinions are unprofessional and contain an obvious bias against SPC.-
The Authority acknowledges.the need for clarity to improve the EA descriptions. However, as
the project's design continues to be refined`in accordance with feedback from regulatory
agencies to our engineering design team, we wish to make it perfectly clear that there is no
signiricant change in the project, despitethe assertions included in DWQ's latest round of
comments. ' To expedite the resolution of this process, we respectfully request a meeting in early
January 2008, to address any remaining concerns DWQ has upon the receipt of the responses to
the November 19, 2007 memorandum, (Version 4). We will bring all available resources to this
meeting in January 2008 to complete any lingering comments. ,
Cordially,
Don Betz
Executive Director
Cc: Mr. Larry Smith, Chairman LCFWASA
DEQ-CFW 00070557

Mr. A.P. Carlton, Kilpatrick Stockton
Mr. Brenan Buckley, P.E. CDM
Mr. Tony Boahn, P.E. McKim & Creed
Mrs. Morellas Sanchez -King, Hobbs, Upchurch & Associates, P.A.
Ms. Coleen Sullins, Director, DWQ
Mr. Alan Clark, Chief Planning Section, DWQ
Mr. Jim McRight, DEH
Mr. John Morris, Director, DWR
Dr. David H. Moreau, Chairman, EMC
Ms. Dianne Reid, BPU, DWQ
Ms. Nora Deamer-Melia, BPU, DWQ
Mr. Jeffrey Manning, CSU, DWQ
Ms. Connie Brower, CSU, DWQ
Ms. Elizabeth Kountis, CSU, DWQ
DEQ-CFW 00070558

` Smithfield
February 27, 2006
Mr. E. Leo Green; Jr.
Chairperson -
Water Allocation Committee
Environmental Management Commission
State of North Carolina
Dear Gentlemen:
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Mr. John Morris
Division Director
Division of Water Resources
NC Department of Environment
and Natural Resources
Pursuant to the Cooperative Agreement beta een the Environmental Management .
Commission, the Division of Water Resources, and the Lumber River Council of Governments
(attached), Smithfield Packing Company (SPC), in conjunction with the Lower Cape Fear Water
And Sewer Authority (the Authority), hereby submits for your review a plan for sustainable
water sources for the Tar Heel facility and surrounding areas.
Over the past 18 months, SPC has been working with Bladen County and the Lumber
River Council of Governments (LRCOG) towards a viable water supply alternative that
recognizes future water supply requirements for Smithfield and the region. Activities in
2005 included numerous stakeholder meetings between SPC, Bladen County, the
LRCOG, and more recently, the Lower Cape Fear Water and Sewer Authority.
■ In November 2005, SPC evaluated a proposal from the Fayetteville Public Works
Commission to supply water to the Tar Heel Facility. The proposal was determined not
to be in SPC's best interest and was rejected.
Additionally, in November 2005, SPC management approved the design and
construction of an eight million gallon potable water storage tank at a cost of $2.7
million. The tank will serve as well water storage in the near term and will act as the
required clear well storage for the new surface water treatment plant. SPC anticipates a
complete final design in the 1" quarter 2006, permitting and construction through the
second and third quarters, and final completion in the 4ffi quarter of 2066.
■ In January 2006, meetings between SPC and the Authority culminated in the execution
of a Memorandum of Understanding (MOU) between the Authority and SPC. The MOU
sets forth many of the terms, conditions, and important elements regarding the proposed
development, construction, and operationof an intake structure on the Cape Fear River
and a Surface Water Treatment Plant to be located on SPC property. A copy of the
MOU is attached. These facilities will serve to.supply treated water to SPC and regional
users. SPC's existing well field system would remain in place as a back up in case of
( emergency or extended downtime of the Surface Water Treatment Plant.
DEQ-CFW 00070559

■ The MOU addresses several items including:
1.
Project scope and definition;
2.
Permitting responsibilities;
3.
Draft Water Supply Agreement;
4.
Construction timeline and schedule;
5.
Estimated construction costs
6.
Regional participation including private and public users;
7.
Financing mechanism; and,
8.
Ownership, operation, and maintenance responsibilities.
The MOU will be followed by a Project Development Agreement (PDA) that will
contain more particular engineering data, specific terms, conditions, representations,
warranties, and covenants customary and appropriate for the project. The PDA will also
set forth definitive project tasks, milestones, and timelines. Estimated PDA completion
is June 2006. A preliminary timetable (subject to change as the PDA is developed) is
attached.
■ The Authority and SPC, in cooperation with Bladen County and the LRCOG, will also
begin the development of information required for the Environmental Assessment and
River Reclassification processes; with the intent of submitting the request for
reclassification in July 2006.
_ Preliminary engineering work on intake alternatives, routing for finished water
transmission main, conceptual plant design, consultations with DENR, and opinions of
probable cost will begin in June 2006, with a final report in August 2006.
■ Detailed facility design work including field recon and surveys, preparation of
construction documents, preparation of technical specifications, and contract documents
will begin in August 2006.
DWQ's river reclassification presentation to the EMC Water Quality Committee by
September 13, 2006 is anticipated with a presentation to the full EMC by November 9,
2006.
■ Submissions for required permits will begin in February 2007.
■ Receipt of all permits by July 15, 2007 is anticipated.
■ The Bid and Award phase is scheduled to begin July 20, 2007 with Notice of Award by
September 25, 2007.
■ A projected effective date for the river reclassification is August 1, 2007.
■ We anticipate asking the Local Government Commission staff for a `preliminary
meeting' regarding bond financing on or about March 1, 2007 and would hope that the
financial process would run its normal and customary course with the approval of the
Local Government Commission being received in early October 2007 and closing to
�.- follow within 30 days.
DEQ-CFW 00070560

Construction will begin October 15, 2007 and take approximately 22 months.
It Plant startup is scheduled for August 15, 2009.
This plan represents our current best estimate of the activities, costs, and schedule associated .
with this project. It must be'recognized, however, that due to the scope of the project, and the
coordination and cooperation of numerous entities that will be necessary for the success of a
project of this scale, that changes and adjustments to the schedules and information contained
herein will no doubt be necessary.
SPC and the Authority look forward to this project and hope that the plan herein meets your
expectations. Both parties are committed to securing a sustainable water supply for SPC's Tar
Heel facility and the surrounding region, We believe the execution of the MOU is an important
milestone that supports the EMC and other stakeholders in providing a sustainable water supply
with the potential to benefit all parties. If there are any questions or concerns, please contact
either Bill Gill (757.356.6715) or Don Betz (910.383.1919)
Sincerely,
r-
U4Lere Null Don Betz
Senior Vice President Executive Director
Smithfield Packing Company Lower Cape Fear Water and Sewer Authority
DEQ-CFW 00070561

s.
A'
02/15/06 09:08 12910 618 5576 LUMBER RIVER COG WJouc
Cooperative Agreement between the
Environmental Management Commission, the Division of Water Resources,
and the Lumber River Council of Governments
October 14, 2004
This cooperative agreement between the Environmental Management Commission, the Division of Water
Resources, and the Lumber River Council of Governments (which represents local governments and
stakeholders in Bladen, Columbus, Hoke, Robeson, Sampson and Scotland Counties) will assure that ground
water levels and withdrawals are monitored and recorded, that a regional plan for long-range, sustainable water
supply sources is developed, and that ground water level declines are managed to avoid damage to the
aquifers. The EMC will review progress at least annually to assure that the specific milestones are met The
agreement allows local water users the opportunity to take responsibility for planning and managing water
resources on a long range, sustainable basis. The EMC retains the authority to begin the development of
capacity use area rules at any time if it determines that progress under this agreement to resolve water
management problems is not satisfactory_
The region's water users and the LRCOG will undertake the following strategies and objectives:
• improve the regional monitoring well network with a goal of investing $150,000 per year over five
YO
• By February 2006, Smithfield Foods, Inc. is expected to develop a plan for sustainable water sources
either acting alone or in partnership with Bladen County and possibly with other users. The plan
must be satisfactory to the Division of Water Resources. Smithfield Foods or a partnership of water
users, if such a partnership is formed, will make quarterly progress reports to the Division starting in
January 2005.
• alternative water sources planning assistance by LRCOG to regional water users, including: shifting
users to surface water sources, !using reclaimed water, reducing waste of water and improving water
use efficiency, developing shallower aquifers, and adding interconnections among water systems
• arrange a 2005 agricultural wager use survey by the Department of Agriculture and Consumer
Services with periodic updates
• develop conservation and reuse strategies for each sector of water supply, including assistanx from
the Division of Pollution Prevention and Environmental Assistance With industrial users; efforts by
the North Carolina Cooperative Extension with irrigators, agri-business and intensive livestock users;
and efforts by LRCOG to promote water efficiency rate structures and public water system
transmission line integrity
• develop regional water supply plans for 2030 that encompass additional water sources, environmental
protection, inter -system cooperation, and regional water resource management
ar A C-q - -
Dr. 4ivj-PVKUor=eau, Chairman -T!q. Morris, Director
Environmental Management 15ivision of Water Resources
Commission
J 0 Perry, Executiv
D for
Lumber River Council of
Governments
DEQ-CFW 00070562