20051457 Ver 1_FW Reservoir Permitting.msg_20110218

Strickland, Bev
From: Reeder, Tom [/o=NCIVIA|L/ou=Exohango Administrative Group
(FYD|BOHF23GPDLT)/on=Rooipionts/ n=tom.modor]
Sent: Friday, February 18.2011 1:59 PIVI
To: Tom Fnanson(tfranson@boUsouMhnoU
Subject: FYV: Reservoir Permitting
Attachments: Randleman Reservoir Permitting Timeline.doc
Tom Reeder
Director, NC Division nf Water Resources
Phone: [phone]
E-mail e-mail: tom.reeder(a-)ncdenr.qo
correspondence to and from this address may be subject to the North Carolina Public Records Law and
mav be disclosed to third i)arties.
From: Smith, Robin
Sent: Friday, February 18,2O112:58PM
To: Rep. Paul Stam; Keith Weatherly (House Majority Leader's Office); Rep. Chuck McGrady
Cm: ]effrevHudson (Research); Bacsness Kah K; Reeder, Tom; Sullins, [o|een; Rep. ChuckMcGnadv
Subject: RE: Reservoir Permitting
Rep. Stam — In addition to talking to Raleigh, we also looked back at the timeline for Randleman Reservoir to get an
understanding of where the time has gone in permitting reservoir projects. I have attached a copy of the timeline that
we were able to put together from historical sources and information provided by the Attorney General's Office. Early
on, the U.S. Army Corps of Engineers considered construction of Randleman Dam as a federal flood control project.
(Water supply would have been a secondary purpose.) After spending a number of years studying the possibility, the
Corps concluded that the dam could not meet federal cost-benefit ratios as a flood control project and abandoned the
idea. It was proposed as a regional water supply project in 1987-1988 on a smaller scale and the actual environmental
review of what became the Randleman Dam water supply project began after that.
Although Randleman Dam ceased to be a Corps of Engineers development project, the Corps of Engineers issues the
most important environmental permit for a reservoir—the Clean Water Act Section 404 permit for impacts to waters and
wetlands. The major state authorization for a reservoir project is the Section 401 Water Quality Certification. Section
401 of the Clean Water Act requires the state to certify that a project requiring a federal permit will comply with state
water quality standards.
Under federal statutes and rules, the Division of Water Quality must act on an application for a 401 certification within
one year and that time period cannot be extended for additional information. That one-year period has to include the
time necessary to meet public notice and hearing requirements for the draft 401 Certification. If the state fails to act
within one year, the ability to have state water quality standards considered in the final Section 404 permit is waived.
You will see on the Randleman Dam timeline that the Division of Water Quality acted on the 401 certification for the
Randleman Reservoir within one year after the application was submitted. There are later state approvals related to
actual construction activities (such as the sedimentation plan approval) but those don't affect permitting of the reservoir
itself and the Sedimentation Act has a 30-day clock on action to approve or disapprove a sedimentation plan.

The majortime sinkfora reservoir project isthe Environmental ImpactStatement required bythe Corps of Engineersfor
the Section 4O4permit. Reaching agreement on the necessary studies for the EIS (both to satisfy the National
Environmental Policy Act and to provide the information needed for state and federal permit reviews); completion of
the studies; and agreement between the applicant and the state/federal agencies on the least environmental damaging
practical alternative accounts for most of the project review time. You will see in the Randleman timeline that it took
nearly nine years for the regional water systems to get to a draft EIS that actually became the basis for the final EIS and
Corps of Engineers permitting decision. (Although state permitting agencies also rely on the EIS, the Corps ofEngineers
makes the decision about completeness of the EIS since it is a federal document prepared in support of a federal
Typically, the applicant is not in a position to apply for the Section 401 certification until the Corps has signed off on a
draft EIS for public notice and comment. The Randleman Dam Section 401 application was submitted to our Division of
Water Quality several months after the Corps of Engineers sent the final version of the draft EIS out to public notice.
Raleigh is having a similar experience with Little River Reservoir — the City is now a little over two years in and they are
no where close to applying for state approvals. The City isin the midst of conducting the studies necessary for the
federal EIS and it appears that the Corps of Engineers may still have questions about whether a reservoir is needed to
meet the projected water supply need.
That is why we focused on the EIS process and the potential for shortening that part of the environmental review. If
state agencies reach agreement with the local government on the appropriate water supply alternative in advance, the
state could beina position to support the local government in the federal permitting process. VVe could also lend the
state's technical expertise with respect to the alternatives analysis; development ofa plan of study for the EIS (including
how to sequence the studies in a way that allows them to be completed as quickly as possible); and possibly conducting
some of the studies for the local government. (The last would likely need to happen under an agreement with the local
government to provide some resources todo the studies.)
Since the EIS is the necessary prerequisite for all of the state and federal approvals and time limits already exist for
action once an application is submitted to Division of Water Quality, we aren't seeing the actual permit processing time
as the issue onthese projects. Raleigh staff has expressed an interest in having the state agencies support the local
government project and work cooperatively with them in the federal process. The way that we can do that is to reach
agreement early on that a reservoir is the appropriate water supply alternative and lend technical assistance in
development of the EIS. We think that could shorten the lead time needed to complete the EIS and actually get to the
permitting actions more quickly.
If I can answer any questions about our thinking on this or respond to other ideas that you may want to pursue, just let
me know.
Asst. Secretary for Environment
NZ. Dept. ofEnvironment & Natural Resources
512N. Salisbury Street
Raleigh NZ.276O4
[phone]
E-mail correspondence toondƒrom this address may besubject to the North Carolina Public Records Low and may be
disclosed to third parties.

From: Rep. Paul Stam [mailto:Paul.Stam @ncleg.net]
Sent: Thursday, February 17, 20119:02 PM
To: Smith, Robin; Keith Weatherly (House Majority Leader's Office)
Cc: Jeffrey Hudson (Research); Barsness, Kari K; Reeder, Tom; Sullins, Coleen; Rep. Chuck McGrady
Subject: RE: Reservoir Permitting
Ms Smith these ideas are all to the good. Can we come up with some reasonable deadlines on agency reviews and
action in order to shorten the 10 year period a tad or two. Rep McGrady will be working with me on this so please
copy him on future thoughts rep Stam
From: Smith, Robin [ mailto :robin.w.smith @ncdenr.gov]
Sent: Thursday, February 17, 20115:45 PM
To: Rep. Paul Stam; Keith Weatherly (House Majority Leader's Office)
Cc: Jeffrey Hudson (Research); Barsness, Kari K; Reeder, Tom; Sullins, Coleen
Subject: Reservoir Permitting
Rep. Stam,
To follow up on our earlier meeting concerning reservoir permitting, I have attached some ideas in a working draft. We
have started from the assumption that the basic question is how to meet a water supply need; a reservoir is one
alternative, but both state and federal law will require consideration of other alternatives that can meet the need with
as little environmental impacts as possible.
After looking back at other permitting experiences and talking to City of Raleigh staff, I worked with our Division of
Water Resources and Division of Water Quality directors to come up with some ideas for making the state - federal
permitting process work better. We concluded that there are two things that could make permitting of reservoirs and
other water supply projects go more smoothly:
1. Early agreement between DENR and the local government(s) on the most practical alternative for meeting the
water supply need that also has the least environmental impact.
Both state and federal water quality programs require selection of the alternative that can achieve the
intended purpose -- some identified water supply need –with the least impact on waters and wetlands. The
Corps of Engineers cannot issue the necessary Section 404 permit under the Clean Water Act unless the local
government has met that test. A similar alternatives analysis is necessary to get a state Water Quality
Certification. A number of reservoir projects have either failed or been significantly delayed by difficulty making
the case that a reservoir is the least environmentally damaging practical alternative to meet the water supply
need. For example, the Corps of Engineers has already told Cleveland County that the Corps will not issue a
reservoir permit to the County because the County can get the water it needs by purchasing from another
water system. There is no way to expedite the permitting of a reservoir that cannot get over that hurdle. What
we propose is to create an opportunity for consultation with the state agencies early – before starting into the
federal permitting process —to try to get consensus between state and local government on the selection of an
alternative that can be permitted. That may be a reservoir or it may be something else.
In any case, the State would contribute its expertise and technical assistance to the local government in doing
the alternatives analysis. And if the local government decides to move forward with the water supply approach
that the State agrees is the least environmentally damaging practical alternative, then that alternatives analysis
would satisfy requirements for other state permit reviews and put the State in a position to support the local
government in seeking a federal permit.
2. Developing the plan of study for the federal EIS.

Again, if the local government and the State can agree on the water supply alternative to take into the federal
process the State can be a partner with the local government in developing the plan of study and even —by
agreement — undertaking some of the necessary technical work for the federal EIS. Now, the local government's
consultants are negotiating with a group of both state and federal agencies on what types of studies are
needed for the EIS and for state /federal permit reviews. And the local government has the entire burden of
figuring out how to satisfy all of those information requests.
There is also a section that would authorize regional water supply management organizations. I confess that I was
starting to run out of steam here, but the idea is to allow for a regional structure short of a water authority that would
provide a forum for water systems to work out partnering arrangements and resolve conflicts so that the most efficient
use can be made of the available regional water resources. Basically, we are trying to find a way to give local
governments like Cleveland County greater security in accepting a water supply solution other than a reservoir.
This represents some brainstorming within a small group of people in DENR. The intent is to respond to your request for
ideas; I cannot say that we have vetted this sufficiently for it to be characterized as a DENR proposal but we are certainly
comfortable with it as a starting point. I have not sent the draft to City of Raleigh staff; from recent conversations it
sounds like they may be able to comment on an introduced bill, but are not authorized to work on the draft. As a result,
I cannot represent this as something that they would support although I think it gets at some of the most fundamental
issues in permitting large water resource projects. It also creates a path toward a stronger state -local partnership in
taking a proposal into the federal permitting process.
Let me know if we can answer any questions.
0 1
rMOTOM12FAVIIIIIIINW,
Asst. Secretary for Environment
N.C. Dept. of Environment & Natural Resources
512 N. Salisbury Street
Raleigh N.C. 27604
(919) 715 -4141
E -mail correspondence to and from this address may be subject to the North Carolina Public Records Law and may be
disclosed to third parties.

HISTORY OF RANDLEMAN RESERVOIR
As a federal flood control project:
1937 — US Army Corps of Engineers proposed dam on the Deep River above Randleman as part
of a flood control project for the Cape Fear River
1968 — Congress authorized $11 million dollar/ 3,000 acre Randleman Lake project for flood
control, water supply and recreation
1976 — First U.S. Army Corps of Engineers Environmental Impact Statement
1987 — After spending $6.1 million on engineering, surveying, planning and environmental
impact statements, the Corps of Engineers withdrew its support for the federal project because
the costs would outweigh the flood control benefits. By that date, the project size had
increased and estimated costs had reached $135 million.
As a regional water supply project:
1987 -1988 — Piedmont Triad Regional Water Authority proposed a smaller project to be funded
by local government as a water supply. Estimated cost: $67 million for a 6,000 acre project.
1991— The Water Authority released a revised Draft EIS; biological and aquatic studies began
on the project area.
1991— Based on the DRAFT EIS, the Environmental Management Commission authorized the
Authority to use the power of eminent domain to acquire land for the reservoir and also
approved a transfer of water from the Deep River to the Haw River.
1994 — Piedmont Triad Regional Water Authority prepared an initial wetland mitigation plan to
satisfy requirements of both Section 404 (the Corps of Engineers permitting program) and
Section 401 (state water quality certification) of the Clean Water Act.
1995 — Preliminary design work on the dam began.
1996 — Archaeological and architectural studies of the project area began. Dam design and land
acquisition continued.
1997 — Revised Draft EIS released for public comment.'
' Since the Corps of Engineers' Section 404 permit for the dam required an EIS under the National Environmental
Policy Act, the Corps ultimately had responsibility for the adequacy of the Randleman Dam EIS. As a result, the
Corps determined when the Draft EIS was complete; published the revised Draft EIS for public comment;
responded to comments; and published the Final EIS and Record of Decision (the selection of the preferred project
alternative from the alternatives described in the EIS).

1998 — Piedmont Triad Regional Water Authority consultants completed studies of the
contaminated Seaboard Chemical and Landfill sites adjacent to the Deep River and concluded
concentrations of toxins would be within drinking water standards.
1998 -- N.C. Environmental Management Commission (EMC) completed a rulemaking to classify
all waters of the Randleman Lake Watershed for water supply uses, designate the area as
Critical Water Supply Watershed and put in place standards to protect the proposed water
supply from excess nutrients.
1998 -- The Authority submitted an application to the N.C. Division of Water Quality for a
Section 401 Water Quality Certification.
1999 —in March of 1999, the N.C. Division of Water Quality issued the Section 401 Water
Quality Certification for the project. (The Corps of Engineers cannot issue a Section 404 Clean
Water Act permit to fill waters and wetlands — required for dam and reservoir construction —
unless the state certifies under Section 401 of the Clean Water Act that the project will meet
state water quality standards. )2
2000 — In December 2000, the Corps of Engineers published the final EIS /Record of Decision
on the Randleman Reservoir project.
2001— April 6, 2001, the Corps of Engineers issued the Section 404 Clean Water Act permit for
filling waters and wetlands to construct the Randleman dam. Construction began in August of
2001.
z The American Canoe Association and the Deep River Coalition appealed the approval of the Section 401
Certification. The legal challenge ended with a 2004 N.C. Court of Appeals decision upholding the state action.