20080868 Ver 2_More Info Letter_20080807

F WATF
?O 9Q Michael F. Easley, Governor
William G. Ross Jr., Secretary
r North Carolina Department of Environment and Natural Resources
Coleen H. Sullins, Director
Division of Water Quality
August 7, 2008
DWQ # 2008-0868
Beaufort County
CERTIFIED MAIL: RETURN RECEIPT REQUESTED
Mr. Ross M. Smith
Manager, Environmental Affairs
PCS Phosphate Company, Inc.
P.O. Box 48
Aurora, NC 27806
Subject Property: Proposed PCS Phosphate mine expansion
Request for additional information for 401 Water Quality Certification
US Army Corps of Engineers Action ID No. 200110096
REQUEST FOR MORE INFORMATION
Dear Mr. Smith:
On July 9, 2008, the Division of Water Quality (DWQ) received your application based on a
public notice issued by the US Army Corps of Engineers dated May 22, 2008 to impact 4,124
acres of wetlands, 29,288 feet of streams, 33.01 acres of Zone 1 protected riparian buffers and
22.13 acres of Zone 2 protected riparian buffers to construct the proposed mine expansion. The
DWQ has determined that your application was incomplete as discussed below. The DWQ will
require additional information in order to process your application to impact protected wetlands,
streams and riparian buffers on the subject property. Therefore, five copies of the additional
information requested below must be provided to this office within 30 days of the date of this
correspondence in order to keep this application active. If we do not receive the requested
information within 30 days, your application will be formally returned as incomplete. Please
provide the following information so that we may continue to review your project.
Additional Information Requested:
As noted below and as discussed in our July 8, 2008 meeting in Raleigh, the NC Division of
Water Quality will need the following additional information before we can make a decision
concerning your request for a 401 Water Quality Certification for the abovementioned project as
described in your application received by DWQ on June 9, 2008 and as discussed in the Corps
of Engineers Public Notice dated May 22, 2008.
1. Groundwater monitoring for metals
It is not clear from the application or our reading of the final EIS, to what extent you plan to
monitor groundwater at the mine site for various metals (notably Cadmium and Flouride) that
have been found in some of the leachate from the mine. Please describe these plans and how
they will meet the Division's groundwater water quality standards for metals.
401 Oversight/Express Review Permitting Unit
1650 Mail Service Center, Raleigh, North Carolina 27699-1650
2321 Crabtree Boulevard, Suite 250, Raleigh, North Carolina 27604
Phone: [phone] / FAX [phone] / Internet: htto://h2o.enr.state.nc.us/ncwetlands
NorthCarolina
Naturaliff
An Equal Opportunity/Affirmative Action Employer - 50% Recycled/10% Post Consumer Paper
PCS Phosphate, Inc.
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August 7, 2008
2. Action by the NC Environmental Management Commission (EMC) concerning your
request for a major variance from the Tar-Pamlico buffer rules concerning buffer
mitigation.
As you know, the EMC will need to issue a Major Variance from the Tar-Pamlico Buffer rules in
order to approve your request for an alternative way to provide some of the projected short fall
in buffer mitigation. DWQ will be unable to issue a 401 Certification until the EMC acts on your
request since we will need to take direction from the EMC for this policy decision. We
understand from our July 9 meeting, that you want to modify the previous draft Major Variance
to include crediting of valley length (and its associated buffers) for mitigation sites to be done
using the new Coastal Headwater Stream Mitigation Guidance from the Corps and DWQ. Staff
have discussed this request and concur assuming that surface flow is documented at these
mitigation sites. As part of that request, please provide a detailed description of the search for
buffer mitigation sites in order to better describe the need for this Major Variance. Also your
request for buffer credit based on conducting research is not acceptable to DWQ since the
research would not result in additional nutrient removal. The Division will support and
encourages additional research into buffer effectiveness but we cannot support additional buffer
credit for conducting this research.
After our discussion, we suggest that a broad based stakeholder advisory group be established
to help guide the selection of alternative BMP mitigation sites (urban and rural). This group
would have broad membership in the local community and be established to provide advise to
DWQ with respect to the identification of possible mitigation sites and their selection. This
advisory group should be referenced in the revised Major Variance. This group would also
review and comment on the proposed method to calculate offset credits that your consultant
(Kimley-Horn) is preparing. Please review these suggestions for the Major Variance and
discuss a revised Major Variance request with John Dorney and Amy Chapman (919-733-1786)
in the near future so we can assure that the item in on the September EMC agenda.
3. Monitoring of possible in-stream effects of drainage area reductions.
As we discussed in our July 9 meeting, the existing water quality and biota monitoring that is
being done to determine if there are any water quality, water quantity or biological effects of
mining thru drainage area reductions in the small streams draining into South Creek and other
tributaries of the Pamlico River will also be included in the new Certification. Additional
requirements of that condition will be that any freshwater biological sample be analyzed at a
DWQ-certified lab and that DWQ biological monitoring staff be notified at least one month in
advance of any sampling so we may accompany your biologists during their sampling visits.
4. Mitigation (Wetlands, Streams, and Buffers)
A. Wetlands Mitigation
1. Notes on mitigation adequacy (for informational purposes).
a. Wetland restoration acreage meets or exceeds impact acreage for all wetland types, so
the State's requirement for 1:1 restoration or creation acreage is satisfied for the entire
PCS Phosphate, Inc.
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August 7, 2008
proposed mining operation.
b. Mitigation ratios in the Mitigation Plan, Table 3, have not been updated to reflect the
values required by DWQ at the 12/13/07 meeting in Raleigh. These values were
generally 2:1 for restoration, 4:1 for enhancement, and 10:1 for preservation (except
where higher ratios were required by the Corps of Engineers). DWQ will apply these
ratios in the calculation of mitigation credits unless compelling evidence is presented for
more favorable ratios.
c. Per DWQ staff calculations, proposed mitigation credits are adequate to meet regulatory
requirements designed to offset projected wetland impacts. This is based on draft
mitigation proposals, and assumes 90% mitigation success, both of which are subject to
change.
d. DWQ may be willing to consider a different ratio than 10:1 for preserved wetlands of
exceptional value. The applicant should present arguments for reduced ratios on a case-
by-case basis, and concurrence should be reached among the agencies regarding the
validity of reduced ratios based on the observed quality of the preservation areas.
II. Credit generation and plan details (responses required)
a. The credits that will be generated by the proposed mitigation projects are uncertain.
Plans for individual mitigation projects are not complete enough to be approved at this
time. A number of issues, which could reduce or increase the mitigation credit potential of
various projects, need to be addressed during review and approval of the mitigation plans.
Permit reviewers will consider the proposed mitigation values tentative until the mitigation
plans are more fully developed by the applicant and approved by agency personnel.
b. P Lands and Hell Swamp vegetative restoration strategies are currently under
development. Please provide a final copy for review.
c. Parker Farm sections J and most of I are located in CU 03020105, adjacent to the CU of
impact (03020104). Therefore, some adjustment in mitigation ratio may be applied to
credits from the Parker Farm site in accordance with current DWQ policy. Further,
proposed preservation credits in section J may be reduced to account for degradation of
wetland function due to drainage by to the eastern perimeter canal. These adjustments
will need to be accounted for in your mitigation summary.
d. Hydrology monitoring currently underway at the Gum Run Sites may generate additional
credits if it shows larger areas of functional wet hardwood and pine flats than previously
calculated. These adjustments will need to be accounted for in your mitigation summary.
e. The Sage Gut Mitigation Plan should be revised to show the boundaries between riparian
and non-riparian wetlands based on the topographic and hydrologic conditions of the site.
As currently presented, it is unclear what types of systems will be restored on the site.
The mitigation credit values will need to be be revised to reflect the updated mitigation
plan.
f. At the Bay City Farm mitigation project, LIDAR data shows that the wetland adjacent to
Gum Swamp Run may be riparian rather than non-riparian forest. Similar situations occur
adjacent to South Creek on the north end of the U-Lands site, and along creeks on the
Upper Back Creek site. This issue should be addressed, and mitigation values adjusted
accordingly.
g. Sandy Landing Road impacts show a discrepancy between community types identified in
FEIS Appendix I, Table 1 and Figure 4. This should be corrected and the table and/or
figure updated accordingly. It appears that the correction will change neither the total
acreage impacted nor the amount of mitigation required under the proposed mitigation
PCS Phosphate, Inc.
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August 7, 2008
ratios.
h. Ecosystem types need to be verified throughout the Mitigation Plan.
i. On-site preservation of wetland areas not mined - As noted in our July 9 meeting, we will
require protection of wetlands in the NCPC and Bonnerton tracts that are not proposed for
mining. We believe that this preservation should receive a favorable credit ratio since
these wetlands are clearly valuable to water quality and are in imminent threat of impact.
We believe that a conservation easement would be a good mechanism to protect these
areas. Please address how these concerns can be addressed in your response.
B. Stream Mitiqation
I. DWQ is concerned about the amount of zero-order stream valley restoration involved with
these projects. Page 9 paragraph 2 of the FEIS notes the creation of 5 miles of streams. As
discussed previously, no success criteria have been presented other than in very general terms.
Detailed success criteria must be included in each specific mitigation plan. Notably, it will be
critical to the success of these projects to document flow. If flow is not documented, then
stream credit will not be awarded.
II. The ratios used for stream mitigation are unclear. Table 4 states that restoration and
enhancement ratios are 1.8:1. This ratio was calculated based on the conditions of the stream
to be impacted. However, it is unclear how it can be applied to both restoration and
enhancement. Preservation is shown at 4:1. The guidelines provide a sliding scale from 2.5:1
to 5:1. Please address more fully how these ratios were developed.
C. Buffer Mitigation
As noted above, buffer mitigation for the first 15 years of operation can be satisfied if credit is
awarded for all streams appearing on USGS topo maps, and for the five miles of headwater
stream restoration proposed. This assumes all of the headwater stream restoration is
successful (e.g. flow is documented). If a stream is unsuccessful, this would result in not only a
loss of stream credit, but also a loss of riparian buffer credit. It is clear that PCS cannot
demonstrate enough riparian buffer mitigation, even with the headwater stream restoration
reaches, to compensate for the total impacts included in the 401 application. Therefore DWQ
will again support a Major Variance from the Tar-Pamlico buffer rules with the changes noted
above.
D. Generic Mitigation Issues
1. On-site mitigation near Porter's Creek site
According to the final EIS, it appears that you have not finalized mitigation plans for the Porter's
Creek headwater stream and wet hardwood flat site. As we discussed in our July meeting, we
believe that stream restoration credit and wetland enhancement credit can be supported by
plugging or filling the existing ditch which runs parallel to the uppermost end of Porter's Creek.
DWQ is willing to support credits from the functional uplift from the proposed enhancement
activities for the site in order to help meet our 1:1 restoration /creation credit requirement (15A
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PCS Phosphate, Inc.
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August 7, 2008
NCAC 2H .0506 (*)). Please discuss this matter more fully with John Dorney who will need to
make a site visit (probably with Corps staff) to conduct an NC WAM (NC Wetland Assessment
Method) evaluation of the site.
II. Mitigation site approval by DWQ staff
In response to your question at our July 9 meeting, we plan to condition the Certification to
require written DWQ approval for detailed mitigation plans for all stream, buffer and wetland
mitigation sites that you have proposed or will propose for the mine expansion.
Success criteria
Overall, there is a lack of detail in the mitigation plans, most notably success criteria. These
criteria should reflect the more current scientific understanding of wetlands in the region
including the final version of hydrological success criteria for headwater forests that DWQ has
recently sent out for review. We believe that these criteria will need to be reflected explicitly in
each mitigation plan to quantitatively indicate that targeted functions have been successfully
replaced. Beyond establishing minimum standards that each site must meet, criteria should be
developed to address and adequately evaluate the level of attainment of targeted ecological
conditions across each mitigation site. Where sites are large and a range of conditions is
expected, it may be appropriate to include multiple success criteria for various landscape
positions or wetland communities. Criteria are expected to be comparable to conditions
observed in high-quality natural reference wetland, stream and riparian buffer ecosystems.
5. Additional minimization efforts
A. Hardwood flats on Bonnerton tract
As you know, staff from the NC Natural Heritage Program have determined that several
hardwood flats on the Bonnerton tract have been identified as Nationally Significant Natural
Heritage Areas. Staff from that program have reviewed your additional information concerning
these sites dated July 9, 2008 (Affadavit of Curtis Brown and Exhibit A attached) and have still
concluded that these sites are nationally significant. Therefore, please address how you will
avoid these areas in your mining of the Bonnerton Tract. As discussed in our July 9 meeting,
DWQ plans to condition the 401 Certification to avoid mining of these wetlands.
B. Wetland Sand Ridge
There are small pockets (22 acres total) of Wetland Sand Ridge, which exist in association with
pocosin-bay and other wetland and upland forests along the scarp in the southern part of the
Bonnerton Tract, slated for impact. Coastal Fringe Sandhill is described in the Third
Approximation as a very rare and threatened community type. Proposed mitigation for these
communities is hardwood wetland restoration, which may or may not adequately offset the lost
functions. These areas warrant further analysis or special consideration.
C. Fingers near Huddles Gut (NCPC)
Several small impacts are proposed southeast of Huddles Cut on the NCPC Tract. These
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PCS Phosphate, Inc.
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August 7, 2008
impact fingers include bottomland hardwood forested wetlands, which are relatively uncommon
in this area, and an intermittent stream. It appears that they are well outside the excavation
limits for most of the tract, and will cause a substantial impact for relatively small return.
Removal of these areas from the mining plan will help to maintain the integrity of the nearby
public trust area.
D. Others
In addition, it appears that minor changes in the alignment in the NCPC tract could result in
significant reductions to impacts to bottomland hardwood and stream systems. Rather than
discussing these modifications in detail, we suggest that your staff meet with DWQ staff to
explore those alternative alignments.
Please respond in writing within 30 calendar days of the date of this letter by sending 5 copies
of this information to John Dorney of DWQ's Central Office at 2321 Crabtree Blvd., Suite 250,
Raleigh, NC, 27604. If you will not be able to provide the requested information within that
timeframe, please provide written confirmation that you intend to provide the requested
information, and include a specific timetable delineating when the requested materials will be
provided. If we do not hear from you in 30 calendar days, we will assume that you no longer
want to pursue this project and we will consider the project as returned.
This letter only addresses the application review and does not authorize any impacts to
wetlands, waters or protected buffers. Please be aware that any impacts requested within your
application are not authorized (at this time) by the DWQ. Please call Mr. Dorney at 919-733-
1786 if you have any questions regarding or would like to set up a meeting to discuss this
matter.
s,
Sin7Zu
Pa
ul Rawls, Section Chief
Surface Water Protection Section
cc: Tom Walker, Asheville Field Office US Army Corps of Engineers
Dave Lekson, Washington Field Office, US Army Corps of Engineers
Bill Ross, DENR
Melba McGee, DENR
Mike Schafele, NC Natural Heritage Program
Becky Fox, US Environmental Protection Agency
Ad Hodge, DWQ Washington Regional Office
Kyle Barnes, DWQ Washington Regional Office
Matt Matthews, DWQ
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PCS Phosphate, Inc.
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August 7, 2008
John Dorney, DWQ
Cyndi Karoly, DWQ
Tammy Hill, DWQ
Eric Kulz, DWQ
Kim Colson, DWQ
Derb Carter, Southern Environmental Law Center
Heather Jacobs, Pamlico-Tar River Foundation
File copy
Central files

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Article Addressed to:
Mr. Ross
Manager, Environmental Affairs
PCS Phosphate Co. P.O. Box 48
Aurora, NC 27806
DWQ# 2008-0868-Beaufort
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