20080868 Ver 2_More Info Received_20080822

Subject: [Fwd: Clarification: PCS requirements for distribution of buffer variance info package]
From: Amy Chapman <[e-mail]>
Date: Fri, 22 Aug 2008 08:53:16 -0400
To: Bev Strickland <[e-mail]>
This is and the email following are the only emails I have.
Amy Chapman
NC Division of Water Quality
401/Wetlands Unit
2321 Crabtree Blvd, Suite 250
Raleigh, NC 27604
Phone: [phone]
Fax: [phone]
E-mail: [e-mail]
Subject: Clarification: PCS requirements for distribution of buffer variance info package
From: [e-mail]
Date: Fri, 22 Aug 2008 05:42:27 -0400
To: John Dorney <[e-mail]>, Amy Chapman <[e-mail]>
CC: [e-mail], "Cyndi Karoly" <[e-mail]>, Eric Kulz <[e-mail]>
John/Amy:
I still need clarification of your statement, "we will require you to pull
these copies together", I need to make arrangements today for allocation of
resources if PCS will be required to duplicate the information packages and
transport them to Raleigh on Monday.
I was away from the office yesterday, so if you have already provided this
information to Jeff, then please disregard this clarification request.
Thanks
Ross
----- Forwarded by Ross Smith/EnvA/Aurora/Phosphate/PCS on 08/22/2008 05:36
AM -----
Ross
Smith/EnvA/Aurora
/Phosphate/PCS To
"Cyndi Karoly"
08/20/2008 03:42 <[e-mail]>, Eric
PM Kulz <[e-mail]>
cc
John Dorney
<[e-mail]>, Amy
Chapman <[e-mail]>,
Jeff
Furness/EnvA/Aurora/Phosphate/PCS@P
CS
Subject
Fw: PCS Buffer Variance info needed
- PCS response

Cyndi/Eric:
I apologize for the oversight of not including your e-mail addresses on the
original transmission.
Ross
----- Forwarded by Ross Smith/EnvA/Aurora/Phosphate/PCS on 08/20/2008 03:40
PM -----
Ross
Smith/EnvA/Aurora
/Phosphate/PCS To
John Dorney
08/20/2008 03:37 <[e-mail]>, Amy
PM Chapman <[e-mail]>
CC
[e-mail], Kyle
Barnes <[e-mail]>
Subject
Re: PCS Buffer Variance info needed
- PCS response(Document link: Ross
Smith)
John/Amy:
In response to your information request, please find the following
narrative documents and attachments. The text includes the following
information requested in DWQ's 08/07/08 letter:
1) additional information related to search for buffer mitigation sites
2) deletion of research component in flexible mitigation description
3) addition of the stakeholder advisory group concept in the flexible
mitigation description
(See attached file: PCS buffer variance request narrative text.doc)
(See attached file: PCS buffer variance agenda title and abstract.doc)
Attachment 1: (See attached file: Attachment 1 - Composite Mine Plan Map -
Alt L.pdf)
Attachment 2: (See attached file: Attachment 2 - Alt L NCPC Biotic
Communities.pdf)
Attachment 3: (See attached file: Attachment 3 - Alt L Bonnerton Biotic
Communities.pdf)
Attachment 4: (See attached file: Attachment 4 - Alt L S33 Biotic
Communities.pdf)
Attachment 5: (See attached file: Attachment 5 - FEIS mitigation plan Table
3.pdf)
Attachment 6: (See attached file: Attachment 6 - FEIS mitigation plan Table
4.pdf)
Please contact me if you have any questions or require additional

information.
In addition, please clarify your statement, "we will require you to pull
these copies together", so that we (PCS-Beaufort County) will understand
your expectations for meeting the deadline on Monday.
Thanks
Ross
Amy Chapman
<amy.chapman@ncma
il.net> To
[e-mail]
08/20/2008 02:56 cc
PM John Dorney
<[e-mail]>, Kyle
Barnes <[e-mail]>,
[e-mail]
Subject
PCS Buffer Variance info needed
Hi Jeff.
We need for PCS to respond to the variance issues noted in the attached
letter by this Friday so we can review the response and then have time to
get back to you so that we can have 10 hard copies (one is for our files)
and 10 digital copies of the complete package to submit to the Water
Quality Committee by noon this Monday. If we agree with the additional info
you submit by this Friday, then we will require you to pull these copies
together and I will drop them off to the appropriate place.
Please submit your response to [e-mail] for review.
Thanks.
-Amy
Amy Chapman
NC Division of Water Quality
401/Wetlands Unit
2321 Crabtree Blvd, Suite 250
Raleigh, NC 27604
Phone: [phone]
Fax: [phone]
E-mail: [e-mail]

(See attached file: PCS Mining Expansion (12).pdf)
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Environmental Management Commission -Water Quality Committee
PCS Phosphate Company, Inc. request for Major Variance
from the Tar-Pam Buffer rules (15A NCAC 2 B .0259)
September 10, 2008
Summary
PCS Phosphate Company, Inc. (PCS) requests that the North Carolina Environmental
Management Commission (EMC):
- clarify that DWQ has authority to issue stream buffer credit of riparian headwater
system stream restoration in the Tar-Pamlico River Basin and
- authorize DWQ to issue buffer credit for DWQ-approved flexible buffer
mitigation projects
for the PCS mine continuation project as described in this document. This variance
request is in harmony with the general purpose and intent of the State's riparian buffer
protection requirements and preserves its spirit. There are practical difficulties and
hardships associated with this project. Public safety and welfare will be assured, water
quality will be protected, and substantial justice will be provided with this variance.
Introduction
In October 2000, PCS submitted an application to the Department of the Army, Corps of
Engineers (Corps) for authorization to continue mining operations at their Aurora North
Carolina (Beaufort County) facility. In October 2006, the Corps filed a Draft
Environmental Impact Statement (DEIS) that evaluated ten (10) alternative boundaries.
In November 2007, the Corps filed a Supplement to the DEIS (SDEIS) that evaluated two
(2) additional alternatives. In May 2008, the Corps filed the Final Environmental Impact
Statement (FEIS). In Section 2.7.6 of the FEIS, the Corps determined that six (6) of the
twelve (12) alternatives are practicable. "Of these alternatives, L is the most restrictive
and therefore avoids the most aquatic resources." Although the Least Environmentally
Damaging Practicable Alternative (LEDPA) determination has yet to be documented by
the Corps, the Alt L boundary parameters have been used in this request. Graphical
depictions of the Alt L boundary are provided as attachments. The mine plan for Alt L is
shown as Attachment 1 (FEIS Volume II Appendix D). The biotic communities impacts
graphics for Alt L are shown as Attachments 2, 3 and 4 (FEIS Figures 7-7a, b, and c).
On March 8, 2006, the Water Quality Committee (WQC) of the EMC discussed a similar
variance request from PCS. A May 10, 20061etter from WQC Chair Dr. Peterson to PCS
states, "After considerable discussion, the Committee decided not to approve a Major
Variance at this time until the extent of unavoidable impact to the protected stream
buffers as well as the proposed mitigation is clearer." The extent of environmental
impacts and the proposed mitigation plan (Appendix I) presented in the FEIS provide the

information as requested by the WQC. In their 2006 deliberations and letter, the WQC
did conclude, "In principle, the Water Quality Committee considers flexible buffer
mitigation to be an appropriate tool for buffer mitigation for the PCS Phosphate
Company mine continuation." The first priority of this variance request is to request the
EMC clarify that DWQ has authority to issue stream buffer credit of riparian headwater
system stream restoration in the Tar-Pamlico River Basin. The second priority of this
variance request is to request EMC authorization for DWQ to issue buffer credit for
DWQ-approved flexible buffer mitigation projects associated with the PCS mine
continuation.
Discussion
The FEIS provides a detailed evaluation of the affected environment and environmental
consequences of Alt L. The FEIS (Tables 4-10 and 4-28) indicates that, within Alt L, a
total (Zone 1 and Zone 2) of 55 riparian buffer acres would be impacted. Table 3 from
the FEIS Volume III Appendix I mitigation plan is included as Attachment 5. Alt L
avoids impacts to 215 riparian buffer acres within the project area (FEIS Table 4-27).
Much of the stream mitigation proposed by PCS involves restoring "riparian headwater
systems" and is based on the "Information Regarding Stream Restoration with Emphasis
on the Coastal Plain" (April 4, 2007) publication from DWQ and the Corps. Many of
these headwater systems do not appear on MRCS county soil surveys or USGS
topographic maps. These systems typically have small watersheds draining into defined
valleys with little longitudinal slope. Relatively unaltered riparian headwater systems will
usually possess a braided, diffuse surface flow pattern across a narrow floodplain of
riparian, wooded wetlands. However, many lower Coastal Plain examples have been
converted to agricultural or silvicultural use. According to the DWQ/Corps publication,
restoration of these riparian headwater systems can provide both stream and wetland
mitigation credit without physically constructing a distinctive stream channel. This type
of mitigation would typically be appropriate for offsetting impacts to those systems that
either do not appear or appear as first order streams on county soil surveys or USGS
topographic maps. The publication does not discuss Tar-Pamlico buffer mitigation credit
for restoring wooded buffers around these restored riparian headwater systems.
The FEIS contains a detailed compensatory mitigation plan (FEIS Volume III -
Appendix I) including a report describing each mitigation project proposed to be used by
PCS to mitigate for the first 15 years of impacts with Alt L. Within the first 15 years, 32
riparian buffer acres would be impacted resulting in a mitigation requirement of 77 buffer
acres based on documented mitigation ratios by zone (Zone 1 @ 3:1 and Zone 2 @
1.5:1). With EMC-WQC clarification that DWQ has authority to issue stream buffer
credit of riparian headwater system stream restoration in the Tar-Pamlico River Basin,
successful implementation of the FEIS mitigation plan would yield 85 acres of riparian
buffer mitigation credit, thus exceeding the riparian stream buffer mitigation requirement
for the first 15 years of Alt L. Table 4 from the FEIS Volume III Appendix I mitigation
plan is included as Attachment 6. Buffer mitigation credit for the remainder of Alt L
impacts will be satisfied through the flexible buffer mitigation projects approved by

DWQ, and payment into the in-lieu fee program for any remaining mitigation credit
requirements.
With approval of this variance request and implementation of the proposed FEIS
mitigation plans, water quality will be protected and, as a result, the public will have
water available for domestic and recreation use, and wildlife and aquatic species will
benefit.
Hardship
Section 15A NCAC 2B .0260 "Tar-Pamlico Basin - Nutrient Sensitive Waters
Management Strategy: Mitigation Program for Protection and Maintenance of Riparian
Buffers" specifies three options for providing compensatory buffer mitigation. These are:
1) payment of a compensatory mitigation fee to the Riparian Buffer Restoration Fund, 2)
donation of real property or of an interest in real property, or 3) restoration or
enhancement of non-forested riparian buffer by the applicant.
PCS has performed an exhaustive search for available tracts of land that have the
potential for restoration or enhancement of non-forested buffer, including reviews of all
available mapping (USGS and county soil surveys), LIDAR data, and field
reconnaissance. Through this process PCS has identified a number of sites that should
yield sufficient stream and wetland restoration credit to satisfy the stream and wetland
compensatory mitigation needs for Alt L. However, based upon the proposed buffer
impacts and the ratio applied to such impacts under the Tar-Pam buffer rules, a deficit of
appropriate buffer restoration sites to compensate for these impacts may occur.
During the search for buffer mitigation sites, several un-buffered channelized drainage
features (ditches), and Waters of the State (streams), located in agricultural tracts were
identified for potential buffer restoration. The concept of buffer development (with
permanent conservation easements) while providing continued agricultural use of the
remaining property was presented to the landowners. During discussions and
negotiations, landowners consistently expressed concerns about limited access and
limited ability to periodically clean out these drainage features, and therefore were
unwilling to sell a 100-foot wide strip of their property. Many potential sites were
comprised of a mosaic of several landowners, and obtaining agreements from the
necessary parties to create a satisfactory length of stream buffer has not been possible.
Based on the above discussion, an adequate amount of riparian buffer restoration sites
may not be available. The lack of available riparian buffer restoration sites has created a
hardship for PCS.
Fulfillment of buffer rules intent
EMC-WQC clarification that DWQ has authority to grant stream buffer credit for riparian
headwater system stream restoration in the Tar-Pamlico River Basin is consistent with the

current mitigation rules and with the intent of the Tar-Pamlico buffer rules. Current
DWQ practice grants credit for riparian headwater system stream restoration. Although
implied by the approval to restore headwater stream systems for credit, there is no
specific language that grants DWQ with authority to grant mitigation credit for the
buffers associated with, and clearly needed for, these stream restorations. The riparian
headwater system stream buffers provide similar functions as compared to other stream
buffers, and therefore the requested DWQ authorization would be consistent with
fulfillment of the intent of the buffer rules.
15 A NCAC 2B .0259(1) states in part, "The purpose of this Rule shall be to protect and
preserve existing riparian buffers, to maintain their nutrient removal functions, in the
entire Tar-Pamlico Basin." In addition to the above requested clarification of authority,
PCS is requesting a variance from 15A NCAC 2B .0260(6) and 15 A NCAC 2B .0259(10)
in order to be allowed to provide flexible forms of mitigation that replace the nutrient
removal functions of the impacted buffers. By providing alternative means of nutrient
removal as compensatory mitigation for riparian buffer impacts, PCS proposes methods
with a goal to improve the total nitrogen (TN) and total phosphorus (TP) removal
functions of the buffers, which is consistent with the general purpose and spirit of 15A
NCAC 2B .0259 and .0260. DWQ recommends, and PCS concurs, 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 regulatory agencies, and would be established to provide advice to DWQ
with respect to the identification of possible mitigation sites and their selection. This
group would also review and comment on the proposed method to calculate offset credits.
DWQ would consider all comments from the stakeholder advisory group, but DWQ
would retain the decision-making authority for these projects.
Riparian headwater system stream buffers
At most of the mitigation sites identified in the FEIS mitigation plan (FEIS Volume III
Appendix I), there will be an opportunity to use the "Information Regarding Stream
Restoration with Emphasis on the Coastal Plain" (April 4, 2007) publication from DWQ
and the Corps. In the case of riparian headwater system stream restoration, credit can be
provided for the length of the riparian headwater system regardless of whether a defined
channel with a wetland or wetland only forms, as long as there is flow. With EMC-WQC
approval of this clarification request, when flow is documented and the riparian
headwater system is used for linear stream restoration credit, DWQ would be authorized
to approve riparian stream buffer credit for the 50-foot forested zone around the riparian
headwater system. This is reasonable since the forested zone around these swampy
headwater systems that flow slowly in the eastern North Carolina coastal plain will
provide the same nutrient removal functions as a riparian buffer around blue line streams.
Flexible buffer mitigation
With EMC-WQC approval of this variance request, DWQ would be authorized to issue
buffer credit for non-stream buffer restoration activities that fulfill the intent of the Tar-

Pamlico River buffer rules. The following methods could be approved to replace the
nutrient removal functions of the riparian buffers that may be impacted within Alt L:
• Conversion of existing untreated cropland into forest and riparian
headwater system mitigation as described in the recent DWQ and
Corps publication, "Information Regarding Stream Restoration with
Emphasis on the Coastal Plain" (April 4, 2007).
• Stormwater best management practices (BMPs) that remove nutrients
from currently untreated urban (developed areas) and agricultural
runoff.
• Other similar quantifiable means of nutrient reduction.
Credits would not be granted for agricultural or silvicultural BMPs if required by other
rules administered by DWQ. As such, none of mitigation activities provided by PCS
could be applied towards any required county nutrient management or reduction
requirements. PCS also agrees that riparian buffer preservation and wastewater (as
opposed to Stormwater) treatment would not be acceptable as riparian buffer mitigation in
the context of the variance as proposed.
Note: DWQ issued a memorandum, "Buffer mitigation and the mining industry"
(09/22/06), which allows mining activities that result in a permanent waterbody within
the footprint of the mine to receive buffer credits for creation of a 50 foot wide wooded
buffer with diffuse flow around the edge of the permanent waterbody. This provision has
not been included in PCS Phosphate's mitigation plan at this time. No permanent
waterbodies are projected in the reclamation plan associated with the Alt L boundary.
Drainage from all reclamation areas will be reconnected to the natural drainage features
outside the mine permit boundary.

1. Request for a Major Variance from the Tar-Pamlico Riparian
Protection Rules (15A NCAC 2B .0259 and .0260) for Buffer
Mitigation for the PCS Phosphate Company, Inc.
The Division of Water Quality (DWQ) will discuss a proposed major variance to the Tar-
Pamlico Riparian Protection Rules. The PCS Phosphate Company, Inc. (PCS) is
proposing a mine continuation in Beaufort County near Aurora, North Carolina along the
lower Pamlico River. In October 2000, PCS submitted an application to the Department
of the Army, Corps of Engineers (Corps) for authorization to continue mining operations
at their Aurora North Carolina (Beaufort County) facility. In October 2006, the Corps
filed a Draft Environmental Impact Statement (DEIS) that evaluated ten (10) alternative
boundaries. In November 2007, the Corps filed a Supplement to the DEIS (SDEIS) that
evaluated two (2) additional alternatives. In May 2008, the Corps filed the Final
Environmental Impact Statement (FEIS). In Section 2.7.6 of the FEIS, the Corps
determined that six (6) of the twelve (12) alternatives are practicable. "Of these
alternatives, L is the most restrictive and therefore avoids the most aquatic resources."
Although the Least Environmentally Damaging Practicable Alternative (LEDPA)
determination has yet to be documented by the Corps, the Alt L boundary parameters
have been used in this request.
On March 8, 2006, the Water Quality Committee (WQC) of the EMC discussed a similar
variance request from PCS. A May 10, 20061etter from WQC Chair Dr. Peterson to PCS
states, "After considerable discussion, the Committee decided not to approve a Major
Variance at this time until the extent of unavoidable impact to the protected stream
buffers as well as the proposed mitigation is clearer." The extent of environmental
impacts and the proposed mitigation plan (Appendix I) presented in the FEIS provide the
information as requested by the WQC. In their 2006 deliberations and letter, the WQC
did conclude, "In principle, the Water Quality Committee considers flexible buffer
mitigation to be an appropriate tool for buffer mitigation for the PCS Phosphate
Company mine continuation." The first priority of this variance request is to request the
EMC clarify that DWQ has authority to issue stream buffer credit of riparian headwater
system stream restoration in the Tar-Pamlico River Basin. The second priority of this
variance request is to request EMC authorization for DWQ to issue buffer credit for
DWQ-approved flexible buffer mitigation projects associated with the PCS mine
continuation. DWQ staff will recommend that the WQC approved this major variance
request.

F WATF
~O 9p 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 wilt 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 fora 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
No°ithCarolina
~~ZEllCll~~l~
An Equal Opportunity/Affirmative Action Employer - 50% Recycled/10% Post Consumer Paper

PCS Phosphate, Inc.
Page 2 of 2
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
I. 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.
Page 3 of 3
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.
Page 4 of 4
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 Mitigation
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
I. 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
4

PCS Phosphate, Inc.
Page 5 of 5
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
5

PCS Phosphate, Inc.
Page 6 of 6
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.
Since~l urs,
,~~,
~/' \
F?aul 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
6

PCS Phosphate, Inc.
Page 7 of 7
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

^ Complete items 1, 2, and 3. Also complete
item 4 if Restricted Delivery is desired.
^ Print your name and address on the reverse
so that we can return the card to you.
^ Attach this card to the back of the mailpiece,
or on the front if space permits.
Article Addressed to:
Mr. Ross
Manager, Environmental Affairs
PCS Phosphate Co. P.O. Box 48
Aurora, NC 27806
DWQ# 2008-0868-Beaufort
A. Sig ure
X T yf _ , A ~ ^ Agent
~ CC~LI ~L/ ^ Addressee
B. ~11. ~ by (Pd N d !' /'! I C.~e/ f~/
~~~~ ~ l
D. Is delivery address different from item 1 ~ C~1 Y~' j
If YES, enter delivery address below: ^ Mo mil
3. Service Type
^ Certified Mail ^ Express Mail
^ Registered ^ Retum Receipt for Merchandise
^ Insured Mail ^ C.O.D.
4. Restricted Delivery? (Exva Fee) ^ Yes
2. Article Number
(Transfer from servloe labeQ 7 0 6 215 0 a o a 5 210 9 7 511
-_
PS Form 3811, February 2004 Domestic Return Receipt 1o25ss-o2-M-tsao

UNITED STATES POSTAL SERVICE
• Sender: Please print your name, address, and ZIP+4in this box •
~.. I
1 NORTH CAROLINA DEPARTMENT OF ~.. °
,_ ', ~t_, ENVIRONMEN~AND 1~1ATURAL RESOURCES ~,,,
- '' 225 GREENSTREET--SUITE 714 ~„
• -~ f=AYETTF_VILLG, NC 2830'15043 a,
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NC 306'
RELOCATIGN
PAULICV ANER
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~ NCPC BASE PROJECT AREA 3,608
• s _..-_,...,_.. NCPC Extension-ALT L 2,185
NCPC Fxlension-Excavation Lirnds 1,3fi<

'+' ° Rewvered Concentrate = 37,697,000 Tons*
- CREEKS/OPEN WATER
s t:. PUBLIC TRUST ARFAS D LF 0
~- , ~ E PERENNIAL STREAM R LF 0

~ '.INTERMITTENT STREAM &,427 LF <Y
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+ i %
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_ ~ ~' ~~ 6 WEfLANO PINE RLANTATIDN 324
- T
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~
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;
-~ 10 WETLAND P00051N - HAY FOREST D
91 WETLAND SANG RIDGE FOREST b
~' (~' 12 POND 11
„~ 13 WETLANp MAINTAINEb AREA 0
1S UPLAND HERBACEOUS ASSEMBLAGE I60
w xce vIP 15 VPLANp SHRUB - SCRUB ASSEMBLAGE 143
' 1s UPLAND PINE PLANTATION 27
' 17 UPLAND HAROW000 FOREST 17
i1 18 UPLAND MI%ED PINE - HARbW00D FOREST 77
19 UPLAND PINE FCRES"f 15

e
~ ~ 20 UPLANp SAND RIpGE FOREST 0

~ 23 UPLAND AGRICULTURAL LANb 94
_
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f ~.r.~ e ~ 47% WEILANA AREAS 59
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. COMMUNITIES ACREAGES LISTED ABOVE )
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WOAD RELOCATION IMPACTS AREAS
PROPOSED BRI
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TO
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BONNER70N BASE PROJECT AREA
BONNERTON L ALTERNATN€
BONNERTON L AL.TERNATNE - EXCAVATION LIMITS
RECOVERABLE CONCENTRATE a 36,940,000 TONS•
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e PERENNIAL STREAM 3,050 LF
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POND
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