HomeMy WebLinkAboutResolution 2013-057 RESOLUTION NO. 2013-057
SOLUTION OF THE CITY COUNCIL OF THE CITY OF
ATASCAlDERO, CALIFORNIA, DENYING APPEAL OF DENIAL OF
INTERIM MANAGEMENT PLAN
This Resolution of the City Council of the City of Atascadero ("City") is based upon the
following Recitals:
RECI['TALS
1. WHEREAS,the Millhollin Mine(also referred to as a Quarry)is located in the
vicinity of Santa Lucia Road and Cenegal Road; and
2. WHEREAS,In March 1980, a Reclamation Plan was approved for the Millhollin
Mine by the County of San Luis Obispo; and
3. WHEREAS, On October 23, 1996, the City Council approved a Conditional.Use
Permit known as CUP 96003 which consists of a Final Reclamation and Closure Plan("1996
Plan"), an Operations Agreement and an Environmental Assessment; and
4. WHEREAS,the effective date of the Operations Agreement was October 23,
1996;and
5. WHEREAS,Paragraph 9 (d)of the Operations Agreement provides: "The
removal of aggregate material from the Property, as provided above,will be completed within 6
to 15 years,depending on the rate at which the material is removed from the Property.'; and
6. WHEREAS, Fifteen years after October 23, 1996 was October 23,2011; and
7. WHEREAS,the obligation of the owner of Millhollin mine to complete the 1996
Plan continues until reclamation under said Plan has been satisfactorily completed; and
8. WHEREAS, On November 1, 2011,the City sent a letter to Mr. Millhollin
advising that the mining of material is no longer permitted as of October 23, 2011 and directing
Mr. Millhollin to cease mining immediately and to submit to the City by December 16,2011 a
proposed revised reclamation plan to include final grades,restoration planting plan, storm water
management plan, reclamation cost estimate,time for reclamation and monitoring plan; and
9. WHEREAS,the City agreed to extend the time for Mr. Millhollin to submit a
proposed revised reclamation plan to February 16, 2012; and
10. WHEREAS, As of the date of this Resolution, Mr. Millhollin has still not
submitted to the City a revised reclamation plan for the Millhollin mine; and
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Resolution No. 2013-057
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11, WHEREAS, On January 9,2012,the City received a notice ("Notice")from the
State Department of Conservation("Notice")regarding Senate Bill 108 ("SB 108") which
amended the Surface Mining and Reclamation Act("SMARA") found in Public Resources Code
("PRC") Sections 2710 to 2796.5; and
12. WHEREAS,The Notice states that the new PRC Section 2777.5 provides that"a
mine operator of a mine that became idle as defined in SMARA section 2727.1 but that failed to
timely file an interim manage (sic)plan may also submit to their lead agency an interim
management plan that may be approved so long as the operator follows the procedures for
correcting previous reported mineral production under new PRC section 2777.5(a)."; and
13. WHEREAS,PRC Section 2777.5 (a) includes the following six requirements: (1)
The operator has provided written notification to the lead agency andthe director of their
intention to continue surface mining operations; (2) The operator has an existing, valid permit or
a vested right to conduct surface mining operations pursuant to Section 2776; (3) The operator's
reclamation plan has been approved and is in compliance with applicable law, the mining
operation is in compliance with the approved reclamation plan and has an approved financial
assurance in place that the lead agency determines is adequate for reclamation and the mining
operation has been inspected by the lead agency; (4)The operator has demonstrated that there
are commercially useful mineral reserves remaining at the surface mining operation; (5) Unpaid
fees for years during which the operation's status was not properly reported have been paid to the
department; and(6) The operator provides evidence to support any modified production
reported on corrected annual reports;and
14. WHEREAS, The Notice provides this summary in its final paragraph: "In
summary,a mining operation that is considered abandoned due to improperly reported mineral
production or status and/or the failure to timely file an interim management plan may be returned
to a pre-abandoned status at the request of the operator and upon lead agency verification of
items 1-6 above if previously filed annual reports are properly amended and/or an interim
management plan is approved, all by July 1, 2013."; and
15. WHEREAS, On December 28, 2012, Mr. Millhollin submitted to the City a
proposed Interim Management Plan("IMP"); and
16. WHEREAS, On February 25, 2013,the City sent a letter to Mr. Millhollin
advising that the IMP was incomplete due to the following items and allowing for 30 days to
submit a revised IMP: (1) Need for provide engineer's cost estimate of reclamation to
determine adequacy of financial assurances; (2) Need to update the financial assurance which is
based on the 1996 cost estimate; (3) Storm water runoff issues due to grading of entrance; (4)
Need to indicate where and how the storm water runoff is released; and(5) Need copies of 2011
and 2012 Mining Operation Reports; and
17. WHEREAS, On April 22, 2013,Mr. Millhollin submitted a revised IMP to the
City; and
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Resolution No. 2013-057
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18. WHEREAS, On June 20,2013,the City submitted a letter to Mr. Millhollin
which denied the revised IMP for two reasons: (1) The right to mine expired on October 23,
2011 pursuant to the CUP and the Operations Agreement. (2) The financial assurance submitted
with the revised IMP of$0.00 is inadequate to perform the reclamation required in the CUP and
provides the cost estimate prepared by Russ Thompson in the amount of$279,000; and
1.9. WHEREAS, The cost estimate prepared by Russ Thompson was a"Preliminary
Opinion of Probable Cost"and, in preparing his cost estimate,Mr. Thompson relied upon the
San Luis Obispo County Department of Public Works"County Approved Unit Costs for Project
Security"; and
20. WHEREAS, In order to obtain further information regarding the cost to perform
the reclamation in the CUP,the City requested an estimate from Diversified Project Services
International ("DPSI")which was provided by L. Alberto Lopez (Registered Civil Engineer)of.
DPSI dated November 20, 2013 in the amount of$121,996; and
21. WHEREAS,the City has received two estimates of the financial assurances:
$279,000 by Russ Thompson and$121,996 by DPSI which are both substantially in excess of
the financial assurance proposed by Mr. Millhollin of$0.00; and
22. WHEREAS, On July 2, 2013,the City submitted a letter to the State in which the
City advised the State that: (1) Mr. Millhollin had not provided the City a written notice of its
intention to continue mining operations; (2) The Operations Agreement provided that the
removal of aggregate was to be completed by October 23, 2011; (3) The financial assurances are
inadequate to perform the approved reclamation plan in CUP 96003; (4) The City had not
received any demonstration that there are commercially useful mineral reserves remaining at the
surface mining operation; and(6) The City denied the operator's request for approval of an IMP;
and
23. WHEREAS, On July 2, 2013, Jon Ansolabehere, legal counsel for Mr. Millhollin
submitted a letter to the City appealing the June 20,2013 denial by the City of the revised IMP;
and
24. WHEREAS, Following receipt of the July 2, 2013 letter from Mr. Ansolabehere,
the City was advised by Mr. Ansolabehere that he would submit a letter to the City by November
11,2013 providing additional information in support of the appeal and the City and Mr.
Ansolabehere agreed that the hearing date on the appeal with the City Council would be
December 10, 2013; and
25. WHEREAS, On November 11, 2013, Jon Ansolabehere submitted a letter
("Letter")to the City raising five issues in support of the appeal of the City's denial of the
revised IMP; and
26. WHEREAS,the first issue raised in the Letter relates to the term of the
Operations Agreement. The arguments raised on this issue are without merit for the reasons
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Resolution No. 2013-057
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stated in the Staff Report, including all Attachments thereto, presented to the City Council at the
hearing on the appeal on December 10, 2013 {"Staff Report"); and
27. WHEREAS,the second issue raised in the Letter relates to alleged vested rights.
The arguments raised on this issue are without merit for the reasons stated in.the Staff Report;
and
28. WHEREAS,the third issue raised in the Letter relates to the requirement of PRC
2777.5 (a)(1) that the operator provide written notification to the lead agency and the director of
their intention to continue surface mining operations term of the Operations Agreement. The
arguments raised on this issue are without merit for the reasons stated in the Staff Report; and
29. WHEREAS,the fourth issue raised in the Letter relates to the requirement of PRC
2777.5 (a)(3)that the operator have an approved financial assurance in place that the lead agency
determines is adequate for reclamation pursuant to the approved reclamation plan. The
arguments raised on this issue are without merit for the reasons stated in the Staff Report; and
30. WHEREAS,the fifth issue raised in the Letter relates to the processing of the SB
108 Application. The arguments raised on this issue are without merit for the reasons stated in
the Staff Report; and
31. WHEREAS, Mr. Millhollin did not provide written notification to the City and
the State Department of Conservation of the intent to continue mining as provided by PRC
Section 2777.5 (a)(1); and
32. WHEREAS, The right to mine the Millhollin Mine expired on October 23, 2011
pursuant to the terms of CUP 96003; and
33. WHEREAS, The 1980 Reclamation Plan does not provide any vested rights for
the continued operation of the Millhollin mine and as provided by PRC Section 2777.5 (a)(2);
and
34. WHEREAS, The financial assurance with the revised IMP of$0.00 is inadequate
to perform the reclamation required in the CUP 96003 and as provided by PRC Section 2777.5
(a)(3);and
35. WHEREAS, Mr. Millhollin has not demonstrated that there are commercially
useful mineral reserves remaining at the Millhollin Quarry. PRC Section 2777.5 (a)(4); and
36. WHEREAS, Mr. Millhollin has not produced evidence to support any modified
production reported on corrected annual reports and as provided by PRC Section 2777.5 (a)(6).
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NOW, THEREFORE, BE IT RESOLVED,by the City Council of the City of Atascadero:
SECTION 1. The City Council finds that the foregoing Recitals are true and correct and
said Recitals are hereby incorporated in full by this reference.
SECTION 2. The City Council hereby incorporates by reference in full the Staff Report,
including all Attachments thereto,presented to the City Council at the hearing on the appeal on
December 10, 2013.
SECTION 3. Mr. Millhollin did not provide written notification to the City and the State
Department of Conservation of the intent to continue mining.
SECTION 4. The right to mine the Millhollin Quarry expired under on October 23, 2011
pursuant to the terns of CUP 96003. However, the obligation of the Millhollin mine operator to
complete the reclamation plan of CUP 96003 continues to exist.
SECTION 5. There are no vested rights for continued mining operations at the Millhollin
mine.
SECTION 6. The financial assurance with the revised IMP of$0.00 is inadequate to
perform the reclamation required in the CUP 96003.
SECTION 7. Mr. Millhollin has not demonstrated that there are commercially useful
mineral reserves remaining at the Millhollin Quarry.
SECTION 8. Mr. Millhollin has not produced evidence to support any modified
production reported on corrected annual reports.
SECTION 9. The appeal of the denial of the interim management plan is hereby denied
for the following reasons, any one of which is sufficient to warrant the denial of the appeal:
(1) Mr. Millhollin did not provide written notification to the City and the State
Department of Conservation of its intent to continue mining.
(2) The right to mine the Millhollin Quarry expired on October 23, 2011
pursuant to the terms of CUP 96003.
(3) There are no vested rights for continued mining operations at the
Millhollin mine.
(4) The financial assurance submitted with the revised IMP of$0.00 is
inadequate to perform the reclamation required in CUP 96003.
(5) Mr. Millhollin has not demonstrated that there are commercially useful
mineral reserves remaining at the Millhollin Quarry.
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Resolution No. 2013-057
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(6) Mr. Millhollin has not produced evidence to support any modified
production reported on corrected annual reports.
On motion by Council Member Fonzi and seconded by Council Member Sturtevant,the
foregoing Resolution is hereby adopted in its entirety on the following roll call vote:
AYES: Council Members Fonzi, Kelley and Moreno, Mayor Pro Tem Sturtevant and
Mayor O'Malley
NOES: None
ABSENT: None
ADOPTED: December 10,2013
CITY
<OF " E�ROBy: �
Tom O'Malley, yor
ATTEST:
Marcia McClure Torgerson, C.M.C., City erk
APPR ED AS TO FORM:
*W,-�-
Brian A. Pierik, City Attorney