2014 SRF Advisory Council Annual Report

REPORT OF THE
SPECIAL RECLAMATION FUND
ADVISORY COUNCIL

January, 13 2015

 

2014 SRF Advisory Council Annual Report

EXECUTIVE SUMMARY

The Special Reclamation Fund Advisory Council (the ?Council?) was established
by the Legislature in 2001 in order to ensure the effective, ef?cient and ?nancially stable
operation of the Special Reclamation Fund (the Fund). Code 22-1-17).
According to Code 22-1-17 the Council shall consist of eight members,
including the Secretary of the Department of Environmental Protection or his or her
designee, the Treasurer of the State of West Virginia or his or her designee, the Director
of the National Mine Land Reclamation Center at West Virginia university and ?ve
members to be appointed by the governor with the advice and consent of the Senate.

The Fund is designated by the Legislature for the reclamation and rehabilitation of
lands subject to permitted surface mining operations and abandoned after 1977, where the
bond posted is insuf?cient to cover the cost of reclamation. The Fund is presently funded
by a tax of 27.9 cents per ton of clean coal mined in West Virginia. From this revenue,
funds based on a tax rate of 15 cents per ton are being paid into the Special Reclamation
Water Trust Fund while coal tax revenues based on 12.9 cents per ton are
being paid into the Fund. According to Code 22-3-11, ?Beginning with the tax
period commencing on July 1, 2009, and every two years thereafter, the special
reclamation tax shall be reviewed by the Legislature to determine whether the tax should
be continued: Provided, That the tax may not be reduced until the Fund and have
suf?cient moneys to meet the reclamation responsibilities of the state established in this
section.? 

The was created ?for the purpose of assuring a reliable source of capital
to construct, operate, and maintain water treatment systems on forfeited sites.? (W .Va.
Code 22-3-11).

The Secretary of the Department of Environmental Protection is required to
conduct formal actuarial studies every two years and conduct informal reviews annually
on the Fund and The Council is also required to make a report to the
Legislature every year on the ?nancial condition of the Fund. Code 22-1-17).
The report is to include: recommendation as to whether or not any adjustments to the

special reclamation tax should be made considering the cost, timeliness and adequacy of

2014 SRF Advisory Council Annual Report

bond forfeiture reclamation, including water treatment [and] a discussion of the council's
required study issues.?

In accordance with the statutory requirements, the Council submits the following:

1. Recommendation: The Council recommends that the present 12.9 cent per
ton tax dedicated to the Fund remain in force and that the tax dedicated to the
will remain at 15 cents per ton. The Council will have a new study
done this year. Additional recommendations by the Council can be found in
the body of this report on page 22.

2. Study issues: Pursuant to Code ?22-1-17, the Council is also required
to ?Identify and de?ne problems associated with the special reclamation
fund.? The Council conducted multiple studies during 2014 to better assess
the current and future ?nancial condition of the funds and to improve upon
water treatment technologies:

Studies conducted during the 2014 report period include:

a. Consensus Coal Production Forecast for West Virginia: 2014 Update
by Christine M. Risch and Dr. Jennifer Shand from the Center for
Business and Economic Research at Marshall University.

b. Enhancing AMDzine with Selenium and Aluminum treatment options
by Dr. Paul Ziemkiewicz of West Virginia University Water Research
Institute.

0. Alternative Enforcement Evaluation by DEP.

Findings of these studies are outlined in the body of the report.

BACKGROUND ON THE SPECIAL RECLAMATION FUND

Article 1, Chapter 22 of the Code of West Virginia was amended by the West
Virginia Legislature in 2001, creating an eight member Special Reclamation Fund
Advisory Council (the ?Council?) with the responsibility of ensuring the effective,
ef?cient and ?nancially stable operation of the Special Reclamation Fund. The
legislation establishing the Council also increased the tax on clean coal mined in West
Virginia, from three to seven cents per ton (the ?Continuing Tax?), and levied an

additional seven cents per ton (the ?Temporary Tax?), to be deposited into the Fund. The

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2014 SRF Advisory Council Annual Report

revenues of the Fund were designated to pay for reclamation on post-1977 bond-forfeited
sites.

The 2001 legislation provided for the Temporary Tax to be in effect for thirty-
nine months. As a result of a 2005 actuarial report ?nding that the expiration of the
Temporary Tax would result in nearly immediate insolvency of the Fund, the Temporary
Tax was extended by the Legislature in 2005, for an additional eighteen months. A 2007
actuarial study commissioned by the Council found that the failure to extend the
Temporary Tax again would result in insolvency of the Fund. Accordingly, in 2008 the
Legislature, through SB 75], created the and enacted a temporary, twelve month
tax of 7.4 cents which was to be allocated between the Fund and a Twelve and
nine-tenths cents was dedicated to the Fund and 1.5 cents was deposited into the 
An updated actuarial study in 2008 concluded that terminating the temporary tax would
result in insolvency within a few years. In response, in the 2009 legislative session, the
Legislature amended Code 22-3-11 to remove the expiration date for the
Temporary Tax and provided instead for biennial review of the Tax by the Legislature.
(Acts of the Legislature 2009, chapter 216).

Based upon projections under the 2011 Actuarial Valuation performed by
Pinnacle Actuarial Resources, Inc. the Fund was found to be suf?ciently funded under
the existing 12.9 cent tax. However, the Council was concerned that as the 
began making payments for water capital and ongoing water treatment in Fiscal Year
2019, as projected, the would fall into a de?cit position in the second year of
operation-2020.? (2011 Actuarial Valuation, page 3). Declining coal production
projected by the 2011 Consensus Coal Production Forecast and the signi?cant increase in
water treatment costs resulting from court rulings in two cases are contributing factors in
the projected insolvency of the Accordingly, in 2012 the Legislature increased
the special reclamation tax to 27.9 cents per ton, 15 cents of which was to be deposited
into the 

Based upon projections under the 2013 Actuarial Valuation performed by
Pinnacle Actuarial Resources, Inc. the Fund is projected to be over 100 percent funded
using a 20-year cash ?ow basis and 95.7 percent funded using a 35-year cash ?ow basis.

The is currently accumulating 15 cents per ton coal tax revenue and interest and

2014 SRF Advisory Council Annual Report

is projected by the 2013 Actuarial Valuation to be 150.4 percent funded using a 20-year
cash ?ow basis and 89.9 percent funded using a 35-year cash ?ow basis.

Membership Status of the Special Reclamation Fund Advisory Council

Currently Christine Risch, Marshall University, Center for Business and
Economic Research, serves as the Actuary/Economist member. Carolyn Atkinson serves
as the member representing the Treasurer of the State of West Virginia. Dr. Paul
Ziemkiewicz serves as the member representing the Director of the National Mine Land
Reclamation Center at West Virginia University. Bill Raney serves as the member
representing the interests of the coal industry. John Morgan serves as the member
representing the interest of environmental protection organizations. Ronald Pauley serves
as the member representing the interests of coal miners. The SRFAC member

representing the interests of the general public is currently vacant.

FINANCES OF THE SPECIAL RECLAMATION FUND THE 

This section of the Report to the Legislature outlines the ?nancial status of the
Fund for calendar year 2014 and provides comments regarding the future ?nancial
position of the Fund. The three key factors that have the most effect on the adequacy of
the Fund are the coal production levels in West Virginia, the risk of ?iture forfeitures,
and the cost of reclaiming existing and future bond-forfeited sites.

To summarize the data and analysis that follow, it should be noted that the Fund
will cover all costs for both land reclamation and water treatment through June 2018.
Starting in July 2018, the will begin covering the cost for water treatment?both
water capital costs and ongoing water treatment costs.

It should also be noted that even though the Fund is expected to carry a positive
balance at the end of 20 years, the fund is projected to dip into a slight negative balance
in 2018 prior to disengaging from covering the liabilities of the in 2019. After
2018 the Fund is projected to add to its balance for a while before the impact of in?ation
and forfeiture activity outweigh the bene?ts of investment income and release activity.

The Fund is projected to go back to a negative balance in 2038.

2014 SRF Advisory Council Annual Report

Based upon projections under the 2013 Actuarial Valuation, the is
projected to have suf?cient capital to operate until some point in 2038 before
experiencing a de?cit. Due to the increased expected revenue from the increased tax for
water treatment, the Funded Status of the has improved tremendously since the
last report. This is also the result of an improved investment strategy as described below.

In May of 2013, following numerous discussions between DEP personnel and
members of the Investment Management Board and the Board of Treasury Investments,
the Council was updated on various investment options and made the following
recommendations:

The ?rst recommendation is two parts:

1. That the current balance of the Water Quality (WQ) Trust Fund and all
additional revenue of the WQ Trust Fund through Fiscal Year (FY) 2018
be invested in the Investment Management" Board (1MB) ?xed income
pool until FY 2019.

2. That DEP develop plans to maximize the return on investment for future
WQ Trust revenue.

The second recommendation is also two parts:

1. That the current balance of the Special Reclamation (SR) Fund be invested
in the West Virginia (WV) short term bond pool with the exception of $5
million, which should remain in the WV money market pool.

2. That DEP develop plans to maximize the return on investment for future
SR Fund revenue.

In October of 2013 the balance of $28 million from the was transferred
to the Investment Management Board Fixed Income P001.

In June of 2013, with the exception of $5 million, the balance of the Fund was transferred
to the WV Short Term Bond Pool. The following charts depict the results of the new

investment strategies.

2014 SRF Advisory Council Annual Report

 

First Quarter Investment Earnings by Fiscal Year
300,000.00 I

 

700,000.00 
500,000.00 
500,000.00 
400,000.00 
300,000.00 ?3321
200,000.00 ?3432
100,000.00  



(100,000.00) 

 

 

 

 

(200,000.00)

 

FY2014 FY2015

 

 

 

Where 3321 represents the Fund and 3482 represents the 

Figure 1

 

I Investment Earnings by Fiscal Year

2,000,000.00
1,800,000.00
1,600,000.00
1,400,000.00
1,200,000.00
1,000,000.00
800,000.00
600,000.00
400,000.00
200,000.00

?3321
?3482

 

FY2010 FY2011 FY2012 FY2013 FY2014

 

 

 

Figure 2

2014 SRF Advisory Council Annual Report

Since 2001, despite a very aggressive reclamation schedule, the Fund and
have been serving the people of West Virginia well through providing for the
reclamation of bond-forfeited sites. At the time of the initial legislation in 2001, there
were 392 forfeited permits requiring reclamation, including some requiring water
treatment. Since passage of that legislation, an additional 185 permits have forfeited as
well, bringing the total to 577 permits requiring reclamation. Of those, work has been
completed on 472 permits. With regard to water treatment, the Fund is treating water at
142 sites and has an additional 63 sites under review or construction; 79 sites have been
determined to have no conditions requiring treatment or have completed treatment. As of
September 30, 2014, the Fund had accumulated cash and investments totaling 81.3
million, while the had accumulated $45.9 million.

Graphic summaries of the status of the Funds are outlined in the following

 

 

 

 

 

 

    

 

 

?gures.
Of?ce of Special Reclamation
Total Quarterly Revenue
$12,000,000 
$10,000,000
$8,000,000 
I. 
.5312"- 
11-. 

 




Ill


?in 1
mm 




Figure 3

 

2014 SRF Advisory Council Annual Report

 

 

 

  
 

 

 

 

 
  
   
  

 

 

 

 
   
  
  
 
    
 

    
    

 
  
  
  

 

  

  
    

 

   
    
 
   

   
    

o? 0? 0? 0? cf

Ei0?000f000 - $4,000,000 i.   I  I  1
$2,000,000   I i I 
$0 1: 71.1  1 .4 .11 ll. .11 I1, 
Q5990: $??Qb9b9b9<b? $05515 62:90: 09:9 ,9 (x (x 
0

Quarter
After Mar-03 Encumbrance Includes Contracted Encumbrance Intransit

 

 

Figure 4

2014 SRF Advisory Council Annual Report

Of?ce of Special Reclamation
2014 Revenue by Source
As of 9-30-14

Other Revenue

Interest Income 343.519

Civil Penaltie?574s415 3??d F?rreitures
$514615 $996212

  
  

Coal Tonnage
Fees
$10,426,261

Figure 5 Revenue Sources

Water Treatment Funding

The current main funding mechanism for bond-forfeited sites is the 27.9 cent tax

per ton of clean coal mined. In 2008, the Legislature authorized, but did not separately
fund, the Special Reclamation Water Trust Fund In reliance on the 

statutory authorization, beginning in July 2008, coal tax revenues based on a tax rate of

1.5 cents per ton were being paid into the In addition, coal tax revenues based

on 12.9 cents per ton were being paid into the Fund. In 2012 the Legislature increased the
amount dedicated to the to 15 cents per ton, but based on the funded status of the

Fund at the time the Fund remained at 12.9 cents per ton. Unless modi?ed in response to

future legislation, for budgeting and analysis puiposes, the DEP plans to continue paying

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2014 SRF Advisory Council Annual Report

all costs for both land and water reclamation work out of the Fund through FY 2018.
Funding the water reclamation and treatment from the Fund will allow the to
build up assets, although it is not anticipated to be solvent without future continuing
funding. The current balance in the is $45.9 million as of September 30, 2014.
The Council is continuing to look at alternatives for water treatment funding.

Increased water capital cost and water treatment cost are the result of two
identical lawsuits ?led against the DEP. The northern and southern district courts entered
into separate consent decrees in 2011 and 2012 respectively. As will be discussed later in
this report, the DEP is now required to apply for and obtain NPDES permits for all the
sites included in Attachment A of the consent decrees plus an additional 21 sites which
were included in an earlier lawsuit, for a total of 192 sites. DEP estimated that it will cost
approximately $35.5 million to bring bond forfeiture sites into compliance with the more
stringent water quality based ef?uent limits. Additionally, DEP estimates that it will cost
approximately $6.7 million to operate and maintain these treatment systems on an annual

basis.

Additional Charges to the Fund Due to NPDES Requirements

Due to NPDES requirements, the DEP has been faced with charging more
expenditures to the Fund. These include:

Realty Land and/or easement purchases have been necessary to expand
existing or new water treatment sites outside permit boundaries. The
following are costs associated with expansion of eleven (11) sites where
additional land was needed to ensure compliance with the more stringent
water quality ef?uent limits (WQBEL):

Surveying - $184,460
Appraisals - $76,796
Appraisal reviews - $5,500
Cost of Timber - $15,942
Recording fees - $133

00000

Easement purchases - $49,356

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2014 SRF Advisory Council Annual Report

0 Hiring private consulting engineers To meet the requirements of the
consent decree and in an attempt to maintain the land reclamation
schedule, the DEP has been compelled to hire private engineering
consulting ?rms to complete designs for projects that have historically
been done in-house. As of the date of this report three (3) contracts have
been awarded at a total cost of $451,846, and an additional nine (9)
contracts have been prepared for bids. DEP estimates that contractual
design increases project cost by 10 to 12%.

0 Increased staff As a result of having to apply for and obtain NPDES
permits at all bond forfeiture sites now and into the future, the DEP has
found it necessary to incorporate an NPDES permitting section into the
Of?ce of Special Reclamation (OSR - The of?ce responsible for
reclamation of land and waters for bond forfeited sites). Four new staff
members consisting of one (1) program manager and three (3) engineering
technicians have been added to ful?l the NPDES requirements for the
OSR. This is an additional charge to the Fund of approximately
$15 6,864/year for salaries alone.

0 NPDES permitting fees:

0 Application fees - $1,000/application. As of the date of this report
the DEP has applied for 144 NPDES permits equating to $144,000

0 Modi?cation fees - $500/mod. As of the date of this report the
DEP has submitted 21 modi?cations equating to $10,500.

0 Water sampling related to permit applications As of the date of this
report, the DEP has spent approximately $26,313 in laboratory cost for
additional water analysis required for NPDES applications.

New DEP Policy Relevant to the Fund

Effective May 21, 2014 the DEP has implemented a new policy establishing a
standard procedure the DEP will follow to terminate the State?s jurisdiction over bond-
forfeited former mining sites (Special Reclamation Sites). With a decision that the

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2014 SRF Advisory Council Annual Report

Special Reclamation Site has satis?ed the applicable performance standards, DEP will
terminate jurisdiction over the subject Special Reclamation Site. The new policy limits
the vulnerability of the State, and consequently the Fund, by reducing the possibility of
lawsuits pertaining to damages unrelated to former mining practices or reclamation
practices, i.c. due to recreation, timbering, oil gas, etc., as well as any changes to
environmental laws taking effect after reclamation of the subject Special Reclamation
Site. The DEP will retain jurisdiction of Special Reclamation Sites, or portions thereof,
that are necessary for the effective treatment of mine discharges emanating from the

subject Site.

Litigation

1. The Fund through FY 2018 and the starting in FY 2019 has acquired
liability for additional water treatment as a result of lawsuits ?led against the DEP, as
described below.

Identical complaints were ?led in the Northern and Southern District Courts, Civil
Actions No. 07-cv-87 (the ?Northern District Case?) and No. 2:07-0410 (the ?Southern
District Case?), assigned to Judge Irene Keeley and Judge John T. Copenhaver, Jr.,
respectively. Both cases were styled West Virginia Highland Conservancy and West
Virginia Rivers Coalition v. Randy C. Hu?inan, Secretary, West Virginia Department of
Environmental Protection.

The two suits alleged that the West Virginia Department of Environmental
Protection (DEP) had violated, and continues to violate, the federal Clean Water Act (the
Act) by failing to obtain West Virginia National Pollutant Discharge Elimination System
permits when the Division of Land Restoration reclaims and treats water
at bond forfeited sites as directed by state law. The Northern District Case named 18
speci?c bond forfeited sites and the Southern District Case named 3 sites.

On March 26, 2009, the Northern District Court entered summary judgment in
favor of Plaintiffs in the Northern District Case, and granted a permanent injunction. The
injunction requires DEP to apply for, process, and issue permits to itself for
the discharge into waters and streams of pollutants from the eighteen bond-forfeited, coal

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2014 SRF Advisory Council Annual Report

mining sites at issue in the case, whose reclamation the agency is required to manage.
DEP appealed this decision to the United States Court of Appeals for the Fourth Circuit
(?Fourth Circuit Court of Appeals?). By order dated November 8, 2010, the Fourth
Circuit Court of Appeals af?nned the Northern District Court?s ruling.

Similarly, a motion for summary judgment in the Southern District Case was
granted by Order dated August 24, 2009. The Southern District Court found that the
Secretary of the DEP was ?in violation of the National Pollutant Discharge Elimination
System permitting requirements of the Clean Water Act.? The Southern District Court
ordered the Secretary to ?apply for, and obtain, NPDES permits for all sites at issue in
this action,? and the parties subsequently submitted a joint stipulation agreeing to the
same injunctive relief and timeframes for compliance set forth in the Northern District
litigation. The Southern District Court entered ?nal judgment August 31, 2010.

On January 11, 2010, the same Plaintiffs (West Virginia Highlands Conservancy
and West Virginia Rivers Coalition) and the Sierra Club submitted a letter giving DEP
notice of their intent to sue DEP regarding discharges ?'om 131 additional bond forfeited
sites on the same legal basis as the previous suits. Based on the outcome of the previous
litigation, DEP engaged in settlement negotiations with the Plaintiffs and reached
agreement regarding the permitting of the 21 sites in the previous litigation and the
additional 131 sites. In August 2011, the Plaintiffs ?led two new suits regarding the
additional sites, West Virginia Rivers Coaiition, et al v. Hu?man, Civil Action No. 1:11-
cv?l 18 (N .D. and West Virginia Rivers Coalition, et al v. Hu?inan, Civil Action
No. 1-cv-524 (S.D. and lodged a proposed Consent Decree with both courts.
The Northern District Court entered the Consent Decree on October 12, 2011. The
Southern District Court entered the Consent Decree February 10, 2012. A list of all bond
forfeited sites at issue in all four suits is attached to the Consent Decree as Attachment A.

The Consent Decree resolves all four suits ?led by the Plaintiffs regarding bond
forfeited sites. The Consent Decree requires DEP to obtain permits for all
21 bond forfeiture sites cited in the initial litigation by September 1, 2011. Thereafter,
DEP will issue draft permits for 50 additional sites by the end of each
calendar year, beginning in 2012. The Consent Decree requires DEP to issue draft
permits for all bond forfeited sites listed in Attachment A to the Consent

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2014 SRF Advisory Council Annual Report

Decree by December 31, 2015. Thereafter, the DEP shall exercise its best judgment on
the timing of issuance of draft permits for sites forfeited after the execution of the consent
decree. As required by the Consent Decree on July 2, 2012 DEP submitted a Final
Treatment Cost Report to Plaintiffs and SRFAC, in which DEP determined the capital
cost and annual operating and maintenance costs for water discharges from each bond
forfeiture site to meet applicable water quality based ef?uent limitations. The DEP
estimates these costs will amount to $35.5 million for one-time capital construction costs

and over $6 million in annual operations and maintenance costs.

2. A third case presents potential for future litigation, should the legislature
not adequately fund the Fund and West Virginia Highlands Conservancy v.
Secretary Salazar, D01, Civil Action No. 2:00-1062 (S.D. The West Virginia
Highlands Conservancy (WVHC) had ?led a motion with the U.S. District Court for the
Southern District of West Virginia to reopen the case and schedule ?thher proceedings
on the grounds that the recommendations of the Special Reclamation Advisory Council
were not being followed with regard to funding the Special Reclamation Fund. Based
upon the Legislature?s extension of funding through the Continuing and Temporary taxes,
the case was placed on the court?s inactive docket as of May 2008; however, the court
allowed the possibility of a renewed motion if the Legislature does not continue to
provide suf?cient monies for the Fund to remain solvent.

In March 2011, the WVHC moved once again to have the litigation reopened
alleging continuing problems with the Fund. A status conference was held on August 5,
and the court ordered the ?ling of a joint status report. On August 25, 2011, the WVHC
and the Defendants ?led a joint status report with the court. The WVHC stated that the
court should not delay reopening the case until the new actuarial report and Advisory
Council recommendations are issued, whereas the Defendants recommended that it was
premature for the court to reopen this matter prior to the close of the 2012 legislative
session.

On March 30, 2012, a status conference call was conducted by the Court. In light of the
enactment of Senate Bill 579 that increased the special reclamation tax from 14.4 cents to

27.9 cents per ton of clean coal mined, the Plaintiff acknowledged that it would move to

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2014 SRF Advisory Council Annual Report

withdraw its Second Motion to reopen and re?le it to address the changed circumstances
that have occurred since the ?ling of its motion to reopen.

On April 2, 2012, the WVHC ?led its Motion to withdraw its Second Motion to reopen
this case with the Court. On August 5, 2012, the Court issued an Order granting the
Plaintiff 5 Motion to withdraw its Second Motion. In addition, the Court granted the
WVHC leave to ?le an additional motion to explain de?ciencies that remain,
notwithstanding the recent revenue increase in the Special Reclamation Fund.

This case remains open, so the District Court can address any issue that may arise

regarding the State?s ABS.

Study Issues

1. Consensus Coal Production Forecast for West Virginia: 2014 Update by
Christine M. Risch and Dr. Jennifer Shand from the Center for Business and
Economic Research at Marshall University.

The West Virginia Consensus Coal Production Forecast is a combined production
forecast comprised of four component forecasts. A consensus approach to forecasting
seeks the ?wisdom of crowds? in producing an expectation for output from the coal
industry. The Consensus Forecast is used in planning analysis to provide the best
expectation of tax to be collected for mandatory reclamation activities conducted through
the Special Reclamation Fund and the Special Reclamation Water Trust Fund.

The 2014 West Virginia Consensus Coal Forecast ?gures are lower than the 2013
Consensus. A primary reason for this is inclusion of ?nal 2012 supply and demand data
in forecasting models, which shifted projections of future production downward. In
addition, expectations of more rapidly declining productivity in Appalachia, particularly
in Central Appalachia, caused EIA to lower projections for both Northern and Central
Appalachian coal production and to raise projections for Interior coal production. The
AEO2014 also projects lower prices for Appalachian coal compared to AEO2013 due to
lower capacity utilization at existing mines. As the EIA forecast has the largest assigned
weight of all the forecasts used to construct the Consensus, its assumptions signi?cantly

in?uence forecast production levels.

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2014 SRF Advisory Council Annual Report

2. Enhancing AMDzine with Selenium and Aluminum treatment options by Dr.
Paul Ziemkiewicz of West Virginia University Water Research Institute.

The WVDEP is required to obtain National Pollutant Discharge Elimination
System (NPDES) permits for water discharges from bond forfeited mine sites throughout
West Virginia. OSR is currently treating many of these sites to achieve circumneutral pH
and metal removal but will need to upgrade treatment systems to accommodate discharge
water quality aluminum (A1) standards of 0.75 and 0.087 milligrams per liter (mg/L) for
warm water and trout waters respectively. Water quality data ?om current acid
mine drainage (AMD) treatment systems indicate inconsistent compliance with those
standards. The objective of the Aluminum Removal Study conducted by WVWRI in
2013 was to identify a low cost method for upgrading existing OSR treatment sites to
achieve compliance with aluminum standards. In addition to the challenges of treating
typical AMD related parameters selenium contamination has become a common problem
in coal mining related areas as well, particularly in the southern coal ?elds. With the
adoption of the 5 ug/L selenium discharge limit for coal mines in West Virginia,
selenium treatment may be needed at many WVDEP mine drainage treatment facilities.
At the present time, however, there is no 'tool available to assist WVDEP in identifying,
evaluating, and comparing different selenium treatment technologies ?'om a treatment
effectiveness and cost ef?ciency perspective.

AMDzine was developed to aid the coal industry and government users in
selecting a multi?unit treatment sequence for an AMD treatment facility ?'om a host of
active, semi-active and passive treatment technologies. Of?ce of Special
Reclamation has used AMDzine for designing and costing treatment systems to meet the
more stringent ef?uent requirements under their NPDES permits. Thus it?s appropriate
and desirable for WVDEP to incorporate, into AMDzine, the low level aluminum
removal technology identi?ed in the previous study and have selenium treatment
integrated into AMDzine as well.

The purpose of this project is to update AMDzine through incorporation of a low
level aluminum treatment module and selenium treatment options. The ?nal product of

the project will be a new and improved AMDzine program that can be used to aid users

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2014 SRF Advisory Council Annual Report

in selection of technologies for AMD and selenium treatment based on suitability of
technology and cost ef?ciency.

3. Alternative Enforcement Evaluation by DEP.

The DEP has begun to re-examine previous bond forfeitures to determine whether
there are any persons or entities whom may have liability for some or all of the Special
Reclamation Fund?s reclamation and water treatment costs from whom the DEP could
pursue cost recovery. Initially, the DEP has identi?ed the twenty largest Special
Reclamation liabilities and referred these to OSM for assistance in investigating and
identifying persons who controlled the companies which forfeited these bonds. OSM has
provided the DEP with preliminary results for the ?rst two of its investigations. The DEP
has assigned legal counsel ?'om its Of?ce of Legal Services to review these preliminary
investigations to determine whether any person/entity identi?ed is worth pursuing. As
investigations are conducted, the DEP will also be providing feedback to OSM to help
OSM perform work that will be of the greatest value to the DEP.

The DEP also monitors and participates in bankruptcy proceedings of permit
holders to, among other things, reduce or avoid revocation of permits that have
reclamation liabilities in excess of the bond amount. By participating in a bankruptcy
proceeding, DEP is sometimes able to encourage/facilitate the transfer (to a capable
party) of sites with reclamation liability in excess of the bond amount. Other agency
efforts in bankruptcy proceedings include ?ling and pursuing claims for reclamation
costs and penalties, objecting to proposed sales or abandonments structured to avoid
reclamation liability, collecting bonds and seeking recovery of reclamation costs,
objecting to plans ?led by debtors, persisting in informing those involved in the
proceeding that a debtor must comply with environmental laws, and continuing to
enforce environmental laws through the exercise of police powers, notwithstanding the
bankruptcy ?automatic stay?.

The bankruptcy cases the DEP has been engaged in during 2014 includes the
Appalachian Fuels bankruptcy and the Cheyenne Sales bankruptcy. Appalachian Fuels
consisted of 50 permits. Of these 50 permits the DEP obtained reclamation responsibility

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2014 SRF Advisory Council Annual Report

for 7 while the remaining permits were absorbed by other operators due, in large part, to
DEP personnel facilitating the transfer of these permits. The DEP did hire outside
council to assist with the recovery of penalties and excess reclamation cost associated
with 3 of the seven permits. To date the DEP has paid $321,527.88 out of the Fund for
attorney fees pertaining to this particular case and has recently been awarded $2.7
million. The Cheyenne Sales bankruptcy included three permits. The DEP Of?ce of
Legal Services (OLS) obtained an administrative expense award in the amount of
$40,559.25 which was entered April 4, 2014 by the US. Bankruptcy Court for the
Northern District of WV. It is noted the administrative expense award is in addition to
the bonds for the revoked permits and was made based upon a demand by OLS for
penalties in the original amount of $5,307,970.48.

Special Reclamation Fund Advisory Council Recommendations to the
Legislature

Based upon conclusions drawn from information included in this report, the
Council makes the following recommendations to the Legislature:

The Council recommends that the present 12.9 cent per ton tax dedicated to the
Fund remain in force and that the tax dedicated to the will remain at 15 cents per
ton. The Council will have a new study done this year. The Council further recommends
that the State Legislature form a panel to examine the elements of our State code that
result in these uncontrolled liabilities, how other states deal with such issues and ?nally
to propose a State legislative initiative to rationalize water quality regulation to meet the
conditions of the Federal Clean Water Act while adding rationality and certainty to the
process.

The Council recommends that the Legislature continue to examine the
implications of the recent court rulings and subsequent lawsuit settlements on the
Special Reclamation Fund, Abandoned Mine Lands, and voluntary efforts by citizen-
led watershed groups to address historic mining-reclamation related liabilities. The
Council further that the Legislature examine the mine reclamation and

bonding programs of other states and as implemented in Tennessee by the federal

19

2014 SRF Advisory Council Annual Report

Of?ce of Surface Mining in order to determine if the statute and regulations creating
the Fund and in West Virginia have inappropriately structured SMCRA to
assume long-tenn CWA liabilities. The Council further recommends the Legislature
examine the separate and distinct authorities of the Clean Water Act (CWA) in
assessing the eligibility of future forfeitures for transfer of liabilities to the

The Council is concerned about default transfer of water treatment liability
to the when opportunities exist to pursue responsible parties under the CWA
per the requirements of an NPDES (CWA Section 402) permit.

As a partial alternative to fully funding the through a future increase
in the tax, the Special Reclamation Fund Advisory Council recommends that, if
possible, the Legislature commit a portion of excess coal severance tax or other
revenues to the so it can begin to build value and help offset the cost of

future water reclamation and ongoing treatment.

20

2014 SRF Advisory Council Annual Report

 

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2014 SRF Advisory Council Annual Report

Appendices for 2014 SRF Advisory Council Annual Report
(All Appendices as of 9-30-14)

A. OSR Graphs:
Total of Land and Water Permits Scheduled by Quarter
Land Permits To Be Contracted
Land Liabilities To Be Contracted
Permits Forfeited Since 6-3 0-01
Reclamation Projects Started Since 6-30-01
Contract Dollars Encumbered
Cash Balance
Total Revenue
Revenue Collected by Source: Bonds, Civil Penalties, Tax

B. OSR Estimated Land Liability-WQ Capital Dollars vs. Contract
Amount

C. Reports Commissioned by the Council
Consensus Coal Production Forecast for West Virginia: 2014
By Christine M. Risch and Dr. Jennifer Shand from the Center for
Business Economic Research
Marshall University, August 15, 2014

22

2014 SRF Advisory Council Annual Report

Appendix A

23

2014 SRF Advisory Council Annual Report

Total of Land and Water Permits Scheduled by Quarter

As Of Septunherso, 

Quarters

Requisition complete, Under Contract Under Contract


0

smuued JO JaqulnN

 
 

Warranty (UCW). or Complete (C)

24

2014 SRF Advisory Council Annual Report

 

 

 

 

 

 

 

 

I ?Wm2014 SRF Advisory Council Annual Report

 

 

 

Of?ce of Special Reclamation
Estimated Dollar Amount of Land Liabilities To Be Contracted

As Of 9-30-14

 

 

 

 

 

 

 

 

$50,000,000
$45,000,000
$340,000,000

     

$35,000,000
$530,000,000 -




 

26

2014 SRF Advisory Council Annual Report

 

 

   
 

-Permits by Quarter

 

 

 

 

  

 



 

 

 

 

 

 

 

 

 

 

 

 

(36@903a3e?




 


30 
60 
40 
20
amp. Mir-1W
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27

 

2014 SRF Advisory Council Annual Report

 

 

 

 

 

 

 

 

 

 

 

 

 


0 WWJlem?h-?a?wmw
9&9 c3396.; ~56 xx? 9359* fig?" 90% of}? 909$ 90?"
Quarter

 

 

 

 

28

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.
. . 

a 0.000.000

    
 

 

0.9.0410):

2014 SRF Advisory Council Annual Report

 

 

 

 

 

 

 

 

 

u200000000 I    -
%6,000.000 - I 
c$4,000,000 - I I I I I
$2,000,000   
   l ll ll I "ll" 
?3 ?3 ?b b?

After Mar-03 Encumbrance Includes Contracted Encumbrance Intransit

29

 

 

2014 SRF Advisory Council Annual Report

 

 

$90,000,000
$80,000,000
$70,000,000
$60,000,000

$50,000,000

 

Office of Special Reclamation
Quarterly Cash Balance
As Of 9-30-14

 

 

 

 

 

 

 

 

 

 

 

 

30

2014 SRF Advisory Council Annual Report

 

Of?ce of Special Reclamation

Total Quarterly Revenue

$12,000,000 

 

 

 

$10,000,000

 

$8,000,000 

 

       

 

 

r. 
.a-L2014 SRF Advisory Council Annual Report

    
      
 
 
  
 
   

ITax
50,0000 - ICivil

Penalties
I Bonds

  

$8,000.000 -
2

:2
-

$4,000,000 -

321900.000 -

 

 

 

.
-.




32

2014 SRF Advisory Council Annual Report

Appendix 

33

2014 SRF Advisory Council Annual Report

05R Land Liability VS. Land Contract Amount as of 09-30-14

For Contracts Awarded After 1-1-2000

 

LIAB
REC REPT
START LAND POST LAND CONTRACT
DATE OFFICE PERMIT STATUS DATE EST LIABILITY AMOUNT
7/27/2000 EM-116 0 6/22/2001 $212,200.00 $293,565.47
7/23/2000 3 149-79 0 5/22/2001 $262,140.00 $171,553.30
12/12/2000 EM-133 0 5/22/2001 $150,235.00 $344,513.00
12/12/2000 P-731 5/22/2001 $213,724.00 $416,210.00
12/13/2000 mm 4/23/2001 $269,401.00 $321,755.00
12/13/2000 R-734 5/22/2001 $367,046.00 $356,431.00
1/22/2001 3300392 0 5/22/2001 $442,000.00 $737,054.40
1/30/2001 8-68-82 0 1/31/1996 $300,000.00 $146,309.70
2/26/2001 6403236 0 4/20/1993 $39,400.00 $35,730.00
3/23/2001 D-108-82 0 5/10/1996 $3,770.00 $24,920.13
3/24/2001 U-4005-90 0 10/3/2003 $7,700.00 $2,490.00
9/19/2001 U-53-35 0 10/6/2003 $90,600.00 $123,002.06
10/25/2001 u-4012-36 4/10/2001 $224,637.00 $310,746.50
10/25/2001 6 u-4029-39 0 5/19/1997 $113,510.00 $103,341.20
11/23/2001 6400692 0 11/17/1999 $30,000.00 $39,910.00
1/16/2002 u-1012-93 0 6/9/2000 $40,000.00 $67,096.90
4/5/2002 0 7/12/1996 $105,000.00 $149,163.65
5/1/2002 0 0-69-62 0 9/15/2003 $14,720.00 $14,720.00
5/2/2002 0 U-140-82 0 9/15/2003 $1 1 ,745.00 $1 1,745.00
5/2/2002 0 U-5027-66 0 9/16/2003 $6,605.00 $2,925.00
5/19/2002 0 00-353 0 9/16/2003 $10,075.00 $10,075.00
6/24/2002 u-2037-66 0 2/29/2000 $72,000.00 $43,921.00
7/2/2002 S-3024-37 10/15/1999 $33,000.00 $67,396.00
7/2/2002 6 U-3003-39 10/15/1999 $30,000.00 $66,973.00
7/2/2002 6 U-3023-37 10/15/1999 $22,000.00 $14,600.00
7/3/2002 0 U-5035-37 SSR 4/23/1999 $123,000.00 $156,900.00
7/3/2002 0 S-5034-37 SSR 4/23/1999 $72,000.00 $73,900.00
3/14/2002 0-2044-33 0 6/9/2000 $297,000.00 $235,592.30
3/14/2002 S-2021-37 0 9/29/2000 $50,000.00 $10,750.00
6/14/2002 6205236 0 11/3/1999 $60,000.00 $49,200.00
6/14/2002 U-2005-33 0 11/6/1999 $70,000.00 $109,330.00
3/14/2002 S-2006-93 10/15/1999 $37,500.00 $54,140.00
9/16/2002 S-96-35 0 $50,000.00 $162,100.00
9/16/2002 6 U-3046-37 0 4/17/2001 $225,000.00 $233,900.00
10/31/2002 U-3042-89 0 3/22/2002 $130,000.00 $130,565.00
10/31/2002 S-113-35 5/26/2001 $40,000.00 $9,100.00
10/31/2002 u-3031-93 0 5/29/2001 $201,000.00 $146,000.00
10/31/2002 U-4011-88 0 2/22/1999 $110,700.00 $115,022.50
11/22/2002 6 06664 3/25/2000 $49,373.00 $163,690.00
11/22/2002 6 R761 0 3/25/2000 $615,020.00 $763,662.00
12/4/2002 0401190 0 10/15/1999 $3,500.00 $7,210.00
1/30/2003 6 U-42-65 10/15/1999 $6,200.00 $12,372.50

34

212012003
212012003
2/24/2003
411512003
411512003
411812003
411812003
412312003
412312003
413012003
51112003
51112003
51112003
511512003
511512003
511512003
512012003
512212003
512212003
61512003
61512003
611012003
611912003
611912003
611912003
611912003
712912003
81612003
81612003
811312003
811 312003
811412003
811412003
91212003
91212003
91212003
911212003
911212003
911212003
911812003
911 912003
912912003
912912003
101812003
1011412003
1011712003
1011712003
1011712003
1012012003
1013112003
1 111212003



2014 SRF Advisory Council Annual Report

3-3035-37
U-3036-87
S-5046-88
U0-727
U0-252
U-107-83
U-3066-88
EM-71
uo-323
S-682
3-1024-33
S-3050-86
S-65-76
D-125-82
U-3020-86
uo-571
3301 1-88
32-31
u-3o74-37
56-81
R-3078-86
U-3017-87
U-3078-87

13-32-31
0-103-33
3-30-33
3-173-75
S-65-85
U-171-83
U-5o-35
S-3020-88

D-75-82
3-2002-92
U-1041-91
3200939
39032
U-3046-88
U-5006-95
D-10-81
3-99-33
U-40-85
0-3077-87
3-1 19-35
3-3009-39
3301233
3307033
U-3006-87
u-32-34.
U-1-85



1 011 511999
1 011 511999
1 011 511999
1211211 997
512212003
512612000
512612000
613011998
1011511 999
512612000
31112000
512612000
512612000
512612000
512612000
512612000
512612000
512612000
512612000
512612000
512612000
512612000
1011 511999
1011 511999
512612000
512612000
512612000
512612000
512612000
813012002
813012002

511412003
1 11812001

1 112612001
1112612001
81312001
512612000
512612000
512212001
911012003
512612000
512612000
51612003

1 112412003
512612000
512612000
512612000
512812003
1011 511999
1011 511999

$178,500.00
$42,000.00
$60,500.00
$18,720.00
$6,655.00
$133,580.00
$83,275.00
$14,365.00
$10,500.00
$27,735.00
$97,600.00
$160,492.00
$24,842.00
$79,360.00
$9,480.00
$19,775.00
$89,830.00
$71 ,500.00
$176,760.00
$173,992.00
$130,104.00
$77,737.00
$55,000.00
$58,000.00
$100,090.00
$54,605.00
$99,1 12.50
$41,450.00
$502,360.00
$40,000.00
$36,000.00
$15,000.00
$18,760.00
$55,300.00
$164,600.00
$21,800.00
$75,000.00
$63,200.00
$709,800.00
$62,000.00
$28,200.00
$46,950.00
$136,505.00
$49,335.00
$85,500.00
$1 1 8,040.00
$20,975.00
$62,450.00
$1 14,000.00
$10,400.00
$36,000.00

$637,700.00
$357,500.00
$48,185.00
$13,459.50
$4,758.46
$249,700.00
$378,185.00
$12,100.16
$8,856.34
$40,400.00
$92,937.00
$177,000.00
$134,800.00
$191,311.75
$71,500.00
$26,800.00
$130,900.00
$105,770.00
$517,520.00
$319,245.00
$237,536.00
$157,231.85
$62,600.00
$68,500.00
$88,000.00
$109,125.00
$74,750.00
$76,510.00
$944,770.00
$70,839.90
$41,496.40
$27,467.50
$11,007.50
$115,000.00
$186,380.00
$77,300.00
$121,230.00
$94,300.00
$1,145,450.00
$94,635.00
$46,365.00
$142,140.00
$255,500.00
$27,750.00
$66,600.00
$220,160.00
$71,684.00
$127,624.00
$72,900.00
$13,597.50
$21,659.88

35

1 1/13/2003
12/24/2003
12/24/2003
12/24/2003
12/24/2003
12/24/2003
1/9/2004
1/9/2004
2/5/2004
2/5/2004
2/5/2004
2/5/2004
2/23/2004
3/2/2004
3/2/2004
3/4/2004
3/10/2004
3/30/2004
3/30/2004
4/12/2004
4/26/2004
5/4/2004
5/4/2004
5/24/2004
7/20/2004
7/21/2004
7/22/2004
8/30/2004
9/3/2004
9/4/2004
9/4/2004

1 1/12/2004
1 1/12/2004
1 1/24/2004
2/4/2005
3/29/2005
5/12/2005
5/12/2005
5/12/2005
5/31/2005
6/8/2005
9/22/2005
12/29/2005
1/3/2006
1/3/2006
1/16/2006
1/20/2006
1/20/2006
2/14/2006
2/14/2006
3/13/2006



2014 SRF Advisory Council Annual Report

UO-406
S-1028-86
S-62-85
0-104-83
0?67-82
U-22-85
UO-694
U0-383
U-4012-94
U-4017-91
U-85-83
UO-439
S-3076-86
U-231-83
UO-155
P-654
R-721
0-46-84
0-46-85
S-3031-87



UO-380
D-60-82
S-24-83
13-79
0-5059-86
U-6012-88
0-40-82
0-45-82
S-94-82

U-26-83
S-3016-92
0-58-83
EM-1 16

U-4002-94

U-4027-88
S-3010-98
S-35-81
S-3028-87

R-4030-86


3-3055-88
U-69-85




2/3/1999
10/1 5/1999
10/1 5/1 999

5/26/2000
5/26/2000
1 1/20/2002
10/15/1 999
3/12/1999
3/10/2003
3/10/2003
1 0/1 5/1999
1 0/1 5/1999
5/26/2000
4/2/1999
5/13/1996
6/5/2002
4/14/2004
6/9/2000
6/9/2000
5/20/1996

10/1 5/1999
10/1 5/1 999
6/9/2000
5/20/1996
1 1/8/2001

4/10/2001
5/16/2003
5/9/2003
5/9/2003
6/5/2002
4/23/2003
3/22/2001
3/29/2004
3/22/2002
4/23/2003
5/28/2003
4/10/2001
10/1 5/1999
4/10/2001
2/10/2004
5/20/1996

6/28/2000

4/12/2001
5/7/2003
5/29/1996
5/29/1996
6/9/2000

$32,000.00
$42,000.00
$35,900.00
$122,750.00
$23,005.00
$382,360.00
$54,300.00
$153,340.00
$180,000.00
$37,466.00
$53,940.00
$100,380.00
$354,915.00
$24,700.00
$89,573.00
$171,000.00
$40,000.00
$90,000.00
$56,000.00
$18,200.00
$20,000.00
$5,400.00
$265,370.00
$50,000.00
$30,000.00
$127,000.00
$25,000.00
$65,436.00
$25,025.00
$10,000.00
$24,315.00
$200,000.00
$21 1 ,21 1.00
$132,370.00

$1,185,363.40
$1,900,000.00

$465,000.00
$133,700.00
$100,958.00
$173,710.00
$274,588.00
$794,257.10

$67,200.00

$35,000.00

$53,690.00
$469,240.00
$368,410.00
$376,722.00
$257,774.00
$140,000.00

$40,000.00

$23,312.50
$40,800.00
$99,180.00
$94,254.90
$72,566.10
$449,007.49
$139,000.00
$255,500.00
$1 19,801 .00
$40,201.00
$152,201 .00
$155,501.00
$749,003.00
$1 10,835.00
$389,389.00
$149,700.00
$27,345.00
$268,350.00
$144,720.00
$20,615.00
$49,140.00
$3,620.00
$844,390.00
$69,410.00
$91 ,450.00
$53,767.50
$46,750.00
$47,050.00
$24,573.00
$54,700.00
$57,700.00
$91,502.00
$158,700.00
$197,360.00

$1,191,550.00
$2,373,659.00

$378,000.00
$108,000.00
$210,500.00
$207,316.00
$250,582.00
$370,900.00
$122,600.00
$138,000.00

$64,650.00
$921,430.19
$610,470.00
$356,000.00
$254,860.00
$217,400.00

$50,604.80

36

4/14/2006
5/4/2006
6/28/2006
1/8/2007
1/12/2007
1/17/2007
1/17/2007
3/19/2007
3/19/2007
3/19/2007
3/19/2007
4/13/2007
5/17/2007
1 1/5/2007
1/8/2008
2/1/2008
2/1 /2008
2/20/2008
2/20/2008
3/24/2008
3/26/2008
4/10/2008
4/21/2008
6/26/2008
6/30/2008
6/30/2008
7/10/2008
7/10/2008
8/7/2008

1 1/26/2008
7/22/2009
10/15/2009
1/26/2010
2/9/2010
5/21/2010
6/9/2010
7/22/2010
7/22/2010
7/22/2010
7/22/2010
6/24/2010
1 1/30/2010
1/12/201 1
1/12/201 1
1/12/201 1
1/12/201 1
1/12/201 1
5/17/201 1
7/22/201 1
8/3/201 1
8/3/201 1



2014 SRF Advisory Council Annual Report



U-5069-87

U-3010-87
U-3003-86
UO-223

S-41-84
S-55-85
S-72-84

D-73-82
P-664
0-172-83
I-544
0-20-85
0-16-82
0-16-85

S-3031-90
187-74
P-61-83


S-20-83
0-169-83
U-225-83
S-19-85
120?79

0-3012-07



U-2002-95
0-6013-88
0-6021-89
S-73-85
U-6018-86
U-2010-94
P-741
S-100-84
S-2004-02
S-1004-88
S-1019-87

S-1005-95
U-2005-97
U-5049-87
S-41-80






UCW
UCW

UCW
UCW

UCW
UCW



10/1 5/1 999
5/26/2000
5/27/1999
6/27/2006
6/16/2006
6/16/2006

1 0/1 5/1999

1 0/1 5/1999

1 0/1 5/1999

1 0/1 5/1999

12/13/2006

5/9/2001
8/31/2005
2/10/2004
1/30/2001
1 1/6/2006

9/1/1998
3/29/2007
1 0/1 5/1999
1 0/1 5/1999
1 0/1 5/1999
1 0/1 5/1999
1 0/1 5/1999
10/1 5/1999

1/26/2004

3/29/2007
3/25/2009
8/31/2006
8/31/2006
12/31/2006
4127/2007
8/27/2003
2/26/2003
8/27/2003
2/26/2003
12/22/2006
8/4/2004
3/29/2007
12/13/2006
9/10/2003
9/10/2003
9/22/2008
9/10/2003
1/22/2009

1 1/4/2002
6/5/2002

$50,000.00
$54,635.00

$1 51 ,000.00
$33,375.00
$271 ,500.00
$157,488.00
$21 8, 120.00
$49,500.00
$35,900.00
$51 ,600.00
$138,300.00
$2,620,101.00
$1 17,200.00
$177,000.00
$1 1 1 ,000.00
$5,000.00
$34,580.00
$50,000.00
$50,000.00
$500,000.00
$602,000.00
$192,810.00
$49,300.00
$934,080.00
$92,900.00
$39,700.00
$60,800.00
$76,800.00
$101,500.00
$30,000.00
$2,096,350.00
$337,820.00
$2,069,075.00
$287,610.00
$864,543.00
$335,924.00
$1,355,000.00
$1 1,400.00
$258,000.00
$13,000.00
$136,230.00
$400,000.00
$792,000.00
$3,590,402.00
$472,500.00
$20,000.00
$1,476,730.00
$565,000.00
$131 ,000.00
$145,100.00
$156,000.00

$224,000.00
$188,575.00
$186,750.00
$164,625.00
$232,140.00
$208,965.00
$199,035.00
$26,200.00
$50,400.00
$175,300.00
$124,510.00
$1,202,392.00
$131,999.00
$114,741.00
$37,900.00
$34,000.00
$31,546.00
$138,600.00
$583,680.00
$96,000.00
$241,500.00
$396,800.00
$62,925.00
$1,571,650.00
$158,150.00
$31,160.00
$99,870.00
$354,730.00
$47,050.00
$330,694.00
$620,111.00
$117,300.00
$533,000.00
$151,460.00
$318,774.00
$251,909.00
$1,391,557.00
$25,000.00
$223,500.00
$24,000.00
$183,420.00
$326,000.00
$1,366,126.00
$2,571,571.00
$369,000.00
$149,000.00
$644,250.00
$511,405.00
$207,025.00
$587,554.00
$392,477.00

37

1 11221201 1
31612012
711612012
713112012
713112012
713112012
713112012
713112012
. 713112012
121312012
121312012
121312012
1 1141201 3
1 11412013
21312014
513012014

Total:
Variance:



2014 SRF Advisory Council Annual Report


8-3016-99
3-34-82
0-5035?88
0-5092-87
U-5018-98

U-5036-88
U-5085-88






7-712912003

1211012001
1 11412002

1 11412002
412912003
412912003
1 11412002
412912003
1011712007
1011712007
1011 712012
412311999
412311999
61912010
61101201 1

$550,000.00
$399,602.00

$44,000.00
$216,100.00
$203,800.00

$14,000.00
$231 ,000.00
$154,400.00
$314,400.00
$283,290.00
$161 ,840.00
$420,208.00

$72,000.00
$123,000.00
$722,635.00
$273,000.00

$46,633,509.00

$228,750.00
$284,450.00
$83,710.00
$200,600.00
$747,440.00
$198,360.00
$162,520.00
$69,000.00
$29,080.00
$61 ,325.00
$21 ,850.00
$60,800.00
$106,1 02.00
$70,098.00
$699,600.00
$7,000.00

$49,571 ,027.88

6.30%

Note: Excludes 10 permits where the variance exceeds 2 standard deviations under the mean or no

Est Liability in database.

Total Unskewed:

Variance Unskewed:

194

?5,906,594.00

Note: The variance of these 17 permits exceeds 2 standard deviations over the mean.

Increased liability over time, more detailed investigation prior to requisition, general in?ation,

increased costs for speci?c goods and services are contributing factors in the variance.

Without these 1? permits, the Estimated Liability vs. Land Contract Amount variance is -1 103%.

Variance (Contract Amount - Est Liability)! Est Liability

$45,433,555.70

-1 .03%

 

38

2014 SRF Advisory Council Annual Report

OSR WQ Cap vs. Water Contract Amount as of 09-30-14
For Contracts Awarded After 1-1-2000

 

LIAB
DATE WQ REPT WQ TOTAL WATER
CONST LAND WATER POST CAPITAL CONTRACT
STARTED OFFICE PERMIT STATUS STATUS DATE DOLLARS AMOUNT
9/16/2002 8 S-96-85 $67,500.00 $128,240.00
10/17/2002 ACT $398,250.00 $243,705.23
12/19/2002 S-1032-86 ACT 4/20/1993 $364, 500. 00 $209, 784.66
2/20/2003 S-60-84 ACT $175,500.00 $282,062.00
4/25/2003 EM-32 ACT $243,000.00 $168,890.00
5/1 /2003 ACT 3/1 /2000 $209,250.00 $173,178.00
5/15/2003 176-77 ACT 5/26/2000 $54,000.00 $312,000.00
5/21/2003 ACT 7/21/2000 $452,250.00 $643,142.22
6/5/2003 8 EM-97 ACT 9/16/2003 $175,500.00 $341 ,775.00
6/5/2003 8 ACT 5/26/2000 $209,250.00 $91,000.00
6/19/2003 8 D-32-81 ACT 5/26/2000 $209,250.00 $260,500.00
8/25/2003 40-81 ACT $398,250.00 $413,962.40
8/27/2003 S-1063-86 ACT $87,750.00 $324,561.00
9/29/2003 8 U-40-85 5/26/2000 $175,500.00 $89,500.00
10/8/2003 $364,500.00 $118,000.00
10/14/2003 65-78 ACT $170,100.00 $1,142,151.00
10/14/2003 ACT 7/21/2000 $315,900.00 $1,600,000.00
10/14/2003 8 S-1 19-85 11/24/2003 $398,250.00 $150,000.00
11/4/2003 ACT 10/15/1999 $209,250.00 $589,265.32
11/7/2003 UO-519 ACT 3/14/2001 $398,250.00 $581,592.00
1/22/2004 0-1035-87 ACT $173,677.50 $406,440.00
1/22/2004 0-43-85 ACT $121 ,500.00 $202,975.00
1/22/2004 0-86-82 ACT 9/24/2003 $35,572.50 $35,125.00
2/5/2004 3 U-3055-87 10/28/2003 $209,250.00 $251 ,300.00
2/5/2004 8 S-86-85 ACT 7/24/2000 $209,250.00 $467,500.00
6/22/2004 $209,250.00 $97,400.00
7/22/2004 8 19-75 $209,250.00 $116,710.00
8/16/2004 $209,250.00 $87,794.00
8/17/2004 8 U-3083-87 3/19/1998 $195,750.00 $220,161.00
9/8/2004 0-1-81 ACT 10/26/1998 $324,000.00 $499,795. 00
10/1/2004 S-52-83 ACT $155,250.00 $298,745.00
2/10/2005 S-61-82 ACT $121,500.00 $245,392.00
3/4/2005 237-76 ACT $109,250.00 $503,239.00
3/4/2005 S-1035-86 ACT $100,000.00 $449,125.00
5112/2005 8 R-3-81 ACT $175,500.00 $487,750.00
5117/2005 ACT 8/31/2000 $364,500.00 $312,985.00
5/24/2005 60-79 $54,000.00 $95,980.00
6/8/2005 U-2024-87 ACT $184,997.92 $348,350.00
12/28/2005 S-21-84 ACT $175,500.00 $208,543.30
12/29/2005 8 5/20/1996 $209,250.00 $284,400.00
1/3/2006 8 S-3028-87 $67,500.00 $412,280.00
4/14/2006 S-6029-86 ACT $87,750.00 $2,497,373.00
5/4/2006 S-64-83 ACT $243,000.00 $316,385.00

39

2014 SRF Advisory Council Annual Report

6/7/2006 34?81 ACT $175,500.00
6/27/2006 D-35-82 TBC ACT 8/4/2002 $2,892,400.00
9/1/2006 S-2003-86 $364,500.00
10/18/2006 8 S-99-83 5/26/2000 $95,500.00
1 1/1/2006 8 6/29/1998 $247,800.00
1 1/9/2006 8 0-3086-87 7/25/2001 $87,750.00
1 1/9/2006 8 0-43-84 ACT 7/25/2001 $87,750.00
12/15/2006 65-77 $209,250. 00
12/15/2006 $87,750.00
5/3/2007 U-109-83 $209,250.00
8/9/2007 67-78 ACT $121,500.00
9/21/2007 192-77 ACT $2,070.90
9/21/2007 ACT $396,179.10
1 1/27/2007 S-122-80 ACT 12/13/2006 $548,012.00
1/9/2008 184-77 ACT $153,983.70
1/9/2008 $21 ,516.30
2/12/2008 ACT $87,750.00
2/20/2008 0?69-82 9/15/2003 $87,750.00
3/26/2008 8 S-3031-90 3/29/2007 $159,000.00
5/1/2008 8 U-4013-91 5/22/2001 $157,010.00
5/23/2008 8 P-656 ACT 6/30/2005 $778,000.00
6/12/2008 3-72 $324,000.00
8/7/2008 8 1/26/2004 $225,000. 00
8/29/2008 RO $243,000.00
9/15/2008 ACT 10/15/1999 $209,250.00
1 1/26/2008 120-79 ACT $209,250.00
1/6/2009 U-5071-86 ACT $243,000.00
3/25/2009 $209,250.00
3/25/2009 8 149-79 5/22/2001 $377,230.00
3/31/2009 51-78 ACT $209,250.00
6/1/2009 7/25/2001 $209,250.00
6/1/2009 S-28-83 ACT $209,250.00
6/15/2010 S-2003-88 TBC ACT 12/13/2006 $716,414.00
7/22/2010 0-6013-88 ACT 8/27/2003 $2,467,307.00
7/22/2010 S-73-85 NA 8/27/2003 $235,000.00
8/30/2010 4/27/1999 $243, 000.00
1112/2011 ACT $121,500.00
2/18/201 1 S-1018-88 ACT 12/8/2000 $209,250.00
5/17/201 1 UCW ACT 9/10/2003 $276,000.00
1 1/2/201 1 12/12/2006 $325,000.00
5/25/2012 UCW 12/10/2001 $732,433. 00
5/30/2014 7?81 U0 U0 6/10/2011 $1,547,925.00
Total: 85 $25,532,528 .92
Variance:

Note: Excludes 4 permits where the variance exceeds 2 standard deviations under the mean.

Total Unskewed: 74
Variance Unskewed:

$24,033,512.62

$297,685.00

$2,856,667.00

$80,052.50
$107, 100.00
$420,500.00
$285,500.00
$276,000.00
$308,028.50
$159,608.00
$139,880.00
$321 ,000.00
$2,300.00
$61 1 ,723.00
$395,158.00
$380,167.00
$139,798.75
$435,825.00
$287,225.00
$137,500.00
$132,987.00
$997,400.00
$123,985.00
$429,106.00
$446,825.00
$664,207.00
$744,924.00
$677,795.00
$414,800.00
$359,750.00
$299,900.80
$415,235.40
$347,902.50
$589,630.00
$932,400.00
$95,700.00
$497,000.00
$31 1 ,940.00
$594,960.00
$805,210.00
$524,000.00
$883,541 .60
$742,700.00

$36,382,673.1 8

42.50%

$27,340,747.?

13.76%

40

2014 SRF Advisory Council Annual Report

Note: The variance of these 11 permits exceeds 2 standard deviations over the mean.

Sparse WQ data at time of Tiff Hilton's liability estimation, new seeps found after estimation,
additional roads. more and larger ponds required after original estimation are the factors in the
variance. For 8?6029-86 a large underground AMD pool and other problems were discovered
during requisition planning. which were not addressed in the initial liability estimate.

Without these 11 permits, the variance is 18.29%.

Variance (Water Contract Amt - WQ Total Cap Dollars) I WQ Total Cap Dollars

41

2014 SRF Advisory Council Annual Report

Appendix 

42