2008 Vermont Natural Resources Board Annual Report
Vermont Natural Resources Board
National Life Records Center Building
National Life Drive
Montpelier, Vermont 05620-3201
DATE: February 25, 2008
TO: Senator Virginia Lyons, Chair of the Senate Committee on Natural Resources & Energy
Senator Jeanette White, Chair of the Senate Committee on Government Operations
Representative Robert Dostis, Chair of the House Committee on Natural Resources & Energy
Representative Donna Sweaney, Chair of the House Committee on Government Operations
TO: Governor James Douglas
FROM: Peter F. Young, Jr., Chair
Michael Zahner, Executive Director
E: Natural Resources Board 2007 Annual Report
The following has been prepared pursuant to 10 V.S.A. Section 6083(d), which requires that the Land Use Panel of the Natural Resources Board (NRB) submit a report annually to the House and Senate Committees on Natural Resources and Energy and Government Operations.
A. Act 115 Transition/Act 183 Growth Center Legislation
As a result of Act 115, the Environmental Board (E Board) and the Water Resources Board (WR Board) were eliminated effective January 31, 2005 although they continue to exist in order to complete their respective caseloads. There are two E Board cases still alive because of recent remands from the Vermont Supreme Court. It is our hope that these matters will be finally resolved this year, however it is possible that the decisions on remand to the E Board could once again be appealed to the Supreme Court. The one pending WR Board matter was argued before the Vermont Supreme Court on 10/25/07. That decision is pending.
Act 115 consolidated all existing environmental permitting appeal routes so that acts or decisions of the District Environmental Commissions and the Secretary of the Agency of Natural Resources (ANR) are appealed to Environmental Court (E Court), as are decisions by local development review entities and jurisdictional opinions issued by District Environmental Coordinators.
2) New and Existing Responsibilities
Act 115 replaced the E Board and the WR Board with the Natural Resources Board (NRB), consisting of a full-time Chair and two citizen panels: a Land Use Panel (LUP) and a Water Resources Panel (WRP). These Panels consist of four citizen volunteers each, with the full time NRB Chair serving as a member and Chair of each Panel.
The LUP has assumed procedural and substantive rulemaking functions previously exercised by the E Board and continues to manage the process by which Act 250 permits are issued. The LUP also initiates enforcement on related Act 250 matters, may participate as a statutory party in Act 250 appeals to the E Court, and may petition the E Court for permit revocation. The LUP is also authorized to hear District Commission fee issue appeals, and will also hear, at the discretion of a municipality, applications for Arequests for findings of facts and conclusions of law@ under specific Act 250 criteria for Designated Growth Centers.
The WRP has assumed the rulemaking functions previously exercised by the WR Board. It also may participate as a statutory party in certain water related permit appeals to the E Court.
3) Chair of the NRB
The full time Chair of the NRB, appointed by the Governor and confirmed by the Senate, serves as Chair of both Panels as well as the Board and focuses on: external relations, procedural and substantive rulemaking – thus participating in significant land use and water resource policy in Vermont, enforcement of Act 250 violations, general oversight of E Court appeals and general oversight of the offices and employees of the NRB and the District Commissions. The Chair is also a member of the Downtown Expanded Board and as such participates as a Board Member in Growth Center and Interim Benefits determinations.
4) Act 250: Vermont=s Land Use Control Law
The LUP has administrative oversight over nine District Environmental Commissions consisting of up to 63 volunteer District Environmental Commissioners (each District consists of three Members and up to four Alternates) appointed by the Governor. The Commissions are staffed by nine District Coordinators, 3 Assistant District Coordinators and 7 administrative assistants. In 2007, a Permit compliance Officer was added to monitor compliance issues as well as investigate permit violations.
This professional staff of twenty support the Nine District Environmental Commissions in five Regional Offices: Springfield, Rutland, Essex, St. Johnsbury and Barre. The Commissions process, upon average, of 500 Land Use Permit (Act 250) applications per year representing an average of $425,000,000 in annual development activity. There are approximately 100 people in the NRB organization as a whole
Including Coordinators, District Commissioners, NRB Members and Alternates, legal and administrative staff.
5) Combined NRB Legal Staff
The Board has four attorneys on staff. In addition, a legal intern from Vermont Law School assists during the fall, winter and summer semesters. A General Counsel exercises oversight over the legal staff and performs a wide array of legal services for the Board including compliance, enforcement, rule making, legal advice to Coordinators and Commissions and coordination with lawyers in other State departments.
One attorney position continues to work full time on Act 250 enforcement matters in all areas of the State. In addition, two other staff attorneys assist the Panels in the formulation of land use and water resource policy, goals, standards and the promulgation of administrative and substantive rules; one concentrating on the water side and the other on the land use side of the Board’s mission. All attorneys, however, participate in all aspects of the Board’s activities from time to time including prosecuting enforcement cases and participating in E Court appeals.
6) Administrative and Legal Support to the District Commissions
Since all appeals now go to E Court, there has been an increased emphasis on providing necessary legal and administrative support to the District Environmental Commissions and staff in the five Regional Offices. Previous to this change, it was difficult to have complete and open discussions with the District Commissions and staff because of the E Board’s role as adjudicator of District Commission decisions and the need to maintain so called “Chinese walls.”
These walls have come down and direct legal assistance is now provided to the District Commissions without the concern that conflicts might arise in an appeal of a Commission decision to the E Board. The legal staff has assumed a much greater role in providing legal assistance to the District Coordinators and District Environmental Commissions.
In FY 07 Board attorneys provided direct legal advice, assistance and written opinions to the District 5,6,7, and 9 Commissions. Occasionally this assistance included actual attendance at contested hearings advising the Chair on procedural and evidentiary matters. Assistance was also provided to the Coordinators in connection with their issuance of jurisdictional opinions.
B. Annual Report
This report is based upon a statistical analysis of NRB and District Environmental Commission activity during Calendar Year 2007 (CY 2007). Where appropriate, a historical perspective has been provided to complement the current information. Information for Fiscal Year 2007 (FY 2007) has been used for the fee revenue analysis.
1) Number of Act 250 Applications (CY 2007)
In CY 2007, 428 Act 250 permit applications were filed with the nine Commissions, compared to 490 the previous year,1 a decrease of 13%.
Four permit applications were denied in CY 2007, a rate of .9%. This compares to seven denials in CY 2006. (1.4%)
2) NRB Special Fund – Permit Application Fees
Generally, Act 250 permit application fees are based on the cost of construction for each development at $4.75 per thousand. State and municipal projects are fee exempt. 10 V.S.A. ‘ 6083a.
1These numbers do not include up to 180 administrative amendment requests submitted each year. Administrative amendments are issued Afor record keeping purposes or to provide authorization for minor revisions to permitted projects raising no likelihood of impacts under the criteria of the Act.@ Act 250 Rule 34(D)
Currently, the Board relies on its Special Fund (SF) to cover approximately 68% of its annual expenditures for personal service and operating costs, with the remaining 32% covered by General Funds (GF). In FY 2005, Act 250 fees were raised for the first time in 15 years. This fee increase and strong construction activity in the Chittenden County metropolitan area, Vermont’s ski areas, and in the Middlebury area increased the fees collected significantly in FY 2005 and to record levels in FY 2006 – $2,375,000. Fees collected in the last three years are as follows:
FY 2005 $ 1.773M
FY 2006 $ 2.375M (record)
FY 2007 $ 1.411M
There is currently an approximate 250K surplus in the SF due to less than expected receipts in FY 2007 shown above which required use of nearly half of the previous
500K surplus carried in the SF.
It was our goal to rely on these surplus funds as well as a GF carry forward of about 250K to assist in the completion of the Board’s Imaging and Database Project which is to place the vast majority of the Act 250 documents into an electronic format which can be easily accessed by the program and the general public through a searchable database and Geographic Information Technology. We had expected to see significant progress on this project in 2008 but because of the short fall in SF in FY 2007 and because fees collected in FY 2008 are below budget as well, we may have to significantly slow the pace of this endeavor.
We are operating in the current budget year (FY 08) with a level GF appropriation of 1.1M and an increase in SF (5%) to1.7M. This total amount of 2.8M is roughly equivalent to our FY 06 budget.
The NRB continues to be cautious with discretionary spending. Most of its budget involves non-discretionary items such as personal service and operating costs. As noted above, several positions have been eliminated during the past few years, and we are now leaving two Assistant Coordinator positions vacant, one in the Springfield Office and one in the Rutland Office.
3) Participation in E Court Appeals (CY 2007)
As indicated, the two Panels have statutory authority to participate in Act 250 and certain water related appeals to E Court. In CY 2007 the LUP reviewed 22 matters appealed to E Court. (Act 250 decisions and District Coordinator jurisdictional opinions.) The LUP voted to participate in 7 of these cases and voted not to participate in the remainder. A synopsis of the cases in which it participated are as follows:
Re: Black Dog Realty, LLC, Environmental Court Docket No.267-12-07 Vtec
A permit was issued by the District 2 Environmental Commission to Black Dog Realty a/k/a Morgan Meadows for the construction of a 41-lot subdivision with the potential for the construction of 90 housing units on 55.47 acres in Windsor. The main issue is whether the project complies with Criterion 9(B) (primary agricultural soils).
The Panel submitted memoranda on whether certain persons should have party status/intervention status as to Criterion 9(B). Environmental Court decision pending.
Re: Callery, Environmental Court Docket No. 29-2-07 Vtec
The District 5 Environmental Commission issued a permit for logging at elevations above 2,500 feet, with conditions applicable to land below 2,500 feet in elevation. ANR appealed and the Panel entered an appearance. ANR and the Panel agreed to continue the appeal until the Vermont Supreme Court decided the Green Crow appeal on the same issue. The Court ruled in Green Crow that conditions must be limited to lands above 2500’ in elevation. Pursuant to the agreement of the Panel and ANR, the Environmental Court remanded this appeal to the District Commission for further proceedings consistent with the Vermont Supreme Court’s decision.
Re: CVPS (Danville), Environmental Court Docket Nos. 18-1-07 and 19-1-07 Vtec; Vermont Supreme Court Docket No. 2007-441
This appeal concerns a proposal to construct an underground utility line in Danville that crosses land subject to an existing Act 250 permit. Because the line would impact deeryard, class 2 wetlands and primary agricultural soils, CVPS applied for an Act 250 permit. The District 7 Coordinator issued a jurisdictional opinion that the line would also require an amendment to the underlying land use permit and CVPS appealed. The District 7 Commission issued a permit and simultaneously amended the underlying landowners’ Act 250 permit, and CVPS appealed this as well.
The Panel filed for summary judgment on the amendment jurisdiction issue. The Environmental Court granted the Panel’s motion on the amendment jurisdiction issue. CVPS recently appealed the Environmental Court’s decision to the Vermont Supreme Court.
Re: CVPS, Environmental Court Docket No.281-12-07 Vtec
CVPS appeals from a decision of the District 7 Coordinator that CVPS’s application for an Act 250 permit for a distribution line is incomplete. Such “incompleteness” decisions are treated as jurisdictional opinions and may be appealed.
CVPS has applied for a permit to construct a distribution line to bring electricity to a private home. The line will cross several properties. The issue is whether CVPS must inform the Commission as to the Act 250 status of any of these lands. The Coordinator issued an “incompleteness” letter requesting, among other things, a listing of those affected properties which have Act 250 permits.
CVPS believes that its application should be treated as an original application under Act 250 Rule 70 and should not have to address questions regarding amendments to existing permits.
The Panel has filed a notice of appearance in this case in order to support the Coordinator’s decision. The case is in its early stages.
Re: Hamm Mine, Environmental Court Docket No. 271-11-06 Vtec
Luzenac America, Inc. and U.S. Talc Co., Inc. appealed the District 2 Environmental Coordinator’s jurisdictional opinion that Act 250 jurisdiction applies to a closed talc mine with an expired Act 250 permit where the permittee violated the permit prior to expiration, resulting in water overflowing a holding pond, washing out a town road and onto a neighbor’s property. The Land Use Panel appeared in this case to brief the legal issues presented, and filed a legal brief opposing appellants’ motion for summary judgment. The Court denied appellants’ motion and set the matter for hearing.
Hearings wrapped up in November with supplemental filings in late December. The matter is pending decision by the Court.
Re: John Lefgren and Times and Seasons, Inc. Environmental Court Docket No. 28-2-07 Vtec
John Lefgren and Times and Seasons, Inc. have appealed two jurisdictional opinions issued by the Coordinator for the District 3 Environmental Commission. In both JOs, the Coordinator concludes that jurisdiction is triggered because the activity that occurred or is proposed constitutes a material change to an existing permit.
The Panel has appeared in this case to support the Coordinator’s decisions. Lefgren’s attorney has decided to seek permit amendments, and if the amendments are obtained, the appeal will be withdrawn.
Re: DCF Development LLC (Killington Ave A250 Condo Community Permit),
Environmental Court Dkt. No. 30-2-07 Vtec
The Agency of Agriculture, Food and Markets appealed a permit issued by the District 1 Environmental Commission on January 11, 2007 to DCF Development LLC for a 24-unit housing project in Rutland. The focus of the appeal is the Commission’s analysis of Criterion 9(B) (primary agricultural soils). DCF filed a cross-appeal.
In its review of the appeal, the Panel determined that there were some errors to the Commission’s decision. Using Environmental Court Rule 5(i), the Panel requested that the matter be remanded to the Commission for reconsideration. DCF opposed the remand, and the Court denied the Panel’s motion.
DCF and the Agency ultimately settled the case, and the appeal was dismissed.
Water Resources Panel
The WRP reviewed 11 water related appeals in CY 2007 and voted to participate in 4 of them. A synopsis of those cases follows. Also included are a summary of a 2008 appeal and an appeal filed in 2006 that was resolved in 2007:
Re: CLF Stormwater Discharge Designation(Residual Designation Authority) Environmental Court Dkt. No. 14-1-07 Vtec.
This case was a remand to ANR on an appeal of a Water Resources Board (WRB) decision regarding a CLF petition requesting that ANR designate a category of stormwater discharges for NPDES permitting (In re NPDES , WRB Docket No. WQ-03-17 ). The WRB had ruled that ANR was required to designate all non-deminimis stormwater discharges in the subject waters, that ANR could not consider future remedial actions in deciding what discharges to designate, and that all non-deminimis stormwater discharges “cause or contribute” to water quality violations (and thus require NPDES permits). The Vermont Supreme Court affirmed the WRB’s decision, but disagreed with the WRB’s finding that all non-deminimis stormwater discharges needed a NDPES permit (In re NPDES, 910 A.2d 824, 2006 VT 91). Instead, the Court remanded the matter back to ANR to “conduct the requisite fact-specific analysis” to determine which discharges required NDPES permits.
On remand from the Vermont Supreme Court, however, ANR did not conduct a residual designation analysis pursuant to 40 CFR § 122.26[a][i][D ], as ordered by the Court. In a letter to CLF, ANR argued that the progress it had made in developing TMDLs for Potash Brook and other stormwater impaired waters in Chittenden County had rendered CLF’s petition for ANR to designate a category of stormwater discharges “irrelevant.” CLF appealed, asked the Environmental Court to designate all non-deminimis stormwater discharges as needing NPDES permits. CLF then moved for summary judgment based on a wealth of ANR data and testimony that (according to CLF) indicated that hundreds of stormwater discharges needed NPDES permits.
The Panel opposed CLF’s motion and cross-moved for mediation. The Panel and ANR disagreed as to whether ANR had conducted the analysis required by the Supreme Court. CLF opposed mediation, but ANR was willing to discuss settlement. With no hope for meaningful settlement discussions, the Panel (at oral argument) invited the Court to search the record and grant summary judgment against both ANR and CLF, since, in the Panel’s view, ANR and CLF were fighting over an analysis which had not been conducted. The Panel asked the Court to remand the matter back to ANR to conduct the requisite fact-specific analysis. The Panel also asked the Court to allow ANR to consider the status of ANR’s remedial efforts under the subject TMDLs when ANR conducted its analysis. This argument was a dramatic departure from the WRB’s NPDES decision, but the Panel felt that the progress ANR had made with its TMDLs warranted a flexible recognition of actual circumstances. The Court’s decision is pending.
Re: Britting Wastewater/Water Supply Permit, Environmental Court Dkt. No. 259-11-07 Vtec
This matter involves an appeal of an ANR on-site septic permit by a neighbor who is an attorney and appearing pro se. Appellant raises a number of claims, including allegations that ANR’s septic rules effect a taking of his land, since the isolation zone from the subject septic system extends onto his land. ANR’s septic rules provide that isolation zones apply regardless of property lines. The Panel agreed with ANR that pollution does not recognize property lines. The Panel did not wish to litigate the variety of property rights and takings claims raised by Appellant. The Panel moved for dismissal of all such claims, which are not properly cognizable before the Environmental Court. The Court’s decision is pending.
Re: South Burlington NPDES Permit Appeal, Environmental Court Dkt. No. 276-12-07Vtec
Re: City of Montpelier NDPES Permit Appeal, Environmental Court Dkt. No. 22-2-08 Vtec
These are two recent cases where CLF has appealed NPDES permits issued by ANR. The issues are not yet clearly defined, but CLF’s main argument seems to be that ANR must require phosphorus limits in the subject NPDES permits which are
stricter than what the Lake Champlain TMDL requires. The Court would need to overrule the WRB precedent of In re Village of Enosburgh Falls (No. WQ-03-03 ) in order to reach this conclusion.
Re: JLD Properties (Wal-Mart) Stormwater Permit Appeals, Environmental Court Dkt. Nos.129-5-06 and 221-10-07
This consolidated case remains stayed pending the issuance or denial of the Act 250 permit. Also on appeal are ANR’s NPDES Stormwater Construction Permit and State Operational Stormwater Permit. The Court has asked the Applicant’s attorney to report back once a decision from the District 6 Act 250 Commission is issued.
Re: Construction General Permit 3-9020, Docket No. 238-10-06 Vtec
The Conservation Law Foundation (CLF) appealed ANR’s issuance of a general permit for construction discharges in 2006. The permit relied in part upon a provision of the Vermont Water Quality Standards (VWQS) known as the Limited Duration Activities (LDA) provision, which allowed temporary exceedances of the water quality standards under certain circumstances. In this appeal, CLF argued that the LDA provision was unlawful. CLF also filed a notice of intent to sue the U.S. EPA in federal court, alleging that EPA had failed to disapprove the LDA provision.
The Water Resources Panel Chair and staff began meeting with parties to both matters, CLF, ANR and EPA, in sessions facilitated by an EPA mediator, to agree on an alternative to the LDA provision. As a result, the parties agreed that EPA would formally disapprove the LDA provision, the Panel would amend the VWQS to allow more flexibility in the turbidity standards, ANR would amend its Construction General Permit to require more monitoring. CLF did not pursue its federal lawsuit and withdrew this appeal in 2007.
Re: Entergy Nuclear Vermont Yankee, Environmental Court Docket No. 89-4-06 Vtec
A permit was issued by the Agency of Natural Resources to allow Entergy to increase the temperature of the Connecticut River by one degree Fahrenheit in connection with Entergy’s cooling operations. Several environmental groups appealed to the Environmental Court. Both Entergy and ANR have appeared to defend the permit.
The Water Resources Panel appeared in the Court solely to insure that any settlement negotiated by the parties did not stray too far from the Panel’s water quality standards. Negotiations began but did not continue. The case is now before the Court awaiting a decision on the merits.
4) District Commission Performance (CY 2007)
In CY 2007 83% of all Act 250 applications were processed as either “minor”
applications or administrative amendments, the same percentage as the previous year. For minors, no hearing is held unless a statutory or permitted party files a timely request for a hearing. Administrative amendments are processed without a hearing; the amendment is distributed to all statutory parties and adjoining property owners with opportunity for reconsideration within 15 days. The minor and administrative amendment rate for CY 2007 was consistent with the average of 81% for the past several years.
The median processing time at the District Commission level for all decisions in CY
2007 was 35 days from the date the application was deemed complete. In CY 2007, 65% of all permit decisions were issued within 60 days and 81% were issued within 120 days. These percentages are comparable to those from the previous year.
5) Enforcement Activity
The NRB has a successful enforcement program. In August of 2002, the former E Board reallocated its legal resources and dedicated one of its Associate General Counsel positions to full time Act 250 enforcement. The NRB has carried forward this practice. The result is a comprehensive, fair and evenhanded approach to Act 250 violations. This enhances the integrity of the Act 250 program and furthers the State’s interest in its public health and environment.
The LUP has certain administrative enforcement jurisdiction by virtue of 10 VSA Section 6027 (G); 10 VSA Section 8004; 10 VSA Section 8007; 10 VSA Section 8221 and Memorandum of Understanding and Delegation of Authority from ANR to LUP amended and renewed on 1/10/08 for two years.
Thirty-two (32) administrative enforcement files were opened in CY 2007. This was in addition to 15 enforcement files that were open and carried forward from prior years. Thirteen (13) of the cases opened in CY 2007 were resolved by the parties executing Assurances of Discontinuances (AODs). Furthermore, thirteen (13) of the cases carried forward from prior years were also resolved by the parties executing AODs meaning a total of twenty-six (26) enforcement cases were resolved in CY 2007. Of those twenty-six cases, four (4) began as Administrative Orders (AOs) issued by the Land Use Panel in CY 2007. A settlement agreement was reached in all four AOs issued by the Panel and all were resolved by AOD.
Eighteen (18) cases opened in CY 2007 remain open and are in varying stages of administrative activity. Two enforcement files were closed after investigation indicated a di minimis violation or no violation.
The total amount of penalties, fees and interest assessed through enforcement actions in CY 2007 was $339,375. Of this amount, $127,500 represented a ten year old unpaid Prime Ag mitigation fee that was collected with interest. Penalties assessed in CY 2007 total $208,375. Penalties actually collected in CY 2007 were $168,375. In addition to penalties, 10 V.S.A. Section 8007(b) allows the LUP to include in any AOD, money for supplemental environmental projects (SEPs). SEPs assessed in CY 2007 total $3,500.
In addition to monetary penalties collected in CY 2007, the Land Use Panel obtained two significant conservation easements for the State for the mitigation of damage done to critical winter habitat for deer (commonly known as deeryards). One easement, located in Highgate, contains 90 acres with an estimated conservation value of $80,000. The second easement of 83 acres located in Chester has an estimated value of $116,200. These values were based upon data supplied by VHCB for recent conservation easements obtained in the Highgate and Springfield areas.
The above numbers do not account for the large number of potential compliance/violation matters which see immediate correction due to the attention of our Coordinators and enforcement attorney. In addition, the Board hired a Permit Compliance Officer during CY 2007. Currently, if available, we use ANR environmental enforcement officers (EEOs) to help investigate many of our cases. With our own full time Compliance Officer we, for the first time, have a systematic process for checking the status of Act 250 permits while the projects are being built. This will allow the NRB to not only be more pro-active in the enforcement arena but also help prevent many violations before they become major problems.
6) Public Information and Education
We continue to improve our access to E Board decisions and other information for both staff and the general public, using our web site and legal research tools such as the Board=s E-Note Index. In CY 2007 NRB and Commission staff continued to educate the general public, the business community, and other interest groups about the role of Act 250 in Vermont=s regulatory system by giving presentations to numerous groups throughout the state. We have made extensive use of our 18-page color brochure about the Act 250 process as well as slide and PowerPoint presentations developed for specific audiences.
As noted above, In CY 2007 the NRB began working with a consultant on a project which will result in a searchable, on-line database of Act 250 District Commission decisions, including scanned images of permits and all other important associated file documents. This database will significantly improve access to Act 250 documents for the general public and Act 250 practitioners, facilitating real estate transactions and the resolution of title issues. The NRB had hoped to complete this project in CY 2008, however, because of the anticipated shortfall in SF revenues, we anticipate scaling back or delaying portions of this project.
7) Act 250 Fees
Over two thirds of our budget comes from Act 250 fees that are generally assessed at the rate of $4.75 per thousand of actual construction costs. FY 2007 saw a significant decline in those fees as shown in paragraph B (2) above. It appears that FY 08 will also show a shortfall. The Legislature last raised Act 250 fees in FY 05.
10 VSA Section 6084(g) authorizes the Land Use Panel to require all permittees to file a post construction certification of actual construction costs and pay any additional fees due. The Panel therefore in January 08 adopted a policy requiring all permittees to file such a certificate and pay any fees not previously paid. Our new Permit Compliance Officer will administer this requirement. He is familiar with commercial construction costs and cost estimating. Hopefully, this initiative will postpone or at least slow the need to ask for a fee increase and help lower the anticipated deficient expected this year from special funds. This is not a fee increase, but simply employment of a tool that has been part of the law for many years.
If we can provide any additional information, please don=t hesitate to contact our office.