ITEM 14: REQUEST FROM THE LAHONTAN REGIONAL WATER QUALITY CONTROL BOARD (LRWQCB) FOR ADDITIONAL FUNDING OF $115,000 (AND 1 POSITION) FROM THE STATE WATER POLLUTION CLEANUP AND ABATEMENT ACCOUNT (ACCOUNT) TO FUND NEW ACTIVITIES NOT PREVIOUSLY ANTICIPATED

DISCUSSION: Leviathan Mine (Mine) is an inactive sulfur mine located in Alpine County approximately five miles east of Markleeville and discharges significant quantities of acid mine drainage (AMD) to state and interstate waters. The LRWQCB is participating in an extensive effort to remediate AMD discharges from the Mine, in order to protect receiving waters. To assist in this effort, the LRWQCB submitted a Budget Change Proposal (BCP) and received an additional 2.6 PYs per year, $1,240,000 for contracts this year, and $820,000 per year in contracts for the subsequent four years for remediation activities.

The resources added this year will not cover all of the work required to address the Mine's problems. Since the date the BCP was submitted, two new issues have arisen. First, the U.S. Environmental Protection Agency (EPA) has issued an Administrative Order on Consent which mandates ARCO, the former operator of the Mine, to remove AMD held in ponds at the Mine. ARCO is now working at the site in response to the Order. LRWQCB staff time is needed to review and comment on specific tasks proposed by ARCO, and to coordinate with ARCO staff at the mine site to ensure that ARCO's cleanup activities do not conflict with LRWQCB remediation efforts.

Second, a federally mandated Natural Resources Damage Assessment (NRDA) by an interagency trustee group is under way in order to assess environmental damages caused by the Mine. The time spent on the assessment may be extensive and subject to reimbursement from the State. The State may also be required to pay damages as a result of the NRDA. To minimize potential costs to the State Water Resources Control Board and LRWQCB, staff must monitor the NRDA's scope-of-work on an ongoing basis to ensure that the assessment accurately reflects the facts, and that the trustees' review does not duplicate work already completed by the LRWQCB itself. Staff time is necessary for meetings with trustees both off and on the mine site, for assembling and organizing the extensive file record, and for oversight of record reviews. The NRDA is also being monitored by the Office of the Chief Counsel and the California Attorney General's office. Legal staff review is being required for most LRWQCB reports and correspondence related to the Mine. Additional LRWQCB staff time is needed for ongoing coordination with attorneys, including but not limited to researching and providing needed information from the extensive file record.

POLICY ISSUE: Should the State Water Resources Control Board approve a $115,000 request for funding on this project from the Cleanup and Abatement Account?

RWQCB IMPACT: LRWQCB. Approval of this request will increase the LRWQCB budget and position authority.

FISCAL IMPACT: As of August 31, 1998, the CAA has an estimated cash balance of $11.2 million. There is $9.3 million committed to cleanup and abatement activities. About $2.6 million will be deposited in the Account during this fiscal year.

The staff time needs above were not anticipated in the BCP and the five-year work plan on which the BCP was based. The LRWQCB has identified a need for one staff position, beginning January 1, 1999, at a cost of $105,000 per PY, to address these tasks. The LRWQCB is also requesting an additional $10,000 from the Account to cover its share of the cost of rebuilding a culvert which crosses the access road to the Mine.

STAFF RECOMMENDATION: That the SWRCB adopt a resolution approving $115,000 from the Cleanup and Abatement Account.

DRAFT: 9 November 1998

WHEREAS:

1. The Leviathan Mine (Mine) is an inactive sulfur mine on property presently owned by the State of California under the jurisdiction of the State Water Resources Control Board (SWRCB). The mine is located in Alpine County, approximately five miles east of Markleeville, California;

2. Degradation of water quality in Leviathan, Aspen, and Bryant Creeks occurs as a result of the discharge of acid mine drainage (AMD) from the Mine. The AMD from the Mine can be characterized as a dilute sulfuric solution (pH 2-3) containing dissolved heavy metals including arsenic, copper, nickel, aluminum, and iron;

3. Anaconda Minerals Company, a wholly owned subsidiary of Atlantic Richfield Company (ARCO), conducted open pit mining at the Mine from 1954 until 1962. Anaconda's mining activities contributed to the discharge of AMD from the Mine;

4. ARCO, through its ownership of Anaconda Minerals Company, is a previous mine owner/operator;

5. In 1984, the SWRCB acquired ownership of the mine. The Lahontan Regional Water Quality Control Board (LRWQCB) completed the Leviathan Mine Pollution Abatement Project in 1985. The completed project included several remediation measures, including channelization of Leviathan Creek to prevent its contact with mine tailings, regrading and compacting the mine pit to reduce AMD production, and construction of five lined ponds to capture and partially evaporate AMD from underground mine workings;

6. The LRWQCB is participating in an extensive effort to remediate AMD discharges from the mine and received an additional 2.6 PYs per year for five years and $4,520,000 in contracts for five years through a Budget Change Proposal (BCP) to assist in this effort;

7. The BCP resources added this year will not cover all of the work required to address the Mine's problems because two significant new issues have arisen;

First the U.S. Environmental Protection Agency (EPA) has issued an Administrative Order on Consent (AOC) to ARCO mandating AMD removal from the ponds at the mine. Significant additional LRWQCB staff time is needed to coordinate EPA's mandate with ongoing LRWQCB remediation efforts;

Second, a federally mandated Natural Resources Damage Assessment (NRDA) by a trustee group is underway to assess environmental damages caused by the mine. Significant additional LRWQCB staff time is needed to monitor the NRDA's scope of work to ensure its accuracy and to ensure its relevance to the overall remediation efforts;

8. To complete the additional LRWQCB tasks resulting from both the EPA's AOC and the federally mandated NRDA, an additional staff position is needed for 12 months at a cost of $105,000; and

9. AMD has damaged a culvert under the main access road to the mine, an additional $10,000 is needed to contribute towards replacing the culvert, thus ensuring continued remediation at the mine.

THEREFORE, BE IT RESOLVED THAT:

The State Water Resources Control Board authorizes its Executive Director or his designee to allocate funds from the Cleanup and Abatement Account, in the amount of $105,000 to fund 1 PY for 12 months for LRWQCB staff to complete additional tasks relative to the pollution abatement activities at Leviathan Mine and $10,000 to contribute towards replacing the culvert.

The undersigned, Administrative Assistant to the Board, does hereby certify that the foregoing is a full, true, and correct copy of a resolution duly and regularly adopted at a meeting of the State Water Resources Control Board held on November 19, 1998.

Maureen Marché

Administrative Assistant to the Board