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Home My WebLink AboutLUBA Remand DocumentsBRUCE W. WHITE, ATTORNEY, LLC June 10, 2011 Hand Delivered Board of County Commissioners 1300 NW Wall St., Suite 200 Bend, Oregon 97701 Subject: SP -07-462 and CU -07-102 for Surface Mining and Crushing Operations on Surface Mining Site #303 Please find enclosed Applicant's written materials in advance of Monday's hearing on the remand of the above -referenced land use permits. These materials consist of the following: • Memorandum of Bruce W. White and attached exhibits • Testimony of Pat McClain with attached exhibits 1-5 • Letter from Andrew Siemens of Siemens & Associate • Letter from Jerry Powell The Memorandum of Bruce White is arranged in order of the issues that were remanded back to the County and addresses legal issues associated with the remand. Similarly, the letter of Pat McClain is organized generally by topics that are implicated by the remand. The letter from Jerry Powell addresses his work in the field in defining the boundaries of the mining site and locating the processing spots on the property in the event the Board wishes to make a site visit. The letter of Andrew Siemens addresses issues related to fugitive dust emissions from the headwall. Following up on Commissioner Unger's inquiry about making a site visit, the applicant is willing to allow for site visits by individual Board members, but does not wish such a site visit to constitute a public meeting. Pursuant to MSHA mining regulations, a representative of Latham Excavation would need to be present for safety reasons, but would not otherwise communicate with the Board or explain the site. Sincerely, Bruce W. White c. Latham Excavation Paul Dewey Dave Kanner Laurie Craghead Paul Blikstad P.O. BOX 1298 • BEND, OR • 97709 PHONE: (541) 382-2085 Analysis of Issues on Remand Mark Latham Excavation, Inc. SP -07-46/ CU -07-102 (Johnson Road Pit — Surface Mining Site 303) This memo analyzes the issues that were remanded by LUBA to the County. These are the issues that the County must address on remand. All other issues that were appealed and affirmed by LUBA or that could have been appealed and were not and that are not implicated by the remanded issues are not in play in the Board's consideration of the site plan and conditional use on remand. Those issued are as follows: (1) Whether Tumalo Tuff which overlies the Bend Pumice can be mined for sale under the 1990 ESEE; (2) Whether supplied screening is required to screen the Hoffman #1 residence from views of the mining site; (3) Whether supplied screening is required to screen Tumalo State Park and the pre -1990 residences across the Deschutes River from views of the mining site; (4) Compliance of the piles of top soil with the '/4 -mile setback; (5) Compliance with the incremental reclamation "requirement" in the ESEE's Program to Meet the Goal; (6) Compliance with air quality standards regarding the headwall; (7) Compliance with setbacks for the proposed northeast and southeast crushing sites; and (8) Compliance with screening requirements for the northeast and southeast crushing sites. These issues are taken up below in the order in which they appear above. I expect to supply a more bulleted version with references to helpful portions of the record at the hearing. Mining of Tumalo Tuff This issue involves whether the ESEE adopted by the Board in 1990 covers removal and sale of the Tumalo Tuff resource that overlies the Bend Pumice resource, which is the only resource specifically inventoried for the site. LUBA determined that the County's findings were inadequate to support the County's April 2009 decision to allow mining of the Tuff for sale. While LUBA indicated this issue could be resolved by conducting a new inventory and ESEE process specifically addressing the Tuff, it also left the door open for "a better explanation" for 1 its determination that the Tuff, as well as the Pumice, could be mined under the existing inventory and ESEE determination for the site: "We do not mean to suggest that in all cases where a different; non -inventoried mineral is found at an inventoried mineral resource site that a proposal to mine that non -inventoried mineral will require an amended ESEE analysis. Mineral deposits are rarely uniform, and where incidental mining of a non -inventoried mineral resource is proposed, we see no impediment in Goal 5, OAR chapter 660, division 016 or elsewhere to a local government issuing a mining permit pursuant to its program to achieve the goal for that site that includes incidental mining of a non -inventoried resource that would otherwise not be entitled to Goal 5 protection. But the scope of protection for incidental reining of a non -inventoried mineral resource in the absence of a Goal 5 analysis of that resource must be sufficiently narrow, or the Goal 5 planning process loses all integrity. In our view, if mining of the inventoried resource requires removal of the non -inventoried resource, and the non -inventoried resource resembles the inventoried resource in economic use and value, the means of extraction and processing, and the type and intensity of impacts on pre-existing conflicting uses, then it is more likely that a local government can adopt a sustainable conclusion that the mining of that non - inventoried resource is incidental to mining of the inventoried resource, and therefore issue a permit for such mining in the absence of a new or amended Goal 5 analysis evaluating the non -inventoried resource, Stated in different terms, mining of an uninvenloried resource can be accurately, viewed as incidental to mining of an inventoried resource if the local government adopts a conclusion supported by the record that, had it known of the quality and quantity of the non - inventoried resource when it adopted the original ESEE analysis and program to meet the goal, the differences between inventoried and non -inventoried resources are sufficiently minimal in terms of extraction methods, conflicts, etc., that the local government would have chosen to balance the conflicts in the same way, and would have adopted the same program to achieve the goal.'' (LUBA, p. 16.) LUBA also found that the quantity of an inventoried material set forth on the inventory did not preclude a mining operator from mining the full amount of the resource, even if, for example the real amount in the ground turned out to be two million cubic yards of material compared to an inventoried amount of 750,000 cubic years. (LUBA, p. 14.) Thus, in the absence of a time limitation, the impacts associated with duration of mining is not a factor to be considered. LUBA's primary concern was that in the absence of information about the extraction of the Tuff, the County's findings did not adequately address concerns that the ESEE may not have adequately accounted for issues related to the potential size of the headwall when viewed from Tumalo State Park and the amount of dust that might emanate from the headwall. (LUBA Decision, p. 20.) LUBA found unpersuasive the Board's comparison to the Program to Meet the 2 Goal for nearby sites 304 and 305/306, in particular because the Board had imposed specific. additional site-specific ESEE conditions for those sites where none been specified for the subject site (Site 303). Latham Response on Remand: Latham believes that consistent with LUBA's decision, the County can make findings that the ESEE is consistent with incidental mining of the Tumalo Tuff. LUBA correctly noted that the Tuff must necessarily be excavated and removed in order to expose and excavate the Bend Pumice and that the general nature of the excavation activities and their impacts was the same or similar to the impacts of mining the Bend Pumice. The issue for LUBA was the headwall — both visually, particularly as it related to the Park and as a source of dust. However, the generic nature of the ESEE gives no basis for the Board to have made a different decision than if the Tuff had been explicitly considered for mining. The Board's deliberations and findings in this and the ESEEs for the other nearby mining sites did not give any consideration as to what form the excavation might take nor how much material the cut might expose. (See ESEES for Site 303. LUBA Record, p. 1368; Site 304. 1556; Site 305/306, 1570.) If the Board had been particularly concerned about the landform that might be left by mining at Site 303, and its impact on the view, it would have been expected to have done something more than parrot the same generic, non -prescriptive langua ge of concern about visual impacts it expressed in Condition No. 23(b) to pay "particular attention ... to screening from Tumalo State Park or the eastern, northeastern and southeastern boundaries." That exact same language is found in the visual impacts finding for Site 304 (Condition 23(b) and for Site 305/306 (Condition 23(b)). Sites 304 and 305/306 were inventoried with considerably less resource than was Site 303 (225,000 cubic yards for Site 304 and 125,000 cubic yards for Site 305/306). Site 303 had 3 times as much resource as Site 304 and 5 times as much resource as Site 305/306 and yet the Board applied the same general ESEE condition language with regard to visual impacts for each of these sites. Furthermore, the Board's decision resulted in applying the same basic level of scenic protection found in the ESEE's for virtually all the various ESEEs — the generic standards of the visual screening criteria of DCC 18.52.110(B). In the absence of specific information about how the resource might be excavated — because there was none of the information that we now know about the stratigraphy of the site. the Board had absolutely no basis for making any judgments whatsoever about the nature of the headwall or landform that might result if more material than just that assumed to be encompassed by the pumice resource were to be excavated. For all the Board knew, the resource might have been located primarily away from the ridge area to the south, which might have resulted in more of a hole in the ground than a side -cut excavation that had potential implications for views from the park and river. Contrast this with the very specific additional conditions that were attached to Sites 304 and 305/306. Site 304 had two specific conditions that went beyond the generic ESEE conditions of approval: a prohibition on crushing and a prohibition on accessing the site at any point other than the northern boundary of the property. The prohibition on crushing was based upon the site being in close proximity to Tumalo State Park. This was a relationship that the Board could clearly see from the facts: how far away the site was from the park and the river. Similarly, the site specific condition relating to where access could be taken at the property responded to a 3 physical relationship that was evident to the Board: where the property was in relationship to surrounding streets. Again, with regard to Site 303/306, the site-specific conditions directly related to observable physical relationships. In its condition 23 (d), the Board placed a limit on blasting, realizing that the mine butted directly up against a residential subdivision with smaller lots (as opposed to the larger EFU-zoned lots that abutted Site 303). In addition, again in responding to the observably close proximity of mining to the Tumalo Rim subdivision the Board placed a specific time limit for excavation of one year. The facts are much more developed today than they were in 1990 a nd therefore i t is not appropriate to import the specifics of the impact arguments made by opponents today regarding mining of the Tuff as a measure of what the Board would have decided back in 1990. Otherwise, it would be appropriate for the Board to make findings related to whether the Tuff would necessarily be restored to the hillside or to what degree the site can actually be seen from the Park. It certainly cannot be concluded from this record that allowing the Tuff to be mined will necessarily result in an increased headwall. Depending upon what reclamation plan for the site is approved, the same disturbance of the land could easily result from a decision to allow only mining of the pumice, than if the Tuff is also allowed to be mined. The same kinds of considerations apply to issues related to dust from the headwall. The Board adopted the same generic findings related to dust for the subject site as it did for Sites 304 and 305/306, despite the much larger amount of material inventoried for Site 303. The Board had no basis to assess how much of a headwall might be left and therefore there is no basis to say that this kind of impact would even been contemplated by the Board in 1990. LUBA's determination that the site is not restricted to excavation of the amount of material also favors the applicant's position. LUBA would have had no problem if the site turned out to have 2 million cubic yards of pumice. What is the difference between that and an extra amount of material that includes much of the same kind of material as that that was inventoried? The Tuff was produced from the same volcanic eruption as the Pumice and has inclusions of the Pumice in it that can be used and marketed for the same purposes as the Pumice, at it relates to horticultural uses. In the alternative or as an additional basis for allowing the Tuff to be mined, the Board might find that the resource really isn't a different resource at all. but that the Tuff is simply an extension of the Pumice and should be treated the same as the pumice (in the nature of sand and gravel in a river -rock site), Given the foregoing. the Board certainly has a basis for making findings that will address LUBA's concerns. Finally, as Pat McClain mentions in his testimony, the Board should be concerned about the precedent a decision to not allow mining the Tuff could set and the potential economic consequences for such a decision. The Tumalo Tuff is widely used as construction fill in public. commercial and residential construction. None of the sites from which that material is currently, extracted in the Bend area have that material inventoried. (See Ordinance 90-025 (Inventory Ordinance), Exhibit G. Sites 282/283 (then Crown Pacific, now Taylor Northwest), LURA Record, p. 1473; Site 381 (then Pieratt Brothers, now Able), 1474, See also Site 283 ESEE. LUBA Record, p. 1543: and Site 381 ESEE, LUBA Record, p. .) The impacts on potentially 4 shutting that material out of the construction market could potentially have drastic consequences on the cost of public, commercial and residential construction, particularly if fill material must be trucked in from remote areas. County staff's issues matrix seems to indicate that the Board previously decided that the headwall was not covered by the ESEE. This conclusion is not supported by the terms of the County's prior decision. Nothing in the discussion and findings by the Board regarding the scope of the ESEE (on pages 14-15 of its 2009 decision) addresses the headwall separately from the site itself. To the contrary, the Board's discussion in the body of its 2009 decision noted the lack of anything in the 1990 ESEE findings addressing the nature of the actual excavation that would be necessary to mine the and the lack of any information regarding the nature of the reclamation that would be required. In addition, in Condition 23, the Board's decision expressly allowed the headwall to be mined in the event that the applicant were able to demonstrate that dust from the headwall could be controlled on-site. The Board could not have allowed for the possibility of mining the headwall if it had already decided that mining the headwall was contrary to the ESEE. Staff may have picked up a statement by the Board on Page 2 of its decision that indicates that mining the headwall was not within the scope of the ESEE, but that language appears to be an inadvertent mistake, given the way the balance of the decision addresses this issue, and it should be treated as such. Visual Protection of Hoffman #1 Residence (Site Plan Issue) This issue involves whether the applicant must be required to screen the Hoffman #1 residence from views of the mining site. The Hoffman #1 residence (a pre -1990 residence) is located in a depression next to the Deschutes River. Views of the mining site are obscured by an intervening ridge between the Hoffman residence and the mining site on the south end of the Hoffman property. In its 2009 decision, the Board determined that supplied screening to protect the Hoffman residence was not required. LUBA determined that the scope of noise and dust - sensitive uses was the area of the home site and not the entire property. However, LUBA determined that the County's findings/ interpretation of the screening requirements were inadequate to support a finding that screening should not be required. Latham Response on Remand: Latham believes that given LUBA's pointed analysis of the language of the topographical exception to supplied screening and the actual language of that exception ("topography," without reference to whether the topographical feature was manmade or not), no screening can be required to protect the Hoffman #1 house, because the topography is such that supplied screening on the applicant's property would be obscured and made ineffectual by the intervening ridge and by the fact that the only portion of the site that could possibly be seen from the Hoffman #1 residence (the top of the headwall) is located at such a great distance from ground level that no screening could ever practically obscure that aspect of the excavation. The Hoffmans had argued in 2009 and before that the vantage point was the property line, not the area of the house and therefore they did not provide information on what the views of the site from their house were. Therefore, there is little in the record as to what the Hoffmans can 5 actually see from the house, and without access to the property, applicant's information on actual views, if any, from the Hoffman #1 dwelling is limited. As Pat McClain's testimony indicates, it appears that any view of the headwall from inside the Hoffman #1 dwelling would be oblique at best. Pictures of the Hoffman #1 house indicate that it is surrounded by vegetation, so it would not appear that there would be views of the headwall from the area immediately surrounding the house and the presence of the horse barn between the house and the site would also screen any of the headwall lying below about 3380 feet. In the final analysis, the actual views that the Hoffmans may have from their main house would not be relevant because due to topography, those portions of the site that are potentially visible from the house cannot effectively be screened. The staff matrix states that either or both DCC 18.52.110(B)(6)(b) or (c) would apply. Latham concurs, provided staff is referring to conditions related to the headwall itself or some physical condition on the applicant's property (and not the ridge on the Hoffman property). Following from LUBA's discussion of this issue, Latham believes the better exception to ground the Board's findings on would be the one found at 18.52.110(B)(6)(b), because as LUBA noted, screening planted at ground level would be obscured by the intervening ridge on the Hoffman property and in any event couldn't reach a height to obscured the highest reaches of the headwall.' Given the topography there clearly is no degree to which any screening would be in any way effective to screen the upper reaches of the headwall from the Hoffman #1 house (if in fact the house has views of the headwall). Visual Protection of Upper Elevation of Tumalo State Park and Pre -1990 Residences Across River This issue involves whether the applicant must be required to screen the mine from view from Tumalo State Park and from pre -1990 houses located near Tumalo State Park across the river. The County did not require that screening be supplied. LUBA found the County's reasoning and findings in interpreting the screening requirements to be confusing and illogical and remanded. The mining site is screened from most of the park and the areas most heavily used along the river and in the campgrounds by the ridge that runs along the river (the river flows in a canyon of sorts) and by a ridge extending along the south end of the Hoffman property and the extensive intervening vegetation, most of which lies on Tumalo State Park property. It is only at the higher elevations on the small nob- above the campground that the mining site becomes plainly visible to park users (and presumably to any nearby pre -1990 houses that adjoin the upper levels of the park): This same rationale would apply to the homes on Ridgewood Drive, to the extent they are in the impact area. From topo maps, the elevation of the top of the nob appears to be 3.320'. (See Exhibit 1, Map 1. A topo map covering the pit site is included as Exhibit I, Map 2.) There arc four houses across the river north of O.B. Riley Road that have elevated views of the site. Those houses are listed in Table 1, attached hereto and shown on the attached exhibits. From a topo map of the area, those houses appear to be at an elevation of 3,340 feet or about 20-35 feet above the existing pit floor in elevation. Two of those houses clearly do not qualify for protection. "Phe Massey house falls outside the 1/2 -mile impact area that surrounds the site (corresponds with the SMIA zone) and therefore lies outside the zone of protection afforded by the SM 6 Latham Response on Remand: Latham believes that the preferable approach is to pick up on LUBA's cue from statements analyzing the visual protection for the Hoffman #1 residence and the applicability/ interpretation of topographical exception to screening to find that the topographical exception is applicable in situations such as this even though the disturbance to the landscape is manmade. (LUBA, p. 35. n. 21.) In this case, it is clear that the relative height of the Park nob and the two adjacent pre - 1990 residences versus the mining site and the topography of the mining site itself — the heights of the excavation, gives rise to topographical constraints in providing effective screening of the mining site. The language of the screening performance standard and the exceptions to that standard is convoluted and encourages circular reasoning that could make the exceptions almost never applicable. For example, the qualifier "to the extent" in the screening performance standard can be read to indicate that so long as supplied screening is effective to some extent, it must be supplied, even when it would largely be ineffective. However, in the case of supplied screening by berms, there is no performance standard to measure to what degree supplied screening must obscure the mining site; the performance standard at DCC 18.52.110(B)(5)(b) states no height for discharging the screening responsibility. In light of this. the Board should adopt a common sense reading of the screening standard: If supplied screening cannot totally obscure the offensive view and an exception is applicable, then no screening should be required. This would be consistent with Goal 5's requirement that performance standards must be clear and objective. Applying the maxim of statutory construction that words should not be interpreted to make any portion of a law irrelevant, Latham's position is that once an exception applies, no screening should be required because the language of DCC 18.52.110(B)(6) states that the site must be screened to meet the standards of DCC 18.52.110(B)(2) "unless one of the exceptions of DCC 18.52.110(B)(6) applies". Because one of the exceptions applies, in accordance with the language of DCC 18.52.110(B)(1) the screening standard of DCC 18.52.110(B)(2) cannot apply. This interpretation would avoid the meaningless exercise of supplying screening that in reality has little effect in attempting to screen a site such as the Latham site. If the Board believes the standard should be interpreted to require screening to some extent, even though it would not be totally effective, then the applicant proposes to discharge that responsibility by constructing a 12 -foot high berm along the eastern edge of the mining area. starting at the northeast corner of the mining area and extending across the flat area, with retained vegetative screening within 50 feet of the mining boundary going up the hill from there visual protection zoning regulations. See Ordinance 90-025, Finding 31, Page 10. The pre -1990 house on the Aller property falls outside of the '/2 mile impact area; that house is being replaced by a post -1990 house that would not be entitled to protection. Whether the Klein house (the red house in pictures of houses overlooking the site) qualify is debatable, because the house appears to just touch the SMIA zone (see Table 1, Exhibit 3). The Scolman house predates 1990 and clearly falls within the impact area delineated by the SMIA zone. Although the Scolman house has a 2002 addition and a SMIA approval for that addition, that doesn't appear to convert the dwelling to a post - 1990 house. For the purposes of this analysis we will treat both the Scolman and Kliene houses as pre -1990 houses that require protection. in accordance with retained screening requirements.4 The berm would be hydro -seeded with a mixture of mulch and native grass seed, such as rye grass, in accordance with DOGAMI best management practices. An offset opening would allow the passage of vehicular traffic across the berm. Per OAR 340-035-035(5)(g) or (h), any noise regulation attendant to operating equipment necessary to build that berm (involving an excavator and a dump truck) would be exempt from noise regulations. Top soil Piles within 1/4 -Mile Setbacks (Site Plan Issue) This issue involves whether the piles of topsoil on the property. most of which pre -date the applicant's ownership of the site and are now vegetated, must meet the 1/4 -mile setbacks for "storage of mineral and aggregate" (shown on the site plan by radiused arcs centered on the nearby pre -1990 dwellings). As noted in Pat McClain's testimony, some of those piles are within the 1/4 -mile setback from nearby pre -1990 houses. The County found in its 2009 decision that the setbacks did not apply to such top soil piles and accordingly did not require that they be moved or make findings for an exception to the setback. LUBA found that the setback did apply to these piles and required the piles to comply with setbacks. Latham Response on Remand: Latham proposes to move the topsoil pile that it brought into the site that is closest to the Hoffman property in order to come into compliance. (See Exhibit 4 to Pat McClain's testimony.) With regard to the piles of topsoil that were placed on site by Caseade Pumice (see Exhibit 4 to Pat McClain's testimony) upon Cascade Pumice's initial excavation of the site. Latham proposes to leave such piles stored where they are under the exception criteria of DCC 1 8.52.090(B)(1 ) and (2). The small size of the parcel and the proximity of conflicting protected residential uses allows limited space outside the '/4 -mile setbacks for placing such top soil piles in a manner that would not interfere with mining operations elsewhere on the site or that would not conflict with mandates to retain existing screening vegetation (to the west of the mining area). We believe that the reference to parcel size as a listed factor in DCC 18.52.090(B)(1) makes it a legitimate consideration to consider the physical constraints of the site in being able to meet the setback criteria. With respect to "existing vegetation," the need to maintain the existing vegetation to the west of the pit puts that area off-limits. The existing vegetation on the piles themselves, as shown in Exhibit 1V to Pat McClain's testimony. is another justification for leaving the piles where they lie. Leaving the piles where they are will have the least impact in terms of noise and dust for the simple reason that moving them to a location. possible, outside the 1/4 -mile setbacks It should be understood that retention of existing natural screening would apply only to the perimeter of the mining footprint that is the subject of this application. Should the applicant or a subsequent property owner seek to expand the mining footprint on the property to a point beyond the retained vegetative screening, the screening issue would be addressed without regard to the screening required on the more limited footprint. 8 would involve the noise and dust associated with scooping up the piles and transporting them to a different location. For new piles, applicant would either locate them outside the 1/4 -mile setbacks in the center area of the pit or would propose to locate them within the 1/4 mile setback of the houses to the south, pursuant to the reasoning adopted by the Board in its 2009 decision in this case (unchallenged by the Hoffmans at LUBA) to authorize stockpiles within that setback. Incremental Reclamation (Site Plan Issue) This issue relates to whether the County must address the incremental reclamation `'requirement" of the Site 303 ESEE's Program to Meet the Goal found at Finding 23(e). The Board found that reclamation was within DOGMAI's purview and found the provision couldn't be applied by the County, given the explicit reference in Condition/ Finding 23(e) to DOGAMI approval of such a plan. LUBA found that the County could not completely ignore this provision and could address this issue by a condition of approval that explicitly delegate consideration of incremental reclamation to DOGAMI. Lathan Response on Remand: ESEE Condition 23(e) reads as follows: "Excavation shall be limited to five acres with ongoing incremental reclamation (subject to DOGAMI review and approval)." That condition is partially implemented through DCC 18.52.110(K), which addresses the 5 -acre extraction size limitation. The section specifies that the 5 -acre limitation does not apply to roads. equipment storage areas, processing sites, etc. Basically, the only areas that are subject to the 5 - acre limitation are the mineral extraction areas. The Hoffmans argued to LUBA that the County's decision failed to ensure that the 5 -acre limitation would be adhered to. However, in light of the fact that Condition of Approval 8 of the County's approval specifically limited the applicant's extraction area to 5 acres, LUBA found this aspect of the Hoffman's appeal had no merit. Accordingly, the issue of the applicant's compliance with the 5 -acre limitation is not an issue on remand. The only issue is the "ongoing incremental reclamation" requirement of ESEE Condition 23(e). It appears that this requirement has not been interpreted by the County prior to this case. Except for the ultimate conclusion the Board drew on this issue in its 2009 decision. Latham believes the Board's findings are as apt today as they were then in expressing the uncertainties and the lack of authority and technical competence the County has in areas involving reclamation. The phrase is no less vague and uninformative today than it was in 2009. In addition, there are the practical realities in a regulatory arena where DOGAMI holds the only regulatory authority in an approval process that involves only the applicant and DOGAMI. See, e.g., ORS 517.780. The County can provide comments during the reclamation process (see OAR 9 632-030-0030(1)(d)(B)). but it has no ability to dictate what reclamation activities or techniques can be required or when. Those decisions are exclusively within the purview of DOGAMI. The applicant has the right to change its reclamation plan during the life of the mining operation as part of a plan amendment. See, e.g., OAR 632-030-0035. In this case, DOGAMI has specifically stated that a proposal to change from the plan's current final slope of 1 '/2 to 1 to a steeper slope could be changed and wouldn't necessarily require even a formal reclamation plan amendment. LUBA Record, p. 723. Nothing in the County's ordinance would preclude or override an applicant's ability to seek such a reclamation plan amendment. (From reviewing the reclamation standard relating the vertical walls, it appears that if the slope is determined to be stable by a licensed geo-tech, the option of going to a vertical headwall is all but allowed. OAR 632-030-0027(1)(c).'.) In light of this regulatory context, any response by the County other than to write a condition defer this issue of incremental reclamation to DOGAMI would be entirely inappropriate. Latham believes that consistent with LUBA's conclusion. an appropriate condition of approval would read as follows: "Applicant shall be required to engage in incremental reclamation if deemed practical by DOGAMI and subject to DOGAMI's exclusive review and approval." Air Quality (Site Plan Issue) Latham appealed the County's application of the DEQ fugitive dust emission standards found at OAR 340-208-0210(2), arguing that the County's conclusion that the applicant had not demonstrated that the headwall could not be mined further without violating the fugitive dust emission standard went beyond the requirement that the applicant take "reasonable precaution" to avoid particulate matter from becoming airborne. Specifically, Latham argued that the standard was not one that required a demonstration of success, but only that `'reasonable precautions" were being employed. LUBA agreed and remanded the County's decision to review this issue under the proper interpretation of the fugitive dust standard. Latham Response: Latham believes that the scope of the remand on this air quality issue is limited to addressing the air quality issues as they relate to the headwall. The other aspects of applicant's compliance with air quality regulations were resolved in the LUBA appeal. From the matrix prepared by staff, this appears to be staff's position as well. When the case was before the Board in 2009, the applicant did not have a complete opportunity to address claims by the opponents that the headwall produced dust. Due to the lateness of the hour and a somewhat confusing discussion of the hearing schedule, Applicant's counsel OAR 632-030-0027(1)(c) allows a slope steeper than 1 '/2 to 1 provided such steeper slopes are consistent with the approved subsequent beneficial use. It is hard to imagine that a vertical wall that was certified as being stable would not be consistent with most any use, provided that there were adequate setbacks from the vertical face. The size of the property would provide ample opportunity for setbacks. 10 misunderstood what its rebuttal rights were. Given that this is a de novo hearing, applicant can introduce such information now to give a complete view of issues related to dust emissions and the headwall area. As stated in Pat McClain's testimony, the issue of dust from the headwall has been overblown. Clearly, there were areas associated with the headwall that produced dust, principally the sloped area at the southwest corner of the headwall (shown on May 20, 2008 Exhibit Map as being mulched) and the bermed area atop the headwall. However, as stated in Mr. McClain's June 10, 2011 testimony and in the June 9, 2011 letter from applicant's geotechnical expert Andrew Siemens, the if certain precautions are taken, the headwall itself is not susceptible to producing dust because of the nature of the material when it is intact (as opposed to being excavated and then stored in piles) and the fact that it readily forms a crust from exposure to wind and water. In his testimony, Mr. Siemens suggests that the crust can be induced to form immediately by wetting down the newly exposed material. This measure retains its effectiveness because the vertical surfaces are not subject to mechanical or other disturbance that would break the crust down. The efficacy of the crust as a dust control measure is evidenced by the fact that excavation marks in the headwall have retained their shape for years, and in the case of some headwalls in the area, decades. Use of water to control dust emissions is clearly viewed by the DEQ fugitive dust standard as a "reasonable precaution," and therefore it is clear that this method satisfies the approval standard. With regard to control of dust emitting from the earthen berm atop the headwall. there are reasonable precautions available to applicant to address those situations as well. Sloped areas adjacent to the headwall can be mulched as was done in May 2008. Any earthen berm atop the headwall can be hydro -seeded with mulch and/or seeded with native vegetation. At this time, the berm atop the headwall appears to have become vegetated and no further stabilization appears necessary. The applicant also has the option of reconfiguring the top of the headwall to eliminate the berm, if desirable by cutting a shelf across the headwall and respositioning the berm, These measures are consistent with and complementary to Latham's dust mitigation program that was approved by the Board in its 2009 decision for those areas other than the headwall. In light of these dust control measures, there is no reasonable argument for taking the position that as a "reasonable precaution" further mining of the headwall must be avoided. With regard to the other potentially applicable DEQ air quality standards, the visible air contamination visibility standard cannot be applied to such a diffuse source as a headwall. By its terms. that standard only applies to sources with a well defined "exhaust stack" or point of release and therefore does not apply to the headwall. OAR 340-208-0110. (See LUBA Record, p. 944. With regard to particle fallout standard of OAR 340-208-450, DEQ enforces this provision through its own Air Contaminant Discharge Permits, as a condition on the grant of such a permit. The applicant has two such permits, one for the pumice crusher and one for the rock crusher. (LUBA Record, p. 596 (pumice crusher), LUBA Record, p. 581 (rock crusher). As the statewide agency responsible for implementing its program, the DEQ has the sole authority to determine whether a violation exists and what the appropriate response should be. , 11 Setbacks for Northeast and Southeast Processing Sites (Site Plan Issue and Conditional Use Issue) This issue relates to the approval of two additional sites for crushing mined material. The relevant approval criterion is found at DCC 18.52.090(B). The applicant proposed three sites on its site plan. In its 2009 decision, the Board approved the southwest site but denied the northeast and southeast additional sites. The Board rejected those sites in findings made under the setback provisions of the code. Applicant appealed the Board's denial of the additional sites on the basis that the applicant met the required 1/4 -mile setbacks and that the County's reasons for denying those sites were addressed to issues not reflected in the County's setback requirements. On appeal. the County argued that the stated setbacks were a minimum and allowed for imposition of setbacks greater than the County's minimums. LUBA agreed with the applicant and remanded the Board's denial of the processing sites on the issue of compliance with the setback requirements. Latham Response to Remand: LUBA's interpretation of the setback criteria for processing sites leaves the County no choice but to find that the northeast and southeast processing sites comply with the applicable approval criteria. It appears from the matrix of issues prepared by staff that staff agrees with the applicant's contention. This leaves only the application of the remaining conditional use criteria under DCC 18.52.140(A). (See below for application of the standards of that section.) Northeast and Southeast Processing Sites - Compliance with Other Criteria (Conditional Use Issue This issue also relates to the Board's denial of the southeast and northeast crushing sites. The relevant approval criteria are found at DCC 18.52.140(A)(1) and (2). In its 2009 decision. the Board's found that all three processing sites met the first conditional use criterion for approval — compliance with noise standards (see DCC 18.52.140(A)(1)). However, following up on its apparent finding that the northeast and southeast sites did not meet the required setbacks, the decision then failed to consider whether the approval standards of DCC 18.52.140(A)(2) had been met. The applicant appealed that denial on the basis that the required approval standards had not been applied in the Board's decision. LUBA agreed with the applicant's position and remanded the decision. Latham Response to Remand: On remand, the Board must apply the standards of both DCC 18.52.140(A)(1) and (A)(2). For the reasons set forth in Latham's previous submittals, as confirmed by the Board in its findings on noise. the first prong is met. With regard to DCC 18.52.140(A)(1), Hoffmans attempted to challenge application of the noise standards in their 7`h assignment of error. but these challenges 12 were not sustained. Accordingly, the Board has no choice but to follow its lead from its own 2009 decision and make findings demonstrating compliance with this criterion.° With regard to DCC 18.52.140(A)(2), it is a virtual certainty that a crusher will remain on site for longer than 60 days in an 18 -month period Accordingly, the processing equipment must be screened from view of protected conflicting uses, to the extent required by DCC 18.52.110(B). The processing equipment will consistent of screening and crushing equipment and a wash plant. (See McClain testimony, p. 10.) Applicant proposes to employ berms of at least 15 feet in height to screen the processing equipment. The surface of the berms would be stabilized by hydroseeding with a mixture of mulch and native grass seed, such as rye grass (as was planted on the top soil piles). The exact placement and height of the berms would not be determined until the time the processing equipment is set up, except that the berm would be required to be located between the processing equipment and the protected houses and the park nob. With respect to the southwest processing site, the Board's 2009 approval allowed for the processing equipment to be screened buy being sighted behind the 20 -foot tall tuff stockpile in the center of the pit. This finding was not challenged on appeal. To the extent diminution of the stock pile eliminates such visual screening, applicant would agree to a berm sufficient to screen the crushing equipment from the protected houses and the park nob. Dated this 10th day of June, 2011. Bruce W. White 6 Using the rock crusher at the northeast crushing site requires that applicant either construct a 5' berm between the processing site and the Hoffman #2 dwelling along the northern boundary or depress the crushing site by 5 feet. (See April 15, 2008 noise report of Kerrie Standlee, LUBA Record, p. 920.) Applicant will agree to such a limitation as a condition of approval. Applicant would agree to a condition of approval that any berm constructed to fulfill this requirement would be hyro-seeded with a mixture of mulch and native grass seed, such as rye grass. 13 10' 1891 3380 COUCH MARKET RDI 'Ii `3a 3300 or' -2 B {l 0 �ryv 4890 P NEHURST• ROAD,. '889 '-'88 3 i 338/ 0 • Gravel Pit r( 10 / • ,E31.1 /2-1, 9 Ceder; Pit x 36 Cinder--, r_`338/ Pit`. /� TUMA40Z3„r821• --_RESERVOIR • C3a00%_� V 97130" 121 ° 22'30" • 3445 '631 ROAD_ Mapped, edited, and published by the Geological Survey Control by USGS and USC&GS Topography by photogrammetric methods from aerial photographs taken 1957 and 1959. Field checked 1-962 Polyconic projection. 1927 North American datum 10,000 -foot grid based on Oregon coordinate system, south zone 1000 -metre Universal Transverse Mercator grid ticks, zone 10, shown In blue F,ne red dashed lines Indicate selected fence lines _toy" _:ected 1971 • -e/10:5 Plt 0 Gra,el • PIIS' ,,/. —11 • )III Tumalo N`, (2 (A M 318 2) o ) } i;• •__{ Sno�^i VIABM"> 3374 ////• 1 780 000 FEET P 1°10' •347 MILS 21 MILS MN 19r/2' (2 E. 20' BEND 5 lv,l 2', S ._._ . 1 -L. _-_ - 1000 0 1000 200J • ' �I'nbit 1 — -- UTM GRID AND 1962 MAGNETIC NORT DECLINATION AT CENTER OF SHEET CONTOU DOTTED LINES R NATIONAL GEODI 48860n)4, N 4885 4884 883 4882 '881 If 3570 vAE3M _Tumalo aces Butte' (lll JSHVLIN /ARK 6c' I/ I 3534 'i, -'i \Flwne i ti ••••••••-r,-9 YE -•r. / E3M 20 /. 3345 Mile ` 160 • ,Ta3MALO E YA 8 w FanhiY -- Jrl' / ' Waiver of Remonstrance (File #) tC C O Z Condition 6 requires Waiver to be signed before issuance of building permits. (SMA -08-4) v } v) N N O Q 2 Date of House c ui rn Post 1990 — house is currently under construction 1988 w/ major addition to existing house in 2002 Inside/Outside Inventoried Impact Area Outside of impact area Small portion of the property in the southwest corner is in the impact area — the majority of the home is outside the impact area. Less than 1/2 of the property (west half) is in the impact area — existing home is outside of the impact area; new home is in the impact area. About Y2 of the property is in the impact area, including the home. L_ Tax Lot 17-12-06-1000 17-12-06-1001 17-12-06-1002 17-12-06-1102 Owner Massey CI) cL •v a) Q 0 ca E l% 0q,0 Zl Ll dVW 335 ; 0 �, F LO R°1° Z'999 Q ,4411m 0o'o0Z �1L VD 0.4 0000Z 00 ._r714IC N 0 C> 0' O TS �►• =f;mgir oO 0 0 Exhibit 1 to Table 0 0 N E 0 E cs) 0 0) • -1 -p - ' E Exhibit 2 to Table 1 Q u) a) c 0 N a) c .Q E O 0 ca 0 Q 11 ca 0 E a7 c g 0 (.) (13t V/ Exhibit 3 to Table 1 Testimony of Pat McClain On Remand of Johnson Road Pit Site Plan — Site 303 June 10, 2011 I am making this testimony as a part owner of Latham Excavation, which is the applicant for site plan approval and conditional use approval to allow for some modifications to the existing pumice removal operation at the Johnson Road pit and to allow crushing at the site. Our attorney will be providing legal argument to supplement this factual testimony. I. Introduction A. Nature of Our Business I would first like to address the nature of Latham Excavation's business. We are a locally owned excavation company. Prior to buying the mining site from Cascade Pumice, our business was focused almost exclusively on excavating construction sites. Our acquisition of the Johnson Road pit allowed us to diversify so that we could provide construction fill materials to our customers and also provided us with a new market to supply pumice materials to pumice block construction companies and to horticultural supply companies. Most of our pumice material is sent out of the area to companies in the Willamette Valley or to the Seattle area. This particular pumice material is a rare commodity and is highly valued. Our company now employs 26 people full time. We have been affected by the economic downturn just as everybody else connected with the real estate or construction industry has been. However, the pumice supply portion of our business has been less affected and it has helped us to ride out the economic downturn. The pumice mine represents an opportunity for us to bring added revenue into the region for a product that originates here in Central Oregon. Our supply of pumice is regarded as being one of the best. As our geotechnical expert Andrew Siemens stated in an assessment of the resource for us soon after we bought the pit, the Bend Pumice is an excellent resource that should be "guarded jealously." (See LUBA Record, p. 803.) Like all businesses, our mining business is one that must be profitable to operate. Cascade Pumice sold us the site in part because it was no longer profitable for them to operate the site. The cost of diesel had gone up, so the cost of mining a material that lay deeply buried beneath the earth became less profitable. In addition, their operations required that the pumice be trucked off-site for processing (screening and crushing) at their industrial site in Deschutes Junction. They had no developed market for the Tumalo Tuff that overlay the Bend Pumice and no way to capitalize on the value of that resource, and they would have had to move the Tuff pile back into the hole left by excavation. It was easier for them to sell out of the site than to continue to operate it. Our ability to operate the site profitably at a time when diesel costs are increasing requires that we have a short travel distance from excavation to processing equipment for processing the pumice and that we be able to receive value for the Tumalo Tuff that overlies the Bend Pumice instead of expending resources to move piles of that resource 1 R • For the purposes of this mining application, to add a 12 -foot high berm for approximately 200 feet along the eastern edge of the mining area to screen a portion of the excavated area from view of protected residences across the river and a condition of approval to retain existing vegetation on the eastern shoulder of the pit as it ascends the slope to screen protected residences and park sites to the east. The berm would allow for vehicle passage by being made up of two overlapping offset segments. • To add to our menu of dust mitigation measures a requirement to apply water to the headwall while it is excavated to form the crust that prevents wind erosion of the headwall faces. • To specify that the berms that would screen the crushing sites would be at least 15 feet in height, with final positions and heights to be determined in the field upon establishment of crushing sites. Berms to be hydro -seeded with a mix of mulch and native grass, such as rye grass. B. The Nature of the Mineral Materials We are informed that one of the issues that LUBA remanded the County's approval on was the issue of whether the 1990 ESEE covered excavation and removal from the site of the Tumalo Tuff that overlies the Bend Pumice. The Bend Pumice was inventoried and the Tumalo Tuff was not. It was the Bend Pumice that Cascade Pumice was after when it identified this site as a mining site during the County's mineral and aggregate Goal 5 process in the late 1980s. As we explained in our previous submittals, the Bend Pumice is overlain by the Tumalo Tuff. The top elevation of the Bend Pumice at about 3,338 - 3,345 feet according to our surveyor. The Tumalo Tuff lies above that in a band of about 120 feet deep below a basalt cap layer. (See Siemens Stratigraphy, LUBA Record p. 822). The top elevation we are proposing to mine lies about 15 vertical feet below that basalt cap layer at about elevation 3410, according to the site plan map. As our geotech Andy Siemens has described in previous submittals, the Tumalo Tuff and the Bend Pumice originated from the same volcanic eruption, but the nature of the Tuff was that it was part of the volcanic ash and it fell to earth on top of a layer of pumice that became known as the Bend Pumice. (LUBA Record, p. 800.) This is consistent with DOGAMI's white paper on the Bend Pumice. (LUBA Record, p. 796 and 3059.) As the DOGAMI white paper indicates, there is no erosion on the top layer of the Bend Pumice, so it is clear that the two strata were deposited in quick succession. (LUBA Record, p. 796, 3059.) From a visual inspection of the two mineral units, it is clear that there are inclusions of the Pumice within the Tuff. (See Exhibits 1AA, 1.1, 1K, and 1L.) Andy Siemens has indicated that these inclusions make up as much as 30% of the total of the Tuff by weight. (See LUBA Record, p. 870.) We know there is a 3 I would also like to clarify why we have asked to take incidental aggregate from the site and the need for a rock crusher. The site is overlain by a cap layer of basalt. A site visit to the mining site shows that portions of that basalt have fallen into the area to be excavated and will necessarily need to be excavated to get to the pumice below. (See Exhibit 1B.) In addition, portions of the tuff are "welded" and not susceptible to crushing by our roll crusher. (See Exhibit 1C, see also LUBA Record, p. 2708.) C. Headwall The existing headwall at the site was created by Cascade Pumice under their 1996 site plan. Our permit boundaries are essentially the same as Cascade Pumice's. Therefore, whatever headwall is created during the mining within this perimeter is a headwall that would be allowed under the 1996 permit. Our proposal is to mine the tuff and to leave a headwall of the tuff and the pumice. We are allowed to leave the headwall by DOGAMI regulations so long as the headwall is viewed as being stable. The preliminary analysis from our geo-tech indicates that the headwall will be stable. (LUBA Record, p. 2342.) We are allowed to change our DOGAMI reclamation plan by submitting a request for an amendment. Under our site plan the headwall can be expanded vertically by about 20-30 feet (up to an elevation of approximately 3410 feet) and horizontally by about 650 feet. It should be noted that as the headwall is expanded toward the east, it curves toward the south, which when combined with the eastern shoulder that will result from cutting back into the hillside, will result in a portion of the headwall being shielded from the nob in the park and the adjacent residences. (See Exhibit 1D.) The trees on the eastern shoulder would be retained as required, to give some visual protection to the park and any protected residences to the east. Such a requirement would apply only to the mining footprint that is the subject of this site plan permit. If the pit were to be expanded beyond the existing permitted footprint in the future, the continued presence of those trees should not be used to preclude a further expansion, provided all applicable standards are met. I would note that due to topography, there is nothing that can be done to shield some houses to the north of the pit along Ridgewood Drive (see LUBA Record, p. 2992) and some houses to the east behind the nob in Tumalo State Park from viewing the headwall. (See Exhibit 1E.) We believe that it is situations such as this that the topography exception from the visual screening requirements was meant for. As we have noted previously, there are numerous instances of near vertical headwalls in the Bend area involving the Tumalo Tuff. Across the river in Tumalo State Park itself, next to the small nob and downslope from O.B. Riley Road, there is an old mining site with an exposed headwall of Tuff and Pumice. (See Exhibit 1F.) On the uphill side of O.B. Riley Road from Tumalo State Park, there are exposed slopes of Tumalo Tuff and Bend Pumice. (See Exhibits 1G, 5 Where we have had problems with wind picking up particulates from the headwall area in the past has been in those areas at atop of the headwall where Cascade Pumice installed earthen berms required by the Mine Safety and Health Administration (MSHA), which is the equivalent of OSHA as it relates to mines, and in the sloped areas above and adjacent to the headwall area. These tend to be made up of unconsolidated earth deposits that are more susceptible to wind erosion than the hardened headwall areas. Pictures showing the earthen berm at the top of the headwall and one of the adjacent sloped areas are attached as Exhibits 1M and 1P. The relative lack of erosion from the headwall can be seen by reviewing the top of the layer of exposed Bend Pumice. There is a layer of wind -deposited Tuff particulate matter on top of the Bend Pumice layer and even after almost three years of inactivity at the pit it is relatively thin. (See Exhibit 10.) That the headwall itself does not shed much can be shown by the limited pile of debris at the toe of the slope, even after almost three years of inactivity at the pit. (See Exhibit 1N.) We believe that biggest step that can be done to cut down on dust coming from the headwall area is to ensure that the bermed areas on top of the headwall are adequately vegetated (which we believe they have become during the time that has ensued since our previous hearings), and to either minimize the sloped areas at the top of the wall where loose material may tend to lie and fall off the wall and/or to ensure that the those areas are adequately mulched. If these steps I have identified above are taken as well as the other steps identified in our dust mitigation program, such as watering of pit travel areas and untreated or unvegetated stockpiles and mulching of other exposed areas, and inclusion of tackifiers as needed, dust can be adequately controlled at the pit. From previous DEQ testimony, we believe these are viewed by DEQ as being reasonable precautions to prevent excavated surfaces from emitting dust. We know that when we initially took over the pit from Cascade Pumice we had issues with dust control. Part of that was just from a learning curve that we experienced as new operators of the pit. Unfortunately, due to his untimely death in December 2007, we weren't able to tap the experience of Cascade Pumice Manager Dugan Pearsall as much as we would have liked in our operation of the pit. We have learned by experience which areas needed treatment and which areas do not. I would note that just before they left the site, Cascade Pumice re-contoured the areas on the eastern portion of the property that had formerly been operated by Bend Aggregate and Paving by filling in that area with the Tumalo Tuff. This exposed new areas of Tuff to wind erosion and created dust issues that had not been present previously and that we were able to rectify with our first application of the mulch product in April 2008. Our previous testimony in the record indicates that we have an adequate supply of water and ability to put water down to control dust on those areas most likely to emit dust. (LUBA 7 We have never received any complaints from Tumalo State Park or park users (other than neighborhood opponents) about our operation of the pit. As noted in my previous testimony of May 20, 2008, (see LUBA Record, p. 693) the day use and camping areas are shielded from the view of the pit by a ridge that runs along the west side of the river (see LUBA Record, pp. 2164, 2165 and 2167) and intervening vegetation. I have attached some reviews of Tumalo State Park from a travel website that indicates the primary complaint with Tumalo State Park appears to be the noise from adjacent roadways, which obviously produce noise all around the clock. (See Exhibit 3.) At least one of those comments was from a time period in which we were operating the pit, but there is no mention of the pit. Due to the topography of the area, there is no possibility of screening the site entirely from surrounding properties. We understand there is no requirement that the site be entirely screened from view where such screening is not possible. We can partially screen the pit floor area from the views of the small nob in Tumalo State Park and nearby houses by providing a vegetated berm across the eastern boundary of the pit. We would propose a berm of 12 feet in height running across the eastern mining permit boundary for this site plan from the northeast corner of the mining boundary approximately 200 feet south to merge into the beginning of the eastern shoulder of the pit at about elevation 3320, vegetated consistent with the manner in which we propose to vegetate the berms around the processing equipment. (See excerpt of site plan at Exhibit 4.) The 12 -foot height was derived from the approximate height of the top soil piles that were left by Cascade Pumice and that appear to provide some degree of screening. As noted, existing vegetation on the vegetated slopes above the pit floor on the eastern shoulder of the expanded headwall would be retained in this mining footprint. It appears that such vegetation retention and the curvature of the wall to the south will shield the nob of the park and nearby protected residences from exposure to portions of the headwall as it is extended east. (See Exhibit 1D.) Setbacks We understand that one of the issues that LUBA identified that needed to be addressed was the piles of top soil that fall within the 1/4 -mile setback. We didn't think that the setbacks applied to such piles of material, given that they just sit there and are not worked. However, we are prepared to address LUBA's determination that the two piles of topsoil that do not meet the 1/4 -mile setbacks, one near the north property line that lies within the 1/4 -mile setback for the Hoffman #1 residence and a series of piles that lie within the X -mile setback for the Todd residence. We are willing to remove the pile of top soil that we imported that lies within the 1/4 mile setback from the Hoffman #1 house. This material can be incorporated into the 12 -foot high earthen berm that we propose to construct along the eastern edge of the mining permit area. That pile is identified in an excerpt from the Site Plan shown in Exhibit No. 4 and pictured in Exhibit 1T. 9 We would propose to screen those sites from pre -1990 dwellings to the east by erecting earthen berms between the processing equipment and the protected residences, as I outlined in my 2009 testimony before the Board (LUBA Record, p. 433) or to use the existing tuff stock pile for the southwestern processing site. As set forth in our earlier testimony, the processing equipment consists of screening equipment, one of two crushers (depending on the material needing to be crushed) and potentially a wash plant for producing horse arena sand. (See April 15, 2008 testimony of Cougar Caverhill, LUBA Record, p. 660, 521, 522 (pumice screener and crusher) and LUBA Record, p. 888 (impact crusher).) The tallest of this equipment stands about 13 - 14 feet in height. We do not know the actual height needed to screen the equipment completely from the elevated protected sources across the river because that is a function of how close the berms would be to the equipment and how much higher the protected conflicting uses are than the pit floor. Until we set up the northeast and the southeast crushing sites and determine their layout in relation to the remainder of the mining operation, we will not know how close we will be able to locate the screening berms to the processing equipment. Without firm information on all these variables, we would propose to include a berm of at least 15 feet in height with the final heights and positions to be determined in the field. These berms would be temporary (the berms would be removed upon completion of the use of a processing site) and would be covered with ground cover. In the event the tuff pile that shields the southwestern processing site from view were to become so reduced in size as to expose that equipment to view, we would erect a similar berm to shield the processing equipment at that processing location as well. For ground cover, we would propose to hydroseed the berms with a mulch and a seed mix of drought -resistant, native grasses, such as rye grass consistent with DOGAMI's best management reclamation practices. (See Chapter 7 of DOGAMI's Best Management Practices for Reclaiming Surface Mines in Washington and Oregon.) (LUBA Record, p. 2169.) Given that only native, drought -resistant plants would be involved that would require minimal watering, we certainly have sufficient water to ensure the success of such plantings. That plantings of native -grass ground cover can be successful at this site is shown by the fact that the top soil piles have been successfully vegetated. (See Exhibit 1V.) Thank you for this opportunity to testify. Pat McClain 11 Exhibit 1- Photographs Exhibit 1A: Survey stakes showing eastern boundary of mining area. Exhibit 'IAA: A band of the Tumalo Tuff showing inclusions of the Bend Pumice. The pumice inclusions show up as the small darker orangish spots embedded in the tuff, Exhibit 1- Photographs Exhibit 1 B: Chunks of basalt from the basalt cap rock that have fallen into the lower layers of Tuff. Exhibit 1C: Pieces of welded tuff. Exhibit 1- Photographs Exhibit 10: Natural vegetation on shoulder of eastern edge of mining area that will partially screen the headwall area from protected houses to the east. Such vegetation will be retained. The house in the background is the Massey house that lies outside of the %-mile impact area. Exhibit 1E: The small "nob" area in Tumalo State Park as viewed from O.B. Riley Road. Exhibit 1- Photographs Exhibit 1 F: The headwall of Tuff and Pumice in Tumalo State Park, the remainder of an old mining operation. Excavation marks are still visible in the tuff. This headwall has existed for as long as I can remember, going back about 50 years and probably predates that considerably. Exhibit 1G: An exposure of Tumalo Tuff on the uphill side of O.B. Riley Road, just above Tumalo State Park. Exhibit 1- Photographs Exhibit 1H: Another exposure of Tumalo Tuff along O.B. Riley Road. The house above the cliff is a post -1990 home and is not protected from visual impacts of the Johnson Road pit. Exhibit 11: The Bend Pumice and the Tumalo Tuff in a road cut along O.B. Riley Road, just above Tumalo State Park. The round pieces of material in the tuff layer are inclusions of pumice. Exhibit 1- Photographs Exhibit 1J: A road cut of Tumalo Tuff above Tumalo Reservoir Road, about 1/z mile to the north. Exhibit 1 K: Claw marks in the Tumalo Tuff at our pit left from excavating the tuff. The round orangish shapes are inclusions of pumice that are embedded in the tuff. Exhibit 1- Photographs Sas • - 't 1 yi• dik • -J A - 4 P: • F • r 4 L.I r 'w . ,I !k/- ..' • 1 W . Exhibit 1L: An example of the Tumalo Tuff from the O.B. Riley road cut, crusted over from exposure to the elements. This also shows inclusions of the Bend Pumice. Exhibit 1M: An earthen berm on top of the headwall at the Johnson Road pit. MSHA requires that such berms be located atop the headwall. Vegetation has now taken hold on the berm. Exhibit 1- Photographs Exhibit 1N: The flat surface of the top of pumice layer in the eastern edge of the current mining area showing how little deposition of Tuff material by wind has occurred over three years. The printed version shows a more orange tint than is present in real life. Exhibit 10: The headwall at the Johnson Road pit showing the Tumalo Tuff above the Bend Pumice. The accumulation of material at the toe of the slope shows how little material has fallen from the headwall and berm over the last three years. Exhibit 1- Photographs Exhibit 1 P: The southwest corner of the pit, where the biggest wind erosion problem in the headwall area occurred. This area was successfully treated with mulch in May 2008 to prevent wind erosion. Exhibit 10: The ridge on the southern edge of the Hoffman property that blocks views from the Hoffman residence of the mine and that shields other houses from the north from views of the pit floor. The presence of the ridge would make it infeasible for us to supply screening along our northern boundary. Exhibit 1- Photographs Exhibit 1 R: Views of the residences across the river from the pit. The houses on the right are post -1990 houses and are not protected. The red house and the house next to it are pre -1990 houses. Exhibit 1 S: A view across the Hoffman property showing the extension of the ridge across the southern boundary of the property. The Hoffman #2 house, shown in the photo, is a post -1990 house, but is protected in any event by the intervening ridge. Exhibit 1- Photographs Exhibit 1T: A view of the Hoffman #1 house from Johnson Road showing how the house sits in a hollow surrounded by vegetation. Exhibit 1U: The top soil pile that lies within the '/4 -mile setback of the Hoffman residence. This pile will be moved. Exhibit 1- Photographs Exhibit 1V: The topsoil pile that lies within the %-mile setback of the Todd residence. This topsoil pile is proposed to remain where it is until mining requires that it be moved. The Klein house appears to the immediate left of the pile and demonstrates that a berm of this approximate height would screen portions of the pit floor from the "nob" in Tumalo State Park and any surrounding protected residences. Exhibit 1W: Vegetated piles of material left from aggregate mining in the 1970s and 1980s by Bend Aggregate and Paving. Exhibit 1- Photographs Exhibit 1X: View east from location of the southwest processing site. Exhibit 1Y: View east from approximate location of southeast processing site. Exhibit 1- Photographs • Exhibit 1Z: View of location of northeast of processing location (at stake). Vegetated pile will be removed when required by mining operations. STATE OF OREGON DEPARTMENT OF GEOLOGY AND MINERAL INDUSTRIES Suite 965 800 N. E. Oregon Street #28 Portland, Oregon 97232 SPECIAL PAPER 27 An Economic Analysis of Construction Aggregate Markets and the Results of a Long -Term Forecasting Model for Oregon By Robert M. Whelan Mineral Economist Oregon Department of Geology and Mineral Industries 1995 74,37 GOVERNING BOARD STATE GEOLOGIST John W. Stephens, Chair Portland Donald A. Hull Jacqueline G. Haggerty -Foster Weston Mountain DEPUTY STATE GEOLOGIST Ronald K. Culbertson Myrtle Creek John D. Beaulieu Oregon Department of Geology and Mineral Industries Special Papers, ISSN 0278-3703 Published in conformance with ORS 516.030 Notice The Oregon Department of Geology and Mineral Industries is publishing this paper because the information furthers the mission of the Department. To facilitate timely distribution, this report has not been edited to our usual standards. ii Summary This report contains the results of a major applied research project on aggregates. The work was done by the Oregon Department of Geology and Mineral Industries (DOGAMI). The main objective of this research was to produce a iong-range forecast of aggregate consumption for every county in Oregon. The project work also yielded new findings that are useful for anyone studying aggregate -related issues in Oregon or elsewhere in North America. Some of the major findings of this research project are: • Per capita aggregate consumption varies greatly from place to place. It tends to be much higher in rural areas than in cities. • Increases in the number of households and personal incomes have a major influence on aggregate consumption. In 1993, growth in households and incomes accounted for about three out of every eight tons of aggregate used in Oregon. • Over half of Oregon's aggregate consumption goes into projects that accommodate motor vehicles. This includes roads, parking lots, driveways, and bridges. • Most of the aggregate mines in Oregon are small. Half of the firms that operated mines in 1993 produced fewer than 16,150 tons. The average mine yielded 83,159 tons • Urban areas use less aggregate per mile of road than rural areas. One reason for this difference is the higher proportion of residential streets in urban areas. • High shipping costs isolate markets from outside competition. Communities that block or prohibit new mines can inadvertently create regional monopolies. • Between 2001 and 2050, Oregon's aggregate consumption will rise 0.53% per year compared to a 1.01% growth rate in the state's population. Consumption will average 55.8 million tons a year. Public works and other government -supported projects will account for 34.3% of this consumption. Almost 30% of total aggregate consumption will go into roads. Other types of infrastructure will use 19%. Nonresidential construction, which also includes farms, will account for 29% of the total. Residential buildings will use 16%. This report is written in a straightforward and nontechnical style so that readers who are unfamiliar with the aggregate industry can readily use it. The report has three chapters. The first is a general discussion of the factors that influence aggregate consumption. There is background information on how and where aggregate is used. It concludes with an explanation ~of the forecasting methods we developed. The second chapter contains the forecast for the entire state. There is also a sensitivity analysis that tells us what the forecast would look like if we assumed different rates of economic growth. Forecasts for Oregon's 36 counties are shown in the last chapter. Every county forecast comes from a large economic model containing extensive amounts of data. This information has been condensed into two-page summaries for each county. Much of the data and analytical work presented in this report is based on original research. Information and data gathered from other sources are cited. The quantities of aggregate in this report are expressed in short tons. Aggregate can also be measured in volume terms. A typical cubic yard of aggregate in Oregon that has been mined, processed, and loaded onto a truck weighs about 1.425 tons. Aggregate in the ground before being mined weighs about two tons a cubic yard. These are averages. Actual densities can be much higher or lower. iii Table of Contents SUMMARY TABLE OF CONTENTS iv LIST OF T.ABI,ES vi TABLE OF FIGURES CHAPTER ONE: THE ECONOMICS OF CONSTRUCTION AGGREGATE MARKETS l INTRODUCTION WHAT IS AGGREGATE? I WHAT ARE SOME OF THE OTHER TERMS USED IN THIS REPORT? 1 How MUCH AGGREGATE IS PRODUCED. -AND USED IN OREGON? 4 W}{OPRODLCES AGGREGATE? 6 WHO USES AGGREGATE AND How MUCH DO THEY CONS['\1E? How DOES NEW HOUSING AFFECT AGGREGATE CONSUMPTION') 10 How MUCH AGGREGATE IS USED ON PUBLICLY FUNDED PROJECTS') I I IS PER CAPITA CONSUMPTION A GOOD W. -AY TO FORECAST DEMAND? 12 WHAT DRIVES AGGREGATE CONSUMPTION? 16 WHAT ARE THE CONTRIBUTIONS FROM GROWTH AND BASE LEVEL USE? 16 Is THE IMPACT OF GROWTH THE SAME_ IN ALL COUNTIES? I8 Do URBAN COUNTIES USE MORE AGGREGATE ON THEIR ROADS? 18 How Is Ro.-AD MILEAGE D[STRIBLTED ['.S OREGON? 21 IS RECYCLING GOING TO REDUCE THE NEED FOR MINING? / WHAT MATERIALS ARE RECYCLED? CAN WE FIND WAYS TO REPLACE AGGREGATE? 23 HOW IMPORTANT ARE SHIPPING COSTS? WHAT HAPPENS IF THERE IS A SHORT.AGF OF AGGREGATE" 7 7 How COMPETITIVE ARE AGGREGATE MARKETS? �7 WHAT CAN BE DONE TO ENCOURAGE COMPETITIVE PRICING? 79 WHAT CAN BE DONE TO CONSERVE VIRGIN AGGREGATE RESOURCES? 30 How DOES THE FORECASTING MODEL WORK? 3 I WHAT ISA LONG-TERM MODEL? 34 WH7" DID You CHOOSE A LONG-TERM MODEL FOR THIS RESEARCH? 34 Do THE MODELS UNDERSTATE PEAKS AND TROUGHS? 35 WHAT FURTHER RESEARCH IS NEEDED? 37 CHAPTER TWO: FORECAST OF AGGREGATE CONSUMPTION IN OREGON .. ... 38 INTRODUCTION 38 FORECAST SUMMARY 38 CONSUMPTION FORECAST BY END USE SUBCATEGORIES 4 I SENSITIVITY ANALYSIS BASED UPON GROWTH 45 SENSITIVITY ANALYSIS BASED UPON INCOME 46 FORECAST OF PER CAPITA CONSUMPTION 47 CHAPTER THREE: INDIVIDUAL COUNTY FORECASTS 48 INTRODUCTION 48 BAKER COUNTY 52 BENTON COUNTY 54 CLACK,-AMAS COUNTY 56 CLATSOP COUNTY" 58 COLUMBIA COUNTY 60 Coos COUNTY 62 CROOK COUNTY 64 IV CURRY COUNTY 66 DESCHUTES COUNTY 68 DOUGLAS COUNTY 70 GILLLAM COLNTY 72 GRANT COUNTY 74 HARNEY COUNTY 76 HOOD RIVER COUNTY 78 JACKSON COLNTY 80 JEFFERSON COUNTY 82 JOSEPHINE COUNTY 84 KLAMATH COUNTY 86 LAKE COLNTY 88 LANE COUNTY 90 LINCOLN COLNTY 92 LINN COUNTY 94 MALHEUR COUNTY 96 MARION COUNTY 98 MORROW COUNTY 100 MULTNOMAI1 COUNTY 102 POLK COUNTY 104 SHERNLAN COUNTY 106 TILLAMOOK COLNTY 108 UMATILLA COUNTY 110 UNION COUNTY 112 WALLOWA COUNTY 114 WASCO COUNTY 116 WASHINGTON COUNTY 118 WHEELER COUNTY 120 YAmii ILL COUNTY 122 The most important benefit is reduced labor cost. More expensive materials will be used if they eliminate worker time on the job. The cost of the displaced aggregate is often an insignificant factor in the substitution. For example, while aggregate may be 10% to 20% of the delivered price of concrete, most of the cost of using it is in the labor needed to form the concrete. In the end, aggregate is only a minor part of the total cost. For some applications in buildings, concrete competes directly with steel. If an architect chooses steel over concrete, the amount of aggregate needed to construct a building is reduced. Although the price of aggregate may not have had any impact on the decision, it gets substituted. Suppliers of building materials are always introducing new products. Some of these lessen or even eliminate uses for aggregate. For instance, innovations in glass have led to losses in aggregate consumption for exterior walls. High-strength concrete has replaced regular concrete in some applications because of its desirable engineering characteristics. Projects made with high-strength concrete use less aggregate. A few new technologies and products directly target aggregate substitution as a major reason for their development. Lime -treated base, for example, is growing in popularity especially in areas where crushed rock is expensive. In this method, lime, sand, clay, and native soil are mixed together and compacted. Asphalt or concrete pavement is placed on top. No base rock is used. The method works well, but technical problems limit its use to special situations. Geotextile fabric is a common alternative to base rock in road construction. A geotextile fabric allows water to drain into soil while keeping crushed rock from sinking into the ground. It effectively reduces the amount of crushed rock needed. Some substitutes do not replace aggregate but simply extend its useful life. New plastic -based chemicals are being used on gravel roads and in asphalt pavements. These improve durability and reduce the amount of aggregate needed for maintenance and repairs. Durability can also be enhanced by use of thicker layers of asphalt pavement or even concrete in place of asphalt. The construction industry is innovative. The materials and methods used today are quite different from those used just two generations ago. Lowering labor costs is the main driver of this change. Substitution of aggregates is usually an unintended consequence. Innovation will cut into future consumption, but this will occur at a very slow pace. Aggregate is simply inexpensive relative to its benefits. For many of its uses aggregate does not face serious competitive challenges. How Important Are Shipping Costs? In 1993, aggregate sold for an average mine -gate price of $4.39 a ton in Oregon. This figure comes from our mining industry census. The price does not include shipping costs. We estimate, however, that the average delivery charge for aggregate shipped by truck was $1,62 a ton. The total delivered price is $6.01 a ton. We estimated the shipping cost because the size, complexity, and lack of readily accessible data made direct data collection impractical. There are 1,074 intrastate sand and gravel carriers alone in Oregon.20 Several thousand crushed rock, captive, interstate, and other types of truckers also ship aggregate. Very few can calculate their average delivery distances and charges. We had to rely instead on informed opinions about normal delivery conditions in Oregon. 2° From a computer printout of sand and gravel carvers by zones supplied by Arnie Chinn of the Oregon Public Utility Commission. 24 We called several independent truckers and mines and asked them what they charged for loading, unloading, and hauling aggregate. We were told that a typical one-way shipment was 10 miles. Respondents said that their charges depend on the driving time, the size of shipment, and the type of truck. Our $1.62 estimate is based on an average truck load of 20 tons. We assume that the typical truck travels 35 miles per hour over its route. At 10 miles each way, a round trip takes over 34 minutes. Loading adds five minutes to each trip. Unloading takes another four minutes. The total round trip time is just over 43 minutes. From our informal survey, we estimated that the average truck costs $45 an hour. That includes fuel, labor, and maintenance. A single round trip, therefore, costs $32.46. Dividing that by 20 tons gives us a shipping charge of $1.62 a ton. About 34 cents of that are the costs of loading and unloading. Trucking costs vary considerably, depending on circumstances. Truck capacity, for instance, has a big influence on delivery costs. Truck capacities range anywhere from one to over 30 tons. A market study of hauling rates for sand and gravel in the Puget Sound region of Washington state shows how important truck capacity is to delivery cost.' According to the study, in 1990 shipping a ton of sand in a truck carrying 15 tons cost approximately twice as much as in a truck hauling 35 tons. Figure 1.2 illustrates the relationship between distance, cost per ton, and truck capacity. Cost ($ Per Ton) 6.00 5.00 4.00 3.00 2.00 1 .00 0.00 u) - a) Figure 1.2 Contract Trucking Costs For Hauling Sand and Gravel as a Function of Distance in the Puget Lowland During 1990 Li) N— 0) c'') U) r rn N N N N C I One -Way Haul Distance (Miles) 15 Ton Truck — 25 Ton Truck 35 Ton Truck Travel time directly affects shipping costs. Traffic hurts the productivity of trucks. In our estimate, if we assume that congestion slows trucks to 30 miles per hour, the shipping cost estimate goes up to $1.84 a ton. Road congestion is one reason why shipping costs are higher in urban areas. Distance affects trucking costs. If we increase the distance in our e3timate between a mine and its customer to 321/4. miles, shipping costs go up to $4.39 a ton. That is double the 1993 mine price of the aggregate. For every extra mile between a mine and a consumer, our estimate of trucking costs rises by 12.9 cents a ton. Actual costs will vary depending on local conditions. 2 White, W.W., III; Stebbins, Scott; Hillman, and Thomas, 1990, Puget Sound Region Sand and Gravel A'iarket Study: U.S. Bureau of Mines Report BIA 64-1II, 1 v. 25 —{ i--1 —' —1 ''r Li) N— 0) c'') U) r rn N N N N C I One -Way Haul Distance (Miles) 15 Ton Truck — 25 Ton Truck 35 Ton Truck Travel time directly affects shipping costs. Traffic hurts the productivity of trucks. In our estimate, if we assume that congestion slows trucks to 30 miles per hour, the shipping cost estimate goes up to $1.84 a ton. Road congestion is one reason why shipping costs are higher in urban areas. Distance affects trucking costs. If we increase the distance in our e3timate between a mine and its customer to 321/4. miles, shipping costs go up to $4.39 a ton. That is double the 1993 mine price of the aggregate. For every extra mile between a mine and a consumer, our estimate of trucking costs rises by 12.9 cents a ton. Actual costs will vary depending on local conditions. 2 White, W.W., III; Stebbins, Scott; Hillman, and Thomas, 1990, Puget Sound Region Sand and Gravel A'iarket Study: U.S. Bureau of Mines Report BIA 64-1II, 1 v. 25 Shipping costs have a dramatic effect on competitiveness. For instance, consider the case of two mines competing to supply crushed rock to a construction project. If one of the mines is ten miles farther away from the project, it will very likely lose out to its competitor, because the shipping charges would add $1.29 per ton to the delivered price. There are exceptions. Some mines can compete well beyond their local markets. They can do this if they produce a highly desirable grade of aggregate, have unusually low mining costs, or have access to low-cost shipping. Mines on interstate highways, for example, can sometime afford to haul aggregates for long distances because their trucks travel at highway speeds. All of these, however, are exceptions. According to our census, over 92% of Oregon's aggregate production in 1993 was delivered by trucks. We estimate that mines originated 2,244,843 truck loads in 1993. We believe there were another 204,000 loads coming from out-of-state mines and recycled -material sources. Our estimate puts the cost of trucking at 16.2 cents a ton mile. This includes the expense of loading and unloading. A ton mile is the cost of shipping a ton of aggregate one mile. While trucking is expensive. it has one major competitive advantage: it is flexible. Trucks can deliver between any two points on short notice They can also economically ship small quantities. Barges haul 5% of the aggregate coming from Oregon's mines. Most of the traffic is on the Willamette River, where calm waters allow for simple deck barges to make local deliveries. Even though barges are suitable for long-distance shipping, only one is currently doing so. On the Columbia, there is one barge making long-distance deliveries between Boardman and Portland. Depending on the design, barges carry anywhere from 1,000 to 3,000 tons of aggregate. The cost, including unloading, runs between one and two cents a ton mile. While inexpensive to operate, barge systems for aggregate often require a very large investment in vessels and port facilities. On the Columbia River, for instance, you need special high -walled barges to protect against the high winds and swells. Railroads shipped 2% of Oregon's aggregate in 1993. Two mines accounted for most of the traffic. One moved rock from a mine in an isolated area of Washington County to a city near Portland. The other mine shipped high-quality railroad ballast from Baker County. A single rail car holds 100 tons of aggregate. Loading and unloading costs about 75 cents a ton. Shipping costs are negotiable and vary with distance. A typical rate would be around 3.5 cents a ton mile.2c Like barges, railroads are handicapped by their inflexibility. Rarely are they adjacent to both mines and construction sites. A substantial investment in equipment is normally required. Aggregate usually has to be transferred at some point onto trucks. Anytime a ton of aggregate is transferred, about 34 cents a ton is added to its final delivered price. Shipping by ocean freighter is another way of delivering aggregate, although it is not presently done in Oregon. Using ocean freighters is feasible because of back -haul pricing. Ships are often empty when they come into ports to pick up loads. Knowing they will make a profit on those loads, the ships can offer low rates if they can find anything they might deliver into the port. These low-cost arrangements are called back -haul rates. Currently, empty ships come into Portland to pick up soda ash, potash, and other mineral commodities. The port has facilities that can be modified to handle aggregate imports.23 22 From a phone conversation with Ed Immcl, ODOT State Railroad Planner. 23 From conversations with the Port of Portland. 26 What Happens if There is a Shortage of Aggregate? Local aggregate shortages occur in Oregon from time to time. Usually, they are caused by one or two large construction projects that overload local mining capacity. Mines can sometimes increase their capacity by adding equipment, but this takes considerable time and money. For the most part, mine capacity is fixed and sudden increase in demand can create local shortages. One way of dealing with such a shortage is to bring in supplies from neighboring markets. Buyers bid up the prices of locally produced aggregate. This makes it practical to ship aggregate in from other markets. To cover the costs of trucking in aggregate another 15 miles, local prices would have to increase about $1.93 a ton. If these costs are all passed down to consumers, the average household would see its cost of living increase by $87.67 a year. -4 Consumers can delay or change their construction plans because of shortages. Few consumers will react in those ways, however, because aggregate is usually a small part of the total cost of construction. When it does occur, it is usually on projects such as roads and parking lots where aggregate usage is very high. Sometimes, local shortages force contractors to use grades of aggregate they would normally avoid. Projects made with poor -quality aggregate often cost more to build and lack durability. A road made from an inferior grade of crushed rock, for instance, will deteriorate quickly and require more maintenance. Ultimately, more aggregate will be used in the long run. When faced with persistent shortages of local aggregate, builders will pay higher prices for their aggregate and make changes in the way they do construction. This will result in higher construction costs. Some of these costs will be hidden in the forms of higher rents, retail prices, and taxes. Overall, the community's economic competitiveness will suffer. In addition, with plenty of aggregate coming in from other markets, there will be more truck traffic and road congestion in the community. How Competitive Are Aggregate Markets? Competition between aggregate producers is often quite fierce. In most markets around Oregon, competition effectively keeps prices in line with production costs. Mines earn fair rates of return, while consumers pay the lowest sustainable prices for aggregates. That is how competitive markets work, but not all aggregate markets are like that. As noted before, high shipping costs isolate markets and limit competition to local producers. Fortunately, you do not need many producers to have a competitive market. Two or three significant producers (assuming they do not collude) are enough to promote competitive pricing. Competitive pricing is important. It assures that consumers pay prices that reflect production costs, business risks, and fair rates of return. At times when demand is weak, the cost of producing an extra ton of aggregate is low, because there is plenty of extra mining capacity and labor around. Prices mirror this condition and fall. When demand is high, both labor and capacity are running full -out. The cost of supplying an extra ton rises and paces go up. In competitive markets, therefore, prices move up and down with demand. Consumers, over the long run, benefit by getting the most for their money. The economic term for this is efficient pricing. Problems arise when a community has only one mine or if the largest producer has an overwhelming share of the market. In some, but not all, cases where this occurs, the largest producer exercises market dominance. ' Total aggregate consumption in 1993 was 53,273,017 tons, and there were 1,171,966 households in Oregon. Dividing those two gives us an average consumption of 45.46 tons per household. Using the trucking cost estimates from the "Shipping Costs" section of this report, the incremental costs of trucking a ton of aggregate 15 miles is just under $193 a ton. Multiplying that by the tons consumed per household gives us a total of $87.67. 27 A producer takes advantage of market dominance by unilaterally raising prices to levels that are well above normal. In addition, such a producer can make these high prices stick regardless of how much demand there is for aggregate. Other local producers, if there are any, are too small to do anything about it. Meanwhile, mines in neighboring markets are far enough away so that high shipping costs keep them from bringing in aggregate. The result is a monopolistic market structure. Three conditions foster monopolistic structures. First, one producer must have a large share of the market. Second, the product must be hard to substitute. Finally, the dominant producer has to be shielded from new competitors.- Monopolistic market structures are not necessarily bad. It depends on how the dominant producer is shielded from competition. Some markets are too small to support more than one producer. Others, because of geologic conditions, have just one good aggregate mining site. Wherever these conditions exist, in practical terms, there is room for only one producer. What results is called a natural monopoly. In a natural monopoly, a community usually pays higher prices for aggregate compared to larger competitive markets. However, if the community breaks up its natural monopoly, it will likely be worse off. It would replace one mine with several smaller and less efficient mines. With higher production costs, the smaller mines could end up charging more for their aggregate than the natural monopolist. Monopolistic market structures can be damaging if the dominant producer is protected by an artificial barrier to entry. A barrier to entry is anything that keeps new competitors out of a market. Unlike natural barriers such as small market size and unfavorable geology, artificial barriers have little to do with the business merits of operating a mine. Artificial barriers keep competent and capable producers from establishing themselves in communities where resources and demand are sufficient to support new mines. Typically, the barrier is political. If a dominant producer sets unreasonably high prices, competitors should be attracted to the area. Sometimes, however, communities shield dominant producers from this threat by making it nearly impossible for competitors to establish new mines. Siting a new mine is an expensive, difficult, and uncertain process. Political systems can protect communities from careless or poorly planned mining operations. Such systems, however, can be used to block competent new competitors from entering the market. By being too restrictive, communities create situations, often unintentionally, that let dominant producers charge excessive prices. In more extreme cases, dominant producers will actively engage in predatory exclusionary tactics that can even lead to the corruption and misuse of political institutions.` If protected by an artificial barrier, a dominant producer can charge prices that are substantially higher than those that would exist under free competition. This type of monopolistic market structure is bad for a community. The excess profit earned by the dominant producer comes at the expense of consumers. The local economy operates less efficiently. Construction costs are higher than they should be. This, in turn, hurts the local business climate and makes housing less affordable. Higher aggregate prices affect government budgets for schools, roads, irrigation districts, and other public construction projects. Total employment suffers. Another characteristic of dominant producers is their tendency to maintain excess capacity. They can control either prices or quantities in local markets, but not both. Typically, they will choose to set prices artificially high. They do this by restricting supply. The producers make more money by operating at a lower level of capacity than they would under competitive conditions. Having extra capacity also allows them to argue that new mines are unnecessary in the community because there is plenty of available capacity for growth. 75 Chamberlin, E.H., 1962, 7heory orAIonopolistic Competition, 8th ed. 'b Scherer, F.M., and Ross, David, 1990, Industrial.tlarket Structure and Economic Performance. 28 There are no simple rules for identifying a monopolistic market structure. The most visible signs show up in prices and market shares. Prices in these markets generally do not fluctuate with changes in demand. They also are unusually high compared to neighboring markets, In all cases, dominant producers have large market shares. A producer may get high prices for reasons that have nothing to do with unfair competition. For instance, a mine may sell a highly desirable and hard -to -find variety of aggregate. The most common reason for high prices, however, is that they are just a reflection of high operating costs. Usually this is due to adverse geologicai conditions. Many aggregate deposits in Oregon, for example, are rich in clay. The clay has to be removed during processing because it is a harmful constituent to the aggregate. Removing clay is an expensive step. High costs can also exist in small markets because mines do not have the benefits of large-scale production. What Can be Done to Encourage Competitive Pricing? Competitive pricing has both economic and social benefits. Ensuring it can be difficult, however. The best way to encourage competitive pricing is to have several significant producers. This is easier said than done, and in some markets it may be impossible. Yet, there is an alternative way to achieve competitive pricing, even if there is only one producer in a community. A dominant producer who has no fear of attracting new competitors in her or his own market can raise prices up to a level called the limit price. This price is just below what it would cost consumers to buy aggregate from another market and have it shipped in. The limit price places an upper boundary to what a dominant producer can charge. Still, it leaves the community paying a large premium for its aggregate. if the nearest competitive market is 15 miles away, for instance, a dominant producer could charge a premium of up to $1.93 per ton.27 Competitive pricing is least likely in markets where the geology limits a community to one mining site. In this type of natural monopoly a producer cannot be threatened by new competitors because the area has no other comparable mining sites. The producer can use limit pricing. If the community has ways to reduce shipping costs, it can lower the limit price. This may be done by allowing larger trucks on the roads or, if possible, by promoting rail or barge shipments. The community can also strongly advocate recycling. None of these options are particularly strong and they are applicable to few communities. Where natural monopolies are caused by small market size, communities have more leverage. They can pressure their producers by remaining open to the siting of new mines by outside competitors. Having a new competitor enter a small market with natural monopoly would be an extremely unfavorable event for an established producer. For that reason, a monopolist would likely keep prices in line with competitive markets to avoid attracting unwanted competition. In markets where there are no natural monopolies, communities usually have at least two significant and separately owned aggregate mines. We also see markets with just one dominant producer. These producers may have become dominant because they were more efficient than any of their competition. In some cases, they may have bought out competitors. Communities with dominant producers and no natural monopolies are best served if they remain open to siting new mines by other producers. If the community does not do this, the dominant producer could raise prices far above competitive levels without the risk of attracting competition. Policies encouraging competition do not have to lead to the development of new mines. They merely have to create a credible threat of new capacity that the dominant producer cannot control or block. Dominant producers will set prices close to competitive levels if the risk of new competition is great. Otherwise, they can set higher prices. S1.93 is the incremental cost of trucking aggregate an additional 15 miles. This cost is based on the assumptions outlined in the "Shipping Costs" section of this report. 29 Source: http://www.tripadvisor.com/ShowUserReviews-g51766-d1576336-r77309205- Tumalo State Park -Bend Oregon.html#REVIEWS Date Printed: June 7, 2011 Tumalo State Park: Traveler Reviews PlanetBub... Northwest 4 reviews `` 1 helpful vote "Great campground, but a noisy highway on both sides of the park." Reviewed August 29, 2010 Hey. We often like to camp in state campgrounds because my honey must use a breathing machine at night. The park has many fine points. It's clean, the robins. blue jays (more of a black blue). tiny tweets, and skittish chipmunks. It used to be that all the state parks where out in the countryside, but now they are more often in the city. This campground vas wedged between to noisy highways. We had one of the disabled ones because we were way late in finding a state park. We have a disabled sticker on our car. However I wish they would have two in the tent camp place as we don't need all that RV space to park. They need a bit more greenery or plants separating the campsites. The toilets were nice. The solar showers were great. hot. even the ones they had posted as being a bit cooler. Next to the solar showers there is a dish washing station that could also be used for a shaving station. One day I took my shower about loam and there was still hot water. The park would be great for big family's. The park rangers and hosts were very nice and helpful. Our lire pit was conveniently placed. Across the street is the day area. In the state park system once you pay for a camping pass it's also good in all the day areas. The same with a day arca pass. There were several nice swimming holes. slow moving for the kids. Grass to lay your towel on (we took several nice naps in this spot). A large grassy tree shade area. Lots of picnic tables and a great small hike along the river. It was a 100% one day and the river is just this side of freezing. On another day it was down to the late 30's one night, and we decided that we may need more covers or a better sleeping hag. There were also yurts which looked nice. The walk and bike spot looked like most people had a car or motorcycle, and one even had a trailer. Most of the people in our area had motor homes or other things that are towed to sleep in, and several tents. I'd go here again. We also visited Tumalo Falls and a very cool place where a person make a lot of stuff out of rocks that were cleared from his farming. Low cost donation and laid back people also make it nice. It's on the old 97 almost to Redmond if your coming from Bend. The moon was full which made it all the more fun to sit around the campfire at night. Past Bend going south is a road that goes out to the national forest. It has all sorts of swimming, boating and other water features. The picture of this camping space shows a different place because there are no rapids here. PlanetBubblesUniverse Was this review helpful? Yes Source: http://www.tripadvisor.com/ShowUserReviews-g51766-41576336-r77309205- Tumalo State Park -Bend Oregon.html#REVIEWS Date Printed: June 7, 2011 Ask PlanetBubbles about Tumalo State Park This review is the subjective opinion of a TripAdvisor member and not of TripAdvisor LLC. Report problem with review neverstop... Vancouver, Washington 58 reviews `- 199 helpful votes "Close to Bend and convenient" Reviewed November 2, 2009 1 person found this review helpful If you want to camp near Bend and have showers. yurts. and hookups. this is the place for you. We stayed in a yurt there for a week last June and we had a great time seeing some of the sights and hiking some of the trails near Bend. The park is located by the Deschutes River and there are hiking trails on both sides of the river both up and downstream from the park. although none go on for a real great distance. Some of our destinations during that week included Smith Rock State Park (see my separate review). Cove Palisades State Park, Shevlin Park. the Upper Deschutes River Trail. and Boyd Cave. a do-it-yourself cave on China Hat Road southeast of Bend. One of the more unusual destinations was Peterson Rock Garden, which is just a few miles away. There. a retired man built all kinds of cool things out of colored rocks all over his yard. It must be seen to be believed. Tumalo State Park probably gets a little hot during the summer and it may be better to camp at a higher elevation at that time of year. For the shoulder seasons. however, it can't be beat. The main drawback to Tumalo SP is traffic noise from (he nearby roads. which can get pretty loud 2 Source: http://www.tripadvisor.com/ShowUserReviews-g51766-d1576336-r77309205- Tumalo State Park -Bend Oregon.html#REVIEWS Date Printed: June 7, 2011 when motorcycles' go by. if you want cooler and quieter. try La Pine State Park. about 45 min. south. During our June stay at Tumalo, it rained back in Portland/Vancouver, but we got almost none at the park, so you do have a better chance of staying dry there. If you are there on Sunday and would like to attend church, Tumalo Community Church is a great place to attend. with very friendly people. 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Designed to provide a fair but challenging round, players can enjoy a relaxed game with friends or invite a competitive neighbor onto the course for a friendly one-on-one. Broken Top Club also offers an extensive practice facility for golfers to hone their skiffs that includes two practice bunkers, a chipping area, and plenty of wed -defined targets at various distances on the range. An18-hole putting course, mowed and rolled to exact course specifications, allows players to perfect their short game, while PGA professionals on staff for lessons and clinics. The Broken Top clubhouse has a pro shop and recreational facilities for the whole family. Residents of Broken Top Club take pride in being involved in their community and gather to participate in various activities. Whether it is fly fishing on the community's two -acre lake, or grabbing a quick bite to eat at the restaurant, there is much to do at Broken Top Club. Two swimming pools and a playground entertain neighborhood children, and it is not uncommon to see a group of people on their way to bike, hike and ski. Youth golf and tennis lessons are also available. Many more activities can be found in Bend and Central Oregon. Broken Top Club offers a diverse array of single family homes and townhomes. Residents enjoy panoramic views of the surrounding wilderness without leaving behind the convenience of living near Bend. Whether you are looking to raise a family or retire, Broken Top Club welcomes you new residents with open arms. Once you call this charming community home, don't be surprised to receive an invitation to meet on the first tee at early tight. For more information about Broken Top, visit www,BrokenToo,0m. Looking for homes for sale in Broken Top? Find Broken Top homes for sale by searching the local listings database for access to listings in Broken Top and other golf course communities. Whether you want to buy or sell real estate in Bend, you can browse through properties or find a wide variety of real estate resources available on this website. Broken Top Real Estate Broker If you are looking for a REALTOR® for Broken Top, choose Martha Hendrick. As your Broken Top real estate broker, Martha Hendrick can assist you with all of your home buying and selling needs. She can provide you with access to the local listings database and offer her experience and knowledge to make the home buying or selling process easier for you and your family Contact Martha Hend ,tck today to get your home search started! Home Property Search Free Email Updates Featured Listings Bend The Bend lifestyle Photo Gallery West Side Communities Coif Communities Hew Homes L4rxury Hames Buyer B nni,rces Seller Resources Area Link,. Meet Martha Contact Me Martha Hendrick Principal Broker, CRS, ABR Licensed faa the State of Oregon Martha Hendrick Realty ,.P I t+',v Havre tt. !.,nd, OR 97751 Dir _t: 541.815,5.100 r. Email: rn 3rtha r .0 a..r1111ss 1MMI nrssw.OMR Real Estate Website Desien rs http://hendrick.com/broken top 6/9/2011 SIEMENS & ASSOCIATES Latham Excavation, Inc. 84 SE 5`s Street #100 Bend, Oregon 97702 Attention: Cougar Caverhill, Pat McClain Project: Subject: Dear Cougar and Pat, Johnson Road Pit, Site 303 Tumalo, Oregon June 7, 2011 Project No. 111020 Geotechnical Reconnaissance: Headwall Fugitive Dust Potential We understand that concerns have been raised about fugitive dust generated from various sources at Johnson Road Pit. One of these sources is reported to be the steep cut exposure of Tumalo Tuff and Bend Pumice known as the headwall. We have recently reviewed the condition and conclude that the headwall is a very unlikely source of fugitive dust and would not benefit from mitigation or treatment. We are of this opinion for several reasons: 1. These exposures were created many years ago and since that time, the surface has developed a "work hardened" condition. That is, fine grained particles that were loosened at the time of excavation have long since been removed by wind, water and time. Initially, the freshly exposed surface offers a limited dust potential; however, owing to the cemented nature of the formation (caused by heat and pressure as it was formed), the undisturbed materials naturally resist wind erosion once the loose surface particles are removed. After that, there is no need for continued dust abatement measures. 2. The headwall exposure comprises a fairly small part of the site's surface area and since it stands vertical, the surface remains undisturbed. 3. Similar headwall cuts remnant from past pumice mining and excavation are present in Central Oregon and we are not aware of similar dust concerns even though at least one of these cuts (along the 8`1' Fairway at Broken Top) is situated in a residential neighborhood. Other, similar exposure Siemens & Associates siemens@bendcable.com office: 541-385-6500 19134 River Woods Drive, 97702 Bend, Oregon fax: 503-296-2271 Johnson Road Pit: Headwall Fugitive Dust Potential Project Number 1 1 1020 Tumalo, Oregon Siemens & Associates include cuts along O.B. Riley Road (Tumalo Market Road), Bailey Road, Shevlin Park Road, Cinder Butte Road and areas west of Summit High School. The following photograph shows the original, vertical excavation marks through the Tumalo Tuff and the Bend Pumice. After many years of exposure, these marks remain; they have not been eroded away by the forces of wind. In our view, this is a testament to the resistive nature of the formations and evidence that the materials of the headwall are not readily reworked to become fugitive dust. Dust Mitigation Dust potential at new headwall or similar exposure of the Tumalo Tuff and Bend Pumice can easily be managed to a stable condition simply by spraying water on the fresh surface to remove loose particles shortly after exposure. A similar stabilizing process will happen naturally; however, not until a rainstorm or windstorm promotes removal of the loose particles. Once this occurs, there is no need for continued treatment of these hardened surfaces. When materials are moved to stockpile, the inherent strength is lost and the potential for fugitive Siemens & Associates page 2 Bend, Oregon Johnson Road Pit: Headwall Fugitive Dust Potential Project Number 111020 Tumalo, Oregon Siemens & Associates dust generation is elevated. Other soils such as common topsoil present similar potential for fugitive dust. Mitigating dust from these sources is a common challenge in every mining operation and the situation is traditionally managed by routine application of moisture as needed, covering of stockpiles and vegetation of surfaces for lower maintenance, longer term treatment. These are simple operational procedures that are effective. We appreciate the opportunity to provide this commentary and would be delighted to expand any of the topics as necessary. If you have any questions, just ask. Siemens & Associates Respectfully submitted, s & Associates s� O 3, w Siemens, P.E., G.E. N ', ws 6/30/2012 3 hard copy page 3 Bend, Oregon June 9, 2011 Pat McClain Latham Excavation 84 SE 5th Street Bend, Oregon 97702 RE: Johnson Road Pit Dear Pat, I am writing this report to provide information about the staking that I did at Johnson Road Pit between May 24th and May 26th of this year. With your request David Evans and Associates, Inc. provided two AutoCAD drawing files with information they had in their records from work they had done for Latham Excavation in the past. One drawing file, SVBSX-MCLA0016.DWG, contained survey control and the other file, PLBSX-2-MXLA0016.DWG, contained site layout information over the aerial photo with contour mapping. You also provided two paper copies of drawing file, PLBSX-2-MXLA0016.DWG, plotted on February 19, 2008. I verified the control points, set by David Evans and Associates, Inc. that I used against other control points found on-site, with no outstanding errors, and established additional control where needed. I calculated the easterly mining limits from scaled distances on the paper plot you provided. I staked the north end at 720 feet west of the easterly property boundary and the south end at 850 feet west of the easterly property boundary with a 225 radius arc connecting them. I set stakes at elevation 3415.0 to establish the southern mining limits, except for the southwest comer was set at 3410.0 because of a drop in elevation of the natural ground at this corner of the property. I set stakes along the top of the low ridge, west of the current pit, by field surveying to establish the high point of the ridge. I set only a few stakes along the northern mining limits, per your request, since there are property line stakes along the north boundary of the property and a fence that roughly follows the property line. The mining limits along the north are 100 feet south of the north property line. We found stakes to locate the northeast and southeast processing sites on my first site visit with you. I staked the southwest processing site including references. I shot the top of the pumice layer at both ends with an elevation of 3338 on the east end and 3345 on the west end. If you have any questions or need any additional information please let me know. Respectfully submitted, Jerry C. Powell, P.L.S. Copy: Bruce White, Attorney REGISTERED 1 PROFESSIONAL LAND SURVEYOR OREGON JULY 18, 1980 JERRY1 C. 1POWELL RENEWS 12 - 31 - 2012 Jerry C. Powell, Surveyor 23030 Donna Lane, Bend, Oregon 97701 Phone: 541-382-2955, Cell 541-678-2899 Email: jerrycpowell@1tve,com