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Home My WebLink AboutItem No. 3CITY OF LADE 2 LSINOIZE DREAM EXTREME. SUPPLEMENT TO THE PLANNING COMMISSION REPORT CITY OF LAKE ELSINORE REPORT TO PLANNING COMMISSION DATE: JUNE 4, 2013 SUBJECT: WYROC MATERIALS. INC - A HEARING TO DETERMINE THE FORFEITURE OF FINANCIAL ASSURANCE OWNER: JEFF HALLORAN WYROC MATERIALS, INC. PO BOX 1239 VISTA, CA 92085 Subsequent to the completion of the staff report, staff received notice from WYROC that the institution providing financial assurance for their mining operation submitted the attached document extending the expiration date of the letter of credit to September 1, 2014. Please review this document staff will be prepared to discuss it at the public hearing. PC June 4, 2013 Item No. 3 Page 1 of 7 Amendment of Standby Letter of Credit May 30, 2013 IRREVOCABLE ST'ANDB'Y LETTER OF CREDIT NO. SB99 -9349 AMENDMENT LETTER OF CREDIT DATE: September 1, 2004 CITY OF LAKE ELSINORE OR City Engineer DEPARTMENT OF CONSERVATION 130 S. Main Street California Department of Conservation Lake Elsinore, CA 92540 Office of Mine and Reclamation 801 K. Street, MS 09 -06 CURRENT AMOUNT: USD92,382.00 Dear Sir /Madam: We have been requested by WYROC, INC., P.O. BOX 1239 VISTA, CA 92085 -1239 to amend the above referenced RZREVOCA13LE LETTER OF CREDIT issued in your favor, as follows: We rescind our letter dated February 26, 2013 stating our intention not to renew this Letter of Credit. The new expiry date of this letter of credit is: September 1, 2014. The auto - renewal clause is reinstated. All other terms and conditions remain the same. This amendment is an integral part of the captioned letter of credit and must be attached to the said letter in your possession. If you have any questions concerning this transaction, please feel free to call us at (213) 593-2127,(213) 593 -2128 or (213) 593 -2131. Sincerely, Au[ zed Signaluro PC June 4, 2013 Item No. 3 Page 2 of 7 CALIFORNIA BANK & TRUST � t CInternational Operations ........;.__. 550 South Hope Street, 3rd Floor Los Angeles, California 90071 S.W.i.F.T. CALBUS66 Amendment of Standby Letter of Credit May 30, 2013 IRREVOCABLE ST'ANDB'Y LETTER OF CREDIT NO. SB99 -9349 AMENDMENT LETTER OF CREDIT DATE: September 1, 2004 CITY OF LAKE ELSINORE OR City Engineer DEPARTMENT OF CONSERVATION 130 S. Main Street California Department of Conservation Lake Elsinore, CA 92540 Office of Mine and Reclamation 801 K. Street, MS 09 -06 CURRENT AMOUNT: USD92,382.00 Dear Sir /Madam: We have been requested by WYROC, INC., P.O. BOX 1239 VISTA, CA 92085 -1239 to amend the above referenced RZREVOCA13LE LETTER OF CREDIT issued in your favor, as follows: We rescind our letter dated February 26, 2013 stating our intention not to renew this Letter of Credit. The new expiry date of this letter of credit is: September 1, 2014. The auto - renewal clause is reinstated. All other terms and conditions remain the same. This amendment is an integral part of the captioned letter of credit and must be attached to the said letter in your possession. If you have any questions concerning this transaction, please feel free to call us at (213) 593-2127,(213) 593 -2128 or (213) 593 -2131. Sincerely, Au[ zed Signaluro PC June 4, 2013 Item No. 3 Page 2 of 7 CITY OF LAKE LSIIYORE --- DREAM EXTREME- 1W CITY OF LAKE ELSINORE REPORT TO PLANNING COMMISSION TO: HONORABLE CHAIRMAN AND MEMBERS OF THE PLANNING COMMISSION FROM: RICHARD J. MACHOTT, LEED GREEN ASSOCIATE ACTING PLANNING MANAGER DATE: JUNE 4, 2013 SUBJECT: WYROC MATERIALS. INC - A HEARING TO DETERMINE THE FORFEITURE OF FINANCIAL ASSURANCE OWNER: JEFF HALLORAN WYROC MATERIALS, INC. PO BOX 1239 VISTA, CA 92085 Background Surface mining activity in California is regulated by the Surface Mining and Reclamation Act (Cal. Pub. Res. Code §§ 2710 et seq.: "SMARA "). In recognition of the diverse conditions throughout the State, SMARA provides for "home rule" with the City having primary responsibility as "Lead Agency" with oversight provided by the State Mining and Geology Board (SMGB). Through annexation in 1990, the City assumed Lead Agency responsibilities from the County of Riverside for all mining operations in the City east of Lake Street, including WYROC Mine ID # 91 -33 -0015. As Lead Agency, the City of Lake Elsinore is responsible for administering and enforcing local mining regulations consistent with SMARA, including the adoption of ordinances, issuance of surface mining permits and recognition of vested mining rights, adoption of reclamation plans and financial assurances, and the conduct of annual inspections. The City's mining regulations are codified in the Lake Elsinore Municipal Code Chapter 14.04 ( "LEMC Mining Regulations "). Under SMARA and the LEMC Mining Regulations, all mining operations must have an approved reclamation plan and adequate financial assurances. To that end, on November 7, 1990, the Planning Commission of the City of Lake Elsinore approved Mining and Reclamation Plan 90 -3 for the WYROC Mine. The Mine is currently "idle" and is operating under an Interim Management Plan ( "IMP ") as permitted by SMARA, PC June 4, 2013 Item No. 3 Page 3 of 7 PLANNING COMMISSION STAFF REPORT WYROC MATERIALS, INC. JUNE 4, 2013 when a mine reaches production levels less than 10% of its maximum production. WYROC was first granted IMP status in 2005 and applied for renewal in 2010. The current IMP expires on January 5, 2015. "Idle" mines are required to comply with SMARA and LEMC Mining Regulations for annual inspection and reporting. They are also required to maintain Lead Agency approved financial assurances for reclamation. The amount of the financial assurances must be calculated, reviewed and approved annually. WYROC's existing financial assurance mechanism is a Standby Letter of Credit in the amount of $92,382 with California Bank & Trust. Proiect Reauest The City as Lead Agency received notice from California Bank and Trust that it will not renew the Letter of Credit which will expire on September 1, 2013. The Letter of Credit, or alternate financial assurance mechanism, is required by SMARA and the LEMC Mining Regulations to remain in force in order to guarantee reclamation of mined lands once mining activity has ceased. Staff is requesting to call on the Letter of Credit prior to its expiration, and keep the funds set aside for reclamation. Project Location The 19.29 acre site is generally located at 31000 Lake Street on the south side of the SB 1 -15 on -ramp, East of Lake Street and more specifically identified as Assessor Parcel Numbers (APN) 390 -130 -018. Access to the site is available from Lake Street. Environmental Setting The site is bounded on the south, east and west by existing mining development and on the north by the Interstate 15. Analysis Staff received notice dated February 26th, 2013 from California Bank and Trust that the Letter of Credit used to guarantee reclamation for the Wyroc mining operation will expire September 1, 2013. The same notice was received by the OMR, as that entity is also a beneficiary. As the Lead Agency, City staff sent a 30 day notice requiring Wyroc to replace the expiring Financial Assurance (FA). Under SMARA and the LEMC Mining Regulations, the financial assurance must remain in place until the reclamation is complete. Expiration of the Letter of Credit will result in no financial mechanism to guaranty reclamation. During the annual inspection process, staff required the Financial Assurance to be brought up to the amount approved by the Lead Agency, $105,198.06. This amount was approved via the Financial Assurance Cost Estimate (FACE) submitted by the owner. PC June 4, 2013 Item No. 3 Page 4 of 7 PLANNING COMMISSION STAFF REPORT WYROC MATERIALS, INC. JUNE 4, 2013 The expiring Letter of Credit is in the amount of $92,382.00. The mine operator has been notified by both the Lead Agency and OMR of the shortfall, but has failed to increase the Letter of Credit to comply with SMARA and LEMC Mining Regulations. This public hearing is being conducted to determine the financial capability of the mine operator to perform reclamation. Notice of the public hearing was published and provided to the operator in accordance with SMARA Regulations. An administrative record has been prepared and distributed to the Planning Commission in accordance with SMARA. The administrative record includes copies of the (1) conditions of approval for Reclamation Plan 90 -3, (2) Interim Management Plan, (3) the existing financial assurance mechanism (CBT Letter of Credit) and related correspondence, (4) the financial assurance cost estimate (FACE) dated October 1, 2012 and (5) the last annual inspection dated November 12, 2012. In determining whether the mining operator has the financial capability to perform reclamation, the Planning Commission must consider all information and testimony presented. It is the sole responsibility of the operator to provide sufficient information to reasonably demonstrate its financial capability. The operator shall be found financially incapable if the Lead Agency acting through the Planning Commission finds that the operator is incapable of providing, or refuses to provide, a financial assurance in an amount deemed adequate by the Lead Agency. If the Planning Commission finds the operator is financially incapable of performing the reclamation, it must notify the operator of its determination and may proceed to take appropriate actions in accordance with SMARA to cause forfeiture of the financial assurance. Staff is working with California Bank and Trust to be prepared to call the letter of credit, if necessary and as directed by the Planning Commission. Staff will also provide the Planning Commission with an update of its discussions with the mining operator. In the event the letter of credit is called and the funds are received from California Bank & Trust, the money would be set aside in an account held as an alternate financial assurance and designated for reclamation. Recommendation It is recommended that the Planning Commission find based upon the record before it and all of the information and testimony presented that the WYROC Mine ID #91 -33- 0015 operator is financially incapable of performing reclamation in accordance with the Reclamation Plan, SMARA and the LEMC Mining Regulations and direct staff to notify the operator of such determination and to take appropriate actions to cause forfeiture of the operator's financial assurance. It is further recommended that the Planning Commission find that upon forfeiture of the Letter of Credit, the funds deposited with and held by the City for reclamation shall constitute alternate appropriate financial assurance only upon immediate deposit of additional funds by the operator to bring the financial assurance up to $105,198.06. PC June 4, 2013 Item No. 3 Page 5 of 7 PLANNING COMMISSION STAFF REPORT WYROC MATERIALS, INC. JUNE 4, 2013 Prepared By: Dina Purvis Engineering Technician Ken Seumalo Director of Public Works Approved By: Richard J. MacHott, LEED Green Associate% Acting Planning Manager '/ I Attachments: 1. Vicinity Map — attached 2. Administrative Record — provided under separate cover PC June 4, 2013 Item No. 3 Page 6 of 7 VICINITY MAP MINE ID# 91 -33 -0015 WYROC MATERIALS INC. APN# 390 -130 -018 PC June 4, 2013 Item No. 3 Page 7 of 7