Article V — FINANCIAL ASSURANCES

(a)

Financial assurances may take the form of surety bonds, irrevocable letters of credit, trust funds, or other forms specified by the state department of conservation, which the director reasonably determines are adequate to perform reclamation in accordance with the operator's approved reclamation plan. The financial assurances shall be made payable to the city and the state department of conservation.

(b)

The amount of required financial assurances shall be based upon the following criteria:

(1)

The estimated costs of reclamation for the years or phases stipulated in the approved reclamation plan, including any maintenance of reclaimed areas as may be required, subject to adjustment for the actual amount required to reclaim lands disturbed by surface mining activities since January 1, 1976, and new lands to be disturbed by surface mining activities in the upcoming year.

(2)

An analysis of physical activities necessary to implement the approved reclamation plan, the unit costs for these activities, the number of units of each of these activities, and the actual administrative costs.

(3)

Financial assurances to ensure compliance with revegetation, restoration of water bodies, restoration of aquatic or wildlife habitat, and any other applicable element of the approved reclamation plan shall be based on cost estimates that include, but are not limited to, labor, equipment, materials, mobilization of equipment, administration, and reasonable profit by a commercial operator other than the operator.

(4)

A contingency factor of ten percent.

(Code 1969, § 15.28.380; Ord. No. 747, § 1(part), 1999)

A financial assurances proposal shall be filed with the department prior to the securing of financial assurances. Such proposal shall be prepared by a state registered professional engineer approved by the director. The financial assurances proposal shall be accompanied by a fee in an amount established by resolution of the city council.

(Code 1969, § 15.28.390; Ord. No. 747, § 1(part), 1999)

Within 30 days of receipt of a complete financial assurances proposal, the director shall forward a copy of the proposal, together with any documentation supporting the proposal, to the state department of conservation for review.

(Code 1969, § 15.28.400; Ord. No. 747, § 1(part), 1999)

(a)

The state department of conservation shall have 45 days from its receipt of a financial assurances proposal to prepare comments if it so chooses. The director shall prepare a written response to any comments

received from the state department of conservation. Such written response shall describe the disposition of the major issues raised by the state department of conservation. Additionally, if the director's position is at variance with any of the recommendations made or objections raised in the state department of conservation's comments, then the written response shall address, in detail, why specific comments and suggestions were not accepted.

(b)

The director shall forward to the operator copies of any written responses received from the state department of conservation, as well as the responses prepared by the director.

(c)

If the state department of conservation does not comment within 45 days of receipt of the financial assurances proposal, the director shall assume that the cost estimates contained within the proposal are adequate unless there is reason to determine that additional costs may be incurred.

(Code 1969, § 15.28.410; Ord. No. 747, § 1(part), 1999)

(a)

The commission shall approve or deny a financial assurances proposal after conducting a public hearing. At the public hearing, the commission shall consider any comments received from the state department of conservation.

(b)

The commission may approve a financial assurances proposal upon making the following findings:

(1)

The financial assurances proposal complies with SMARA, the regulations promulgated thereunder and this chapter.

(2)

The financial assurances proposal is sufficient to fund reclamation of lands remaining disturbed by the surface mining operation.

(c)

If the commission does not approve a financial assurances proposal, the director shall return the proposal to the applicant within 60 days. The applicant shall have 60 days from the date on which the financial assurances proposal is returned to revise the proposal to address identified deficiencies.

(d)

The director shall send a copy of each approved financial assurances proposal to the department of conservation.

(Code 1969, § 15.28.420; Ord. No. 747, § 1(part), 1999)

Financial assurances shall be secured in accordance with the approved financial assurances proposal prior to conducting surface mining operations. The financial assurances shall remain in effect for the duration of the surface mining operation and any additional period until reclamation is completed.

(Code 1969, § 15.28.430; Ord. No. 747, § 1(part), 1999)

Each year, no later than 45 days prior to the anniversary date of the approval of the financial assurances proposal, the operator shall submit any revisions to the financial assurances to the director. If revisions to the financial assurances are not required, the operator shall explain, in writing, why revisions are not required.

(Code 1969, § 15.28.440; Ord. No. 747, § 1(part), 1999)

The director shall annually adjust the amount of financial assurances required for a surface mining operation for any one year to account for new lands disturbed by surface mining operations, inflation, and reclamation of lands accomplished in accordance with the approved reclamation plan.

(Code 1969, § 15.28.450; Ord. No. 747, § 1(part), 1999)

If a mining operation is sold or ownership is transferred to another person, the existing financial assurances shall remain in force until new financial assurances are secured from the new owner and have been approved in accordance with this chapter.

(Code 1969, § 15.28.460; Ord. No. 747, § 1(part), 1999)

If the director determines that an operator is financially incapable of performing reclamation in accordance with the approved reclamation plan, or has abandoned its surface mining operation without commencing reclamation, the director shall do the following:

(1)

Notify the operator by personal service or certified mail that the city intends to take appropriate action to forfeit the financial assurances. Such notification shall specify the reasons for forfeiting the financial assurances.

(2)

Allow the operator 60 days to commence or cause the commencement of reclamation in accordance with the approved reclamation plan. Reclamation shall be completed within the time limits specified in the approved reclamation plan or some other time period mutually agreed upon by the director and the operator.

(3)

Take appropriate action to require forfeiture of the financial assurances if the operator does not substantially comply with subsection (b) of this section.

(4)

Use the proceeds from the forfeited financial assurances to conduct and complete reclamation in accordance with the approved reclamation plan. In no event shall the financial assurances be used for any other purpose. The operator shall be responsible for the costs of conducting and completing reclamation in accordance with the approved reclamation plan that are in excess of the proceeds from the forfeited financial assurances.

(Code 1969, § 15.28.470; Ord. No. 747, § 1(part), 1999)

Upon determining that reclamation has been completed in accordance with the approved reclamation plan, the director shall release financial assurances for that surface mining operation. The director shall give written notice of the release of the financial assurances to the operator and to the state department of conservation.

(Code 1969, § 15.28.480; Ord. No. 747, § 1(part), 1999)