The Port Townsend Paper Corp. has put $790,500 in a trust fund in Wells Fargo bank in the name of Jefferson County Public Health to assure Jefferson County there is money to close the mill's 25-acre landfill.

It's the first time in 40 years of operating the private landfill that mill owners have complied with a Limited Purpose Landfill (LPL) permit and have provided what is called a financial assurance instrument to guarantee there is money to close the landfill and maintain it after it is closed.

The deal was completed Nov. 2 after the state Department of Ecology approved the mill's closure plan and a companion post-closure plan, said Jared Keefer, environmental health and water quality director for Jefferson County. He said Ecology approved of the mill's plans and its estimated cost analysis. Cost of closing the landfill was estimated at $267,600, and post-closure costs were estimated at $522,900, Keefer said.

“It feels great to have this chapter done,” said Keefer. “In the last year there has been excellent cooperation to get to this point, and it's a relief.”

Keefer said he had been working with the mill's environmental manager, Kevin Scott.

Scott confirmed the deal Monday, noting that the value of the trust fund was estimated by a third-party engineering firm, and that the cost estimate is redone every year to account for inflation and changes in the landfill life.

Scott also noted that the mill is doing groundwater monitoring and tests seven monitoring wells. It installed a new well in the last year and will be installing one more well in 2016, he said.

“The trust account is held by an approved trustee and funds can only be disbursed for the specified landfill closure and post-closure tasks subject to approval by Jefferson County Public Health,” Scott said.

“It sits there until it needs to be tapped,” Keefer said of the money. He said the mill cannot withdraw the money on its own and only he and Jefferson County Public Health have access to the funds.

“And these numbers [funds in the account] will be adjusted annually to account for inflation and any other associated cost increases,” Keefer said.

Although the mill had signed a five-year LPL in July 2014, the financial assurance pledge of the permit had not been completed before new owners purchased the mill in February of this year.

Previous owners of the mill had balked at providing financial assurance and had fought the county over doing an LPL permit, insisting that an inert permit was enough. An inert permit does not require water-quality monitoring and the financial assurance instrument, while the LPL permit does.

The mill has been depositing ash and lime grit at the site since it first acquired the property south of the mill starting in 1973 and mined the clay for use in its 33-acre treatment pond.

HISTORY

The mill's landfill permit has been both complicated and controversial.

It was first permitted in August 1989 by Jefferson County’s health department as an inert landfill and not required to conduct groundwater quality monitoring, according to an April 27, 2011 memo from Peter Lyon, regional manager for the Waste 2 Resources Program for Ecology, which oversees landfills in 12 counties.

In September 1989, the state appealed that inert permit to the state Pollution Control Hearings Board, arguing the waste “didn’t meet the definition of inert.”

The board ruled in August 1990 that the state was right.

After that, the county started permitting the mill’s landfill as an LPL under WAC 173-304-460.

But then, Ecology drafted new rules for solid waste handling in 1999 and created a category for listed wastes presumed to be inert, which included cured concrete, brick and things like glass and aluminum.

In June 2003, the mill proposed that its boiler ash and lime grits met the criteria for inert. The mill hired Landau Associates to help it prove that.

By 2004, the mill was no longer doing groundwater testing and it was operating again as an inert landfill.

The permit sat on the county's shelves with little attention until 2011 when the mill proposed a $55 million cogeneration project that could have increased the amount of material going into the landfill.

Opponents of that project targeted the inert landfill permit as both an area of concern and an avenue for an appeal.

Lyon also acknowledged in 2011 that a private landfill in Cowlitz County became a concern because the owners were facing bankruptcy and there was a worry that county could get stuck with footing a bill to bring the landfill back into compliance since it, like Port Townsend's landfill, wasn't being monitored.

Back in 2011, PT mill officials were adamant that the landfill be considered inert while county and state officials disagreed.

New owner Lindsay Goldberg, which created a new holding company, Crown Paper Group, took over in February 2015.

The new owners said they expected to invest about $40 million in the mill in the next two years. In addition to resolving the landfill debate, the company also has invested more than $10 million to install air pollution scrubbing equipment for the emissions from Power Boiler No. 10, and has dredged a treatment pond that was felt to have contributed to the telltale “mill” odor coming from the mill.