BHP requests the City of Hoquiam lower shorelines permit fee

The company considering a $440 million potash export facility at the Port of Grays Harbor told the City of Hoquiam the $445,000 shorelines permit application fee calculated by the city is “in excess of that which could be considered reasonable relative to expected costs” and asked the city to cut it by more than 75 percent.

A letter signed by Trevor Heuer, Senior Management Studies for BHP Potash Projects, the Australia-based company proposing the facility, stated, “BHP respectfully requests the city cap the project value at $100 million for the shoreline fee calculation and include costs associated with the administration of the permit applications (e.g. third party review) in this fee.”

Hoquiam City Administrator Brian Shay explained the process behind permit fee calculations. “In our fee resolution, a shorelines permit is based upon the value of the project. In (BHP’s) application the project was $440 million. Based upon that value the shorelines permit would be $445,000.”

Shay added, “Additionally, we use an outside consultant to review the shorelines permit and environmental documents and State Environmental Policy Act documents that come with the permits,” said Shay. “The cost of the consultant is charged to the applicant. In this case the estimate from the consultant was an additional $60,446.” BHP is asking for that fee to rolled into the lower application fee it is requesting.

Shay explained the city passed a resolution in 2008 wherein a shorelines permit fee would be based on the amount of money the applicant plans to spend on the project. The fee is $7,000 for the first $1 million in value, and $1,000 per million after that. There are other associated fees, including a $500 shorelines conditional use fee, a $1,000 hearings examining fee and a $750 land use conditional use permit fee.

Shay said in his talks with BHP, the company said the $440 million total listed in the permit application included project costs that should not have been used in the permit application. Shay said BHP plans to get him something in writing requesting that the city consider a lower project cost for the permit evaluation.

“We expect to receive payment for the outside permit review by Oct. 17,” said Shay. “Once this happens, we will begin review of the application as their request to modify our fee structure is considered by the City Council.”

Heuer concluded his letter by writing, “BHP notes that the project itself would generate a significant economic benefit to the city and the surrounding communities. The export facility proposed would have a lifespan of 50-plus years. Furthermore, BHP has proposed to conduct substantial on-site wetland and shoreline habitat mitigation projects, currently estimated to cost in excess of $4 million to implement. These mitigation projects will directly enhance shoreline habitat at the site and result in a net ecological credit in terms of both shoreline quantity and function, thereby freeing up city resources for other shoreline restoration efforts.”

Requests for comments from BHP Wednesday were not immediately returned.