After a coal company denied landowners access to appraisal documents tied to plans for future cleanup of the Belle Ayr coal mine in Campbell County, the group took the matter all the way to court. The court’s ultimate decision, rendered last week, set a new precedent for public records requests for commercial information in Wyoming.
A Wyoming judge ruled in favor of the Powder River Basin Resource Council’s petition to unlock sealed appraisal documents listing the value of two properties used to back coal company Contura Coal West’s future reclamation, or cleanup, costs at Belle Ayr. The landowners wanted to ensure the properties had sufficient value.
“... the public possesses a strong interest in knowing that the mining company posted adequate collateral to secure its reclamation obligations,” Judge Steven Sharpe stated in the court decision.
Coal companies must file for permit renewals every five years in Wyoming. During that process, the state’s Department of Environmental Quality considers whether a company has adequate insurance in place to reclaim its mines in case they must close. A coal company holding mine permits must demonstrate it has sufficient bonds in place in case it cannot satisfy cleanup requirements. The bonds serve as a safety net for the state and ensure taxpayers don’t foot the bill for cleanup down the road.
But when Contura filed a perfunctory permit renewal for the Belle Ayr mine last year, the Power River Basin Resource Council had a particular interest in making sure the state agency did a proper review.
Bonds come in many forms, and about one-fifth of the bonds backing Contura’s future reclamation liabilities are collateral, or property, bonds. That means if Contura proved unable to complete the cleanup required at Belle Ayr, the state would intervene by collecting and forfeiting the bonds to finish the job.
By investigating the appraisal documents, the council sought to protect taxpayers from the possibility of covering extra cleanup costs.
“We are pleased that the judge agreed with us that this needs to be an open, transparent process in order to protect Wyoming’s taxpayers from taking on too much risk. Contura is the first coal company to use a real estate bond for reclamation, but they may not be the last, and we need to know that companies are being up-front in this important process. Had this appraisal been allowed to remain confidential, it would have set a dangerous precedent for other coal companies to do the same,” stated Joyce Evans, council chair for the landowners group.
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Belle Ayr is the first coal mine to use collateral bonds for reclamation purposes in the basin, according to the council. Collateral bonds can come with certain risks, because property values fluctuate over time, explained Shannon Anderson, an attorney for the Powder River Basin Resource Council.
“The risk is that the (appraised value) is wrong,” Anderson said. “Anyone who has ever bought and sold property knows that numbers fluctuate.”
For a collateral bond, a company pays for an appraiser to help determine the fair market price of a real estate property. The appraisal documents unlocked to the public last week revealed multiple appraisals had been conducted at Contura’s two ranch properties. Appraisers valued the combined 50,000-acre properties at $26.7 million.
Both the state and landowners group agreed the value was sound.
“The appraisal seems to be done well, but it just shows you that there is a range of values for real estate in Campbell County, and only time will tell if that property will be sold for that amount,” Anderson cautioned.
The Department of Environmental Quality will not appeal the court’s decision, according to a Keith Guille, a public information officer for the agency. He said the decision provided more clarity for future public record requests the agency would consider.
“We will certainly follow this ruling in the future,” Guille said. “We do not have a problem with that.”
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