1 STATE OF VERMONT

SUPERIOR COURT ENVIRONMENTAL DIVISION

} In re Fontaine Act 250 Application } Docket No. 12- 1-10 Vtec In re Fontaine Act 250 Reconsideration } Docket No. 143-9-10 Vtec (Appeals of Fontaine) } }

Decision and Order Appellant-Applicants Daniel Fontaine and Michael F ontaine (Appellants) appealed from a decision by the District 4 Environm ental Commission (District Commission) ruling that Act 250 Rule 34(E) prevente d its consideration of Appellants’ application for partial findings for a proposed residential development located within the sand extraction areas governed b y an existing Act 250 permit. They also appealed from the District Commission’s s ubsequent decision declining to reconsider its decision, and the two appeals were co nsolidated. Appellants are represented by John W. O’Donnell, Esq.; the Land Use Panel of the Natural Resources Board (NRB) is represented by John H. Has en, Esq.; and the Agency of Natural Resources (ANR) is represented by Elizabeth Lord, Esq. Many of the facts necessary to decide the Rule 34(E ) issue are undisputed; an evidentiary hearing was held before Merideth Wright , Environmental Judge, to take any remaining evidence relevant to the Rule 34(E) i ssue. The parties were given the opportunity to submit written memoranda and request s for findings. Upon consideration of the evidence, of the undisputed fa cts, and of the written memoranda and requests for findings filed by the pa rties, the Court finds and

concludes as follows.2

Procedural History and Factual Background Appellants’ project property consists of approxima tely 293.5 acres of land on both sides of Chapman Lane in the Town of Williston, located southerly of the Winooski River and easterly of North Williston Road . Parcel #1, consisting of 135 acres, is located northerly of Chapman Lane and is o pen land currently in agricultural use. Parcel #2, consisting of 158.5 ac res, is located southerly of Chapman Lane and contains the two sand extraction p its and their associated roadway that are the subject of the Act 250 Permit at issue in the present appeal. Parcel #2 contains an open area near two ponds adjo ining Chapman Lane, and is otherwise forested, except for the areas within the sand extraction pits. The forested areas of the project property, as well as those of a djoining property, function as a deer wintering area and have been so identified on maps produced by ANR. In 1991, Appellants 1 applied for and were issued Act 250 Land Use Permi t # 4C0893 (the 1991 Permit) for the operation of a s and extraction pit on a portion of that parcel. The Permit authorized Appellants to d isturb approximately 42 acres of the parcel, consisting of a 5.5-acre sand extraction area, a 33.9-acre sand extraction area, and a total of 2.5 acres of access roadways se rving those areas. The District Commission’s Findings of Fact related to the 1991 Permit state that the property contains “an important deer winte ring area” and that Appellants had “agreed to conditions recommended by the Vermon t Department of Fish and Wildlife to mitigate the impact” of the sand extrac tion project on the deer wintering

area. As stated in Condition 10 of the 1991 Permit, the permit required that the remaining 98 forested acres of the project parcel b e “retained in its natural condition as winter shelter for deer” and that it be managed under a forest management plan,

1 For ease of reference in discussing the permit h istory of the project property, the term Appellants includes the present Appellants’ pr edecessors and co-applicants.3

to be updated every five years, “specifically outlin ing [the] protection and enhancement of the hemlock and white pine component ” of that forested area. Condition 12 of the 1991 Permit required that sand extraction operations be suspended each winter from December 1 through March31, except if special circumstances require sand extraction, and then only if the Department of Fish and

Wildlife determines that such extraction will not r esult in any adverse effect on local deer populations. Condition 13 of the Permit requi red that, “following the extraction of sand resources,” the cleared areas are required to be replanted “to a hemlock/white pine cover type” and the road is requ ired to be replanted to grass. The 1991 Permit allowed extraction to occur through October 1, 2016, unless the duration of the permit was extended by the District Commission. Restoration of the first extraction pit began in or about 2005, as dis cussed in the letter in evidence as

Exhibit CC. The Town Plan, Subdivision Regulations, and Zoning R egulations have each been amended over time since the original 1991 Perm it was issued. Appellants did not provide any editions of any of those documents, but did provide evidence in their Exhibit 7 that the municipal regulations requ ire that 75% of the parcel be preserved as open space. They also provided eviden ce that projects served by a loop road or cul-de-sac, that is, with only single ac cess onto the adjoining street network, are limited to no more than 40 units, but th at 50 units had been allowed under the regulations as they existed in 2004. App ellants did not provide evidence of any other specific changes in the municipal regu lations over time since the 1991 permit conditions were imposed that would affect th eir ability to locate development outside the boundaries of the deer wint ering area. Appellants also described the phased process for approval of reside ntial development in the Town

of W illiston, which requires an applicant to obtain allo cations of residential dwelling construction many years in advance of the proposed construction dates.4 In March 2006, the District Commission issued Act 25 0 Land Use Permit # 4C0893-1 (the Dash-1 Amendment) as an amendment t o the 1991 Permit, allowing Appellants to use 36.1 acres of the 152.5-acre neig hboring Chapman Parcel 2 for sand pit operations, and to use an existing logging road characterized in Condition 19 of the Dash-1 Amendment as “connect[ing] the existing Fontaine Pit with the proposed pit on the Chapman parcel.” Condition 18 of the Da sh-1 Amendment required “the remaining 74.6 acres” (presumably of the forested p ortion of the Chapman parcel) to be “retained in perpetuity as protected deer winter ing area.” Conditions 20, 21, and

22 are similar to conditions of the 1991 Permit and include requirements addressing winter operations, forest management, and reclamation by replanting the extraction areas “to a hemlock/white pine cover type” and repl anting the roadway with grass. Paragraph 38 of the Dash-1 Amendment extended the e xpiration date of the permit to December 1, 2030, and the reclamation completion d ate to December 1, 2035, and specifically stated that the permit “shall not expi re until the Commission has determined that such reclamation has been completed .” It is not clear from the materials provided by the parties whether the exten ded expiration date applies only to operations on the Chapman parcel or also extende d the expiration dates regarding the original Fontaine pit sites; Appellan ts appear to treat the Fontaine pit sites as continuing to have a 2016 restoration date

. In December 2006 and in 2007, the District Commissio n issued two additional permit amendments applicable to operations on the C hapman Parcel. Permit # 4C0893-2 (the Dash-2 Amendment) approved a haul r oad between the two approved pits on the Chapman Parcel. The Dash-2 Am endment reiterated the conditions related to the deer wintering area conta ined in the Dash-1 Amendment,

2 Based on a notation on the project plans in evide nce as Exhibit 9, the Chapman Parcel appears to be located easterly of the southe rly project parcel.5

including the reclamation dates and requirements. In 2007, the District Commission issued Permit # 4C0893-3 (the Dash-3 Amendment), app roving a modification to the haul road to allow the sand extraction operation on the Chapman parcel to comply with an ANR stormwater permit and an ANR wetlands p rogram conditional use

determination. The Dash-3 Amendment reiterated the conditions related to the deer wintering area contained in the Dash-2 Amendment, in cluding the reclamation dates and requirements. In 2009, Appellants submitted the present applicatio n to the District Commission. Appellants seek partial findings under Act 250 Criterion 8(A) for a proposed 34-lot residential development to be locat ed on the sites of the Fontaine sand extraction areas approved in the 1991 Permit. An Act 250 application for partial findings under selected Act 250 criteria ma y be filed pursuant to Act 250 Rule 21. Under Criterion 8(A), a permit must be denied i f a party opposing the application demonstrates that the development “will destroy or significantly imperil necessary wildlife habitat,” and any one of the foll owing is met: (i) the economic, social, cultural, recreational, or ot her benefit to the public from the development or subdivision will not outweigh the economic, environmental, or recreational loss to the public from the destruction or imperilment of the habitat . . . , o r (ii) all feasible and reasonable means of preventin g or lessening the destruction, diminution, or imperilment of the habita t . . . have not been or will not continue to be applied, or (iii) a reasonably acceptable alternative site is o wned or controlled by the applicant which would allow the development or subdivision to fulfill its intended purpose. 10 V.S.A. § 6086(a)(8)(A). In 2011, ANR updated the deer wintering area maps fo r Vermont, using a more accurate Geographic Information Systems (GIS) based mapping methodology than the aerial photography methodology used to pro duce the previous series of maps in the 1970s and early 1980s. The updated map s added new forested areas6

and removed areas in which residential development or deforestation had occurred since the previous survey of deer wintering areas. For that reason, Appellants’ two sand extraction areas and related roadways were exc luded from the 2011 deer wintering area map.

Rule 34(E) Analysis Appellants applied for partial findings under Act 2 50 Criterion 8(A) for a proposed residential development on the sites of th e Fontaine sand extraction areas governed by the 1991 Permit. Because the 1991 Perm it was still in effect on the project property, the District Commission treated it as an application to amend the 1991 Permit’s conditions requiring reclamation upon closure of the sand extraction operations. 3 In its decision, the Commission first analyzed, und er Act 250 Rule 34(E), whether the reclamation conditions from the 1 991 Permit applicable to the

Fontaine sand extraction areas could be amended to allow residential development in those areas instead of requiring restoration of the areas to provide deer wintering

habitat. Because the District Commission ultimatel y determined that amendment of the permit conditions was not warranted under its R ule 34(E) analysis, the Commission did not proceed to address the merits of the application for partial findings under Criterion 8(A). Act 250 Rule 34(E) sets out the analysis to be appl ied when an application seeks to amend conditions of a final Act 250 permit . Before the merits of an application to amend an Act 250 permit condition ca n be considered, the Court must first consider whether the applicant meets the stan dards of the so-called Stowe Club

3 As discussed further below, it appears that, in con sidering Appellants’ application as an application to amend the 1991 Permit conditio ns, the District Commission did not take into account the fact that the present per mit will expire and Act 250 jurisdiction over the tract will cease when and if reclamation is completed.7

Highlands balancing test codified as Act 250 Rule 3 4(E). See In re Nehemiah Assocs., Inc. (Nehemiah II), 168 Vt. 288, 293 (1998) ( citing In re Stowe Club Highlands, 166 Vt. 33, 37 (1996)) (explaining that th e primary issue in an amendment case is “under what circumstances . . . permit cond itions may be modified”). The Rule 34(E) analysis proceeds in three steps.

All that is before the Court in the Statement of Questions is whether Appellants’ Act 250 Rule 21 application for partial consideration of their future residential project meets the criteria of Act 250 R ule 34(E). Even though, strictly speaking, Appellants’ application that was before th e District Commission does not seek to amend any existing permit conditions, it was treated as such by the District Commission because the existing permit had not yet expired. In this context—an application for a future project on property covere d by an existing but limited-term permit—the Rule 34(E) analysis does also serve as a useful method for balancing considerations of flexibility and finality in the s equencing of Appellants’ application. That is, in the present case the Court will use the Stowe Club Highlands analysis, as codified in Act 250 Rule 34(E) to determine whether flexibility outweighs finality to allow Appellants to submit their application for pa rtial consideration under Act 250 Rule 21, before they seek approval, if later necessar y, to amend the 1991 Permit

conditions.

Whether Issue was Critical First, the Court must determine whether any permit c ondition that an applicant seeks to amend “was included to resolve a n issue critical to the issuance of the permit.” Act 250 Rule 34(E)(1). That is, the limitations imposed by Rule 34(E) only restrict the amendment of final Act 250 permit s if applicants seek to amend

conditions that were intended to resolve issues cri tical to the District Commission’s initial decision to issue the permit. In re Judge Development Corp., No 189-9-058

Vtec, slip op. at 7 (Vt. Envtl. Ct. Aug. 7, 2006) (Wr ight, J.); see also Act 250 Rule 34(E)(1)(a). As fully discussed in the Findings of Fact, Conclusi ons of Law and Order of the 1991 Permit, and as is apparent from the 1991 le tter from ANR’s Department of Fish and Wildlife in evidence as Exhibit BB, the win ter operation, deeryard preservation, and ultimate reclamation conditions at issue were critical to the issuance of the sand extraction permit. The Depart ment’s support for the permit under Criterion 8, and the District Commission’s iss uance of the permit under Criterion 8, depended on the conditions at issue in this appeal.

Whether Application Seeks to Relitigate or Undermin e If the condition that an applicant seeks to amend w as included to resolve an issue critical to the permit’s issuance, the Court m ust next determine whether the applicant is seeking to relitigate the condition or to undermine the purpose or intent of the permit condition. Act 250 Rule 34(E)(2). In the present case, Appellants are not seeking to r elitigate the permit conditions as to the sand extraction project or to undermine the purpose or intent of those conditions. Appellants do not contest either the existence of the extensive deer wintering areas on the project property, nor the imp ortance of the permit conditions to preserving and restoring the deer wintering capa city of the overall property during the lifetime of the sand extraction permit. Rather, Appellants seek an opportunity to present ev idence to the District Commission that they can provide an approvable exte nt of protected deer wintering area in the Town of Williston, compared to that prot ected in the sand extraction permit series, through the design and conditions of their proposed residential development. They essentially are asking to have t heir proposed residential development on the Fontaine property analyzed as of 2016, that is, as if the sand9

extraction areas had been restored and the sand ext raction permit had expired.

Balancing Flexibility & Finality If an applicant is seeking to amend a condition cri tical to the permit’s issuance but is not merely seeking to relitigate th e condition or undermine the permit’s intent, then the Court must balance the nee d for flexibility against the need for finality to determine whether the application t o amend the permit condition may be considered. Act 250 Rule 34(E)(3). In analyzing the need for flexibility with regard t o a permit condition, the Court must consider the following factors: a) changes in facts, law, or regulations beyond the perm ittee’s control; b) changes in technology, construction, or operations w hich necessitate the need for the amendment; c) other factors including innovative or alternative d esign which provide for a more efficient or effective means to mitigate the impact addressed by the permit condition; d) other important policy considerations, including the proposed amendment’s furtherance of the goals and objectives of duly adopted municipal plans; [and] e) manifest error on the part of the district commissi on; the environmental board; or the environmental court in the issuance of the permit condition[.] Act 250 Rule 34(E)(4)(a)–(e). The changes adduced in support of the need for flexibility must be relevant to the conditions at i ssue, see In re: Dr. Anthony Lapinsky and Dr. Colleen Smith, Nos. 5L1018-4, 5L0426 -9 EB, Findings of Fact, Conclusions of Law and Order at 19 (Vt. Envtl. Bd. Oct. 3, 2003), and must be a “driving force” behind the proposed amendment. See In re: Town and Country Honda, No. 5W0773-2 EB, Findings of Fact, Conclusions of Law and Order at 17 (Vt. Envtl. Bd. Feb. 15, 2001). Although the District Commission treated Appellants ’ application as10

effectively seeking amendments to the winter operat ion and forest management conditions of the 1991 Permit, the application does not seek to change those conditions during the pendency of the sand extracti on operations. Nor does it seek amendment of conditions permanently applicable to a completed project, where neighbors or residents of the completed project hav e a reliance interest in the continued applicability and enforceability of the c onditions. Strictly speaking, the present application does not even seek to change or amend the reclamation condition as it pertains to the sand extraction pro ject. Rather, Appellants seek a very preliminary ruling as to whether a new residential project, taken on its own merits, can be designed to satisfy Criterion 8(A). In considering how to balance flexibility with fina lity, it is important to recognize that such balancing of finality with flex ibility operates differently in the context of permits with an indefinite duration than it does with respect to permits, such as the present one, that will actually expire s o that Act 250 jurisdiction will

cease after reclamation has occurred. See 10 V.S.A . 6090(b) (distinguishing Act 250 permits that have a limited duration from those wit h indefinite duration); In re Huntley, 2004 VT 115, ¶ 1, 177 Vt. 596 (mem.) (“[W]he n a permit expires . . . the land is no longer subject to Act 250 jurisdiction absent some activity to trigger the statute’s application.”). It would be extremely wasteful of public and privat e resources to require an applicant to reclaim an are a by planting and growing trees, only to later allow the same area to be cut and dev eloped immediately afterwards, if it is capable of qualifying for such development un der the applicable municipal and state regulations, including Act 250. The dilemma posed with the current application is s imply one of timing. If a prospective developer of land to which Act 250 juri sdiction has not yet attached is entitled to apply for a partial findings ruling som e years before investing in complete design plans for a project, there must be a way for a prospective developer11

of land subject to a finite-term permit to obtain t he same sort of ruling in advance of the permit’s expiration. This dilemma only occurs in the present case becaus e the 1991 Permit will expire, at that time leaving the property without an y conditions unless and until a new project is proposed and a new permit is ruled o n. See In re Huntley, 2004 VT 115, ¶ 1. Under the analysis developed in Huntley, o nce extraction on Appellants’ property has ceased and five years of reclamation g rowth has occurred in compliance with the permit requirements, Appellants will be free to apply for an Act 250 permit for their residential project without re gard to the conditions of the expired permit. Under Act 250 Rule 21, they could t hen seek a ruling as to whether the proposed project complies with Act 250 Criterio n 8(A). If Appellants would have the opportunity to have their application for partial findings considered on its merits after the current permit has expired, then th e question before the Court in the present case is whether flexibility outweighs final ity to allow Appellants to obtain that ruling in advance of the permit’s expiration. Turning to the flexibility factors in Act 250 Rule 34(E)(4), the present case does not involve any error on the part of the Distr ict Commission in imposing the conditions in the original permit. See Act 250 Rul e 34(E)(4)(e). Nor does it involve an alternative design to more efficiently or effect ively mitigate the impact on the deer wintering area, as the proposed residential dev elopment will involve yearround effects in an area that is protected during t he winter months under the existing permit. See Act 250 Rule 34(E)(4)(c). Ho wever, this factor shifts in favor of flexibility after the expiration of the existing pe rmit, as the deer wintering area on the property will then have no protection unless fu rther conditions are imposed in a future permit. Similarly, after the expiration of t he existing permit, policy considerations regarding housing and affordable hou sing in the municipal plan may come into play, together with the state and local po licies regarding wildlife habitat.12

See Act 250 Rule 34(E)(4)(d). The changes in coverage of the ANR Deer Wintering A rea maps—those that exclude the sand extraction areas from the mapped c overage—are not a factual change beyond the permittees’ control. See Act 250 Rule 34(E)(4)(a). Rather, those changes resulted from activity controlled by the pe rmittees; those changes were the very changes allowed under the permit and that invo lve the areas subject to restoration as deer wintering area. Nor is the imp roved GIS mapping technology a technological change requiring an amendment to the existing permit, because improvements in mapping technology are not the “dri ving force” behind the amendment. Town and Country Honda, No. 5W0773-2 EB , Findings of Fact, Conclusions of Law and Order at 17; see Act 250 Rul e 34(E)(4)(b). Changes in the municipal regulations applicable to the potential for housing development on the property are not a regulatory ch ange beyond the permittees’ control with regard to the sand extraction permit c onditions. See Act 250 Rule 34(E)(4)(a). On the other hand, such regulatory con straints would be relevant to the analysis of the merits of a new application under C riterion 8(A)(iii) regarding reasonably acceptable alternatives. See 10 V.S.A. § 6086(a)(8)(A)(iii). However, one change in the law since the 1991 Permit was issued does support the need for flexibility, at least in allowi ng the consideration of a project designed in anticipation of the sand extraction per mit’s expiration. When the 1991 Permit conditions were imposed, Act 250 jurisdictionwas understood to continue to attach to property containing closed and reclaimed mineral extraction sites. After the Huntley decision in 2004, Act 250 jurisdiction i s understood to cease once the extraction area is closed and properly reclaimed inaccordance with the permit conditions governing the site. 2004 VT 115, ¶ 1; cf . In re Hamm Mine Act 250 Jurisdiction, 2009 VT 88, ¶¶ 17–18 186 Vt. 590 (concl uding that Act 250 jurisdiction does not cease when an applicant has not fully comp lied with permit conditions).13

This change in the decisional law was beyond the pe rmittee’s control and affects Appellants’ prospective plans for the project prope rty. See Act 250 Rule 34(E)(4)(a). Having determined that there are factors in favor o f flexibility, the Court must now balance these factors against the need for finality in the permit conditions. The Court balances the need for flexibility against the need for finality to insure that the initial permitting proceedings are not “merely a prologue to continued applications for permit amendments.” Stowe Club Hi ghlands, 166 Vt. at 39. In making that determination, the Court considers, among other things, “the degree of reliance on prior permit conditions or material rep resentations of the applicant in prior proceeding(s) by the district commission, the environmental board, the environmental court, parties, or any other person who has a particularized interest protected by [Act 250] that may be affected by the proposed amendment.” Act 250 Rule 34(E)(4)(f). Thus, even if some of the factor s support flexibility, if those factors reflect a change that was “reasonably foreseeable a t the time of the permit application,” or if parties or other interested pers ons “reasonably rel[ied] on the permit conditions in making decisions,” consideratio n of an application to amend the permit may not be justified. Nehemiah II, 168 V t. at 294.

The balancing of flexibility against finality there fore must be analyzed differently with respect to the existing sand extra ction permit than with respect to Appellants’ application for partial findings on whe ther their proposed residential development satisfies Act 250 Criterion 8(A), becaus e the sand extraction permit is designed to expire. If Appellants were applying to change the contested conditions of the sand extraction permit, in and of itself, and without first obtaining approval of an alternate future project on the property, finali ty would outweigh flexibility. ANR

has relied on the contested conditions in its effor ts to protect deer wintering habitat during the sand extraction use of the property and until the permit expires.14 However, Appellants are not now asking to change the 1991 Permit conditions; instead, they are seeking partial findin gs as to whether a different proposed project could be approved after the expira tion of the existing sand extraction permit. For the reasons discussed above , in particular because Act 250 jurisdiction over the project property will cease a fter the permit expires and once reclamation is completed, the Court concludes that f lexibility outweighs finality to allow Appellants to submit their application for pa rtial consideration of their future residential project under Act 250 Rule 21. Given t he long planning horizon required for residential projects in the Town of Williston u nder its municipal regulations, it is appropriate for the District Commission to consider , in advance of the existing permit’s expiration date, the merits of whether Appe llants’ proposed residential project could be designed to satisfy Act 250 Criter ion 8(A). This decision does not in any way address the merit s of Appellants’ residential project application under Criterion 8(A ) and Act 250 Rule 21, because the merits of the application are for the District 4 En vironmental Commission to

consider in the first instance. 4

4 The merits of the application must of course be a nalyzed as if the sand extraction areas had been fully restored as required in the ex isting permit; otherwise, it would be necessary for Appellants to apply to change the restoration conditions of the existing permit, which they have not yet done. It w ill be up to them to apply to change those conditions if and only if they obtain approval of their residential project within the areas slated for restoration. A t that time, the District Commission would have to determine whether the approved reside ntial project warrants changing the restoration conditions under Act 250 R ule 34(E). However, as it is possible that the application will be disapproved u nder Criterion 8(A), or that the project’s location or scope may be changed during t he course of the application process, it is simply premature for the Commission t o consider whether the duration or the restoration conditions of the existing permi t should be changed, unless and until it rules on whether the application is approv able under Criterion 8(A).15 Accordingly, based on the foregoing, it is hereby ORD ERED and ADJUDGED

that the District 4 Environmental Commission’s Act 250 Rule 34(E) ruling is REVERSED, concluding this appeal. The District 4 En vironmental Commission shall proceed to consider the merits of Appellant-Applica nts’ application for partial findings as to Criterion 8(A) for the proposed resi dential development, consistent

with this decision.

Done at Berlin, Vermont, this 20th day of December, 20 11.

_________________________________________________ Merideth Wright Environmental Judge