Anaconda (IR Copy)

In this file photo, the Anaconda-Deer Lodge County courthouse is pictured with the slag piles in the distance at right. Anaconda officials have been under fire for the financial agreement it worked out with ARCO since officials unveiled a draft of the agreement in August.

BUTTE -- Controversy swirls around Anaconda’s tentative $125 million deal with ARCO.

As soon as Anaconda-Deer Lodge County unveiled its proposed agreement with Atlantic Richfield Company to manage the copper smelting waste in August, county officials came under fire.

Questions have swirled around the integrity of the agreement, which provides the county with money necessary to manage the Environmental Protection Agency’s mandated waste left in place. The contaminated land covers an estimated 300 square miles.

The waste is due to nearly 100 years of copper smelting activity, which led to heavy metals being spread airborne across the land. The smelter closed in 1980.

Anaconda lawyer Michael Grayson is one of the foremost critics of the county’s agreement with ARCO, which is the responsible party for Anaconda’s Superfund cleanup. Anaconda became a Superfund site in 1983.

Grayson questions the fact that the county signed a confidentiality agreement with ARCO in order to negotiate its own deal -- a financial one -- with the former oil giant. London-based BP bought ARCO in 2000.

“The secrecy is a huge thorn,” Grayson said from his office. “I’d like to see a more open process.”

But outgoing county chief executive Connie Ternes-Daniels said a small group in Anaconda are taking cheap shots at Anaconda-Deer Lodge officials.

“(The critics are) unfairly tagging the county as if we’re holding illegal meetings,” said Ternes-Daniels earlier this month. “We’re abiding by a federal judge’s order in order to be involved in the (legal talks with EPA and ARCO). We’re not going to dispute a federal judge’s order.”

U.S. District Judge Sam Haddon signed an order in 2003, establishing that consent decree discussions -- legal talks to define Superfund cleanup -- are to be conducted behind closed doors between the EPA and ARCO. Any third party who wants to be a part of those Superfund talks has to sign the confidentiality order.

County officials in Anaconda say that to negotiate their own agreement with ARCO, they needed to have knowledge of EPA’s talks with ARCO.

As a result, the Anaconda-Deer Lodge board of commissioners agreed to abide by the confidentiality order in July 2015.

That vote likely violated the public’s right to participate because the vote wasn’t listed in the agenda, according to Mike Meloy, a Helena attorney who specializes in media and access law in Montana.

But Meloy said the violation, “is probably not fatal to (the county’s) open meeting obligations,” because the July 2015 agenda stated that the commission would discuss the confidentiality order.

In any event, the statute of limitations is long since passed, Meloy said via email.

Anaconda citizen Alan Shewey echoes Grayson’s concern over the county participating in the confidentiality order.

“The county decided to go into secret negotiations based on a court case that doesn’t have anything to do with Anaconda’s issues,” Shewey said.

But Carl Nyman, the county's Superfund coordinator, said it was impossible to negotiate one without being privy to the other.

The county's agreement

County officials, who felt they have worked hard with the county’s best interests at heart, have responded with some dismay over the criticism.

The county says the compact with ARCO relieves taxpayers of unbearable burdens and is far reaching -- providing for the county for generations to come.

The $125 million will be spread out over 100 years.

Board of commissioner Terry Vermeire said that amount is set at today's value. The amount will be adjusted for inflation, Vermeire said.

Nyman said earlier this month that the tentative agreement -- called the Institutional Controls or the IC agreement -- solves problems for the county. Some of those problems were obvious and some a little more unknown.

The new tentative agreement wipes away an earlier compact the county reached with ARCO in 1994. That old agreement assumed Old Works Golf Course would bring in profit it never has.

Because of that assumption, the 1994 agreement left the county with the oversight and management for around 500 additional acres in east Anaconda. The thinking at the time of the 1994 agreement was that the county would have the money to handle all that property because of the golf course’s anticipated profit.

“The county has contractual obligations,” Nyman said.

The inherited land has arsenic, lead and other metals still on it. There are varying caps on some of those 500 acres.

Since the golf course has not turned a profit, the county has struggled to take care of the additional acreage ever since.

“The ’94 agreement put the screws to us. We were responsible for millions of dollars (worth) of waste left in place. It was a monkey on the county’s back,” Nyman said. “Even if (the cost of maintenance) is $4,000 to $5,000, it’s more than the county has budgeted for.''

In addition, the county-owned golf course has been unable to break even since 2009. From 2014 to 2016 the county took out nearly $1 million in loans from ARCO to pay for much needed upgrades and to help keep the golf course afloat.

The Jack Nicklaus-designed course, rated as one of the 100 best in the country by Golf Digest, brings in an estimated $3.3 million annually to businesses in the county in “trickle down” revenue, according to a 2013 report. But it is also a complex cover over waste. Underneath the course lies a water system that prevents metals-contaminated groundwater from reaching Warm Springs Creek. 

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If the golf course closes, the county will be stuck holding the bag. Taxpayers would have to pay to convert it into some other cap, according to the 1994 agreement. To turn the golf course into another use that would still be protective of the arsenic-contaminated groundwater would cost, according to a conservative estimate, $18 million, Nyman said.

The county’s annual tax revenue is about $15 million.

The tentative IC agreement also takes care of the nearly $1 million debt the county has racked up with ARCO so repayment of that loan will not come from Anaconda taxpayers.


The former deputy county attorney and county attorney, Grayson told The Montana Standard that the public was “largely unaware” of the fact that Anaconda and ARCO had been involved in negotiations.

But Vermeire told The Standard earlier this month that the county has made the talks known at commission meetings since 2010. That’s when commissioners joined the negotiating table. Vermeire has participated in those talks since his 2012 election.

"I wanted to be in on this because of how important it is," Vermeire said. "We're a cap gun going against cannons."

Vermeire says it was never a secret that the county had four large issues at stake. (See information box.)

“Every meeting I went to I reported on,” said Vermeire.

What the county couldn’t discuss, starting in July 2015, were the details themselves -- until the county released the draft of the agreement in August.

What's next?

Nyman said the county sent the draft of the agreement, with the public’s requested changes, back to ARCO after hearing from the public in August. When the next draft is agreed to -– it also has to go through both EPA and the state approval -- it will then go through another public comment process, Nyman said.

ARCO spokesperson Brett Clanton said ARCO and the county agreed to put the agreement on hold until the election cycle was over “so that it would not become a distraction in the election,” Clanton said. Clanton added that the timeframe to finalize the tentative agreement is up to the county.

Ternes-Daniels said the fact that she lost her bid for re-election shouldn’t impact the agreement. Anaconda’s chief executive doesn’t have a vote in commission meetings. The commissioners will vote on the agreement when the final draft is reached.

Ternes-Daniels said she hopes Anaconda can come together on this agreement.

“The IC agreement has great potential for this community,” said Ternes-Daniels.

Incoming chief executive Bill Everett did not respond to calls from The Montana Standard for comment.

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