Mitigation Banking. Southeast Stormwater Association SESWA. Creative Alternatives for Stormwater Funding. April 23, 2010

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1 Mitigation Banking Southeast Stormwater Association SESWA Creative Alternatives for Stormwater Funding April 23, 2010 Steve Leo, Stormwater Management Director, Gwinnett County Pete Wright, Principal Engineer, Gwinnett County Joel Tillery, Project Engineer, CH2M HILL Phil Sacco, Project Ecologist, CH2M HILL

2 Presentation Overview History Why Gwinnett developed a Mitigation Bank! Mitigation Overview Mitigation and Mitigation Banking in Georgia Mitigation Banking in Gwinnett County

3 History: Why Gwinnett developed a Mitigation Bank

4 Regulations 1990s Water Quality Standards Violations 1996 Env Group 3 rd Party Suit: EPA failed to enforce CWA EPA agreed to consent order to establish TMDLs Failure to comply: no new discharge/withdrawal permits EPD required withdrawal/discharge permit seekers to conduct a Watershed Assessment (WA). Develop a Watershed Protection Plan (WPP) to address WQS violations WPP s incorporated into discharge and withdrawal permits

5 Watershed Assessment Gwinnett needed a discharge permit WA completed in 2000 Findings: Excessive sediment release due to stream widening and deepening Diminished instream habitat for biota Reduced water quality and high turbidity Degraded riparian corridor and loss of riparian habitat with continued strembank failure Deminished flood control as channels are incised and floodplains are less accessible

6 Watershed Protection Plan Major Findings Mitigate changes in hydrology Protect stream and riparian areas and buffers Reduce pollutant loads from stormwater Watershed Improvement Strategies New Development Requirements Ordinance Revisions Improving Degraded Watersheds Watershed Improvement Plans

7 Watershed Improvement Plans Extensive Stream Walks and Evaluations 13,000 + Potential Projects, but all not Available Project Prioritization and Implementation Mandated by permits: 30 year plan implementation

8 Watershed Improvement Plans Development of Conceptual Watershed Improvement Projects Structural BMPs Stream Restoration

9 Project Implementation Before After

10 Watershed Improvement Plans Expensive: $7/lb TSS removed, or Conservative CIP estimate: +$350M Funding Sources Stormwater Utility General Fund Water and Sewer fees Grants Mitigation Banking

11 What is Mitigation? A regulatory requirement to replace or enhance stream and wetland ecosystems destroyed or impacted by proposed land disturbances with artificially created or restored systems. Compensation through stream restoration, wetland restoration, enhancement, or creation for functions and values that are lost due to impacts. Regulatory requirements create a supply & demand principle.

12 Regulatory Requirements Impacts to streams and wetlands are required to be mitigated per federal statutes: Sections 404/10 of the CWA Mitigation under Section 404(b)(1) CWA Federal Compensatory Mitigation Rule (2008) Compensatory Mitigation satisfied through: Mitigation banks In-lieu fee programs Permittee specific mitigation

13 Why is Mitigation Needed? Over 50% of the wetlands in the US have been filled and their function and value are lost and many of the countries streams are severely degraded The goal of mitigation is to replace functions which provide public benefits, such as flood storage, water quality protection, fish and wildlife habitat, and groundwater recharge.

14 Who Needs Mitigation? Anyone working in wetlands or waters of the US, should coordinate with the USACE to determine if a permit and mitigation is required to offset any unavoidable impacts. Impacts caused by development, transportation, infrastructure improvements Municipalities one of the major users of mitigation

15 Creating the demand Unavoidable impacts to waters of the US are determined by the loss of amount, function, and/or type The loss is converted into a required credit value to offset the impact The impacts must be offset through mitigation credits created by restoration activities

16 Mitigation Procedures by Region Standard Operating Procedures Calculations to determine required number of credits to offset impacts. Calculations to determine number of mitigation credits developed through restoration. Mitigation Bank Guidelines Instruction manual on how to set up a mitigation bank Credit release schedule Monitoring requirements and success criteria Reporting

17 USACE Oversight Wetlands permitting and mitigation is administered by the USACE USACE Districts Charleston Jacksonville Mobile Savannah Wilmington

18 Calculating Required Credits Wetland Adverse Impact Factors Factor ADVERSE IMPACT FACTORS Options Dominant Effect Fill 2.0 Dredge 1.8 Impound 1.6 Drain 1.4 Flood 1.2 Clear 1.0 Shade 0.5 Duration of Effects 7+ years years years years 0.5 < 1 year 0.1 Existing Condition Class Class Class Class Class Lost Kind Kind A 2.0 Kind B 1.5 Kind C 1.0 Kind D 0.5 Kind E 0.1 Preventability High 2.0 Moderate 1.0 Low 0.5 None 0 Rarity Ranking Rare 2.0 Uncommon 0.5 Common 0.1 These factors are determined on a case-by-case basis.

19 Credit Calculations, Wetland Required Mitigation Credits REQUIRED MITIGATION CREDITS WORKSHEET Factor Area 1 Area 2 Area 3 Area 4 Area 5 Area 6 Dominant Effect Duration of Effect Existing Condition Lost Kind Preventability 2 0 Rarity Ranking Sum of r Factors R 1 = 12 R 2 = 0.9 R 3 = R 4 = R 5 = R 6 = Impacted Area AA 1 = 100 AA 2 = 1000 AA 3 = AA 4 = AA 5 = AA 6 = R AA = Total Required Credits = (R AA) = 2100

20 Providing the supply A mitigation bank is a designated and approved wetland or stream area that has been created, restored, enhanced, or preserved (limited) and set aside in perpetuity to compensate for future unavoidable impacts to wetlands and waters of the US. Mitigation banks preferred method of compensatory mitigation per national rule. Credits are purchased at the bank as compensatory mitigation.

21 Why is mitigation banking preferred? Provides land owners, developers, environmentalists, and regulators the opportunity to join together in making responsible, ecosystem driven decisions about the future of local, regional, and national wetland resources. Pre-impact mitigation through creation, enhancement, restoration, and preservation. Stresses establishment of functional values prior to the occurrence of permitted unavoidable impacts. A scientifically sound alternative means of compensation for unavoidable losses

22 Mitigation Credit Calculations

23 Martin Heights Mitigation Credits

24 Credit Value in the Market Credits = $$$$$ Variable cost for credits, a competitive market Wetland $5,000 to $10,000 per credit Stream $40 to $100 per credit Credits impacts and credits generation calculated based on USACE SOP which may vary by region.

25 Developing a Mitigation Bank Selecting a suitable site is key Watershed based Ecological lift potential Service areas Regulatory Process Prospectus and Public Notice Draft and Final Banking Instrument Restrictive Covenants Agency Coordination

26 Phase I Site Selection & Draft Prospectus Considerations Existing Site Conditions Property Ownership Bank Sponsor must own property

27 Phase II - Prospectus Considerations Data Collection Project Design and Credit Potential Financial Assurance Public Notice Period Interagency Review Team Coordination (IRT) EPD BANKER EPA IRT USACE Interagency Review Team NMFS FWS

28 Phase III Draft Banking Instrument Considerations Public Comments Addressed Final Credit Calculations Detailed Design Financial Assurance IRT Coordination

29 Phase IV Final Banking Instrument Address final comments from IRT IRT Approval Finalize Design Construction planning The fun begins

30 After Construction Long-term Monitoring Success Criteria and Performance Credit Release Schedule Maintenance and Adaptive Management Credit Sales Reporting and Ledger Tracking

31 Gwinnett Mitigation Banking Program Concept Generator of credits not just a user Use mitigation banking as a revenue source to implement restoration projects and maintain compliance with NPDES permit Use credits for internal needs DOT, Water & Sewer, others

32 Goals and Objectives Implement recommendations of WIP Restore degraded streams to meeting designated uses Compensate for stream/riparian buffer zone and wetland functional losses Generate revenue from sale credits for County watershed improvements Add value to other County resource assets Implement TMDL requirements, remove from 303d list (improve water quality), improve recreation opportunity

33 Cost Benefit Analysis of Stream and Wetland Restoration Old Norcross Mitigation Bank Restoration costs Wetlands -- $5,000 to $50,000 per acre Stream -- $200 to $500 per foot Maximum credits value available for restoration 5 for wetlands 11 for streams Example stream restoration 2,120 ft cost of $425/foot = $901,000 9 credits/foot x 2120 feet = 19,080 $65/credit =$1,240,200 Financing costs = $270,000 (3% interest 15 year loan) Potential Revenue $1,240,200 - $901,000 - $270,000 = $69,200

34 Mitigation Banking Challenges Site Selection Project size limit Ownership Banker must own the bank site Biotic success criteria in an urban setting Time to develop a mitigation bank and release of credits Upfront Capital

35 Mitigation Banking Opportunities Phased watershed approach Partnering with land owners / land trust organizations Implementation of County Watershed Improvement Program to achieve biotic success criteria Mitigation provides opportunities for: Accruing financial resources for community improvements Creating natural amenities (parks) in an urban setting Enhancing education about restoration and water quality for local schools

36 Case study -- McDaniel Farm Permittee, GA DOT, I-85 and SR 316 Interchange 26,000 stream credits (33.5 wetland credits) McDaniel Park Mitigation 1,425 LF of stream restoration (13,984 credits) and 28 acres buffer enhancements (16,715 credits) GA DOT Funds = $1.6 Million (Eng., Construction, Monitoring)

37 Eroded Perennial Channel

38 Eroded Intermittent Channel

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41 Privet Removal, Before and after Exotic Species Management

42 Public Outreach Close coordination with Parks and Recreation Brochure describing project and program New trails and 3 bridges Outdoor classroom

43 Case study Martin Heights 850LF of stream restoration Created stream credits Credits released / sold = 3,098 credits Revenue generated ~ $280, Pending release 1,549 credits GEFA Funded ~ $1.7M Eng. & Const. (~$700,000 stream and buffer only)

44 Project Elements W ater Quality Treatm ent Environmental Improvements

45 Martin Heights Pre-Conditions

46 Martin Heights Pre-Conditions

47 Stream Rosgen E Channel Bankfull Elevation Riffle Cross Section Relative Elevation (ft) Station (ft) Constructed pool Proposed Riffle Existing Riffle View of stream pool Bankfull Elevation Bankfull width Wbkf (ft) Typical 18 Min Max Pool-pool spacing p-p (ft) Riffle length Lrif (ft) Pool length Lpool (ft) Run length Lrun (ft) Constructed riffle Glide length Lglide (ft)

48 Stream Restoration Design Geomorphic survey of existing site and reference reaches Natural channel design Level 1 restoration Rosgen E Channel type-slope= Enhanced native buffer and wetland vegetation Elevation (ft) Station (ft) Existing Martin Hts Riffle Proposed Cross Section

49 Views around the Project Site

50 Pictures During a Rain Event

51 Pictures During a Rain Event

52 Summary Mitigation banking is a demonstrated source of funding for Gwinnett County watershed improvement program. Numerous challenges in regulatory environment. Implementation of projects through mitigation banking achieves multiple County goals.

53 Questions Gwinnett County Department of Water Resources CH2M HILL