Proposed Revisions to the EEP Schedule of Fees for Streams and Wetlands September 13, 2006

1. Proposed Revisions to the EEP Schedule of Fees for Streams and Wetlands September 13, 2006

2. Presentation Outline • Background • Supporting Data • Proposed Revisions • Revision Timeline • Advance Outreach

3. Background • EEP operates an in-lieu fee program to provide an option in NC for meeting mitigation requirements • Since 1998 EEP has accepted 581 payments from a variety of clients • 86% from private entities/companies • 14% from government agencies (excluding DOT) • EEP is required to annually evaluate actual project costs and adjust fees as necessary

4. Background continued • Last fee revision occurred in 2003 • Increased stream fee • Added annual adjustment for inflation • In last two years, EEP has developed many projects that provide the most data ever related to restoration costs • DBB projects in monitoring phase • FD contracts awarded • Latest data analyses reveal need for revision

5. Supporting Data • Analysis of 44 DBB Stream Projects • UNC-W/Clemson • Assessment of per unit costs of full-delivery projects • Wetlands and streams • Coastal land cost assessment • State Property Office

6. UNC-W/Clemson Cost Study • Inventory Project Costs • Develop Analysis Tool • Predict expenses of individual projects • Forecast total cost of coming year’s projects • Assist in determining fee schedule

7. Project Cost Components • EEP Administration • Land Acquisition • Design/Engineering • Construction • Construction Management • Monitoring • Stewardship

8. Component Breakdown

9. Typical Project Expenditure Over Time • 1st Year 24.50% • 2nd Year 66.45% • 3rd Year 5.70% • 4th Year 0.70% • 5th Year 0.70% • 6th Year 0.70% • 7th Year 1.25% 90.95% 9.5%

10. Cost of Stream Restoration • Differentiation of Developing-Urban vs. Rural projects • EEP DBB stream project costs were normalized (current cost of living) and averaged • Average Cost - $242/ft • Rural Cost - $204/ft • Developing-Urban Cost - $332/ft • EEP FD stream project costs normalized and averaged (61 projects) • Average Cost - $264/ft • Rural Cost - $259/ft • Developing-Urban costs - $268/ft

11. Cost of Wetland Restoration • Normalized (current cost of living) for all wetland FD projects and averaged • Riparian Wetland (28 projects) • Developing-Urban-$56,000/ac • Rural-$32,000/ac • Non-Riparian Wetland (15 projects) • Developing-Urban-$21,000/ac • Rural-$21,000/ac (no difference)

12. Accounting for Coastal Land Costs in Stream and Wetland Fees • Evaluated average cost of land acquired by SPO in 20 coastal counties • Stream:                            $6,800/acre • Non-riparian Wetland:        $3,800/acre • Riparian Wetland:              $7,800/acre  • Removed land cost from stream and wetland cost data for rural projects and applied coastal land cost to derive recommended fee

13. Proposed Revisions • Establish three fee categories • Developing-Urban (to reflect complexities of restoration in urban and developing areas) • Coastal (to reflect escalating land costs in coastal part of NC) • Rural (to maintain a base fee for remaining parts of the state) • Define categories geographically based on county boundaries

14. Category Definitions • Urban counties were originally defined by evaluating MPO boundaries • It has been suggested that we consider urban areas as defined pursuant to Phase II stormwater rules • Coastal counties were defined based on the presence of waterfront properties

15. Proposed Category Locations

16. Proposed Fee Revisions

17. Fee Revision Timeline

18. Advance Outreach • Letters (>500) sent out to ILF clients, interested parties and Liaison Council members • Presented proposals to the PACG and PACG-TC • Held meeting for interested parties on September 8th

19. Requesting permission to proceed to the November EMC asking to initiate rule-making through Notice of Text and Hearing. Slight modifications to proposal may be made prior to presentation to EMC.