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Mitigation Banks and In-Lieu Fee Funds

Mitigation Banks and In-Lieu Fee Funds. Processes and Lessons. Mitigation Banks and ILF. Provide compensation for stream or wetland impacts permitted under the Virginia Water Protection Permit Program (VWPP)

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Mitigation Banks and In-Lieu Fee Funds

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  1. Mitigation Banks and In-Lieu Fee Funds Processes and Lessons

  2. Mitigation Banks and ILF Provide compensation for stream or wetland impacts permitted under the Virginia Water Protection Permit Program (VWPP) Credits derived from stream or wetland restoration, enhancement, preservation; upland buffer restoration and preservation Credits sold on open market

  3. Site Approval Process

  4. Site Approval Process

  5. Interagency Review Team (IRT) DEQ and Corps are “Co-Chairs” Other members of IRT: EPA, FWS, NOAA, DGIF, DCR, DOF, VMRC, localities IRT develops template documents and guidance used for banks and ILFs IRT meets monthly IRT strives for consensus but Chairs make final decision Dispute resolution processes established

  6. Prospectus • Provides… • Sponsor identification • General information on project • Maps of location, topos, aerials, draft site design • Land ownership information • Service Area • Site selection factors • Feasibility issues (threats to site, locality zoning/plans, known encumbrances

  7. Sponsor Sponsor is responsible party for bank If Sponsor is LLC, Company, or other, IRT must insure that representative has ability to sign for LLC Review of Operating Agreements Sponsor must be registered with SCC if company

  8. MBI Development Mitigation Banking Instrument (MBI) is a ‘contract’ between Sponsor, DEQ, and Corps Outline credit creation, monitoring requirements, success criteria, reporting requirements, Long Term Management, financial assurances, credit release schedule, closure procedures.

  9. Service Area Area in which a bank can sell credits Limited by SWCL Same or adjacent subbasin (8 digit HU) within same river watershed IRT may also limit based on physiographic province or other factors to ensure similar resources and consistency

  10. Land Ownership • Sponsor does not need to own land but must have sufficient interest in property • Fee simple ownership is preferred • Sponsor must have easement if not owned • Allow access for Sponsor, IRT, and Long Term Steward • Allow construction and repair activities • Transfers all rights for sale of credits derived from eased land to Sponsor

  11. Land Ownership If land owner is LLC, Company, or other, IRT must insure that representative has ability to sign for LLC Review of Operating Agreements Title search and title insurance determine encumbrances and other interests (utility easements, separated resource rights)

  12. Site Protection • Required by State Law and federal reg • Sites must be protected in perpetuity • Deed Restriction • Uses template language • Restricts activities • Must be recorded with locality • Runs with the land • Conservation Easement • Restricts activities • Must be recorded with locality • Runs with the land

  13. Conservation Easements Additional credit given if conservation easement is held by third-party non-profit in accordance with Virginia Conservation Easement Act or Virginia Open Space Act (State agencies including Virginia Outdoor Foundation) Provides additional protection

  14. Financial Assurances • Four financial assurances for each site • Initial Credit Release • Monitoring and Maintenance • Catastrophic Events • Long Term Management • Accepted Types: Escrow Accounts, Bonds, Letters of Credit, Casualty Insurance • Managed by escrow agent per MBI and escrow agreement

  15. Financial Assurances • Initial Credit Release • 15% credits released prior to construction • FA ensures compensation is built or can be purchased elsewhere • Typically bond, LOC, or fully funded escrow • Monitoring and Maintenance • % of each credit sale proceed put into escrow account • Ensures money available for yearly monitoring and maintenance • 1/10 of fund released each year

  16. Financial Assurances • Catastrophic Events • % of each credit sale proceed put into escrow account • % based on complexity of project • Released only when catastrophic event occurs • Long Term Management • Amount based on complexity of project, site conditions, complexity of Long Term Management needs. • Either % of credit sales or payment plan • Released to Long Term Steward yearly and when maintenance activities occur

  17. Success Criteria Based on goals of the project Clear, quantitative criteria Wetland criteria based on hydrology, vegetative success, hydric soil development Stream criteria based on stability of stream Buffer criteria based on stem density, herbaceous cover, vigor

  18. Tree Success Criteria 400 stems per acre until 30% canopy cover 60+% herbaceous cover No more than 5% invasive species cover Goal to develop a diverse native forest

  19. Monitoring Requirements Based on the activity conducted Correlate with Success Criteria 10 year monitoring period Additional years added if success is not met by 10th year

  20. Reporting Requirements Reports required each monitoring year Requirements correlate with Success Criteria and monitoring requirements Reports include maintenance activities for the year and a description of success Due date in MBI Credit releases based on results of monitoring report and outcome of site visits

  21. Credit Release Schedule • 15% initial credit release (‘seed’ money) • Must be built within 1 full growing season • Wetland credits released upon success • Stream credits released yearly based on success and bankfull events • 10% of each type of credit is withheld until Year 5

  22. Credit Releases Releases by formal letter Credit releases and sales recorded on ledger Ledgers available to public on Corps-sponsored website http://ribits.usace.army.mil

  23. RIBITS • Regulatory In-lieu fee and Bank Information Tracking System • Map of all approved, proposed, terminated, and closed banks in VA • POC information • Ledger • Service Area • Cyber Repository • Monitoring Reports • Credit release letters

  24. Long Term Management • Sponsor is default Long Term Steward • Money for Long Term Management provided by LTM Fund • LTM Plan outlines requirements, typically including: • General monitoring • Site protect from trash and trespass • Defense of easement • Fence, gate, road repair • Yearly report preparation

  25. Templates Ensures consistency Allows project-specific modifications Eliminates the need for legal review on most projects Proponents submit redlined documents highlighting changes from template Speeds up document review

  26. Templates • Mitigation Banking Instrument • Deed Restriction • Escrow Agreement • Long Term Management Plan • Other documents could use templates: • Letters of Credit/Bonds • Monitoring Reports • Conservation easements

  27. Guidance Documents • Provide public with clear expectations • Provide consistency • Provide IRT with support for decisions • Examples: • Mitigation Dos and Don’ts • Site Selection Criteria • Wetland Mitigation Design Recommendations • Unified Stream Methodology (crediting)

  28. Approval of Mitigation Banks Data as of April 2011

  29. Summary Interagency Review Team provide diverse agency review and participation DEQ Co-Chair of IRT Site protection important Goals of project drive success criteria Financial assurances Long Term Management Templates and Guidance Docs provide consistency

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