Wetland Banking BasicsDoug Van Werden

Definition

Wetlands Wetlands are lands transitional between terrestrial and

aquatic systems where the water table is usually at or near the surface or the land is covered by shallow water. Wetlands must have one or more of the following three attributes: (1) at least periodically, the land supports predominantly hydrophytes; (2) the substrate is predominantly undrained hydric soil; and (3) the substrate is nonsoil and is saturated with water or covered by shallow water at some time during the growing season of each year.

Types of Wetlands

Marshes Tidal Nontidal

Wet meadowsVernal pools Prairie potholes Playa lakes

SwampsForested Swamps

Bottomland HardwoodsShrub Swamps

Mangrove Swamps Bogs

Northern BogsPocosins

Fens

Legal Jurisdiction

1977 Clean Water Act (CWA) states that the wetlands program goal is “no net loss of wetlands”

Section 404 requires any construction project that may require the loss of an acre or more of wetlands to notify and apply for a permit from the Corps.

1985 Food Security Act 1990 Memorandum of Agreement (MOA) between the EPA

and the Department of the Army. 1991 Intermodal Surface Transportation Efficiency Act 1995 Memorandum to the Field. “Federal Guidance for the

Establishment , Use and Operation of Mitigation Banks”

Legal Jurisdiction

Federal level - thirteen congressional committees and subcommittees, eight cabinet agencies, six independent regulatory agencies, and two White House offices.

Over 300 departments at the state level

Over 100,000 local water-related entities

Mitigation banking

“wetland restoration, creation, or enhancement …. “ performed in advance of permitted wetland losses

Mitigation

Where On-site Off-site

Type Enhancement Restoration Preservation Construction

Compensation Ratios

Wetland Banking - Adv

1. Better management and monitoring 2. Legal responsibilities transferred to the

mitigation bank sponsor. 3. Decreases design and construction time.4. Permitting is more stream lined and takes

less time.5. More economical and cost efficient6. Mitigation costs known

Wetland Banking - Adv

7. Developers not be responsible for wetlands maintenance

8. Increases the efficiency of limited resources

9. Large banks allow for a larger variety of flora and fauna

10. More successful than small wetland patches

Wetland Banking - Adv

11. Eliminates public concerns that mitigation will not take place or not work

12. Not constricted by the land area of the development project

13. No lag time between destroying the old wetlands and having the new wetlands being productive.

14. Helps prevent regulatory takings and the claims generated.

Wetland Banking - Disadv

1. May not be allowed to use

2. Loss of specific types of wetlands

3. Generally are not considered as in-kind mitigation

4. Loss of local ecological environment

5. Might be composed of less valuable compensatory wetlands

6. Lower stewardship by the governmental

7. Potential for a net loss of wetlands

Types of Banks

Single-Client

Publicly-Sponsored,

Credit-For-Sale

Privately-Sponsored,

Credit-For-Sale

Single-Client

Advantages– Developer has complete control of the bank.– Developer can place on-site at a large project to compensate for several

small on-site/off-site wetland patches. – Allows for wetland compensation in advance of planned future projects.

Disadvantages– Developer is responsible for all the legal aspects. – Developer must plan, design, and construct.– Developer is responsible for the management. – Developer pays all costs

– No income is gained

Publicly-Sponsored, Credit-For-Sale

Advantages– Sponsor is paid to develop, construct, and manage– Credit buyers pay less since nonprofit – Owners usually build to protect and enhance wetlands – Owners may use to bring business into an area – Owners are generally highly motivated to make the bank work. – Consolidation of permitting, credit-production, oversight, and

management

Disadvantages– Finding sponsors.– Unforeseen costs later in a bank’s life – Credits are bought over a time period. – Credits not sold until the project is completed– Sponsors must be able to pay for the planning and development

Privately-Sponsored, Credit-For-Sale

Advantages– Profitable– Is a business – Brings market forces behind saving the wetlands – Must be of high quality so as to attract credit buyers

Disadvantages– Legal responsibilities may revert back to credit buyers if sponsor goes

bankrupt – Potential for sponsor to deceive buyers– Sponsor in it for the money

– Credit fees higher than if buying into a nonprofit bank

Costs

Costs range from a few dollars per acre to hundreds of thousands per acre.

Costs can range from 66,000 to 306,000 dollars per acre on land that originally was not meant to sustain wetlands

Saves 75% of the cost to rebuild wetlands

Remember

Complicated

Governmental

Regulations

Mitigation Banks

can be great

Saves Money