Mitigation Bank White - SCCRTC

Mitigation Bank White - SCCRTC

Appendix K Monterey Bay Area Conservation/Mitigation Bank White Paper AMBAG 2010 MTP CONSERVATION/MITIGATION BANK WHITE PAPER I. INTRODUCTION The...

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Appendix K

Monterey Bay Area Conservation/Mitigation Bank White Paper

AMBAG 2010 MTP CONSERVATION/MITIGATION BANK WHITE PAPER I.

INTRODUCTION

The purpose of this paper is to summarize potential conservation and mitigation banking options for AMBAG 2010 MTP transportation projects in Monterey, San Benito and Santa Cruz Counties for potential future losses of natural resources that could occur as the result of implementation of these projects. Public and private entities, including land trusts, environmental groups, community organizations, private mitigation banks and resource agencies have been consulted in developing these options. Ideally, a county-wide or multi-county Habitat Conservation Plan could serve this purpose, but in the absence of such a plan, this paper provides other long-term solutions for consideration.

II.

CONSERVATION/MITIGATION BANKS DEFINED

A conservation or mitigation bank is privately or publicly owned land managed for its natural resource values. In exchange for permanently protecting the land, the bank operator is allowed to sell credits to developers or government agencies that need to satisfy legal requirements for compensating environmental impacts of development projects. 1 A conservation bank generally protects threatened and endangered species habitat. Mitigation banking is the same concept as conservation banking, but is specifically for wetland restoration, creation, enhancement, and in exceptional circumstances, preservation. Banking is undertaken by a government agency, corporation, nonprofit organization, or other entity under a formal agreement with a regulatory agency expressly for the purpose of compensating for unavoidable habitat/wetland losses in advance of development actions, when such compensation cannot be achieved on-site or would not be as environmentally beneficial. 2 Conservation and Mitigation banks have four distinct components:

1 2



Bank site: the physical acreage restored, established, enhanced, or preserved;



Bank instrument: the formal agreement between the bank owners and regulators establishing liability, performance standards, management and monitoring requirements, and the terms of bank credit approval;

California Department of Fish and Game [CDFG]. 2009. Conservation and Mitigation Banking, September 30. U.S. Army Corps of Engineers [USACE]. 1995. Federal Guidance for the Establishment, Use and Operation of Mitigation Banks. 60 Fed. Reg. 228, 58605-58614, November 28.

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Interagency Review Team (IRT): the interagency team that provides regulatory review, approval, and oversight of the bank; and



Service area: the geographic area in which permitted impacts can be compensated for at a given bank.

The value of a bank is defined in "compensatory mitigation credits." A bank's instrument identifies the number of credits available for sale and requires the use of ecological assessment techniques to certify that those credits provide the required ecological functions. Banks are a form of "third-party" compensatory mitigation, in which the responsibility for compensatory mitigation implementation and success is assumed by a party other than the permittee. This transfer of liability has been a very attractive feature for Section 404 permitholders, who would otherwise be responsible for the design, construction, monitoring, ecological success, and long-term protection of the site. 3

III.

EXISTING CONSERVATION/MITIGATION BANKS IN THE TRI-COUNTY REGION

Figure 1 (Existing Conservation/Mitigation Banks in the Region) and Figure 2 (Existing Roadways in the Region) provide visuals for this section. The following descriptions of existing banks are based on research conducted by PMC and may not be comprehensive. A.

MONTEREY COUNTY

Elkhorn Slough Watershed Transportation Mitigation Bank The Elkhorn Slough Early Mitigation Partnership (ESEMP) is a Caltrans-sponsored interagency effort to provide early mitigation for a series of future transportation improvement projects within the Elkhorn Slough Watershed. The proposed bank aims to protect resources such as wetlands, endangered species and agriculture. On January 28, 2009, the Transportation Agency for Monterey County [TAMC] awarded the ESEMP the 2008 Transportation Excellence Award. 4 The ESEMP, which builds on statewide efforts already underway to consider mitigation on a regional or watershed level, invests in collaborative planning and negotiations with appropriate resource, regulatory and planning organizations. The ESEMP Memorandum of Understanding (MOU) recently signed by ten government agencies and one non-profit organization will help facilitate the development of early mitigation planning that will incorporate regional-scale mitigation which could be implemented prior to traditional transportation project milestones. 3 4

U.S. Environmental Protection Agency [U.S. EPA]. 2009. Mitigation Banking Factsheet, January 12. Information Center for the Environment [ICE]. 2009. Advance Mitigation Efforts win Award in Monterey, April 7.

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T:\_GIS\MONTEREY_COUNTY\MXDS\MTP_EIR\FIG 1.MXD - 3/31/2010 @ 2:31:12 PM

Lucky Day

Santa Cruz County

Pajaro River

Zayante Sandhills

Elkhorn Slough NMCUSD

San Benito County

Carmel River

Monterey County

Legend

Approximate Bank Site Location County Boundary Ohlone Preserve Conservation Bank Service Area* Elkhorn Slough Mitigation Bank Service Area Pajaro River Mitigation Bank Service Area Zayante Sandhills Conservation Bank Service Area

* Service area extends further north, bank site located in Alameda County. Source: Bing Maps, 2009

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0 MILES

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Figure 1

Existing Conservation/Mitigation Banks in the Region K-3

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T:\_CS\Work\Monterey, County of\MXDS\MTP_EIR

J17 J7 35 33 140

82

9 165 17

Santa Cruz County 152

_

156

101

183

San Benito County

68 25

Monterey County

1

198

Source: Bing Maps, 2009

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0

Figure 2 Existing Roadways in the Region

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MILES

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Through this collaborative process, by investigating methods to allow for the early implementation of biological mitigation, the ESEMP may provide more cost effective, collaborative resource conservation on a watershed level while also achieving transportation objectives. 5 Carmel River Mitigation Bank Caltrans and the California Department of Parks and Recreation (CDPR) cooperatively fund the Carmel River Mitigation Bank (CRMB). 6 It is a 43-acre area that is located in the Odello West field, previously used for agricultural production of artichokes, adjacent to and south of the mouth of the Carmel River, and west of Highway 1. The CRMB was created in 1996 due to severe winter storms in the previous year that resulted in substantial flooding of the Carmel River mouth and floodplain. It was originally developed for off-site mitigation for the Hatton Canyon Scenic Highway project, but the project was never built. 7 The site was restored to mitigate for future ‘‘unavoidable impact to wetlands and riparian habitats associated with transportation projects in the Monterey area’’. Under the restoration plan, 37 acres of woody riparian species and 6 acres of freshwater wetland species were planted in 1996 to 1998. The vegetation communities at the CRMB are now immature riparian forest, coastal marsh, and central-coast riparian scrub. 8 To date, Caltrans has not taken any credits from the bank. Bank credits can only be used for transportation projects in the Monterey Peninsula area that have “in-kind” impacts to coastal streams in the service area. Before credits can be used from the bank, Caltrans must complete an accounting of habitat credits available at the bank and submit that to the USACE for review and approval by the Mitigation Bank Review Team. 9 Lucky Day Wildlife Conservation and Wetland/Stream Mitigation Bank (Potential) The Lucky Day Ranch California Partnership, through its agent WRA Environmental Consultants, has applied for authorization to construct a wetland mitigation bank through the USACE. This proposed compensatory mitigation bank would be located on a 1,790-acre site located northwest of the City of Gilroy in Santa Clara County. This bank would have the same service area as the Pajaro River Mitigation Bank, including portions of all three counties. The

Elkhorn Slough Early Mitigation Partnership [ESEMP]. 2009. About ESEMP, September 23. Ventana Wilderness Society [VWS]. 2002. Carmel River Lagoon Avian Monitoring Project Report 1999-2002, December. 5 6

7

Gary Ruggerone, Caltrans District 5. 2010. Personal Communication.

Journal of Wildlife Management 70(3):859-866. 2006. Vertebrate Use of a Restored Riparian Site: A Case Study on the Central Coast of California. 9 7, Ibid. 8

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proposed bank site is located in two watersheds, Uvas and Llagas Creeks, both of which drain into the Pajaro river. This bank would provide off-site compensatory mitigation for impacts to of the Clean Water Act, waters of the State of California under Section 1600 of the California Fish and Game Code, federally-listed threatened or endangered species under Sections 7 and 10a of the Endangered Species Act, wetland and wildlife resources under the applicable sections of the California Environmental Quality Act, and/or the establishment and/or preservation of habitat associated with the Santa Clara Habitat Conservation Plan. NMCUSD Conservation Bank (Potential) Caltrans was recently contacted by John Dominguez, representing the North Monterey County Unified School District (NMCUSD). Based on preliminary discussions with Gary Ruggerone and Nancy Siepel from Caltrans, Mr. Dominguez has indicated that NMCUSD-owned property in the Castroville Boulevard area, that supports populations of degraded habitat for Santa Cruz long-toed salamander and California tiger salamander, has the potential for restoring the site for possible use as a conservation bank. B.

SAN BENITO COUNTY

Pajaro River Mitigation Bank The Pajaro River Mitigation Bank, constructed by Wildlands, Inc. and sponsored by Santa Cruz and Monterey Counties, consists of 273 acres, includes nearly 150 acres of created seasonal wetland credits which can be tapped to offset the impact of development elsewhere in the 1,300-square-mile Pajaro River Watershed that covers portions of Santa Cruz, San Benito, Santa Clara or Monterey counties. The 150 acres of wetlands were created to complement the existing 6.73 acres of wetlands that are also being preserved. The Bank offers wetland mitigation credits to the development community and public sector to fulfill permit obligations of the United States Army Corps of Engineers (USACE) under the Clean Water Act in order to fulfill the goals of the federal "no net loss" wetlands policy. Ohlone Preserve Conservation Bank The Ohlone Preserve Conservation Bank is approved to sell California redlegged frog (RLF), Alameda whipsnake and California tiger salamander (CTS) credits. The bank is owned by Fletcher Conservation Properties and consists of 640 acres, serving San Benito County as well as Alameda, Contra Costa, Marin, Merced, Napa, San Joaquin, San Mateo, Santa Clara and Stanislaus Counties.

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The service area covering San Benito County only provides credits for CTS, and not RLF or the whipsnake. C.

SANTA CRUZ COUNTY

Zayante Sandhills Conservation Bank The Zayante Sandhills Conservation Bank is a private venture run by California Limited Liability Company, LLC (PCO, LLC). The USFWS initially authorized the Bank to sell a total of 56.77 conservation acre credits based on the habitat value of a 22.78-acre sandhills parcel located in Ben Lomond. This parcel is known as the Ben Lomond Sandhills Preserve, and must be managed in perpetuity according to a management plan prepared by sandhills experts and approved by USFWS. Moreover, PCO and the Center for Natural Lands Management have entered into a conservation easement on the parcel to ensure that it is preserved and managed according to the approved plan. The County of Santa Cruz is a third party beneficiary of the Conservation Easement and, as such, is entitled to enforce compliance with the easement in accordance with its terms and conditions. The cost of acquiring and managing the preserve is being financed through an endowment, funded from the sale of conservation credits. The endowment is being established over time, with a full funding amount of approximately $1 million. This amount will generate sufficient revenue annually to manage the preserve. In the mean time, PCO has established an interim management account in the amount of $66,000 to ensure that one years’ worth of management funds for the preserve are always available. This amount cannot be depleted without USFWS consent, in which case it would be immediately replenished. Once the endowment reaches full funding, the funds in the interim account will be transferred to the endowment fund. While USFWS issues conservation credits in terms of acre credits, they are sold in square-foot units. The current price of a conservation credit is $7.50 per square foot of habitat disturbed. The proposed operating agreement ties future increases in the cost of credits to the Bay Area Consumer Price Index ($326,700/acre). 10

IV.

MAIN HABITATS AND SPECIES OF CONCERN IN THE TRI-COUNTY REGION

Within Monterey, San Benito and Santa Cruz Counties, there exists a wide range of habitats and species of concern. To name just a few, Monterey County is home to species of concern such as the Brown Pelican, California Red-legged Frog (RLF), California Sea Otter, California Tiger Salamander (CTS), Monterey Spineflower and the Western Snowy Plover; San Benito to the Burrowing Owl, 10

Santa Cruz County Planning Department. 2008. Letter to Board of Supervisors: Proposed Operating Agreement Between County of Santa Cruz and Zayante Sandhills Conservation Bank, January 15.

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CTS, San Joaquin Kit Fox, RLF, Yellow Warbler and Yellow-brested Chat; and Santa Cruz to the Ben Lomond Buckwheat, Spineflower and Wallflower, Mount Hermon June Beetle, Santa Cruz Cypress, Tarplant and Wallflower and the Silverleaf Manzanita. Habitats in the region include, but are not limited to, Coastal Oak Woodland, Coastal Scrub, Estuarine, Wetland and Cropland. Potential future losses of these natural resources, among others, could occur as the result of implementation of the 2010 MTP transportation projects. As such, all banking options would have to address the need to mitigate for potential future losses of the range of natural resources found in this diverse region.

V.

CONCLUSIONS AND RECOMMENDATIONS

The following conclusions and recommendations reflect PMC’s research and findings for AMBAG and the tri-county region RTPA’s to have mechanism options to consider for addressing potential future natural resource impacts that could occur as the result of implementation of the 2010 MTP transportation projects. A.

OPTION 1: RELY ON PURCHASE OF EXISTING BANK CREDITS

There are several existing mitigation and conservation banks in the region, as outlined in the above section. For AMBAG’s purposes, the Zayante Sandhills Conservation Bank is geographically limited in its applications and most likely would not be available for credit purchase. However, the remaining banks would provide purchasing options for AMBAG. This option is the least intensive, as there are no upfront or administrative costs and no management tasks associated other than credit purchase. However, it does have a downside: uncertainty. There is no guarantee that each roadway project in the future will be able to purchase credits from these banks, as it is up to the provider which projects qualify, and they will eventually run out of credits. In addition, these banks, with the exception of the Elkhorn Slough Watershed Transportation Mitigation Bank, which will only be available for mitigation associated with transportation projects, are open to all forms of development mitigation, including residential, commercial, etc.; and therefore, there would be more projects vying for credits as opposed to the creation of a new bank geared expressly towards roadway project mitigation. B.

OPTION 2: CREATE “AMBAG AREA” UMBRELLA CONSERVATION/MITIGATION BANK

An umbrella bank is a regional banking program with multiple bank sites sponsored by a single entity. It is a programmatic bank; it is characterized by having one mitigation banking instrument that lays out the general requirements of the program and allows for the authorization of future additional bank sites. The banking instrument generally describes the supplemental site-specific

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information (e.g., individual site plans) that is required to bring a new site online. 11 There is currently no mitigation banking instrument like this in the area. An example of a transportationrelated umbrella bank is MaineDOT’s “Umbrella Mitigation Bank for Transportation” or “UMBT”. Recently, the MaineDOT has submitted a Source: PMC 2009 proposal for a statewide mitigation banking instrument, with their first deposit being an island to be used for recreation, education and conservation facilities. The bank will be used for transportation related projects involving compensatory mitigation for unavoidable impacts to waters of the U.S. MaineDOT will be responsible for long-term preservation and management of the project area, implementing restoration, creation, enhancement and preservation of aquatic resources and upland buffers for the purpose of generating compensation credits. 12 While this option is preferred among responsible agencies, it can be one of the most challenging due to upfront costs, bank siting and effectiveness, long-term administration and site maintenance. 13 Restoration is the preferred “first choice” in the banking field. Wetland restoration should take precedence over enhancement and creation as a mitigation method, preservation is only acceptable in “exceptional circumstances,” and wetland creation is expressly discouraged. 14 The region’s land trusts (Santa Cruz County, Ag Land Trust, Big Sur Land Trust) are always looking for new sites to conserve. Currently, the Santa Cruz County Land Trust is in the process of prioritizing possible conservation sites in the region that could be available for banking. 15 Partnering with local land trusts could provide a beneficial relationship for both AMBAG and the trusts. There are weaknesses in multi-agency partnerships; however, including responsibilities, monitoring, followthrough and coordination. 16 Many of these issues can be dealt with from the beginning through adoption of an Operating Agreement [OA]. An OA would 11 12 13 14 15 16

Ibid, 2. USACE, New England District. 2009. Public Notice: MaineDOT Federal Umbrella Mitigation Bank Prospectus [NAE-2008-1703], February 3. Jaime Hill, PMC. 2009. Personal Communication “Experience of Robert Hill, Conservation Director of the Land Conservancy of San Luis Obispo County. October 1. Environmental Law Institute [ELI]. 2002. Banks and Fees: The Status of Off-Site Wetland Mitigation in the United States, Claudia Slater, Santa Cruz County Planning Department. 2009. Personal Communication. October 1. Sierra Perry Ryan, Central Coast Wetlands Group. 2009. Personal Communication. October 1.

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outline working responsibilities, terms and conditions, project requirements for credit purchasing, among other critical components. Another difficult aspect of this option is how to garner the often hefty upfront costs associated with purchasing lands and setting up the banking instrument. Funding often comes from multiple sources, such as grants, in-kind and monetary donations, fund raisers, government funding, and multiple agency commitments. On-site issues to be aware of include habitat and wetland success rates. Restoration typically has much higher success rates than preservation or creation, as the “foundations” for success are already in place. C.

OPTION 3: DEVELOP HABITAT CONSERVATION/MANAGEMENT PLAN (IN-LIEU FEE MITIGATION PROGRAM)

Implementation of Habitat Conservation Plans (HCPs) or Habitat Management Plans (HMPs) is one of the most common forms of compensatory mitigation. Approval of an HCP/HMP results in an associated take permit, usually with a limit on habitat acreage. Most HCPs/HMPs are considered a form of “in-lieu fee mitigation”. In other words, as development takes place under an HCP/HMP, developers pay a per-acre fee to a local government entity that then uses the fees to acquire and manage other lands for compensatory conservation purposes. The key differences between banking and in-lieu fee arrangements; therefore, are that before a bank can sell credits, the site must be protected, a banking instrument must be in place, and the banker is required to have secured appropriate financial assurances. In-lieu fee mitigation programs, on the other hand, generally accept payments with only the promise of offsetting impacts before the mitigation sites are secured or the site-specific mitigation plan has been approved. It is generally conducted after permitted impacts have occurred in circumstances where a permittee provides funds to an in-lieu fee sponsor instead of either completing project-specific mitigation or purchasing credits form a wetland mitigation bank approved under the Banking Guidance. 17 Banks have generally been preferred over the use of in-lieu fee mitigation programs, as stated in the 1995 Banking Guidance, since there has historically been a lack of regulation over these programs. But as of the 2000 release of “Federal Guidance on the Use of In-Lieu-Fee Arrangements,” 18 in-lieu programs have become more detailed and similar to banking instruments; making them more transparent and accountable to a standard. In addition, in 2008 the U.S. 17

18

US Department of the Army, U.S. EPA, US Department of Interior, and US Department of Commerce. 2000. Federal Guidance on the Use of In-Lieu-Fee Arrangements for Compensatory Mitigation under Section 404 of the Clean Water Act and Section 10 of the Rivers and Harbors Act. Ibid, 13.

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EPA and the USACE issued revised regulations governing compensatory mitigation for authorized impacts to wetlands, streams and other Waters of the U.S. The regulations were designed to improve the effectiveness of compensatory mitigation to replace lost aquatic resource functions and area, expand public participation in compensatory mitigation decision making and increase the efficiency and predictability of the mitigation project review HCPs/HMPs generally work very effectively once established; process. 19 however, it can take several years of planning and negotiation before they are approved.

19U.S.

EPA. 2008. Army Corps and EPA Improve Wetland and Stream Mitigation-News Release, March 31.

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