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Minnesota GraphicWCA Stakeholder Advisory Committee

WCA Assessment Stakeholder Meeting Summary

MnDOT Conference and Training Center
Shoreview, Minnesota

July 25, 2006

Replacement Ratios, Regulatory Simplification and Banking

Roger Lake Mn Association of Watershed Districts
Steve Commerford Mn Soybean Growers Association
Dan Girolamo BWSR
Steve Eggers U.S. Army Corps of Engineers
LuAnn Tolliver BWSR
Sheila Vanney Mn Association of Soil and Water Conservation Districts
Allyz Kramer Wetland Professionals Association
Lawrence Zdon PCA
Marita Valencia U.S. Army Corps of Engineers
Tom Tri St. Louis County
Bruce Gerbig DNR-Waters
Dan Greensweig Mn Association of Townships
Sandy Hooker Mn Association of Townships
Doug Fischer Mn County Engineers Association
Mary Mueller Wetlands for Minnesota
Ben Meyer Wetland Professionals Association
Doug Norris DNR-Waters
Laurie Fairchild U.S. Fish and Wildlife Association
Sarma Straumanis MnDOT
Annalee Garletz Association of Mn Counties
Frank Pafko MnDOT
Tom Mings BWSR
Fred Corrigan Aggregate Ready Mix Association
Tamara Cameron U.S. Army Corps of Engineers
Dale Krystosek BWSR

Call To Order.
Dave Weirens called the meeting to order at 1:12. Introductions were made and handouts were explained. Weirens defined the program for the day and explained that replacement ratios, regulatory simplification, wetland banking and the BWSR Wetland Committee document would be covered provided there is adequate time.

Wetland replacement issues were discussed. The purpose of today’s meeting is to discuss wetland replacement as they relate to aligning with no net loss. What are the replacement issues? Some of the issues are replacement ratios and what actions to allow for mitigation credit. Weirens reviewed the list of wetland replacement issues that have been generated by the Stakeholders and by WCA LGU’s.

Issue 1 – 50% of required replacement must be wetland

Bruce Gerbig asked, is PVC upland? Weirens responded not necessarily, a variety of actions can provide PVC.

Allyz Kramer said BWSR field staff are currently interpreting the Rule as follows. If the project requires a 2.25:1 replacement, The U.S. Army Corps of Engineers (Corps) requires 1:1 and the remaining 1:1.25 can be PVC? Instead, BWSR staff are recommending that 1.125:1 be NWC and 1.125:1 be PVC. The Rule says the first acre must be NWC and the balance can be PVC as this meet the no loss requirement.

Bob Whiting added, everything above 1:1 can only be ½ buffer so he supports the 1.125 requirement for both NWC and PVC if the replacement ratio is 2.25:1.

Marita Velencia mentioned that there is an additional issue. These are the requirements for onsite, in-kind and in advance, and how to track buffer.

Steve Eggers added that they have a proposal for minimum buffer. A minimum width of 50’ for rural sites and 25’ of urban sites and a maximum of 20% of the total credit can be upland. Example: a one acre wetland with a 50’ buffer will have about one acre of buffer at 4:1 credit = 0.25 acres of credit. The total site would generate 1.25 acres of NWC counting both the restored wetland and the upland buffer.

Weirens mentioned that BWSR and the Corps are moving toward a single credit. Eggers said it has always been this way with the Corps.

Whiting recommended that we keep the debits and credits separate during these discussions. Weirens commented that we are talking about credits. Whiting replied that banking as a mitigation method is improved under a common WCA/Section 404 system for providing mitigation credit.

Weirens continued, if the Corps and BWSR were to view this the same, the first issue discussed (how much NWC and how much PVC) won’t matter. Tom Mings added, only one kind of credit helps at the national level as it helps monitor in-kind. Are there any reasons for not tracking different types of wetlands? What are the denominations? This helps with the in-kind issue.

Whiting agreed, yes it helps with the in-kind but what about bookkeeping? Mings replied, the book keeping is already there. In-kind matters.

Eggers mentioned that wetland type debits are currently following Circular 39. The Corps wants to talk to BWSR about tracking the 12-wetland types.

Laurie Fairchild asked, how project specific mitigation is reconciled? Eggers said offsite would be separate. Fairchild responded, how about different wetland types that would be lumped? Eggers replied that credits have to be tracked by type.

Weirens added, a single credit system would be easier than tracking types like BWSR does now. Gerbig asked if the BWSR staff have developed any ideas? Weirens responded, that a proposal has been developed that will be covered later. Gerbig continued by saying he would like to hear from the Corps about replacement within their bank service areas and whether or not this would be considered onsite? Weirens responded, for banking purposes it would be.

Tom Tri offered a generic credit system concept. From the applicants side they would have x acres of impacts. Would this be debited with a generic credit? Applicants do not know if the replacement is in-kind or out of kind and they can’t track it. The penalty seems ludicrous. Why have a factor for out of kind if generic credits are used?

Gerbig questioned the generic credit and asked if this concept encourage restorations? Would we lose sedge meadow wetland and forested wetland restorations? We try to promote these different sites but this concept would work against it.

Dale Krystosek responded that BWSR tracks types but would eliminate PVC.

Doug Norris asked if the 50% NWC requirement would apply only in the 2:1 area? In the 1:1 area, is it all wetland? Valencia commented that 1:1 is all NWC. Doesn’t the state law required this? Norris responded, yes.

Ron Harnack commented, a person fills an acre, they buy an acre. Assume collectively that we get what we want. BWSR will promote private banks. This will result in a better outcome, a better wetland and everyone wins.

Tri asked if we are promoting partial credit for uplands? Harnack replied, adequately manage the credits in the bank and it all comes out in the wash. Norris stated he is in favor of the buffer but if we give NWC for upland we will lose wetlands.

Harnack continued, our discuss should include acres, but also function and values. This would be good for wetlands in the big picture as to much weight is being put into the wet for wet. We need to look at function.

Tri compared the Corps and WCA and said the main difference between them is the Corps converts buffer to wetland and the state requires all wet and the buffer is icing on the cake. WCA should operate more like the Corps. We may not get wet area replacement but you get buffer that is integral to wetland function.

Harnack replied, Old sites w/o buffer look tough. Tri asked, will we need to change the Rule? Harnack continued, look at the impact and go to the bank. One credit equals one acre. If the replacement is 2:1 then buy two acres. If the ratio is 1.5:1 you buy 1.5 acres.

Gerbig stated that WCA does provide PVC for restoring partially drained wetlands. Weirens referenced the wetland mitigation credit spreadsheet, Section 404 and WCA would use the same method to determine wetland replacement credit.

Mary Mueller had two comments. First, put a maximum allowable credit on PVC, perhaps 1:1? Second, is how to track upland as a wetlands type for purposes of in-kind?

Harnack said the maximum credit for 10 acres of wetland would be 10 acres wetland credit. Forty acres of upland would generate 10 acres of credit. Wildlife managers recommend 4 acres of upland for every acre of wetland. If people believe we should use one system, we need further discussion to get this resolved.

Mueller confirmed, one credit wetland equals one credit wetland and upland will be credited at 4:1. Weirens referenced the buffer proposal on the credit comparison spreadsheet to address the Norris question regarding the loss of wetlands if upland buffer is converted to NWC: Buffer is difficult as they are very different systems. The concept is to require a minimum buffer with credit. Either 50’ or 25’ would be mandatory. Credit would be 1:1 for the buffer credit and voluntary additions would receive 4:1 with a maximum. How do we count it and track it?

Kramer commented that this is already going on in the 2:1 areas but north will scream due to 1:1. We all agree buffers are good but what about the 1:1 counties? Weirens replied, that this proposal presents challenges in the 1:1 area.

Fairchild commented that conservation is going on all over. All projects require replacement. Manager’s are required for each site. How many projects use the bank?
Mings commented that private bankers are selling about 200 acres/year outside the road program.

Fairchild asked what percent of permits are mitigated via the bank? What sideboards are there for buffer? Tri responded that roadbed removal is used to generate replacement but a buffer can’t be guaranteed. It is not always possible to provide a 100% buffer when restoring or creating a wetland.

Fairchild Commented that homogenous wetland credits blur in-kind. This is good for ban system management, but not good for the biology end of things. Forested wetlands and pristine pothole are very different. How do banks determine what types are needed? Should the state wetland bank only accept the types that are needed? Mueller added, the proposal is to not do away with wetland types.

Fairchild further commented that lumping everything together in the bank, even within the Bank Service Area (BSA), will result in poor replacement.

Whiting clarified the Corps position on wetland crediting. Replacement wetlands are typed when banks become certified. Certain wetland types are approved in certain BSAs. It is Ok to include the BWSR wetland types. The proposal is to include buffers and make the system more simplistic.

Norris asked about the replacement ratios in Table 2. Only 1:1 if in-kind, in-advance and in-place in greater than 80%? So, if 1.25:1 replacement is required, then the mitigation could be one acre of NWC plus 1 acre of upland buffer at 4:1. Then we get to a common ratio and common currency and buffer where possible? If the replacement ratio is 1:1, there will be no buffer as part of the mitigation?

Eggers offered, one credit will be ok if there is no net loss & function.

Norris asked, what about 1:1 situations? Tri stated, include the buffer in the wetland and that would take care of it. The replacement requirement will always default to the most restrictive. WCA may allow one acre and the Corps 0.25 acres.

Harnack said there are a number of ways to cut it. The discussion is mixing compensation and crediting. Compensation ratios should not include in kind and just look at in place. Always use a 1.25:1 replacement ratio and make it simple.

Weirens asked if the recommendation is to scratch compensation type and timing columns on table #2? Harnack responded, there should be less emphasis on tracking in-kind. Instead check the BSA, if the replacement is in the BSA, the ratio is 1.25:1 and if you the replacement is outside of the BSA the ratio is 1.5:1. This will still achieve the objectives of the law.

Tri stated that an effort should be made to try to solve the problem. One method could use Ron’s way, 1.25 across the board. This would work until the Corps changes again leaving applicants wondering, now what? If you need a buffer, include it with the wetland credit; then private bankers will be able to sell PVC. Others will worry about the loss of wetlands while others will be concerned about the loss of functions and values.

Kramer questioned if this promotes the use of bank credits. We are not addressing sequencing. Focusing on banking when the first step should be sequencing. Harnack replied, the first step is avoidance. Applicants are barely doing minimization with a storm pond here and a hole there.

Kramer responded, it’s hard to achieve high quality replacements on site. Larry Zdon offered that impacts in small watersheds will have negative effect on water quality as land is it is developed. On site replacement is important to maintain water quality.

Doug Fischer we are doing mitigation, storm ponds, and floodplains. These may not all be wetlands but they are high quality. He is worried about requiring mitigation of upland impacts. Weirens stated, we are still discussing the Wetland Conservation Act.

Gerbig asked about storm water impacts. Many things are captured in storm water retention basin design practices. Concurrent replacement may require a higher ratio to account for temporal losses.

Mings cautioned that we can’t ignore the water quality functions of wetlands. Stormwater ponds are in MPCA’s arena so we can leave WCA out. If a lot of on site is done, then lost functions can be replaced elsewhere.

Zdon added, we could take a dramatic approach. Should the buffer be a requirement or an incentive? We could adjust the ratios if needed. Whiting commented that a 10-acre wetland would include a lot of buffer if the minimum 50’ width is required. We should try for enough buffer to increase water quality.

Zdon asked, which side of the ledger? Either way they pay for it, but it’s a question whether or not its accounted for? Fischer commented that in place would be limited due to buffer requirements.

Frank Pafko recommended using the incentive approach as it will result in better sites. If you require buffers, you will get the minimum. As for the water quality issue, I concur with Mings’ and Fischer’s comments.

Mueller offered that if the buffer fits, require it. Credit at 25% will eliminate the problem of getting too much PVC because of high land values. Flexibility for some but economically invalid unless the value is increased dramatically.

Weirens stated that we are looking for a balance. We need buffers to help the wetland but we don’t want requirements to discourage buffers.

Lou Ann Toliver commented that sequencing is used in several watershed projects and the public likes it. She then asked Roger Lake if he had anything to add. An important aspect to keep in mind is that sequencing is often added to other issues.

Roger Lake commented, that his watershed requires sequencing. Problems surface when applicants want flexibility and we follow sequencing.

Fairchild asked if a wetland bank has 25 credits, 20 in marsh and 5 in permanent deep water, can it be assumed that the buffer will be worked in? Whiting replied, it’s a matter of keeping track and looking at more in kind replacement. Eliminating in-kind and using acre surrogates will be hard for the Corps unless we homogenize.

Ben Meyer offered a comment on the compensation ratio discussion. Function and value issues are important. Some LGUs require mitigation within their jurisdiction. Applicants want to go straight to the bank, which may not be the best choice for the environment when nice opportunities exist onsite and watershed districts are pursuing replacement within the watershed.

Pafko added, there are a lot of watershed organizations putting this requirement into their plan. If some watershed districts think its ok, we should not require it for the entire state.

Tri added, Hermantown and Duluth both require replacement within their jurisdiction. Flexibility will be needed to go directly to the wetland bank.

Issue 2 – Refine the definition of “in-kind”, “in-place” and “in-advance”.

Weirens stated that BWSR is working with the Corps to make these definitions the same. The WCA defines in kind as a location component, which needs to be refined to streamline replacement.

Norris asked, what about the 1-12 wetland community types? Weirens replied, we are currently working on this issue. Norris asked, who thinks these definitions are right?
Weirens replied, they generally describe kind, place and timing.

Issue 3 – Maintain the current replacement ratios.

The current replacement ratios generally work fine but the Stakeholders are split on the status quo versus increases.

Issue 4 – Increase WCA replacement ratios, apply an increase proportionately between
Issue - Increase rations to deter impacts
Issue - Higher ratios for critical areas-shoreland and floodplain
Issue - Increase ratios for violations
Issue - Replacement rations are inadequate

Weirens asked the group if it’s appropriate for regulated impacts to effectively provide mitigatation for those that are non-regulated? LGU’s are reporting that the required mitigation exceeds the impacts. How do we determine “no net loss”?

Tri offered that increasing the ratio will not deter impacts. Even if the replacement ratio is 200:1, we still have to pay for it. Harnack said it is more efficient to implement small incremental increases in favor of simplification.

Tri said he personally is in favor or a 1.25:1 replacement ratio. Fischer said it is all related to cost. Lowering the credit ratio will not equal lower cost. If it is cheaper to go out of place with an increase in ratio, that’s ok. Ratio and cost are always tied together. The road program produces better product than onsite replacement.

Norris offered that to offset the exemptions we might have to increase replacement ratios by 50%. How would a 1.25 ratio help the issue in the greater than 80% area?

Krystosek added, we have estimated about 100 acres of impact per year in the greater than 80% area. Gerbig asked, do we have a statewide total? Weirens replied, about 300-350 acres per year.

Issue 5 – More credit for restorations and enhancement as opposed to creations.

Weirens referenced the handout and re-stated the discussion at the previous Stakeholder Advisory Committee that it is counter intuitive to give creations more credit than restorations. Both WCA and Section 404 provide incentives for different ways to gain wetland credit under the law.

Norris asked, how does this work in reality? When do you get more credit for a creation versus a restoration? Weirens replied, partially drained basins and vegetative restorations.

Norris asked, would you decrease creations and increase restorations? Weirens answered, probably lower creations.

Harnack stated, I’m not sure if we would accept creations into the bank. Use a set ratio to incent what is desired, perhaps 3:1. Tri commented that if you lower credit for creations you can kiss the gravel pit restorations goodbye. Harnack, we may need to.

Pafko commented that creations already have a disincentive. Digging a hole cost a lot of money. Harnack added, creations are not on par with restorations.

Gerbig offered that we could split creations into several categories: No wetland, enlargement and perhaps others.

Sarma Straumanis offered a contrast between creations in the greater than 80% area with those in Lincoln County. Don’t discourage it in the greater than 80% area. Creation in the greater than 80% area is good, but not in the less than 80% area.

Whiting stated that we need to look at the outcome. The Corps gives 50-100% credit for creations. He agreed with Tri and reiterated that northeast Minnesota has limited wetland replacement opportunities. Mines are a big problem. Mines do more in creation in the tailing basins. We need to look on a case-by-case basis.

Norris had two things. First, referring to what Gerbig said, enlargements have improved chances of being successful and second, referring to Whiting, performance standards require more and longer monitoring.

Issue 6 – Stormwater – (1) if not Corps? (2) if the stormwater pond provides more wetland functions, then allow credit, (3) No credit
Issue – Eliminate or change stormwater credit

Weirens commented that replacement credit for stormwater ponds should be based on the function or the outcome. The spreadsheet on page 3 outlines current replacement credit given for stormwater ponds and a proposed change. There is movement away from providing eligibility for stormwater ponds to receive wetland replacement credit.

Mueller asked with the proposal to allow 50% PVC credit allowed, how to multi cell systems? Weirens replied that primary and single cell systems would receive no credit.

Whiting stated, the Corps has been thinking about this. How much credit to give should be outcome based. Steve Eggers added that the amount of credit offered should be only for the amount required beyond those basins needed to meet stormwater pond permitting.

Zdon added, we need clarity of definition of primary and secondary cells. Primary is used to manage initial runoff and meter it out. Secondary ponds are co-joined to a project to provide enhancements with primary hydrology sources.

Straumanis asked about retention. Urban transportation projects look, walk and talk as a SWP would. Whiting mentioned the Corps has offered credit for these.

Harnack replied, how often do you give credit? Whiting replied, not very often.
Harnack followed up, why make it tougher than it needs to be? Whiting replied, whether stormwater pomds or preservation with continued logging, its in the outcome. Primary cells get a lot of inputs resulting in lower quality. The Corps operates case by case.

Straumanis asked, if we are renovating land we typically put it into basins as it has a benefit. Do we want this done or not? Whiting replied, fine, but don’t dig the pond in a wetland. Fischer and Kramer both replied, sometimes you do not have a choice.

Issue 7- Nonwetland areas mitigating impacts to wetland areas

Issue 8 – Require Buffers

Issue 9 – Allow PVC for high quality upland areas

Fischer stated that infiltration is becoming more of a concern. #7 provides benefits, recharge, water quality benefits etc. Weirens commented, we need to be careful when splitting out functions and values. Adding preservation will add to this discussion.

Tri added, if looking at preservation, you need to invert the project. Miller Creek property is selling for $10 per square foot, which equals $400,000 per acre multiplied by 8 (8:1) equals $3.2 million per acre of credit. We can show a delta for the Corps. There needs to be more credit or you will not have preservation credits.

Fischer added, real estate appraisers won’t do it, green space is just too valuable. He went to ask Whiting, are you going to deny permits and projects? Whiting replied, yes but not often. Eggers added, we need a demonstrable threat.

Tri commented, at 8:1 you are only offering 0.12 cents on the dollar. Harnack replied, the other part is an interest in preserving the wetland. It has high value so avoidance and minimization will be critical.

Weirens continued, the flipside, preserve is not replacing something that was impacted.Tri added, there is no economic incentive. The math is not there, that’s reality.

Tri asked about the land values in the metro. Fischer responded to say, 5-15 cents per square foot, depending on improvements needed. These prices usually include utilities and services.

Pafko reflected, back in the early to mid 1980’s there was a precursor to the Interagency Wetland Group. There was a credit for preservation but MnDOT has not used it in 20 years. That’s how difficult it is.

Gerbig stated that preservation/acquisition in urban areas might be open space but not what it should be. Harnack commented, preservation does not work well on small parcels. Larger sites will provide greater value.

Harnack added, there is a strong interest in replacing quality sites with quality sites, we don’t work in the avoidance end very well.

Weirens added, preservation for the Corps is 8:1. High land values prevent its effective use. MnDOT’s experience – 20 years – never used is instructive. The option looks good on paper.

Weirens commented that due to time constraints and the good discussion on replacement ratios, the planning topic will be pushed to the next meeting.

Issue 10 – Make consistent with the Corps.

Weirens spoke of the proposal to blend the WCA and Corps replacement ratios.

Issue 11 – develop coordinated state/federal replacement ratios, with a single wetland “denomination”

Weirens mentioned the conservation acres issue when reporting WCA losses. Conservation acres are used for statewide calculations for “no net loss” but not used to cancel out wetland impacts.

Tri asked, what does that statement mean? Weirens explained it further. WCA non-exempt impacts are replaced with mitigation. Hopwever, WCA results in a net loss when the exemptions are factored in. But, the statewide big picture of wetland change is improving when conservation restorations are considered.

Weirens continued, BWSR is tasked with developing a restoration strategy. We propose to look at DNR concerns and MPCA water quality issues. Add other value to other programs and other interests.

Steve Commerford, asked that conservation acres are not counted towards regulatory effectiveness, but look at exemptions in terms of accounting the loss. Is this the practice?
Harnack replied, regarding counting gains and losses under WCA. Statewide, WCA results in a net gain over 3 years. However, when exemptions are counted the net loss equals about 350 acres per year. This process will cover the question of how can we further limit losses: by increasing ratios, federal cooperation or development of a statewide restoration strategy. If we don’t put private and public dollars toward it, we will not achieve our goal.

Commerford so there are two methods of accounting? The state should have one book. The public may not perceive this too well.

Harnack stated that the exemptions are the public policy as enacted by the legislature. It is part of WCA. Pafko responded that this is a debate and a question for the legislature. Was the intention a net gain of wetland in the state or was the wetland regulatory program to achieve no net loss on its own? Harnack replied, the public policy for net gain is already in place.

Fischer asked if some impacts are exempt, should the legislature set up a fund to replace these impacts instead of doing it on the backs of the regulated? Pafko replied that when they looked at eminent domain, they said no. Harnack further replied, for the Road Program they offered money.

Sheila Vanney commented that we should clarify the goal of WCA. Diminishing the SWCD and voluntary government incentive based programs.

Norris shared that WCA initially passed with a statewide replacement ratio of 2:1 with no de minimus. Exemptions have grown over time and we have lost the original intent.
Harnack replied, that they also appropriated $6 million to replace impacted acres. The program has been running for 15 years with few problems but it is time to make some modifications.

Issue 13 – Wetland impacts in shoreland areas should be replaced with “in-kind” sites

Issue 14 – Concern over replacing same wetland type with the same wetland type.

Issue 15 – Environmental and economic cost of replacement must be considered.

Weirens asked for closing comments.

Kramer asked about the word “concurrent”. Harnack answered, concurrent will go away. With concurrent replacement there is still a temporal loss and the Corps doesn’t allow it.
Kramer continued by asking if this will place more pressure on the banks? Harnack responded that this will require more use of the banks. Kramer asked if this will affect on-site replacements? Harnack responded, yes, on-site replacement will require either advance planning or the development of more credit

Kramer commented that there is no funding available to get the mitigation done in advance. The requirement needs to be clearer to match in advance replacement to higher public loss. Harnack replied, the Corps already requires this.

Krystosek added, that with concurrent replacement there is a temporal loss as the function will not be there

Kramer asked, while we manage construction projects, how will we protect mitigation sites that are in-place? Tri offered an example: on a curve redo, the road removal is all excavation. This will be concurrent replacement, expensive and onsite.

Valencia offered her prospective regarding onsite or banking. We still see a lot of off site mitigation proposals

Zdon commented that the cost of mitigating is an issue, siting criteria does not take into account replacement ratios. Proximity and reasonableness are mentioned in our language. Cheaper to go elsewhere, but the permit authority should take ecological issues into the decision.

Weirens offered a sneak preview of the upcoming Wetland Committee meeting by presenting the Exemption Discussion Point tracking sheet the Wetland Committee will be reviewing tomorrow. He referenced the handout and informed the group that it was still in draft form.

Fairchild asked about the decisions to be made. Weirens stated that committee will make recommendations to the BWSR Board and then to the Clean Water Cabinet.

Harnack stated, ultimately, the results of this Assessment are going to the wetland round table to identify rule and statute changes. This effort will be similar to the earlier roundtable effort.

Fairchild thanked Weirens for keeping the group on track.

Weirens announced the next meeting will be help at the same location on August 22nd from 1-4. The topics to be covered include regulatory simplification, planning and any remaining issues.

Meeting adjourned.

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