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| Do You Want to Be a Mitigation Banker? |
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Mud Slough Mitigation Bank photo Larry Devroy
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It seems that a lot more people in Oregon are answering "Yes" to this question. Since the Compensatory Wetland Mitigation Banking Rules went into effect in early 1997, the Department of State Lands (DSL) and the Corps of Engineers have approved 19 mitgation banks, and counting. Several bankers have expanded their banks or started new ones.
However, prospective bankers need to be aware of the detailed requirements and also the risks involved in this unique business venture. Listed below are some of the common issues and concerns.
Site Suitability
A good bank location is one that provides substantial opportunity to provide important wetland functions such as flood storage and attenuation, water quality improvement, a diversity of wetland habitat types, and connection to these habitats from other protected natural areas. The water source that sustains the wetland must be reliable. Banks should be sited where they pose the least conflict with adjacent land uses, and where human disturbances will be minimal. If a bank site coincides with the interests and priorities of a local land trust or other long-term conservation steward, it may be easier to secure the required agreement to manage the site in perpetuity.
Bank establishment requires technical expertise and equipment
Wetland restoration is both a science and an art. It is important to understand the capability of the soils at your site to target the correct native plant communities that will succeed there. Access to farming expertise, especially site preparation and ongoing weed control, has proven important to the success of existing banks. Timing of site treatments can be critical, so it helps if the appropriate agricultural equipment is readily available. Also, it is helpful if the banker becomes familiar with the permit procedures of DSL and Corps in order to understand their potential customers' needs.
Bank service areas
A service area is the geographic area where a bank is allowed to sell credits to applicants for removal-fill permits or to resolve fill violations. Normally, the agencies identify the fourth order HUC watershed map as the appropriate service area; however some variation may be approved if justified by ecological principles. Therefore, the size of the bank needs to be commensurate with the market demand within the watershed.
Timelines to establish a bank
It can take about a year to craft the agreements to begin a new mitigation bank; however DSL and the Corps are working on template documents to make the process faster and more predictable. The mitigation bank sponsor will work with a Mitigation Bank Interagency Review Team (IRT) to ensure the plans meet the requirements of all the relevant agencies, and have a high probability of success. The process includes a public review, agency review of draft documents, and securing permits for construction, water rights, local land use approvals, etc.
Competition among banks
The bank sponsor is responsible for assessing market demand. The IRT cannot guarantee future credit sales, nor do they prevent new banks from starting up within the service areas of existing banks. Removal-fill permit applicants always will have the option of conducting their own wetland mitigation, but it is often more convenient for them to buy credits from a banker and avoid the liability for the success of their own mitigation site.
Long-term stewardship of bank sites
The bank sponsor is required to provide plans for the long-term protection, management and monitoring of the bank site. This includes contigency plans in the event the sponsor becomes unable to operate the bank.
Frequently Asked Questions
How does the IRT determine how many credits will be generated?
State rules allow use of the standard ratios or other accounting methods based on assessment of wetland functional gains, as approved by DSL. Corps replacement ratios may be different, so the MBRT will discuss and reach agreement on a common denominator to meet the needs of both agencies.
Who determines the value of a bank credit?
Bankers determine how much to sell their credits for, based on a variety of market conditions for their service area. The IRT does not get involved in establishing the price for credits.
Can I get credit for protecting an existing wetland?
Conservation of certain types of existing rare or high-quality wetlands is allowable, but the credit ratio is low compared to projects that yield a net gain of wetland acres.
Can a wetland bank allow hunting?
Yes, hunting can be allowed on bank sites, subject to state hunting regulations.
For more information about mitigation banking, contact Dana Field; (503) 986-5238.
Wetland Mitigation Banking Guidebook
Steps to establish a new wetland mitigation bank
EPA fact sheet on mitigation banking
Ecosystem Marketplace overview of wetland banking
HUC Watershed Map
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