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94 Metzger, M. E., Messer, D. F., Beitia, C. L., Myers, C. M., and V. focus for an envisioned relationship between transportation L. Kramer. The Dark Side of Stormwater Runoff Management: and watershed planning (Bank, 1996). A case study was used Disease Vectors Associated with Structural BMPs. Stormwater, to illustrate how the relationship can work to maximize coor- Vol. 4, No. 7 (NovemberDecember 2003). dination and cooperation between watershed and transporta- Russell, R. C. Constructed Wetlands and Mosquitoes: Health Haz- tion stakeholders. ards and Management Options-an Australian Perspective. Eco- logical Engineering, Vol. 12 (1999a) pp. 107124. Until TMDLs became a consideration, water-quality con- Russell, R. C., Hunter, G., and G. Sainty. Wetlands for Stormwater cerns were not a driving factor in DOTs' consideration of Management: Water, Vegetation and Mosquitos--A Recipe for watershed approaches. In a survey conducted in 1997, Clean Concern. Proc., Comprehensive Stormwater and Aquatic Eco- Water Section 404 permitting for wetland impacts was the system Management Conference, Vol. 2 (February 1999b) pp. primary driver in state DOT efforts to consider or incorpo- 137144. rate a watershed approach (Venner, 1998). Concerns about Sarneckis, K. Mosquitoes in Constructed Wetlands. Environment endangered species were drivers in only a few states, includ- Protection Authority (December 2002) 27 pp. ing Idaho, Montana, Washington, and Maine; in those states, VBDS, California Department of Health Services. An Initial Assess- DOTs identified watershed boundaries on projects primarily ment of Vector Production in Structural Best Management Prac- tices in Southern California. Vector-Borne Disease Section, to indicate red-flag potential impacts. The study also exam- Department of Health Services, CA (June 2001) 40 pp. ined success stories, barriers, and lessons learned in DOTs' Walton, W. E., Workman, P. D., and C. H. Tempelis. Dispersal, implementation of watershed approaches. Survivorship, and Host Selection of Culex Erythrothorax (Diptera: Washington State DOT and North Carolina DOT remain Culicidae) Associated with a Constructed Wetland in Southern the leaders among state transportation agencies in integrating California. Journal of Medical Entemology, Vol. 36, No. 1 (Jan- a watershed-based approach into this work, primarily as it uary 1999) pp. 3040. pertains to mitigation siting. Both Washington State DOT and North Carolina DOT target mitigation funds to sites 3.3. WATERSHED-BASED APPROACHES offering the greatest ecological benefits. In North Carolina, such needs are identified through a formal watershed plan- As previously mentioned, using watershed-based ap- ning process conducted by the State Department of Environ- proaches to stormwater planning and management in- ment and Natural Resources and are partially funded by North volves coordinating and integrating human activities to Carolina DOT. The watershed-based approaches of Wash- implement watershed recovery efforts and to prevent fur- ington State DOT and North Carolina DOT follow: ther degradation of natural resources within the basin. Part- nerships and negotiations among various jurisdictions and Washington State DOT levels of government often are required to fulfill multifac- Endangered salmonids drive watershed planning and eted social, economic, and environmental goals within the attention to watershed impacts in Washington State. watershed. Washington State DOT's watershed-based approach Only eight states have conducted studies or prepared is characterized by a community-based environmental reports on the retrofitting of existing stormwater manage- decision-making process that coordinates and integrates ment measures at DOT facilities where a watershed-based human activities to implement watershed recovery efforts approach is employed to address fish passage or other issues and to prevent further degradation of natural resources pertaining to receiving waters. Five states have developed within large drainage basins. In 1996, Washington State research or resources in the area of programmatic or other DOT shifted from mitigating impacts on a project-by- alternatives to project-specific mitigation, including means project basis, irrespective of the top watershed needs, to for establishing critical needs and priority mitigation on a analyzing mitigation opportunities based on watersheds. watershed scale. Now Washington State DOT's approach makes links Below, the topical areas of watershed-based approaches between watershed issues and creates partnerships with are divided into planning, which may involve the implemen- public, private, and nonprofit organizations that affect tation of regional and distributed stormwater management and are affected by the issues. controls and practices throughout an entire basin, and into Initiatives directly contributing to the watershed-based market-driven approaches, which may involve placing mon- approach at Washington State's DOT include the depart- etary value on stormwater quality that can be traded on the ment's Wetlands Strategic Plan, the Fish Passage Bar- open market. rier Removal Grant Program, the Advanced Environ- mental Mitigation Revolving Account, Stormwater 3.3.1. Watershed Planning Retrofit Grants, Flood Management Strategy, and Cap- ital Budget Coordination. A common theme in each of In 1996, FHWA came out with Transportation Plan- these initiatives is the establishment of incentives for ning--The Watershed Connection, which provided a national targeting mitigation investments to sites that protect,

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95 preserve, or restore key components of the watershed, portation mitigation dollars toward high-priority water- yielding substantial benefits for the state as a whole. shed recovery projects in the basin, the DOT is working Over the past year, Washington State DOT has under- cooperatively with other agencies to look for ways to taken a broad analysis of mitigation siting potential, aimed reduce transaction costs, increase environmental benefits, at making a tangible contribution to watershed restoration. and obtain a more streamlined consensus that mitigation To assist this effort, the DOT is developing landscape- efforts happen in priority areas within the watershed. based approaches and tools to systematically examine Washington State DOT's Snohomish Basin Demon- ecosystem function and identify core problems leading stration Project has focused on developing methods to degradation of water quality, increased peak flows, to identify candidate transportation projects from the declining base flows, and the loss of anadromous fish agency's 2-year and 6-year programs, which have miti- habitat. These tools are pointing to more cost-effective gation needs that could be linked to watershed improve- and environmentally beneficial options when the depart- ment activities. This project also provides an example of ment reaches technical limits for onsite mitigation. The how a literature review was loaded into a GIS to collate approach lays the groundwork for a more flexible and environmental recommendations for the watershed. less prescriptive process for achieving multiple natural North Carolina DOT resource goals, resulting in a more predictable permit- The North Carolina DOT and the Department of Envi- ting process with measurable transportation and envi- ronment and Natural Resources (DENR) have designed ronmental benefits. the Ecosystem Enhancement Program (EEP) to deal with For each project, Washington State DOT inventories a rapidly expanding transportation program that has a aquatic and terrestrial resources on site, identifies poten- high volume of new alignments, impacting an estimated tial impacts, and assesses the potential and sustain- 6,000 acres of wetlands and a million feet of streams ability of mitigating on site. On a watershed scale, the over the next 7 years in a state with notable nutrient- department determines offsite mitigation needs; charac- loading concerns. The state has decided to tackle these teristics of the predevelopment landscape; current land issues through a strategic progress of riparian buffer and use and future build-out; and the condition, location, wetland restoration. EEP is intended to protect the state's and extent of aquatic and terrestrial resources and sup- natural resources through the assessment, restoration, porting ecological processes. The DOT then identifies enhancement, and preservation of ecosystem functions target areas for mitigation at multiple spatial scales. and through identifying and implementing compensatory Within each spatial scale, Washington State DOT iden- mitigation programmatically, at the watershed level. In tifies the ecological processes necessary for and capable particular, the program will of mitigating project impacts. To qualify as environmentally desirable offsite miti- Enable multiple project impacts (wetlands, stream gation, the potential mitigation site and local ecosystem corridor, water quality, species, and habitat) to be processes must meet targeted threshold criteria, indicat- addressed in a comprehensive manner. ing high potential to maintain ecological functions over Target mitigation resources to better protect the nat- the long term. The process identifies priority recovery ural resources of the state by assessing, restoring, areas for each targeted resource (fish and wildlife, water enhancing, and preserving ecosystem functions and quality, riparian, and wetland) and opportunities and compensating for impacts at the watershed level. The priority areas for multi-objective mitigation. Land uses program will address watershed concerns, including that alter or decrease the success of ecological processes preservation of threatened high-quality sites and that the mitigation would seek to restore or enhance are restoration of wetlands and riparian buffers along a primary screen. Before candidate sites and restoration impaired streams. projects are chosen, a comparative assessment of eco- Exceed the state and the Federal Highway Adminis- logical functions is performed along with social, eco- tration's "no net loss" objectives for wetlands. nomic, and environmental costbenefit analyses for the Allow implementation of mitigation years earlier than candidate sites. From these assessments and analyses, the current project-letting schedule, expediting proj- Washington State DOT is able to develop a defensible ects and eliminating temporal loss of wetland and priority list of sites capable of mitigating project impacts riparian areas. and maximizing environmental investment. Reduce permit staff workload, rework, and duplica- Washington State DOT's watershed-based approach tion of effort, thereby saving time and money. is leading to the identification of mitigation sites on a Reduce project controversy and improve communi- watershed basis and the costbenefit analysis of miti- cation, planning, and environmental stewardship. gation options. A new state law has created a goal of Serve as a model for positive interagency relationships. achieving a 50% increase in environmental benefit from Dramatically increase the ecological effectiveness of mitigation at a 25% reduction in cost. To direct trans- the investments of public dollars in compensatory

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96 mitigation, illustrating better stewardship of public BMPs that are consistent with the goals and objectives resources, and setting a nationwide standard for miti- developed for each watershed. Anticipated deliverables gation at the ecosystem level for unavoidable impacts will include resulting from transportation improvements. A watershed needs assessment methodology accepted by applicable resource management agencies; The EEP evolved from a multiyear effort by North The scale of watershed assessment for each ecosys- Carolina DOT, DENR, FHWA, the U.S. Army Corps of tem function of interest; Engineers, North Carolina Wildlife Resources Commis- A guidance manual outlining the watershed needs sion, the EPA, and the U.S. Fish and Wildlife Service to assessment process; streamline the project delivery process for transportation Standard protocols that will be used to establish goals improvement projects, to reduce environmental impacts and objectives for each watershed; in concert with avoidance and minimization, and to pro- Protocols for the selection, evaluation, and prioritiza- duce the most environmentally beneficial mitigation tion of projects, including compensatory mitigation; possible. A year of multi-agency process improvement Recommendations concerning the frequency of review workshops determined that compensatory mitigation and revision of watershed plans; should be "de-coupled" from individual permits and Recommendations for integrating the assessment out- project reviews and performed on a watershed basis, comes and conclusions into a statewide GIS layer; with mitigation projects constructed in advance of per- Criteria to measure the ecological-effectiveness and mitted impacts. The program has been endorsed at the cost-effectiveness of identified projects; and highest levels of participating agencies. Resources (staff and funds) necessary to implement Mitigation strategies under EEP embrace the concept the recommended watershed assessment procedures of functional replacement for unavoidable impacts. Mit- throughout North Carolina. igation needs and replacement opportunities are being developed through a collaborative process that includes The compensatory mitigation strategy will include a all interested parties with the goal of restoring and sufficient amount of restoration and enhancement to protecting watersheds throughout North Carolina. The ensure no net loss of wetland and riparian acres and approach evaluates cumulative impacts of all projects functions, including water quality effects. The project's within a watershed and implements mitigation focused preservation component is preserving the highest qual- on achieving a net increase in wetland and riparian func- ity and most biologically diverse wetland and riparian tions in the watershed and across the state. To ensure that sites throughout North Carolina. program goals are met, a ledger of implemented projects and actual impacts will be produced for each watershed. On an annual basis these ledgers will be compared to 3.3.1.1. Identification of Research Needs determine if a "no net loss" of wetland and riparian func- tions has been achieved. Any shortfall is programmed Although much literature exists to support watershed man- for correction in the next annual cycle, and excess miti- agement, there is still a need for development and evaluation gation is reserved for future use. In the first year of the of techniques to integrate transportation-related runoff analy- program, mitigation requirements were satisfied for sis into overall watershed management. Stream channels 82 transportation projects by focusing on addressing the respond to changes in flow volume and sediment loading. greatest environmental needs on a watershed basis. Watershed change is known to have a corresponding effect An interagency team led by the state's DENR is on channels leading to bank erosion and head cutting. These charged with developing a watershed assessment method- processes are well understood and descriptions of channel ology to facilitate full replacement of functions. The morphology are well developed, but effective predictive team recently has compared, contrasted, and evaluated models of channel geomorphic response are lacking, espe- existing watershed assessment methods, including the cially in response to the episodic nature of runoff. Indices and methods utilized to develop watershed restoration plans indicators specific to transportation-related runoff are lack- and local watershed plans. The method will assess eco- ing as well. system functions of importance and the appropriate scale and assessment methodology for each function of inter- est as determined by all the agencies involved. The team 3.3.1.2. Primary References will oversee the adoption of standard protocols that will Venner, M. Integrating Planning for Transportation and Water- be used to establish goals and objectives for each water- shed Management. (January 1998). shed. These protocols also will provide the framework Venner, M. Personal Interviews: Dick Gersib, Watershed Program for identifying traditional restoration and enhancement Manager, Washington State DOT; Bill Gilmore, EEP Manager, opportunities and other actions such as preservation and North Carolina DOT (20022003).

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97 3.3.2. Market-Driven Approaches: BMP Asset On January 13, 2003, EPA's Office of Water released the Management and Pollutant Trading final Water Quality Trading Policy (U.S. EPA, 2003). The purpose of the policy is to encourage and provide guidance One of the major barriers to water quality planning and to states, interstate agencies, and tribes to develop and imple- management in urban watersheds is the imbalance between ment water quality trading programs for nutrients, sediments, economic development and environmental protection. Envi- and other pollutants where opportunities exist to achieve ronmental economists often contend that the best approach water quality improvements at reduced costs. More specifi- to overcoming this barrier is to devise a mechanism for plac- cally, the policy is intended to encourage voluntary trading ing monetary value on the quality of the environment, thus programs that facilitate implementation of TMDLs, reduce creating an economic incentive for environmental protection. the costs of compliance with CWA regulations, establish Applying this reasoning to highway runoff management, incentives for voluntary reductions, and promote watershed- BMPs may be treated as an asset that must be maintained, based initiatives. Based on the policy, EPA supports trading along with roads. Asset management is a business process that involves nutrients or sediment loads, as well as cross- and a decision-making framework that covers an extended pollutant trading for oxygen-related pollutants where ade- time horizon, draws from economics as well as engineering, quate information exists to establish and correlate impacts on and considers a broad range of assets. The asset management water quality. EPA recognizes the potential value of trading approach incorporates the economic assessment of trade-offs other pollutants but believes such trades pose a higher level among alternative investment options and uses the informa- of risk and should receive a higher level of scrutiny. EPA tion to help make cost-effective investment decisions. Little currently does not support trading of pollutants considered asset management information exists for BMPs. (by EPA) to be persistent bioaccumulative toxics (PBTs). Pollutant trading is a fairly new watershed-based, market- EPA would consider a limited number of pilot projects over driven approach to improving receiving water quality while the next 2 to 3 years to obtain more information on the trad- minimizing the costs associated with mitigation and restora- ing of PBTs. tion. Pollutant trading provides watershed managers and the Another potential approach to stormwater management at regulated community more options for managing point and the watershed level is using tradable allowances for excess nonpoint source discharges. In 1996, the EPA issued Draft stormwater runoff. Thurston et al. (2003) proposed a trad- Framework for Watershed-Based Trading, which provides able runoff allowance system that would create economic guidelines for establishing a market-based system of pollu- incentives for landowners to employ low-cost runoff man- tant trading (U.S. EPA, 1996). Specifically, the document agement practices so that excess stormwater flow to more provides ecologically sound levels could be reduced. The trading mech- anism requires detailed mapping information on individual Background on what effluent trading is and the benefits properties, including size, percent imperviousness, and soil it offers; type to predict runoff using sophisticated hydrological mod- A series of conditions that are necessary for trading, els. Each property owner is allocated a specific quantity of including those that ensure protection of water quality annual runoff based on an assessment of predeveloped con- comparable to the protection that would be provided ditions and receiving water sensitivity (this is assuming a without trading; stormwater management authority is in place). Anything A template of regulatory, economic, data, technical, sci- above this allowance is considered excess runoff and must be entific, institutional, administrative, accountability, and mitigated or traded. The costs include the cost of mitigation, enforcement issues that facilitates identification and eval- which would be the cost of BMP construction, operation and uation of trading opportunities; and maintenance, and the opportunity cost of land taken out of Worksheets and checklists for evaluating whether poten- other uses. Based on the theory of economic systems, excess tial trades meet threshold conditions. runoff could be traded within a watershed-based open market. The Water Environment Research Foundation (WERF) Pollutant trading has been successfully implemented in sev- currently is funding a 1-year, $100,000 research project-- eral communities. The U.S. EPA (1999) compiled a document Common Currency for TMDL Commodities: Trading Infra- that summarizes 37 effluent trading and offset activities that structure (RFP No. 02-WSM-1). The primary objective of are occurring or have occurred around the country. Half of the the project is to generate practical tools that support the activities are still in the early stages of development and nearly implementation of watershed-based trading efforts for use by all are trades based on point source discharges, mainly by pub- point and nonpoint dischargers. The tools developed in this licly owned treatment works. The majority of the pollutants research will help trading participants to better delineate their traded to date are nutrients (nitrogen and phosphorus). How- watersheds and trading markets, allow participants and poten- ever TSS, ammonia, temperature, pH, BOD, DO, and metals tial participants and their commodities to identify each other, also have been traded at various implementation levels, and help develop transferable marketplace infrastructure to including individual, watershed, and statewide trades. enable creation of functional markets.