Wetland Mitigation, Volume 2, A Guidebook for Airports (2019)

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68 7.1 Introduction An objective of this guidebook is to address the costs and logistics of developing mitigation and life-cycle obligations. Factoring in all the project elements is essential to develop the actual cost of a wetland mitigation project. This chapter also provides the reader with an under- standing of the process to aid in making their decision. Wetland mitiga- tion projects are typically not standalone projects for an airport as they are directly linked to a project and/or development program for which there are unavoidable wetland impacts. Previous chapters explain why mitigation is required and describe the types of wetlands and mitigation alternatives. From this, the reader can only imagine the variety and scope of mitigation that can be undertaken. The selected mitigation and scope depend on the resulting wetland impact from an activity, considering the type, function, and scale of that impact. Typically, the type of mitigation is considered during the environmental planning process and presented as a mitigation measure during the NEPA evaluation and as a condition of NEPA approval. After the environmental process is completed, the project proponent must prepare a permit application for a USACE 404 permit along with 401 Water Quality Certification. In addition, in some regions of the country, a state and local wetland permit may also be required. Chapter 2 expanded on the regulations for each state related to wetland mitigation. This chapter does not include the cost of the NEPA process, as this is considered a project cost regardless if any wetland impact is identified, and therefore not associated exclusively with wetland mitigation. This chapter focuses on the cost of mitigation after completion of the NEPA process. 7.2 Permitting The effort and associated cost of preparing a permit application depends on the type of permit and impact being permitted. For example, the USACE issues general or nationwide permits for certain types of activities or for impacts below certain disturbance thresholds. These are typically less labor-intensive permits. Individual permits involve more effort, commensu- rate with the impact and proposed mitigation. For complex projects, a 404/NEPA integration or merger process can be implemented to provide efficiencies. A 404/NEPA process typically requires a formal agreement by both the federal agency (for example, the FAA) and the USACE at the onset of the NEPA process. A 404/NEPA process still requires preparation and submittal of a permit application; however, concurrence at critical decision points is achieved during the merger process. C H A P T E R 7 Costs and Funding Case studies in Chapter 9 present a range of mitigation projects in terms of com- plexity, cost, and long-term stewardship.

Costs and Funding 69 When banking or in-lieu-fee mitigation is proposed, the permitting effort itself should cost less than for permittee-responsible mitigation. The cost is lower because the application will not require the development of plans to advance the permittee-responsible mitigation concept. Situ- ations that require plan development to advance the mitigation concept, agency coordination time, and the actual analysis and design take a considerable amount of time, which increases cost. 7.3 Mitigation Type 7.3.1 Banking and In-Lieu-Fee Programs Both of these mitigation methods depend on the availability of an appropriate wetland bank or in-lieu-fee program. 7.3.1.1 Banking Agency directives (such as those from the USACE) favor mitigation banking for reasons cited in Chapter 4. The types of wetlands in mitigation banks and the kinds of mitigation credits available correlate—more types of wetlands mean the mitigation options also increase. These are proven and managed sites that can be both public and private banks. The cost of credits is based on the amount and type needed. Demand for credits in the applicable watershed (basin) and price competition from other sources also affect project costs. Generally, private investors form the banks based on local demand, so service areas where demand is low do not typically have banks. The cost of credits is market driven in most cases, particularly where private banks are active. Local and regional agencies, utility companies, and other entities may form banks to offset project-specific impacts. In some states, the DOTs have established banks. Whether privately or publicly run banks, there is considerable range in the cost of credits, which are identified by watershed, type of wetland, and location. The best way to determine potential bank costs is to contact the bank managers directly. 7.3.1.2 In-Lieu-Fee Mitigation Similar to mitigation banking, the project sponsor is not responsible for developing a mitiga- tion bank, and fees vary depending on wetland type, watershed, and location. The advantage to this concept is that typically the program managers are resource agencies with staff and exper- tise to develop and manage good sites. According to the Wisconsin Department of Natural Resources’ website, in 2015 its in-lieu-fee program credit cost was about $60,000 per acre. The USACE Sacramento District showed 2014 fee categories ranging from $5,752 to $23,528 for non-riparian wetland credits to $155,998 for coastal wetland credits. Ohio’s 2017 fees ranged from $48,000 to $71,000. The actual amount of credits required will be based on mitigation ratios determined by the agencies regulating the wetland program. With both banking and in-lieu-fee, the mitigation cost is one time, up front. Banking and in-lieu-fee mitigation present less risk than permittee-responsible mitigation, which requires monitoring and abil- ity to meet performance standards. Permittee-responsible mitigation may require adaptive management to meet performance objectives and requires long-term maintenance and management. For these reasons, there is a tendency to consider banking and in-lieu-fee mitigation where these programs exist unless a specific resource has been identified as being impacted that cannot be replicated at another location, and there- fore requires permittee-responsible (project-specific) mitigation. Additional information can be found at: • https://dnr.wi.gov/topic/Wetlands/ mitigation/WWCT.html, • http://www.spk.usace.army.mil/ Portals/12/documents/regulatory/ Reg_workshop/2014-06-27/ 3B-Mitigation-Banks-In-lieu-Fee- Programs.pdf, and • https://www.nature.org/en-us/about-us/ where-we-work/united-states/ohio/

70 Wetland Mitigation, Volume 2: A Guidebook for Airports 7.3.2 Permittee-Responsible Mitigation Unique situations can lead to permittee-responsible mitigation. In some cases, credits from mitigation banks are not available due to issues such as the wetland not being the needed type or HUC. In other cases, there is not an in-lieu-fee program. In these situations, the airport may need to consider permittee-responsible (project-specific) mitigation or development of a wetland mitigation bank. FAA AC 150/5200-33B provides guidance on separation distances of wetland mitigation from the AOA. Mitigation on-site or within the siting separation distances is avoided in most circumstances unless it is agreed upon by agencies that the proposed mitigation would not create or result in a wildlife attractant increase. It is typically only considered when the impacted wetlands “provide unique ecological functions, such as critical habitat for threatened or endangered species or ground water recharge, which cannot be replicated when moved to a different location” (FAA, AC 150/5200-33B). If project-specific mitigation is undertaken, then the following elements are part of the miti- gation cost. 7.3.2.1 Real Estate If an airport operator does not own an identified mitigation site, the property must be acquired. The cost associated with site selection and acquisition must be identified in the project budget. Project acquisition costs include property acquisition in fee simple and water rights as applicable. Regardless of the property owner, a wetland mitigation site must be protected in perpetuity through a permanent and irrevocable conservation easement that runs with the land. 7.3.2.2 Regulatory/Permitting Approvals The permitting/regulatory approval process for a permittee-responsible mitigation is usu- ally more expensive than other types of mitigation because it requires advancing a mitigation concept to a level of design that demonstrates the feasibility and function sufficient to meet mitigation objectives. The design effort includes more extensive agency coordination and the determining of performance objectives. Design documents such as cross-sections and plan views must be prepared to describe how the site will function and provide assurances regarding long- term management. 7.3.2.3 Site Planning and Design Site planning and design include the site investigation, hydrologic studies, and other design considerations (see Chapter 6). The cost will vary depending on the project scope. The case studies presented in Chapter 9 demonstrate the variability in project costs. 7.3.2.4 Construction Costs Construction costs are comparable to those associated with other types of construction projects and include activities such as grading and planting. However, specialized equipment and materials may be required, such as vehicles that can operate with lower tire pressure and project-specific planting materials and specifications. These variations must be considered when estimating project costs. 7.3.2.5 Monitoring to Meet Performance Objectives Once construction is complete, the monitoring period begins and continues until perfor- mance objectives are met. Monitoring typically occurs over 5 years, but some permit conditions require a longer period. During this time, costs may increase if adaptive management is required to meet the objectives.

Costs and Funding 71 7.3.2.6 Post-construction Although the intent of a mitigation site is to provide a natural system that can sustain itself once established, the site owner is responsible for its continued function to meet the identi- fied objectives. If the airport does not find a long-term steward to transfer the site to, it will be responsible for the ongoing maintenance and management, including possible adaptive man- agement. Finding a site and an appropriate long-term steward for the site can reduce or elimi- nate the post-construction costs. 7.3.2.7 Life-Cycle Cost Analysis Life-cycle cost analysis is especially useful to compare project alternatives that fulfill the same performance requirements but differ in initial and management costs. An LCCA (see Figure 7-1) aids in selection of the alternative that maximizes net savings. For example, constructing on-site mitigation (airport-owned) may be more expensive than an off-site strategy, despite the cost to acquire property, because of the added constraints of FAA design standards and potential wildlife strike hazards associated with on-site construction (within the FAA separation criteria). Similarly, buying into an established wetland banking operation may reduce the overall costs by having the owner assume the long-term maintenance costs. Typically, the decision on what type of mitigation to pursue is less driven by the LCCA than what is acceptable to regulatory agencies and the sponsor from a purely environmental perspec- tive. The Preliminary Design Section of Chapter 6 touched on alternative consideration once a site has been selected, but when permittee-responsible mitigation is being pursued, the alterna- tive evaluation considers more the function and likelihood of success given the site constraints than costs. The results of an LCCA typically would rank wetland creation lower than restoration or enhancement because creation is also typically more expensive, time-consuming, and riskier than other mitigation methods. Construction costs Management cost Acquisition costs Life-cycle cost analysis Figure 7-1. Life-Cycle Cost Analysis. LCCA is a method to assess the total cost of site development and ownership. LCCA accounts for all costs of planning, acquiring, designing, permitting, constructing, and managing mitigation sites.

72 Wetland Mitigation, Volume 2: A Guidebook for Airports 7.4 Funding Sources All mitigation costs are eligible for Airport Improvement Program (AIP) funds if associated with a specific AIP project according to Table S-1 of Order 5100.38D, Airport Improvement Program Handbook (FAA 2014). The cost of wetland monitoring for the required period is included in the ROD, up to a maximum of 5 years, and is an AIP-allowable cost. If the project is not federally funded, then the cost will be borne by the sponsor and pos- sibly the state. There may be opportunities for the sponsor to secure a portion of its funding through other sources, such as local partners through regional collaboration, as explained for the Pullman-Moscow Regional Airport Case Study in Chapter 9. In addition to the FAA, airport (sponsor), and state DOT, two counties, a port, two universities, and an analytical laboratory contributed to the local match and/or to the operational budget of the airport. This chapter has identified what costs are included in a mitigation site. However, because of the variability in each site, providing detailed costs is not possible. The case studies presented in Chapter 9 provide cost information in a project context. 7.5 Summary Chapter 7 identified the various elements comprising the total cost of mitigation, and those costs can vary greatly depending on the type and scale of mitigation necessary. Mitigation costs associated with an AIP project are eligible for AIP funds. Monitoring may be an eligible cost according to the FAA’s Airport Improvement Program Handbook (FAA 2014). If the project is only sponsor- and/or state-funded, there may be opportunities to secure funding through other partners, with the level of participation being project-specific.