SOUTH DAKOTA DEPARTMENT OF TRANSPORTATION STATE-WIDE UMBRELLA MITIGATION BANKING AGREEMENT. Wetland Mitigation Bank Prospectus

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1 SOUTH DAKOTA DEPARTMENT OF TRANSPORTATION STATE-WIDE UMBRELLA MITIGATION BANKING AGREEMENT Wetland Mitigation Bank Prospectus DECEMBER 2012

2 TABLE OF CONTENTS 1.0 INTRODUCTION GOALS AND OBJECTIVES ESTABLISHMENT AND OPERATION PROCEDURES Service Area Establishment Establishment of Bank Sites Ecological Suitability Water Rights Determining Credits Use of Bank Credits Accounting Assessment Method Site Development Plan Performance Standards Monitoring and Reporting Real Estate Provisions and Long-Term Management Financial Assurances IRT REVIEW AND USACE APPROVAL QUALIFICATIONS OF THE SPONSOR REFERENCES ATTACHMENTS South Dakota Geographic Service Areas... 1 Prepared by: HDR ENGINEERING, INC S. Old Village Place Suite 100 Sioux Falls, SD South Dakota Department of Transportation i December 2012

3 1.0 INTRODUCTION The South Dakota Department of Transportation (SDDOT) proposes the development of an Umbrella Mitigation Bank (Umbrella Agreement) to be used to compensate in appropriate circumstances for unavoidable wetland impacts for proposed transportation improvement projects (activities). SDDOT proposes that the Umbrella Agreement will consist of multiple wetland mitigation bank sites. Bank sites will be added to the Umbrella Agreement as developed and approved by the Interagency Review Team (IRT) and will be for SDDOT use as a cost-efficient way to consolidate resources and increase the potential for mitigation success. The primary goal of the Umbrella Agreement is to restore, enhance, create and/or preserve wetlands and their functions and values to compensate in appropriate circumstances for unavoidable wetland impacts for activities authorized under the following: Section 404 of the Clean Water Act Section 10 of the Rivers and Harbors Act 23 CFR 777 (Mitigation of Impacts to Wetlands and Natural Habitat) Executive Order South Dakota Statewide Wetland Finding 2.0 GOALS AND OBJECTIVES According to the mitigation banking guidelines published in the Federal Register (FR), the overall goal of a mitigation bank is to provide economically efficient and flexible mitigation opportunities, while fully compensating for wetland and other aquatic resource losses in a manner that contributes to the long-term ecological functioning of the watershed within which the bank is to be located (60 FR ) A mitigation bank is defined as a site, or suite of sites, where resources are restored, established, enhanced, and/or preserved for the purpose of providing compensatory mitigation for impacts authorized by DA permits. (33 CFR Part 332). The SDDOT has the following goals for the proposed Umbrella Agreement: To support the national goal of no net loss of wetlands by providing wetland mitigation sites. To consolidate resources in order to increase the potential for the establishment and long-term management of successful mitigation that maximizes opportunities for contributing to biodiversity and/or watershed function. To reduce permit processing times and provide more cost-effective compensatory mitigation opportunities for those projects which qualify. To increase review and compliance monitoring efficiency and, thus, improve the reliability of efforts to restore, create, or enhance wetland areas for mitigation purposes. South Dakota Department of Transportation 1 December 2012

4 3.0 ESTABLISHMENT AND OPERATION PROCEDURES 3.1 Service Area Establishment The geographic service area (GSA) of each bank will be determined on a combination of watershed basins and eco-regions within South Dakota. This approach divides the state into manageable sections and retains similar physiographic features within its own boundary. Banking sites will be selected in areas of need to compensate for future SDDOT transportation improvement projects planned within each GSA. Refer to Attachment 1, Geographic Service Areas for a figure showing proposed GSAs. South Dakota s ecoregions is based on Ecoregions of North Dakota and South Dakota (Bryce, 1998). These ecoregions separate South Dakota into unique regions based on geologic patterns, soils, and environmental resources. These regions have distinct qualities and characteristics in regards to local and ecologic and biologic criteria. Physiographic regions such as ecoregions consist of recurring landform patterns that reflect regional geology and recent and historic climates, giving indications of the type of natural resources and biodiversity within these regions. Watersheds are hydrologically defined and geographically focused. Operating programs on a watershed approach considers the cumulative effects of activities within that watershed. By developing GSAs on both physiographic regions and by watersheds, the GSAs consider hydrologic connections as well as the geological features of the state. It is the intent of this Umbrella Agreement that SDDOT will attempt to develop mitigation and use credits from "in-basin" bank sites, for transportation improvement projects in that "service area". Use of a bank site and the credits derived from that bank site for "out-of-service-area" projects will be considered on a case-by-case basis. Out-of-service-area mitigation will be an option for some projects where proper inservice-area options are not available due to the location, distance, or lack of available credits. Use of out-of-service-area mitigation will only be feasible with ecological justification as per the Final Rule (33 CFR Part 332). Out-of-service-area mitigation will still require a functional assessment and the ratio of credit will be at the discretion of the U.S Army Corp of Engineers (USACE) and the IRT. All wetland impacts will be based on the HGM functional approach and the proper mitigation will be pursued. 3.2 Establishment of Bank Sites SDDOT retains legal rights to develop or sponsor wetland mitigation projects throughout the State of South Dakota to satisfy Sections 404/401 and Section 10 permitting requirements. SDDOT will develop plans to establish and/or maintain wetland communities as part of this Umbrella Agreement. Bank sites may include one or more parcels of land and may include one or more forms/types of compensatory mitigation (restoration, creation, enhancement, preservation, etc.). Each bank site will be subject to the terms of a Site Development Plan. South Dakota Department of Transportation 2 December 2012

5 The need for supplemental site-specific information will be addressed on a case-bycase basis through individual Site Development Plans reviewed by the IRT for each respective bank site for approval Ecological Suitability SDDOT s Umbrella Agreement will consist of multiple wetland mitigation bank sites. Each bank site will be evaluated during the site selection process in order to determine the ecological suitability of the site to achieve the proposed objectives of the mitigation bank, including the physical, chemical, and biological aspects of the site. Furthermore, this evaluation will determine how the site will support aquatic resources and functions. This evaluation will be included in the Site Development Plan. Potential bank sites will be evaluated for potential development and inclusion in the Umbrella Agreement based on the following criteria: Water Rights Location of the bank site relative to the potential service area that the site would support; Location of the bank site relative to the locations of potential impacts on wetlands/or waters of the U.S. caused by highway construction projects in South Dakota; Suitability of the bank site to meet the Umbrella Agreement s primary goals and objectives; Physical, chemical, and biological characteristics to support desired aquatic resources and functions; Source and adequacy of hydrology; Technical feasibility; Method of establishing the site (restoration, creation, enhancement, and/or preservation); Potential inclusion of upland areas to act as buffer zones and to enhance overall ecological functioning of the site; Compatibility with adjacent land uses (current and foreseeable future); Presence and/or protection of cultural resources and/or threatened and endangered species. The affect of the proposed wetland mitigation bank will also be evaluated for its affect on the amount and timing of water to those in the surrounding area. Additionally, a water rights permit will need to be obtained from the South Dakota Department of South Dakota Department of Transportation 3 December 2012

6 Environmental and Natural Resource (SDDENR) for any wetland mitigation site that stores 25 acre-feet of water or more. 3.3 Determining Credits Mitigation bank sites will be evaluated using a proposed function assessment methodology or other USACE approved methodology. Functional scores of wetlands for projects where unavoidable wetland losses will occur will be determined using the same method to determine the appropriate debit requirement. Credits for the Umbrella Agreement will be produced at the bank sites through restoration, creation, enhancement, and/or preservation of wetland areas. The number of credits will reflect the difference between pre- and post-compensatory mitigation project site conditions as determined by the functional score. Potential credit production at a bank site will be identified in the Site Development Plan. The Site Development Plan will help to determine compensation ratios, based on the type of credit production (i.e. creation, restoration, enhancement, preservation), available pre-crediting, and credit ratios for other portions of the bank site meeting the success criteria. Credit ratios will be determined by the USACE on a project-by-project basis Use of Bank Credits The Umbrella Agreement and associated mitigation sites would be solely used for SDDOT projects requiring mitigation under Section 404 of the Clean Water Act and/or Executive Order Bank site credits utilized by the SDDOT will apply to new grading, regrading, structural, or other related highway projects that drain, fill, or otherwise impact wetlands. Bank sites may be used only after all attempts to avoid or minimize impacts are exhausted, provided other mitigation options are not available and environmentally preferable. For wetland impacts that are jurisdictional under Section 404 of the Clean Water Act, the USACE, in consultation with the other regulatory and resource agencies, would determine the eligibility to withdraw credits on a project-specific basis. The USACE will make the final decision as to whether the mitigation is adequate. For non-jurisdictional wetland impacts requiring authorization under EO 11990, FHWA would determine the eligibility to withdraw credits on a project-specific basis. In some cases, FHWA funds may be used to establish a bank site. For these sites, the FHWA and SDDOT would be required to complete a NEPA document for the site Accounting SDDOT will be responsible for establishing and maintaining an accounting system (i.e., ledger) of the credits, which documents the activity of the mitigation bank site credit account. Each time an approved debit/credit transaction occurs under the Umbrella Agreement, SDDOT will enter the debit/credit in the ledger and document the appropriate permit and project numbers, the impacted functional units and the major South Dakota Department of Transportation 4 December 2012

7 river basin of the impacts. If more regionally appropriate mitigation becomes available prior to project impacts taking place, the FHWA and/or the USACE may approve reallocating the mitigation to a different site and crediting the account accordingly. SDDOT will submit the bank site ledger to the USACE when requests are made for use of bank site credits. 3.4 Assessment Method Development of bank sites will begin with the submission of conceptual plans to the IRT for evaluation. A site assessment will be conducted using the best available methodology. The site assessment methodology is subject to change as methodologies for assessing wetland impacts and mitigation bank credits are refined by the USACE and subsequently implemented by the SDDOT. Site assessment methodologies may also vary by GSA as different physiographic regions may warrant an assessment methodology that is more relevant to the region. Specific site assessment methodologies will be identified in each Site Development Plan. 3.5 Site Development Plan Bank sites included in the Umbrella Agreement will be designed by developing conceptual and final site development plans that will be submitted to the IRT for review and approval. Within the Site Development Plan, a pre-project functional assessment and a postproject functional assessment will be performed to determine the net gain or net functional lift of the proposed site, and thus the functional units anticipated to be available for credit and to determine pre-credits available. Each bank site will have an individual Site Development Plan, which will include the following: Site location and map Proposed geographic service area Site goals and objectives Baseline conditions of the site (determined through a site assessment and wetland delineation) Size (area) and types of potential wetlands that would be developed Size (area) and types of potential upland areas that would be developed Preliminary site plans (conceptual engineering design and vegetation plans) Impacts on wetlands (by type) or other aquatic resources suitable for compensation Methods for determining credits and debits Accounting procedures Performance standards for determining credits available and success of the site (based on the pre- and post- functional assessment) Reporting and monitoring protocols and monitoring plan Contingency and remedial actions/responsibilities Compensation ratios South Dakota Department of Transportation 5 December 2012

8 Long-term management and maintenance provisions Real estate provisions Anticipated site development/construction schedule The information provided in the Site Development Plan will be used by the IRT to approve the addition of a bank site to the Umbrella Agreement. As conceptual plans are drafted and final plans are developed and approved, bank sites will become components of the Umbrella Agreement. 3.6 Performance Standards SDDOT will be responsible for evaluating the restoration, creation, enhancement, and/or preservation activities at the bank sites. Performance criteria for each mitigation bank site will be developed based on best available methodologies for assessing site functions. In some cases, a functional assessment may be completed both prior to establishing the mitigation site as well as a functional assessment after the bank site is complete in order to determine the amount of functional gain that was established on site. In general, designated performance standards will be developed for all mitigation bank sites for the areas: Vegetation Vegetation will be reviewed for current USACE delineation criteria (e.g. Regional Supplement to the USACE Wetland Delineation Manual: Great Plains Region), established canopy cover, and dominant species composition appropriate for the region. Hydrology Minimum inundation/saturation durations will be determined to correlate to wetland types proposed for establishment. Upland Buffer Native species cover and richness will be determined as appropriate for the region. Though these basic standards will be applied to all sites, specific performance standards would be site-specific and will be outlined in detail within the Site Development Plan Monitoring and Reporting Monitoring shall occur for a minimum of five (5) years from the time the wetland is established. Success criteria will be based on the completion of the goals set for each specific bank. These goals will be specific to each banking site and will be based on the functional assessment and the Regional Supplement. Monitoring will report the development and condition of mitigation each bank site. It will also document the progression of success of each bank site or any issues or failures that need correction. Monitoring will continue until mitigation sites have achieved their site goals or functions as outlined in the Site Development Plan. South Dakota Department of Transportation 6 December 2012

9 4.0 Real Estate Provisions and Long-Term Management SDDOT will initially assume ownership, establish a conservation easement, or implement other real estate mechanisms for the mitigation bank site properties. The properties that constitute each mitigation bank site will have restrictive preservation mechanisms, such as deed restrictions, conservation easements, or other legal protections, placed on them at an appropriate stage of development to preserve the bank site as wetland. SDDOT would submit preliminary copies of the unsigned real estate provisions to USACE for review. SDDOT would provide copies of the signed purchase agreement with the applicable restrictive preservation mechanism to USACE prior to authorization of any crediting and debiting of the mitigation bank site (not including pre-crediting). If SDDOT relinquishes ownership of a mitigation bank site property, these restrictive preservation mechanisms will provide for protection of the developed resources at the mitigation bank site in perpetuity. For each mitigation bank site, the individual restrictive preservation mechanism will be identified in the Site Development Plan. The operational life of each bank site would terminate when compensatory mitigation credits have been exhausted or banking activity is voluntarily terminated with written notice from SDDOT and it has been determined that the mitigation bank site is functionally mature and/or self-sustaining to the degree specified in the Site Development Plan. Further, a long term manager of the site would need to be determined and long term management plan approved prior to closure of the site. 4.1 Financial Assurances SDDOT, as the Bank sponsor, will own or be in full control of each bank site and will be responsible for management and long-term maintenance. SDDOT will be responsible for securing adequate funding for operation and maintenance of the each bank site during its operational life as well as for the long-term management of the wetlands. SDDOT is a governmental unit with taxing authority and the financial capability to implement mitigation banking. Thus, SDDOT has access to the necessary financial resources to cover each bank site s needs, including long-term management and unforeseen events as determined by the IRT. 5.0 IRT REVIEW AND USACE APPROVAL Prospectus: IRT has a 30-day review period after receipt of a complete draft prospectus. After receipt of a complete final prospectus, the USACE notifies the public that the Prospectus is out for review. This is a 30-day review period. Draft Instrument: Generally, the draft instrument goes through a 30-day comment period, starting 5 days after the receipt of a complete draft instrument. The USACE has 90-days after receipt of a complete draft instrument to notify the SDDOT of the status of the IRT review and indicate whether the draft instrument is generally acceptable and which changes or comments need to be addressed. South Dakota Department of Transportation 7 December 2012

10 Final Instrument or Modification to the Final Instrument: The SDDOT will submit a final instrument to the USACE and members of the IRT for approval. After receipt of a complete final instrument, the USACE has 30 days to notify the IRT whether or not they intend to approve the instrument. 6.0 QUALIFICATIONS OF THE SPONSOR SDDOT has developed numerous successful site-specific wetland mitigation sites for their roadway projects. The sponsor s agent has also completed numerous successful site-specific mitigation projects as well as completed umbrella wetland mitigation projects for other sponsors. 7.0 REFERENCES Bryce, Sandra. James M. Omernik, David E. Pater, Michael Ulmer, Jerome Schaar, Jerry Freeouf, Rex Johnson, Pat Kuck, and Sandra H. Azevedo Ecoregions of North Dakota and South Dakota. Jamestown, ND: Northern Prairie Wildlife Research Center Online. (Version 30NOV1998). Gilbert, M.C., Whited, P.M., Clairain, E.J., and Smith, R.D. (2006). "A Regional Guidebook for Applying the Hydrogeomorphic Approach to Assessing Wetland Functions of Prairie Potholes," ERDC/EL TR-06-5, U.S. Army Engineer Research and Development Center, Vicksburg, MS. 8.0 ATTACHMENTS South Dakota Department of Transportation 8 December 2012

11 8.1 South Dakota Geographic Service Areas South Dakota Department of Transportation 1 December 2012

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