Wetland Mitigation Compliance

1. Wetland Mitigation Compliance James Robb Presented to: Water Pollution Control Board April 13, 2005

2. Voluntary compliance is lacking

3. Not all mitigation sites are constructed

4. Many of those that are constructed do not establish the required area of wetland

5. Failure Rates & Ratios • Ratios to achieve 1:1 replacement • Forested 3.4:1 • Meadow 7.7:1 • Shallow 1.2:1 • Open water 1.1:1 • Insufficient data to evaluate other communities

6. How many permits are we talking about?

7. Wetland Enforcement Track Record • 8 Referrals • Results • Judgment • Commissioner’s order – in appeal • Agreed Order • Active • $80k in fines collected • Most compliance problems resolved before referral to enforcement • Prior to SWANCC (2001) most wetland enforcement handled by federal agencies

8. Options for Increasing Compliance • Enforcement • Performance bonds • Up-front mitigation • Mitigation ratios • Technology

9. Ratios Established by State Law Compared to Ratios Derived from Observed Risk (Without Up-classing)

10. Options for Increasing Compliance • Enforcement • Performance bonds • Up-front mitigation • Mitigation ratios • Technology • In lieu fees • Reduce expectations • Better performance standards • Design criteria

11. Positive Fines create a financial incentive to comply Deterrent effect is broader than single case Credible threat of enforcement may be necessary for other options Negative Spawns enmity Politically unpopular State resource intensive Enforcement

12. Performance Bonds • Positive • Creates a financial incentive to comply • A familiar tool to many of our applicants • Can be tied directly to performance • Negative • Adds to the cost of mitigation • State resources required to enforce terms • What if the applicant defaults? • Unprecedented

13. Positive Impact site directly comparable to mitigation site  risk of net loss Risk shifts from applicant to provider (e.g., bank)  mitigation ratios  department resources consumed Consolidation of mitigation into larger, better planned attempts (mitigation banks) Negative  project delays (in the absence of banking) Provider carries all the risk Consolidation/relocation of wetlands Up-front Mitigation

14. Positive reduced risk =reduced costs Less confrontational Negative There is little incentive to innovate Has much more to do with performance than compliance Improvements to Technology

15. Positive Simplifies permitting Transfers responsibility from numerous applicants to a few providers Providers have other incentives to establish wetlands Negative IDEM cannot own property Accountability Perceived as selling permits Government vs. private efficiency Often state subsidized In lieu fees

16. Positive Reduced cost to applicants If compliance were easier more people would comply Reduced demand on agency resources – less to worry about Negative Less likely to reestablish the uses lost False sense of success Reduced Expectations “Trying is the first step towards failure.”

17. Positive  confusion/uncertainty  enforceable  expectations =  results Negative  flexibility  expectations =  costs Tougher performance standards may result in reduced compliance Better Performance Standards

18. Positive  confusion  applicant’s performance burden Negative  innovation  flexibility Site specific Process based rather than results based Shifts performance burden to IDEM No “cookbook” for successful mitigation IDEM currently lacks the expertise Design Criteria

19. So what is IDEM currently doing to fix the problem? • Grant application to fund 2 inspectors • Database under development • Remote sensing techniques under development • Implementation of a wetland monitoring strategy

20. Conclusions • Fewer wetlands are established through mitigation than required • Statutory ratios may exacerbate the problem unless the success rate is improved • None of the options for increasing success/compliance are without drawbacks