Ecosystem Enhancement Program

1. Ecosystem Enhancement Program February 5, 2008

2. Ecosystem Enhancement Program • Background • Structure • Core Processes • Results

3. EEP Programs • NC DOT Transportation Program (MOA) • stream and wetland mitigation • In Lieu Fee Program (MOU) • stream and wetland mitigation • Buffer Program: • meet mitigation requirements associated with riparian buffer impacts in Neuse, Tar-Pam, Catawba River basins and Randleman Reservoir watershed • Nutrient Offset Program: • meet nutrient offset mitigation requirements in the Neuse and Tar-Pam river basins

4. Background of DOT Program: DOT Compensatory Mitigation Pre-EEP • Mitigation was provided “TIP project by project” with limited success • Each mitigation site required high level of regulatory oversight • Reactive mitigation- planning for the mitigation began late in the TIP planning process, little to no estimates of impact amounts • Cost of mitigation embedded in individual TIP budgets- incorporated as piece of total budget • 40% of transportation projects LET’s were delayed

5. Executive Directive to “Solve the Problems” (Merger 01 Studies) USACE, NCDOT and NCDENR Leadership charged a process improvement team to address the following problems: • Unacceptable number of delays caused by lack of mitigation • TIP schedule changes, Site negotiation, Mitigation site failure • Lack of consistent guidance or policy from regulatory agencies

6. EEP Concept a Recommended Solution for Mitigation • Fundamentally very different type of program based on four main goals: • Mitigation that is in place and meets success criteria before transportation construction begins • Mitigation that is linked to watershed planning and has a programmatic (not project-by-project) approach • A single agency holds responsibility • Mitigation is based on functional replacement, not acres and feet.

7. 18 months later… • EEP was formalized on July 22, 2003 by signing of the tri-party MOA • The final MOA remained consistent with original team’s recommendations • National Guidance for In lieu and banking

8. Tri-Party MOA • All parties reaped benefits • All parties made concessions Gave: advanced funding Got: permits without delay DOT Gave up: project-by-project controls Got: mitigation in advance, within CU, based on watershed planning DENR USACE Gave up: project-by-project controls Got: opportunity to focus mitigation for natural resource management

9. Tri-Party MOA • Set Purpose, Mission, Goals, and basic operating procedures/ responsibilities

10. The purpose of the EEP is to: • Provide a comprehensive, natural resource enhancement program • Identify ecosystem needs at the local watershed level • Preserve, enhance and restore ecological functions within target watersheds • Address impacts from anticipated NCDOT projects The Mission of the EEP is: To restore, enhance, preserve and protect the functions associated with wetlands, streams and riparian areas including but not limited to those necessary for the restoration, maintenance and protection of water quality and riparian habitats throughout North Carolina

11. MOA Operating Procedures: DOT: • Obtain off-site mitigation from EEP • Provide advanced, program-funded payments to the Ecosystem Restoration Fund for the planning, acquisition, construction, long-term monitoring and management and necessary remediation of projects identified in the watershed needs assessment, restoration plans and local watershed plans. • Based on biennial budget • Details of funding to be entered by separate DOT/DENR MOA • Annually provide 7 year TIP Impact list

12. MOA Operating Procedures: USACE: • Evaluation of EEP/ Programmatic Review • Authorize Use of EEP mitigation • Programmatic coverage consistent with permitting process/timing

13. DOT/DENR MOA • Authorities • Responsibilities • Reporting Requirements • Fiscal Accounting Reporting • Biennial Budget - BOT approval • Funding • Asset transfer • Alternatives (ILF program options)

14. Changes made to original agreements: • Advanced funding changed to quarterly Cash-Flow- actual cost funding agreement (by agreement/ request from DOT Financial office) • Timing requirements (amended March 7, 2007 Amendment to Tri-Party MOA)

15. Program Oversight • Secretaries and Colonel of Wilmington District • Program Assessment and Consistency Group: • State and Federal Regulatory Agencies USACE, EPA, NOAA, DWQ, DCM, USFWS, NCWRC, DMF

16. Oversight within DENR Fiscal oversight Staffing oversight Tech. Development/ Acquisition oversight

17. Additional Oversight • Department of Administration • State Construction Office • State Property Office • Environmental Review Commission (legislature) • Environmental Management Commission

18. EEP Program Structure HR, Budgeting, Contracting Director Analysis and Procedures Administration Strategic Planning Operations Manager Reports, Policies, Procedures, Public Relations, IT Asset management, Forecasting, MOA and ILF permit acceptance, nutrient and buffer programs Watershed Planning and Project Implementation Acquisition and Preservation Project Control and Research Full Delivery, Design and Construction Contracting, Design Review, Maintenance, Monitoring Easement acquisition, boundary definition, interface with SPO and DENR Stewardship Watershed targeting, plan development, project development and oversight

20. River basin Planning • Identifies local watersheds where ecological restoration or protection is most needed • Focuses resources in areas of need • Incorporates DWQ Basin wide Assessment and Water Quality Plans • Uses GIS datasets • Involves coordination with local resource professionals

21. Local Watershed Planning • Conducted in areas where traditional mitigation opportunities are limited or mitigation needs are extensive • Determines where mitigation investments can provide greatest benefit • Results in a project atlas that prioritizes specific mitigation opportunities • EEP has/will be involving DOT Divisions

23. Example of Restoration Priority Targets • More detailed analyses conducted in areas selected for Local Watershed Planning • Includes: • Monitoring • Modeling • Stakeholder involvement

24. Operational Strategic Plan • Action plan for every 8-digit hydrologic unit • Comprehensive assessment of mitigation needs derived for all programs and available mitigation credits • Identified need programmed (no more, no less) • Updated throughout the year

25. “Programmatic” mitigation coverage Example Mitigation Projects 10 9 10 Identified priority area in LWP 6 5 7 8 TIP Projected Impacts/ Permits 6 ILF Program Needs 9 9 5 Individual Cataloguing Unit Type R= Restoration RE= Restoration Equivalent Timing

26. DOT Program Business Model February: DOT Places order with EEP (Projected Impact List) Timing Type Location April EEP Estimates biennial costs of mitigation order June BOT Approval of estimated costs EEP: Checks inventory: DOT Asset Inventory ILF Assets available to sell March: Develops plan (OSP) DOT invoiced quarterly for actual costs Secures: 8.5 Year Process Acquire Construct Monitor

27. Biennial Budget

28. Project Delivery • Design-Bid-Build • Full-Delivery

29. Cost Controls for Expenditures and Savings • All projects managed based on fee schedule • EEP has promoted savings in construction costs through training • Comprehensive evaluation of project success for future savings • Donations of property interest (especially in planning areas)

30. Expenditure Oversight • Quarterly review by DOT auditors • Comprehensive audit by FHWA • Quarterly and annual fiscal reporting • Subject to DENR, SCO, SPO and DOA procedures regarding competition, purchasing and contract award Audited 14 times

31. EEP Policies and Operating Procedures • Based on ISO 9001 Quality Guidelines • Continual Process Improvement • Promoted efficiency and effectiveness • Published on Web: http://www.nceep.net/abouteep/analysis_procedures.htm

32. Results: Mitigation Post EEP • Mitigation is provided “programmatically” (not project by project) • Mitigation is provided proactively • Mitigation is watershed based • Regulatory oversight is programmatic, with periodic “spot-checks” and close-out visits to ensure conformance and compliance • “How to” implement functional replacement is still being developed • Mitigation costs are budgeted and exposed • No transportation projects have been delayed • Compliance: Streams- 98.99% Riparian Wetlands 98.14% Non-riparian Wetlands 100%

33. Results: DOT Permits • Total “ordered” (through 2013): 915 • Permits with-out delay: 252 • 763 future permits- of these • 365 future permits have mitigation ready • 398 future permits for which mitigation is being actively pursued • EEP Mitigation has secured/ensured permits for 617* TIP Projects • *does not include mitigation that was secured for permits that have “moved” from the TIP list, and/or additional permits that could be secured in Surplus areas, and the “return” on HQP Investment

34. Benefits • DOT • No projects delayed • Programmed mitigation – strategic based on forecasts • Future LET “insurance” policy • DENR • Increased quality/regulatory assurance • Watershed benefits/ ecosystem enhancement • USACE • Increased quality/regulatory assurance • Statewide mitigation management resource • One agency responsible for DOT off-site mitigation

35. Ecosystem Enhancement Program 2004-2005 Annual Report North Carolina Department of Environment and Natural Resources ECOSYSTEM ENHANCEMENT PROGRAM QUARTERLY REPORT July 1, 2005 - September 30, 2005 Restoring… Enhancing… ProtectingOur State State of North Carolina Michael F. Easley, Governor More Information • www.nceep.net • Quarterly accounting of impacts and assets • Annual Reports • Monitoring reports

36. Questions?