Wetland Mitigation Wetland Mitigation ComplianceCompliance

James RobbJames RobbPresented to:Presented to:

Water Pollution Control BoardWater Pollution Control BoardApril 13, 2005April 13, 2005

Voluntary compliance is Voluntary compliance is lackinglacking

Not all mitigation sites are constructedNot all mitigation sites are constructed

62%20%

14% 4%

ConstructedIncompleteNo attemptInfo needed

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

0 5 10 15 20 25 30 35 40

Lost

Required

Built

Hectares

Forest

Shrub

Meadow

Shallow

Deep

Floating

Open

Mixed

Unspecified

15.21

34.3

13.7

Failure Rates & RatiosFailure Rates & Ratios

Ratios to achieve Ratios to achieve 1:1 replacement1:1 replacement Forested 3.4:1Forested 3.4:1 Meadow 7.7:1Meadow 7.7:1 Shallow 1.2:1Shallow 1.2:1 Open water 1.1:1Open water 1.1:1

Insufficient data to Insufficient data to evaluate other evaluate other communitiescommunities

70%

87%

18%7%

0%

20%

40%

60%

80%

100%

Failure rate

Forest Meadow

Shallow Open

How many permits are we talking How many permits are we talking about?about?

0

100

200

300

400

500

600

700

2001 2002 2003 2004

Year

Nu

mb

er

Individual

General

Wetland Enforcement Track Wetland Enforcement Track RecordRecord

8 Referrals8 Referrals ResultsResults

JudgmentJudgment

CommissioneCommissioner’s order – in r’s order – in appealappeal

Agreed OrderAgreed Order

ActiveActive

$80k in fines collected$80k in fines collected Most compliance Most compliance

problems resolved problems resolved before referral to before referral to enforcementenforcement

Prior to SWANCC Prior to SWANCC (2001) most wetland (2001) most wetland enforcement handled enforcement handled by federal agenciesby federal agencies

Options for Increasing ComplianceOptions for Increasing Compliance

EnforcementEnforcement Performance bondsPerformance bonds Up-front mitigationUp-front mitigation Mitigation ratiosMitigation ratios TechnologyTechnology

Ratios Established by State Law Compared Ratios Established by State Law Compared to Ratios Derived from Observed Risk to Ratios Derived from Observed Risk

(Without Up-classing)(Without Up-classing)

0 1 2 3 4 5 6 7 8

Forested Class 3

Non-forested Class 3

Forested Class 2

Non-forested Class 2

Forested Class 1

Non-forested Class 1

Ratio Numerator (X:1)

Observed Law (off-site) Law (on-site)

Options for Increasing ComplianceOptions for Increasing Compliance

EnforcementEnforcement Performance bondsPerformance bonds Up-front mitigationUp-front mitigation Mitigation ratiosMitigation ratios TechnologyTechnology In lieu feesIn lieu fees Reduce expectationsReduce expectations Better performance standardsBetter performance standards Design criteriaDesign criteria

EnforcementEnforcement

PositivePositive Fines create a Fines create a

financial incentive financial incentive to complyto comply

Deterrent effect is Deterrent effect is broader than single broader than single casecase

Credible threat of Credible threat of enforcement may enforcement may be necessary for be necessary for other options other options

NegativeNegative Spawns enmitySpawns enmity Politically unpopularPolitically unpopular State resource State resource

intensiveintensive

Performance BondsPerformance Bonds

PositivePositive Creates a financial Creates a financial

incentive to complyincentive to comply A familiar tool to A familiar tool to

many of our many of our applicantsapplicants

Can be tied directly Can be tied directly to performanceto performance

NegativeNegative Adds to the cost of Adds to the cost of

mitigationmitigation State resources State resources

required to enforce required to enforce termsterms

What if the What if the applicant defaults?applicant defaults?

UnprecedentedUnprecedented

Up-front MitigationUp-front Mitigation

PositivePositive Impact site directly Impact site directly

comparable to mitigation comparable to mitigation site site

risk of net loss risk of net loss Risk shifts from applicant Risk shifts from applicant

to provider (e.g., bank)to provider (e.g., bank) mitigation ratiosmitigation ratios department resources department resources

consumedconsumed Consolidation of Consolidation of

mitigation into larger, mitigation into larger, better planned attempts better planned attempts (mitigation banks)(mitigation banks)

NegativeNegative project delays (in the project delays (in the

absence of banking)absence of banking) Provider carries all the riskProvider carries all the risk Consolidation/relocation of Consolidation/relocation of

wetlandswetlands

Improvements to TechnologyImprovements to Technology

PositivePositive reduced risk reduced risk

==reduced costsreduced costs Less confrontationalLess confrontational

NegativeNegative There is little There is little

incentive to incentive to innovateinnovate

Has much more to Has much more to do with do with performance than performance than compliancecompliance

In lieu feesIn lieu fees

PositivePositive Simplifies Simplifies

permittingpermitting Transfers Transfers

responsibility from responsibility from numerous numerous applicants to a few applicants to a few providersproviders

Providers have Providers have other incentives to other incentives to establish wetlandsestablish wetlands

NegativeNegative IDEM cannot own IDEM cannot own

propertyproperty AccountabilityAccountability Perceived as selling Perceived as selling

permitspermits Government vs. Government vs.

private efficiencyprivate efficiency Often state Often state

subsidizedsubsidized

Reduced ExpectationsReduced Expectations

PositivePositive Reduced cost to Reduced cost to

applicantsapplicants If compliance were If compliance were

easier more people easier more people would complywould comply

Reduced demand Reduced demand on agency on agency resources – less to resources – less to worry aboutworry about

NegativeNegative Less likely to Less likely to

reestablish the uses reestablish the uses lostlost

False sense of False sense of successsuccess

“Trying is the first step towards failure.”

Better Performance StandardsBetter Performance Standards

PositivePositive

confusion/uncertaintconfusion/uncertaintyy

enforceableenforceable expectations = expectations =

results results

NegativeNegative flexibilityflexibility expectations = expectations =

costscosts Tougher Tougher

performance performance standards may standards may result in reduced result in reduced compliancecompliance

Design CriteriaDesign Criteria

PositivePositive confusionconfusion applicant’s applicant’s

performance performance burdenburden

NegativeNegative innovationinnovation flexibilityflexibility Site specificSite specific Process based rather Process based rather

than results basedthan results based Shifts performance Shifts performance

burden to IDEMburden to IDEM No “cookbook” for No “cookbook” for

successful mitigationsuccessful mitigation IDEM currently lacks IDEM currently lacks

the expertisethe expertise

So what is IDEM currently doing to So what is IDEM currently doing to fix the problem?fix the problem?

Grant application to fund 2 inspectorsGrant application to fund 2 inspectors Database under developmentDatabase under development Remote sensing techniques under Remote sensing techniques under

development development Implementation of a wetland Implementation of a wetland

monitoring strategymonitoring strategy

ConclusionsConclusions

Fewer wetlands are established Fewer wetlands are established through mitigation than requiredthrough mitigation than required

Statutory ratios may exacerbate the Statutory ratios may exacerbate the problem unless the success rate is problem unless the success rate is improvedimproved

None of the options for increasing None of the options for increasing success/compliance are without success/compliance are without drawbacks drawbacks