Success Story: Wetland Mitigation Bank
Charlotte-based utility runs a stream and wetland mitigation bank
Project Purpose
Before the establishment of the City of Charlotte Umbrella Stream and Wetland Mitigation Bank, Clean Water Act permitting was the primary protection for the city’s water resources. Public infrastructure projects with impacts to surface water resources like streams and wetlands would be minimized to the maximum extent practical; however, in a city with aging infrastructure, avoidance can only go so far. Unavoidable impacts would have to be mitigated, and this mostly was completed by purchasing mitigation credits from the North Carolina Ecosystem Enhancement Program (EEP; now known as NC Division of Mitigation Services). NCEEP projects are often built by private, for profit, mitigation providers, who construct projects where land cost and risks of failure are low. This resulted in many mitigation projects being constructed far from the city.
With some large infrastructure projects on the horizon, and some stream improvement experience under their belt from work completed on larger stormwater projects, the City saw the potential to create its own mitigation bank and keep the benefits of mitigation local. The City began identifying and constructing stream improvement projects in conjunction with infrastructure projects as on-site mitigation. They eventually determined that a formal mitigation bank would be a great way to establish a credit supply in advance of infrastructure project impacts.
Quick Facts
- Wetlands help mitigate flood hazards by capturing stormwater and reducing the burden on downstream channels during storms. They also provide habitat for thousands of species of aquatic and terrestrial plants and animals (US Geological Society, n.d.).
- Environmental banks work because developers are already required to buy credits for projects in environmentally sensitive areas. Section 404 of the Clean Water Act requires developers to avoid, minimize and mitigate impacts to waters of the United States. They must restore, enhance or preserve waters within the same watershed, or as close as possible to, where the disturbance occurs.
- In 2004, Charlotte-Mecklenburg Storm Water Services established the City of Charlotte Umbrella Stream and Wetland Mitigation Bank. It was the first municipal mitigation bank in North Carolina and the largest in the state.
- City and County agencies and departments managing infrastructure projects, i.e., public sector developments, can purchase credit from the mitigation bank to offset construction impacts. Project managers buy credits to comply with the Clean Water Act. The Charlotte Douglas International Airport, owned by the City of Charlotte, is one major consumer of the program’s mitigation credits.
- The City does not sell credits to private developers. The US Army Corps of Engineers (USACE) requires private developers to purchase credits from a private mitigation bank, but none operate in Charlotte. Instead, developers must pay a state in-lieu fee program for credits or perform their own mitigation activities.
What is a mitigation bank?
A mitigation bank is a system in which an aquatic resource improvement in one area compensates for impacts to an aquatic resource in another area. For example, a mitigation banking program hires a contractor to restore, establish, enhance or, in certain cases, preserve a wetland, stream or other aquatic resource. A mitigation banking program uses these improved or preserved aquatic resources to compensate for impacts to aquatic resources during development projects (US EPA, 2015). The term “bank” refers to the environmental resources being preserved, restored or conserved.
Spotlight on Equity
Stream and wetland mitigation bank programs can prioritize aquatic resource upgrades in under-represented communities. Charlotte’s Umbrella Stream and Wetland Mitigation Bank engages residents during the planning, design and construction processes. The utility holds public information meetings on project scope to inform residents about the benefits of temporary construction, restoration activities or permanent easements on or near their land. The utility recognizes that the public will remain active stakeholders through the life of a project, so it connects with local residents to aid in reporting of issues. These programs could also engage residents earlier in the planning process to acquire input on the design, goals and location of projects to ensure projects meet the needs of the local population.
| Key Info | |
|---|---|
| Location | Charlotte-Mecklenburg, N.C. |
| Estimated Costs | Unavailable |
| Published | March 1, 2024 |
| Project Contact |
|---|
| Erin Shanaberger, PWS Watershed Planning & Project Implementation Supervisor City of Charlotte Erin.Shanaberger@charlottenc.gov (704) 562-2691 |
| Related Resources |
|---|
- In response to the demand for Clean Water Act-based construction permits, Charlotte-Mecklenburg Storm Water Services approached regulatory agencies including USACE, the NC Department of Environmental Quality Division of Water Resources, the Environmental Protection Agency, the Wildlife Resources Commission and the National Fish and Wildlife Foundation for permission to establish an umbrella mitigation bank.
- In 2004, the City of Charlotte officially established the Umbrella Stream and Wetland Mitigation Bank
- Presently, the City works closely with Mecklenburg County and other potential project partners to establish mitigation projects and issue credits. The program is run as follows:
- The City identifies and prioritizes potential stream and wetland improvement projects. Staff conduct initial assessments of feasibility and the potential improvement of surface water quality.
- The City works with a consultant to prepare a prospectus for each site. The prospectus is reviewed by regulatory agencies on a review team chaired by the USACE.
- The USACE provides feedback on the site and the City determines if the project should move forward. A Site-Specific Mitigation Plan is developed to formalize the proposal to the review team.
- The review team approves a project. This approval formalizes the number of credits proposed for a specific project.
- Projects are designed and constructed by private firms and contractors hired by the City.
- Required post-construction monitoring occurs for seven years once a project is complete. After that, it enters a long-term management program.
- Credits are released to the bank at certain milestones throughout the process, like SSMP approval construction completion and after each successful monitoring year.
- Once credits are released for sale, they are available for purchase.
- City or county departments needing credits request them from the City. The City then processes payment and completes required permitting documentation.
- Charlotte-Mecklenburg Storm Water Services originally hired a consulting firm in 2008 to help them understand the quality of streams and wetlands in the area and develop a methodology to rank each location’s need for improvements. The utility used these rankings, called the Stream Restoration Ranking Protocol (SRRP), to prioritize the program’s conservation efforts.
- In 2022, the City updated its SRRP to rank projects according to the program’s current needs and goals and 15 years of lessons learned.
- In 2021 and 2022, the Charlotte-based utility updated their processes to incorporate lessons learned from over 15 years of running the program. They adopted a new ranking protocol that provides more flexibility for project managers.
- Charlotte-Mecklenburg Storm Water Services implements each mitigation project through two phases:
- Phase One: Site identification, design, permitting and construction (4+ years)
- 3-6 Months: Field reconnaissance and feasibility studies
- 18 Months: Planning and design
- 3 Months: Bid solicitation for project construction
- 12-18 Months: Construction
- Phase Two: Monitoring (7+ years)
- The utility performs the required annual monitoring and management.
- Phase One: Site identification, design, permitting and construction (4+ years)
- The original vision for the Umbrella Stream and Wetland Mitigation Bank was for it to be self-funded. Revenue from the sale of credits generated from one mitigation project would be used to fund the next project. However, Charlotte-Mecklenburg Storm Water Services began prioritizing larger mitigation projects that required additional funding upfront.
- Charlotte-Mecklenburg Storm Water Services uses additional funding from its stormwater utility fee to fund projects when the sale of mitigation credits does not cover existing need.
- A mitigation project’s cost is highly variable based on several factors including site location and real estate costs, length or area of improvements and construction material costs.
City of Charlotte, Charlotte-Mecklenburg Storm Water Services, Mecklenburg County Land Use and Environmental Services Agency
- Charlotte-Mecklenburg Storm Water Services found a reliable method for handling stormwater mitigation and wetland protection through the City of Charlotte Umbrella Stream and Wetland Mitigation Bank. The program enables the preservation of valuable stream and wetland resources and a method for obtaining and providing credits for mitigation projects.
- Between 2001 and 2020, the Umbrella Stream and Wetland Mitigation Bank improved 24 miles of streams and improved or preserved 34 acres of wetlands. As of 2020, the program holds approximately 400 acres in conversation easements (City of Charlotte, 2023).
During the initial years of the Umbrella Stream and Wetland Mitigation Bank, the utility had difficulty determining the future demand for credits in each of the three primary watersheds. That difficulty led to periods where one watershed may have had an excess of credits while another had none. The City is working to more accurately predict credit demands over time by collecting project projection data from purchasing documents
Among the toughest projects are those requiring conservation easements with multiple property owners; getting large numbers of contiguous property owners to agree is challenging. In addition, it can be challenging to stay in contact with current owners. Properties are constantly sold, and new owners may not know of or understand the conservation easement on the property.
City of Charlotte. (2023). Monitoring. Retrieved from https://www.charlottenc.gov/Services/Stormwater/Surface-Water-Quality/Monitoring
US EPA. (2015, June 16). Mitigation Banks under CWA Section 404. Retrieved from https://www.epa.gov/cwa-404/mitigation-banks-under-cwa-section-404
US Geological Society. (n.d.). Why are wetlands important? Retrieved from https://www.usgs.gov/faqs/why-are-wetlands-important#:~:text=Wetlands%20provide%20habitat%20for%20thousands,products%2C%20recreation%2C%20and%20aesthetics