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Dr. David Robinson: Father of Full-Delivery Mitigation

We just returned from the National Mitigation Banking Conference last week in Sacramento, where old friend David Robinson gave an excellent presentation on the benefits of “Full-Delivery” mitigation procurement systems. You can also view it here on his website:  http://www.full-delivery.com/

By way of background, as some readers will know, the NC Ecosystem Enhancement program is North Carolina’s unique, state-wide, non-regulatory, Fee Program. The NCEEP sells hundreds of millions of dollars of mitigation to the public and the government at government established rates. The NCEEP is the funnel through which the vast majority of mitigation in North Carolina flows.

The program develops the mitigation sold to the public in two ways.  ”In-House,” where the state identifies the land and purchases it themselves, then contracts with separate firms to design, construct, and care for the site, with no firm responsible for the entire project, and various state employees responsible for various parts.

Or, the NCEEP accomplishs the mitigation by conducting a bonded, public, low-bid system called “Full-Delivery.” In the Full-Delivery system, companies like Restoration Systems will identify and contract for the purchase of the land privately; and, if awarded, acquire, design, construct, and care for the site long term — with all resulting credits accruing to the state.

Back to Dr. Robinson. David was instrumental in the development of Full-Delivery mitigation as the preferred alternative for large state purchases of compensatory mitigation in North Carolina. He mid-wifed the birth of the innovative procurement system at the Department of Transportation in the 1990’s and has seen it adopted by other agencies, and other states, lately including South Carolina.

Robinson makes the case here that large government purchases of environmental mitigation should utilize a competitive “Full-Delivery” procurement model that lowers costs, reduces risk for the buyer and stimulates green jobs for the economy.

Take it away Dr. D….

Robinson on Full-Delivery mitigation for wetlands, streams and other natural assets

Victory on Jones Street: New state law means big changes for mitigation in North Carolina

As poorly headlined in last Sunday’s Raleigh News and Observer [Legislature OK’s Rule on Streams 6/19/2011], our little state trade association, the North Carolina Environmental Restoration Association, had a huge legislative win in the just adjourned 2011 session of the North Carolina General Assembly.  It is not our way at RS to get out ahead of ourselves, so Stories from the Field wanted to wait until the Governor signed the bill before announcing this bit of good news for the ecological balance of the Tar Heel state and commercial mitigation.

She signed it last night.

SESSION LAW 2011-343 puts the state fee-program and private mitigation banks in much closer compliance with the 2008 Federal Mitigation Rule by establishing a statutory preference for mitigation bank credits in North Carolina in almost all cases, as well as establishing “Full-Delivery” turn-key mitigation as the preferred method for contracting for the state’s continuing fee-program obligations where banks are not yet available.

The law continues the wise policy taking hold nationwide of transferring responsibility for restoring and caring for compensatory ecosystems from governments to privately capitalized and bonded green firms like RS and our competitors.  It almost ensures that mitigation in North Carolina will continue its progress from a state monoply functioning with state mandated “static” prices, to a vibrant ecosystem services market with true-cost competitive pricing.

All progress in commercial mitigation is incremental.  A win in the legislative halls for the NCRA is a long way from the bottom line of any individual company. But this legislation may finally have turned the ship of state in North Carolina toward performing mitigation that is not established according to available funds — but priced according to true costs.

The former method, state production and pricing, has failed miserably as detailed in the recent News and Observer series, “Washed Away.”  The latter method endorsed by the new law – establishing mitigation and then market pricing it for sale — makes sure that someone (I hope RS) is taking personal economic and ecological responsibility for a given impact to the waters of the U.S. within our state.

The bill description below may read like a wonky little change to policy but it makes a huge difference on the ground. It allows the green shoots of true-cost restoration and advance mitigation to grow in Tar Heelia without fear of being plucked by the cold dead hand of The Leviathan.

I can’t let this post end without giving a shout-out to the NCERA lobbyist from McGuireWoods Raleigh office, Harry Kaplan.  It takes a special kind of patience to navigate legislation in a heretofore unknown field with desperate entrepreneurs nipping at your heels in the halls.

Here is Harry’s summary of the law:

Analysis of Senate Bill 425:

During their 2008 Regular Session, the North Carolina General Assembly enacted legislation to provide that, under certain circumstances, certain applicants for compensatory wetlands mitigation must seek that mitigation from a private wetlands mitigation bank before seeking that mitigation from the Ecosystem Enhancement Program (“EEP”) in the North Carolina Department of Environment and Natural Resources. During their 2009 Regular Session, the General Assembly enacted legislation to extend this preference for private mitigation to the areas of riparian buffer protection and nutrient offsets. Under the law prior to the enactment of Senate Bill 425, the preference for private mitigation and nutrient offset did not apply to the State, the federal government, or to local governments.

Section 1.1 of Senate Bill 425 amends the definition of “governmental entity” in GS 143-214.11 (Ecosystem Enhancement Program: compensatory mitigation) so that the preference for private mitigation and nutrient offsets now applies to local governments unless the unit of local government was a party to a mitigation banking instrument executed on or before July 1, 2011, notwithstanding subsequent amendments to such instrument executed after July 1, 2011. Section 1.1 defines a “private compensatory mitigation bank” as a site created by a private compensatory mitigation provider and approved for mitigation credit by State and federal regulatory authorities through execution of a mitigation banking instrument. No site owned by a government entity or unit of local government shall be considered a “private compensatory mitigation bank.” Section 1.1 also requires an existing local compensatory mitigation bank to comply with the requirements of Article 12 of Chapter 160A of the General Statutes governing the sale and disposition of property whenever it transfers any mitigation credits to another person.

Section 1.2 of Senate Bill 425 establishes a new process by which the EEP provides for compensatory mitigation. This new process creates a priority system for different types of programs for the procurement of compensatory mitigation – with “Full Delivery/Bank Credit Purchase Program” listed as the first priority. Under Senate Bill 425, EEP must first seek to meet compensatory mitigation procurement requirements through its Full Delivery program or by the purchase of credits from a private compensatory mitigation bank, as defined above.

Senate Bill 425 became effective when it became law on June 17, 2011 and applies to all projects and contracts awarded on or after that date.

Ecosystem Marketplace: Mitigation Bankers Say Army Corps Not Following the Rule

From Hannah Kett and Ecosystem Marketplace

According to law, if you damage a wetland in the US, you must restore a comparable piece of property in the same watershed. A 2008 regulatory rule says wetland credits from a mitigation bank should be your first option. Mitigation banks, however, say this isn’t happening, and they want the Army Corps of Engineers to tell them why. The Corps says it’s just trying to be flexible – and promises more transparency in the future.

29 September 2010 | In April, 2008, wetland scientist Rich Mogensen read “The Rule” and speculated that the number of wetland mitigation banks in the United States could triple from 500 then to 1500 right about now as a result of its issuance.

Officially titled the Compensatory Mitigation Rule for Losses of Aquatic Resources, the Rule was jointly issued by the US Environmental Protection Agency and the Army Corps of Engineers (USACE) (with a push from Congress), and it declared that anyone who damages a US wetland should look first to mitigation bankers to compensate for the damage before exploring other alternatives.

National Mitigation Banking Association letter to Army Corps of Engineers regarding the implementation Fede… Read more

UNC School of Government Study of EEP: Solid as Banana Cream Pie

UNC School of Government Study of EEP: Solid as Banana Cream Pie

This past Friday the UNC School of Government released its “Phase 1 Report” on evaluating the Ecosystem Enhancement Program’s method for procuring its mitigation.

As all long suffering followers of the inner workings of the ‘black box’ known simply as EEP understand, there are two separate processes for this: 1) a competitive bid system known as Full Delivery in which the provider assumes all liability for delivering the contracted amount of mitigation without an any change order provisions and is fully bonded, and 2) an arbitrarily awarded design contract (not competitive bid) for projects from a list of ‘on-call’ design firms which is then subsequently farmed out to bid for only the construction component known as Design Bid Build.

One would have assumed that UNC would have actually looked into the mechanics of these two methods and drawn some conclusions or at least made some salient observations. Oh wait, if that’s what was done then there would actually be something useful coming from this process. Instead, all that UNC did is establish a set of criteria for how to evaluate the two methods and with apologies to my friends at UNC—a third grader could have come up with the two main ones: effectiveness and transparency. The SOG work so far has been analogous to a round table discussion of the shade of black on the side of the box, with little discussion of what’s inside and why nobody gets to see it.

Was it really necessary to engage dozens of stakeholders in the process to come up with those revelations? Can you say ‘pass the butter knife so I can cut the banana cream pie’?

As one of those stakeholders who falls under the category in the study of “Mitigation Provider” i.e. one who actually does this work and has been well acquainted with both EEP and its DENR management since before the 2003 start of the program, let me add one point of clarification to the second sentence of the second paragraph on page 1 of the study which reads “DENR’s new leadership identified a need to have an objective third party review EEP’s procurement process.” WHOA!

There is an elephant in the room here and it needs to be acknowledged. The Assistant Secretary of DENR ever since the EEP has existed, Robin Smith, is married to Mike Smith the head of UNC’s School of Government. Now, both

and Smith are well regarded in their respective capacities and I am not trying to imply any cronyism was at play in the decision for DENR to give UNC the $25,000 contract for this study. After all, if DENR had wanted to bring in Bain Consulting to perform a thorough top to bottom review of the EEP, as UNC did when it had Bain study its layers of overlapping university bureaucracy, it would have cost a heck of a lot more than $25k.

However, I am disappointed that the study offered no disclaimer to this obvious reality which was discussed by several stakeholders outside of the series of meetings. It does neither institution any favors when even the appearance of a potential conflict of interest is involved, especially so when it is not duly acknowledged in an allegedly “transparent” process.

The one clear take away result from the study is that what is likely to come next—you guessed it, is another study! One can only hope that the Phase 2 Report actually comes up with real analysis and recommendations.

If not then we ‘stakeholders’ better be prepared for more banana cream pie. One can only wonder what the budget is for another serving of the same mush?

BrassGrill

Video: Double dip throw down on Jones Street

Lawmakers might dun DENR for wetlands mistake

State lawmakers said Thursday that they might have to pull $700,000 from the Department of Environment and Natural Resources budget to make up for a costly error in a wetlands clean-up in Johnston County.

When the state pays to preserve environmentally sensitive wetlands, it gets a credit to offset the destruction of another wetland for a highway project or other development. Each restored area can be used only once as a credit, but DENR hired a firm last year to restore the same 46 acres in the Neuse River Basin that the state Department of Transportation paid to restore in 2000.

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