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Del/elopers who are willing to purchase wetlands and place conservation. easements bave removed the wetlands from any threat ojjutZ/re permitted impacTs. "r" "j"OEC-0s-se 11,2S FROH,H,B.5.S. -, ~ impactS. Under the Guidance, setVicc 2tC1 ""lc:ction is to be b35ed on hydt'Ologlc (water) and biolos;cal c<ite- na. The U5e of a bank in =s adj2<:o:m to 3 service ""'" may be 2II0...'ed on a case-by<ast basis only 'when practicable and environmentally desirable" This limita- tion may hurt backing It a good Site is found In 3 ser- Vice area with little development and few ,,'e<landS impacts. However. the Guidance allows the service area to be expanded to CO'= brger watersheds. if justi- fled under local or regional management p!.:lns, which could encour2gc regional water- shed. pl'2ht'lI"8 The Guld2nce uso sanctions out-of.klnd mitig;ation In c~ dr- cumsunc;c; If environmentall}. preferable. Out-of.klnd mitigation involves creating or restOring a dlf- ferent type of ....etland (e.g.. forest) from the type of we <land being impacted (e.g., sh.rub). A bank oper- ator ..ill /12ve the f1exi!>ility ro design a ....etlands mltiptlon projea that benefits olher reso=s (jor instance. by n:babUltating a degrad- ed stream). or as p:ut of an areaw- ide management plan. Fin2J1y, Ihe Guidance vests bank sponsors wJIh broad authority regarding erediting. debiting. and accounting procedures. While the Guidance IItlkes clear that a func. tional assessment methOd should be used in assigning =ditS. the bank sponsor wUl maintain a ledget of cn:dits sold :o.nd may determine the cost of credit:> wilh. out any ageney involvement. Thus, once a bank is "UP and running. - !n:e.market forc;c; should drive the process. .' ~ ...>). ~ :.J1 A Tale 01 Two Banks Two recently CSl:lbllshed banks dcmonstnte the promise of the federal Guidance in bdlltating private entrepreneurial banldng: The Ohio Wetlands Foundation, a nonprofit corpot2lion formed to CSl:lb1lsh private banks. which ,",cent!y comple~ twO major mitig3%ion projects; 2lJd the Florida Wetlandsbaok, which r=:ored a ~;.aae degnded wetlands site on land owned by the city of Pembroke Pina. Ohio W..tIa..ds Fou>ldarton. One of the moSt $UC- cessful wetland mitlption banJcs In the country sarted when m'o en\'ironmental consultantS and an Ohio Stale wildlife administr2tor sat down in the early 19905 to b....instonn on betler ways to achieve wetland mitiga- tion. Their titsthand experience with the deficiencies of the lI!llny piecemeal. on-slle wetland mitigation pro- jectS crated during the 1980. coruuualon boom con. firmed that fulfilling wctland obligatioll5 ...... usuaJJy a ~ 10.870 247 ee27 ~AuE ~, , hurrted aftenhought. The ~Ul2tOIY drive to mitig;"e on site created many small wetlands surrounded by development. These ....etlands were: degraded by off. road "ehldes and dumping. and they did not foster goOd wetland hablt3t for wildlifc_ The gfOUp approached the Ohio Humebuilders ASSOCiation with the Ido of n:directing mitigation to restore l:uge areu of wetlands that would have ~- = wildlife and water qu:aJity benelits. The Homebullders A5SOCiation enthusiastic:ally endorsed the proposal and provided.. 590,000 loan in 1992 to crdle the Ohio Wetbnds Foundation as a pri\'2.te, nonprofit cotpOration_ The founda. tion ncgotUted agrtttnents "-ith the cegulatOry agencies that defined ilS responsibilitics in carrying out mitigation. The foundation'. first mitig:llion bank "'35 rhJrty-thrce acrcs of prior-<:onvened cropland owned by the Ohio [)cpattment of Narural Resources adjacent 10 a swe: fish hatchet}. in Hebron. twen- ty miles caSt of Columbus, Ohio. SimulWlCOusty. the foundation had to convince federal and scate regu!:ltoty 'l!:encies to allow deVel- oper.; to pwchase creditS in the mitigation bani< instead of mitigat- Ing on sileo The foundation was concerned that the substantUI up- froQI COstS of estabUshing a pure mitigation bank in which wetlands would b2ve 10 be fully e5t2blished befon: credits could be sold would be uneconomical. Thcrdore, the foundation markered its concept to the regulaIoty agendes as "pooled" or "cOnsolidaled" miti. gation. and requested permission to sell credits to developers for the needed cash flow befon: accual wet. land consuuctlon. A foundation goal was to sell or pre. debit 25 percent of its creditS before construction_ The foundation found a sueng suppott~r in thc Corps' Huntington District, which issues we<land per- mits for much of Ohio. The Corps saw mitigation bank. ing as a -win-win" Situation that would place wetlands whete they we:e needed. and at the same time help reduce crilicism of Ihe Section 404 program building in Washington_ EPA took a mon: skeptical View of the foundation's initiati,.cs in various correspondence. EPA "''25 initially concerned that there ..-ould be inadequate accounting of mitigation and objeaed to the predebltlng of mitiga- tion credits, which would lead to net wetland losses should a bank fail, In addition. EPA feared that mitiga- tion banking might be substituted for the ""quencing requirementS that avoid and minimi:ze wedand impaas before <lllowing compensator}" mitigation of unavoi<l- (Continued on page .,370) Nlt&E Summer 1998 ~