n-Lieu Fee Project Site Plan
Review Workbook
November 2022
EPA-840-B-22003
Prepared by: Prepared for:
*>EPA
Ecosystem
Planning 8c
United States
KESTORATION Environmental Protection
Agency
Ecosystem Planning and Restoration, LLC
8808 Centre Park Drive, Suite 205
Columbia, MD 21045
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Acknowledgements
This project was funded by the U.S. Environmental Protection Agency (EPA) through EPA IDIQ contract
(EP-C-17-001) to Ecosystem Planning and Restoration (EPR). Erin Knauer, Environmental Scientist
with EPR, and Steven Martin, subject matter expert, co-wrote and edited this document with oversight,
guidance, and close review by staff from EPA's Office of Wetlands Oceans and Watersheds: Brian Topping,
Palmer Hough, and Emily French (former Oak Ridge Institute of Science and Education Fellow). Brian,
Palmer, and Emily also led the effort to assemble a steering committee (SC) to solicit input from regulators
and industry experts across the nation. The review and individual input from the steering committee
members were essential to making this document a more comprehensive and relevant guide for interagency
reviewers, federal and state regulators, and industry professionals alike to reference in producing and/
or reviewing mitigation instruments and associated documents. The steering committee included the
following participants:
Kate Thompson, Washington Department of Ecology
Devin Schenck, The Nature Conservancy
Pam Fetterman, Ecogenesis/Ecological Restoration Business Association
Melissa Scianni, EPA Region IX
Melody Rudenko, Oregon Department of State Lands
Charlotte Kucera, U.S. Fish and Wildlife Service
Stacia Bax, Missouri Department of Natural Resources
Jessi Miller, U.S. Fish and Wildlife Service
Susan-Marie Stedman, NOAA
Donna Collier, Valencia Wetland Trust/National Environmental Banking Association
Andrew D Beaudet, U.S. Army Corps of Engineers Headquarters
Michelle L Mattson, Institute for Water Resources, U.S. Army Corps of Engineers
Valerie L Layne, Institute for Water Resources, U.S. Army Corps of Engineers
Calvin L Alvarez, Alaska District, U.S. Army Corps of Engineers
Special thanks are due to other collaborators including:
Jeanne Richardson, Norfolk District, U.S. Army Corps of Engineers
Sara Johnson, Ecological Restoration Business Association
Stephanie TomCoupe, National Fish and Wildlife Foundation
Timothy Dicintio, National Fish and Wildlife Foundation
Citation:
Knauer, E., Martin, S., Topping, B., Hough, P., and French, E. 2022. In-Lieu Fee Project Site Plan
Review Workbook and Checklist. Document No. EPA-840-B-22003
Cover Image Credit:
Erin Knauer - EPR designed Maryland wetland restoration site.
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Disclaimer: This document organizes technical and programmatic information to facilitate the efficient
review of a draft in-lieu fee project site plan. It is not intended, nor can it be relied upon, to create any rights
enforceable by any party in litigation with the United States. Anyone may decide to use the questions and
information provided in this document or not. The statutory provisions and regulations described in this
document contain legally binding requirements. This document does not substitute for those provisions
or regulations, nor is it a regulation itself. Thus, it does not impose legally binding requirements on EPA,
the Corps, States, or the regulated community and may not apply to a particular situation based on the
circumstances. Any decisions regarding a particular in-lieu fee project site plan will be made based on the
statute and regulations. Therefore, interested parties are free to raise questions and objections about the
substance of these documents and the appropriateness of the application of these documents to a particular
situation.
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Table of Contents
Acknowledgements i
Introduction 1
Background 5
Terminology 10
Commonly Used Acronyms 13
Project Establishment 14
1. Project Goals and Objectives 15
2. Site Selection 17
3. Baseline Information 24
4. Mitigation Work Plan 27
5. Project Budget Review 29
6. Financial Assurances 34
7. Site Protection Instrument 39
8. Geographic Service Area 43
Project Operations 46
9. Credit Determination 47
10. Credit Release Schedule 50
11. Assumption of Mitigation Responsibility 53
12. Accounting Procedures 54
13. Reporting Protocols 55
14. Default and Closure Provisions 57
Performance and Management 59
15. Performance Standards 60
16. Monitoring Requirements 63
17. Maintenance Plan 65
18. Adaptive Management Plan 66
19. Long-Term Management Plan 68
References 74
APPENDIX A: REVIEW CHECKLIST 78
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Figures & Tables
Figures
Figure 1. Mitigation bank and ILF workbooks and checklists 2
Figure 2. ILF project site plan development 8
Figure 3. An example of a goal and associated objectives 15
Figure 4. A case example of site selection factors 20
Tables
Table 1. Types of financial assurance 35
Table 2. Example of financial assurance estimates - Monitoring and Maintenance Phase_36
Table 3. Example of financial assurance estimates - Stream and Wetland Restoration 37
Table 4. Examples of how other interests in property may affect site protection 41
Table 5. Example wetland credit release schedule for an ILF project site 51
Table 6. Example stream credit release schedule for an ILF project site 51
Table 7. Examples of Performance Standard 3 Elements 60
Table 8. Case example of how adaptive management applies to performance standards and
monitoring 67
Table 9. Case example of LTM plan annual management costs 71
Table 10. Example cap rates for long-term management funds 72
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Introduction
In 2007, the U.S. Army Corps of Engineers (Corps) and the U.S. Environmental Protection Agency (EPA)
began training federal, state, and tribal members of Interagency Review Teams (IRTs) on the review
and approval process for mitigation banks and in-lieu fee (ILF) programs through national and regional
courses.1 In 2008, the Corps and EPA issued joint regulations known as the Mitigation Rule which
standardized the review and approval process for mitigation banks and ILF programs. This review
workbook and checklist reflect the lessons learned through more than a decade of teaching and learning
from participants across the country. This workbook is one of a series of five review workbooks, with
one for each of the following: Mitigation Bank Prospectus, Mitigation Bank Instrument, ILF Prospectus,
ILF Instrument, and ILF Project Site Plan. Each workbook is accompanied by a checklist that takes the
mitigation review elements from each workbook and puts them in a fillable document to help track
the IRT members review progress and comments. Where the review elements are the same for
mitigation banks and ILF programs, the corresponding workbooks are the same.
The workbooks provide many references and example practices discussed during the trainings and are
organized according to the mitigation elements identified in the Mitigation Rule. Each mitigation element
includes the relevant regulatory text, examples of how it is addressed from different District templates or
instruments, and a series of questions to help IRT members adequately review all the relevant information
needed to understand the proposal. The workbooks and checklists are technical resources to provide an
organized structure for reviewing mitigation bank and ILF program proposals and ensuring that all aspects
of the Mitigation Rule are considered. The checklist includes each review element question in a table for
easily identifying what information has been reviewed and where any comments or questions remain after
review. Bank and ILF proposals can often be hundreds of pages long and organized as a single or multiple
documents. The checklists have been designed to help track where information is and determine if more
information or clarification is needed.
The complete set of five workbooks covers each of the major review steps for a mitigation bank and an ILF
program development, as shown below (Figure 1). Bank review starts with the workbook and checklist
for the mitigation bank prospectus. The bank prospectus workbook covers the eight review elements from
the Mitigation Rule associated with a mitigation bank prospectus. Next is the mitigation bank instrument
review workbook, which starts by asking if there are any unresolved questions from the bank prospectus
review and then focuses on the 18 elements required for mitigation bank instruments. The ILF proposal
review is a bit more complicated, with three workbooks and associated checklists. The ILF program
prospectus covers the eight review elements from the Mitigation Rule associated with an ILF prospectus
(six in common with the Mitigation Bank Prospectus Workbook). The ILF program instrument workbook
differs from the bank instrument review workbook because it only covers 11 review elements needed for
establishing the program, five in common with bank instruments, and six that only pertain to ILF program
instruments (Figure 1). Lastly, there is the ILF project site plan review workbook that covers 19 review
elements, including all 18 elements required for a mitigation bank instrument and one additional element
specific to establishing ILF sites.
1 See: https://www.conservationfund.org/our-work/conservation-leadership-network/our-services/training-resourc-
es-3rd-party-mitigation-interagency-review-team
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Figure 1. Mitigation bank and ILF workbooks and checklists
ILF Review Steps
V ^
Draft / Final
Prospectus
r i
Draft / Final
Instrument
r i
Draft / Final
Project Site Plan
1
r n
ILF Prospectus
Review
Workbook and
Checklist
^ J
1
r
ILF Instrument
Review
Workbook and
Checklist
^ J
1
r
ILF Project Site Plan
Review Workbook
and Checklist
Mitigation Bank Review Steps
r ^
Draft / Final
Prospectus
1
Draft / Final
Instrument
r n
Mitigation Bank Prospectus
Review Workbook and
Checklist
V J
1
r
Mitigation Bank Instrument
Review Workbook and
Checklist
v
This workbook and checklist are intended for use by members of the IRT to facilitate the review of an
ILF program project site plan. ILF project site plans may go by a number of names, including project
development plans, site development plans, or simply site/project plan. This workbook will refer to them as
ILF project site plans. ILF projects are typically large and complex projects, often with multiple supporting
attachments or exhibits. The purpose of this project site plan review workbook is to assist the IRT reviewer
in evaluating whether a proposed ILF project is ecologically beneficial and will effectively compensate for
lost aquatic resource functions and services. It is not intended to provide local guidelines and policies or
replace any locally developed templates, tools, or guidelines used to prepare and review an ILF project site
plan.
Before delving into review of the draft ILF project site plan, the reviewer should first be familiar with the
ILF instrument and examine the prospectus for the ILF project site to assess how any concerns that were
raised during review of the project site prospectus have been addressed in the ILF project site plan.
Workbook Organization
This workbook and associated checklist cover 18 separate review elements typically associated with ILF
projects. Twelve of these elements are required for all mitigation plans (permittee responsible, mitigation
bank, and ILF project proposals), and the other six are specific to banks and ILF projects. Taken together,
these 18 elements are used to reduce the risk of potential ILF project failure, such as failure to complete
construction, meet its performance standards, or continuation of long-term management when operations
cease. For example, consider how these elements function to reduce risk:
Financial assurances are used to help ensure that an ILF project has adequate resources available to
guarantee a site is constructed, managed, and monitored throughout its operational life.
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The site protection mechanism is used to ensure that incompatible activities are prohibited on an ILF
project site.
The credit release schedule makes credits available to the Sponsor based on the project meeting
performance milestones.
Collectively these and the other elements work to minimize the risk of failure. It is important to realize that
although risk can be minimized, it can never be completely eliminated.
To organize the 18 elements in these workbooks, they have been grouped into three logical categories that
relate to their role in an ILF project: Project Establishment (denoted with a *), Project Operations (denoted
with a #), and Performance and Management (denoted with a +). Note that these groupings do not reflect
the order in which the Sponsor might undertake them but are instead a logical grouping for IRT review of
the draft project site plan.
12 Elements of a Mitigation Plan
6 Elements of an ILF Project
Goals and objectives*
Service area*
Site selection*
Credit release schedule*
Site protection*
Accounting procedures*
Baseline information*
Reporting protocols*
Credit determination*
Assumption of mitigation responsibility*
Mitigation work plan*
Default & closure provisions*
Maintenance plan+
Performance standards+
Monitoring requirements+
Long-term management plan+
Adaptive management plan+
Financial assurances*
Project Establishment refers to those elements that must be resolved/in-place for an ILF project site to
be identified and constructed. The elements in this grouping include goals and objectives, site selection,
baseline information, mitigation work plan, financial assurances, site protection, and service area. Note,
the term project establishment, as discussed in this ILF Project Site Plan Review Workbook, is not the
same as what may be used in other district or state guidance or template documents. For example, the Los
Angeles District ILF Enabling Instrument template (2012) refers to ILF project establishment as including
securing the project site and all necessary authorizations, modifying the ILF program instrument, and
posting all necessary financial assurances.
Project Operations include those elements directly related to operations. These elements include credit
determination, credit release schedule (schedule of credit availability to the Sponsor), provisions for the
Sponsor to assume permittee mitigation responsibility, accounting procedures (for each and all credit
transactions), reporting protocols (monitoring reports, ledger accounts, and status of financial assurances
and long-term management funding), and provisions related to default (failure to comply with the project
site plan) and closure of the ILF project site.
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Performance and Management include those elements that ensure the ILF project meets its ecological
targets and develops into the intended resource. It includes performance standards, monitoring
requirements (to evaluate attainment of standards), maintenance plan (as part of overall management),
adaptive management plan (as necessary to ensure that performance standards are met), and long-term
management of the ILF project (to ensure it is sustainable beyond the operations phase).
All of the ILF project site plan review elements are interrelated and will be referenced repeatedly throughout
this workbook. In many cases, one element in a workbook may refer the reviewer to another element in
the workbook. For example, an ILF project's goals and objectives are the basis for performance standards
(performance standards are used to evaluate the attainment of goals and objectives), which are themselves
evaluated through regular monitoring reports submitted to the IRT.
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Background
For every permit issued by the Corps under the Clean Water Act (CWA) section 404, adverse impacts to
wetlands, streams, estuaries, and other aquatic resources must be avoided and minimized to the extent
practicable. For those unavoidable impacts, compensatory mitigation is often required to replace
the loss of wetland, stream, tidal habitat, and other aquatic resource functions in the watershed.2 The
term "watershed" used throughout this workbook includes consideration of landscape and seascape
perspectives. Compensatory mitigation refers to the restoration, establishment (creation), enhancement,
or preservation of wetlands, streams, estuaries, or other aquatic resources in order to offset these
unavoidable adverse impacts.
In 2008, the Corps and the EPA
issued joint regulations known
as the Mitigation Rule.3 These
regulations established standards for
all compensatory mitigation projects
to offset permitted losses under CWA
section 404. The Mitigation Rule
recognizes three mechanisms for
satisfying compensatory mitigation
requirements: mitigation banks,
ILF programs, and permittee-
responsible mitigation (PRM).
Equivalent standards are required for
all compensatory mitigation projects
regardless of the mechanism used to
develop that project. This document
focuses on reviewing and developing
an ILF project specific site plan.
Organization of the Mitigation Rule
(Corps: 33 CFR 332/ EPA 40 CFR 230)
The Mitigation Rule is divided into eight sections:
1. Purpose and general considerations
2. Definitions
3. General compensatory mitigation requirements
4. Planning and documentation
5. Ecological performance standards
6. Monitoring
7. Management
8. Mitigation banks and in-lieu fee (ILF) programs
The first seven sections apply to all forms of
compensatory mitigation
The last section establishes standards that apply only to
mitigation banks and ILF programs
Mitigation Bank (bank): A mitigation bank is a project where aquatic resource conservation
(restoration, establishment, enhancement, or preservation) has been initiated in advance of permitted
losses of aquatic resource functions or services. Banks typically provide consolidated compensation for
multiple permit actions. With the approval of regulatory agencies, permittees can acquire credits from
a bank to meet their permit requirements for compensatory mitigation. The bank Sponsor (not
2 For some resource types, it may be preferable to site compensatory mitigation projects using geographic units other than
watersheds. For example, for vernal pools, landscape units known as vernal pool regions may be preferable, and for coral
reefs, tidal wetlands, and other marine and estuarine resources, seascape units such as reef complex or littoral drift cell maybe
preferable. According to the RIBITS, projects using seascape or landscape units to site compensatory mitigation projects make
up less than 5% of ILF projects.
3 The appropriate citation from the Code of Federal Regulations associated with the Corps is 33 CFR Part 332 and EPA is 40
CFR Part 230, both are included throughout the workbooks.
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the permittee) is responsible for the success of the bank project. Banks provide off-site compensation,
meaning the compensation is at a location not typically on or immediately adjacent to the permitted
impacts. Bank operation is governed by an instrument that the Sponsor drafts, often based on district
or state-provided templates, and is subject to review and approval by the Corps and its state and
federal counterparts who compose the IRT.
ILF Programs: ILF programs are established by a public agency or non-profit organization (the ILF
Sponsor) and sell credits to permittees. The Sponsor commits to use those funds to perform mitigation
activities. Typically, the Sponsor collects funds from multiple permittees in order to pool the financial
resources necessary to build and maintain the mitigation site. The ILF Sponsor is responsible for the
success of the mitigation. Like banking, ILF mitigation is also typically off-site; however, unlike banking,
the mitigation typically occurs after the permitted impacts. Many districts/states require additional
compensation to offset this temporal lag (see 33 CFR 332.3(f)(2)/40 CFR 230.93(f)(2). Like banks,
ILF program operation is governed by an instrument drafted by the Sponsor, often based on district or
state-provided templates, and is subject to review and approval by the Corps and the IRT.
Templates: Many districts have developed templates of ILF-related documents (i.e., instruments,
long-term management plans, site protection documents) to increase review efficacy. These
templates are becoming more commonplace and encouraged by many District and state policies
and practices. The IRT staff should be aware of language revision constraints and refrain from
commenting on prior, approved language within the templates or providing comments that conflict
with the approved template.
Permittee-Responsible Mitigation: PRM is undertaken by a permittee to compensate for aquatic
resource impacts resulting from a specific project. The permittee generally performs the mitigation after
the permit is issued but prior to or concurrent with the initiation of permitted impacts. The permittee
is responsible (liable) for the implementation, success, and long-term protection and management of
the mitigation project. The permit governs the Permittee-Responsible Mitigation (PRM). There is no
IRT involvement or instrument associated with PRM, and PRM may occur at the site of the permitted
impacts or an off-site location within the same watershed.
Mitigation Preference Hierarchy: The Mitigation Rule established a preference hierarchy for
mitigation credits (33 CFR 332.3(b)(2) and (3)/40 CFR 230.93(b)(2) and (3)). Under this hierarchy
if the appropriate type (wetland, stream, etc.) of released credits are available from a mitigation bank
or an ILF project in a service area that includes the permitted impact, those credits are generally
preferred over advance credits from ILF programs or PRM projects that have not been initiated.
Using released credits from banks and ILF projects is generally a preferred form of compensatory mitigation
under the Mitigation Rule because they implement projects in advance of permitted losses, thus reducing
temporal losses of functions and uncertainty over project success. Additionally, ILF programs may
consolidate compensatory mitigation projects where ecologically appropriate, in turn combining resources
(including financial as well as agency resources) and scientific and technical expertise. (Note, this may be
more of a challenge or even impractical for small PRM projects.) An ILF project site plan may also include
descriptions of how the mitigation project will provide offsets under other regulatory authorities, such as
state counterparts to CWA section 404, CWA section 402, or the Endangered Species Act.
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ILF programs differ from mitigation banks in a number of ways:
ILF programs can only be sponsored by government (usually state or local government) or non-profit
conservation organizations.
ILF programs are required to use a watershed approach for strategic site selection (forms part of the
Compensation Planning Framework).
ILF programs include two types of credit activities: advance credits that are associated with a program
service area (NOT a project site); and released credits, generated by project sites that were funded with
proceeds from advance credit sales and meet performance standards.
ILF programs typically operate by selling advance credits as mitigation. These advance credits are
associated with service areas, and the proceeds are then used to develop and implement mitigation
projects on sites within the applicable service area. Credits generated from an ILF project site or
mitigation bank (released credits) are generally preferred over these advance credits.
The fee schedule for these advance credits is publicly available.
When a program sells advance credits and has accrued sufficient proceeds from those credit sales, the
ILF program can then identify project sites and develop and implement mitigation projects.
Credits generated from an ILF project (released credits) are first used to fulfill a mitigation obligation
generated by the sale of an advance credit. If there are any released credits left over after fulfillment,
they can be sold and may be determined to be equivalent to a bank credit.
ILF programs are required to identify financial accounting procedures to ensure that all collected funds
are transparently and appropriately managed and dispensed.
These programs often provide compensatory mitigation when there are few or no mitigation banks
with available credits or where PRM is not practicable.
Some ILF programs provide compensation for resources that are more difficult or less in demand,
like the ecologically valuable fens, shellfish, seagrasses, mudflats, and subtidal sediment remediation
projects, which generally have limited opportunities for return on investment.
ILF project site plan development and authorization follow a similar four-step process as the ILF or Bank
instrument approval process (see Figure 2). The Sponsor is responsible for preparing and submitting all
documentation associated with the project to the IRT for review.4 The timelines depicted in Figure 2 are
contingent upon the submittal of complete documents by the Sponsor at each step in the process.
4 Development and review of bank instruments follow the same four-step process as the development of ILF project site plans.
A bank instrument is required to provide the same information as an ILF project site plan.
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Figure 2. ILF project site plan development
Draft
Prospectus:
The IRT has 30
days to review
Up to 90-day
period to
process, incl.
required public
notice
Draft
Instrument
Up to a 90-day
period for
review and
comment by
the IRT
Up to 30-
day period
for Corps
review and
approval/
disapproval
Up to 45-
day
period for
IRT to
object to
the Corps
decision
Project Site Plans follow the same 4-step approval process (see Figure 2 and below descriptions) as
mitigation banks and ILF programs. However, the regulations do not require the Corps to prepare an
initial evaluation letter (IEL) in response to the prospectus for a project site (33 CFR 332.8(d)/40 CR
230.98(d)). This proposal for an ILF project site is called different names in different districts. These include
Site Development Plan, Receiving Site Plan, Site Plan, Mitigation Plan, Instrument Amendment, etc. This
workbook refers to the proposal for an ILF project as a project site plan. Approval of the project site plan
is considered a modification of the approved ILF instrument (33 CFR 332.8(g)(l)/4Q CFR 230.98(g)(1)).
Draft Site Plan/Prospectus submittal is considered an optional step in the Mitigation Rule, although
many districts/states require submittal. The purpose is to allow the identification of any potential issues
with the project early in the process so the Sponsor can address them prior to the start of the formal
process.
Site Plan/Prospectus submittal is required for all ILF projects. The Corps is required to issue a 30-day
public notice for the complete prospectus. All comments received in response to the public notice are shared
with the Sponsor and IRT within 15-days of the end of the public notice. For banks and ILF programs,
the Corps is required to provide the Sponsor with an initial evaluation letter (IEL) stating the potential
suitability of the proposal to provide compensatory mitigation. ILF projects are considered modifications
of the ILF program instrument (33 CFR 328(g)(l)/40 CFR 230.98(g)(1)). An initial evaluation is not
required by regulation for ILF projects (33 CFR 328(d)(5)(iv)/40 CFR 230,98(d)(5)(iv)); however, many
districts provide an initial evaluation of the prospectus. If the prospectus is suitable, the Sponsor may be
directed to prepare a draft ILF project site plan. If the prospectus is deemed unsuitable, the Sponsor may
revise the prospectus to address the deficiencies and resubmit. If the Sponsor submits a revised prospectus,
the Corps will issue a revised public notice. An approved prospectus does NOT guarantee approval of a
proposed ILF project site plan.
Draft Site Plan/Instrum ent Modification is submitted to the IRT by the Sponsor for review and comment.
The Chair or co-chairs are responsible for providing all comments to the Sponsor to be addressed in the
final instrument within 90-days of receipt of the complete Draft Site Plan. The ILF project site plan must be
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based on the prospectus and describe in detail the physical and legal characteristics of the ILF project and
how it will be established and operated. It must incorporate all of the draft instrument elements specified
in the Mitigation Rule (33 CFR 332.8(d)(6)/40 CFR 230.98(d)(6)). The Chair or co-chair is responsible for
providing all comments to the Sponsor to be addressed in the final instrument.
Final Site Plan/Instrument Modification is then submitted to the IRT by the Sponsor, along with
documentation indicating how the Sponsor addressed previous comments on the draft instrument. Within
30-days of receipt of the complete Final Site Plan, the Corps must notify other members of the IRT of its
intent to approve/disapprove the Final Instrument. If a federal member of the IRT disagrees, he/she may
then object to the Corps decision and initiate a formal dispute resolution process. There is no automatic
approval of an ILF instrument. This same step applies to modifications of an approved instrument, such
as approval of an ILF project site plan. On several occasions, districts have determined that the proposed
project site plan is not potentially suitable for compensatory mitigation regardless of revision. In those
cases, districts and/or Sponsors have withdrawn those proposals from further consideration.
Delays in Project Site Plan Review
Delays in the timelines, specified in the Mitigation Rule for review and comment on the project proposal
and ILF project site plan, can affect program planning and feasibility. For example, purchase and sale
agreements for land purchases generally allow a limited time period for due diligence/feasibility evaluation.
The landowner may not agree to a time extension or, if so, only at additional expense to the Sponsor.
The Sponsors ability to secure project sites and project implementation partners, acquire conservation
easements, stay within project development and implementation budgets, secure financial assurances, and
develop and implement ILF projects is more difficult when regulatory timelines are not followed.
Review can be delayed for a number of reasons, including:
Completion of endangered species consultation
Completion of cultural/historic resources coordination (Section 106 NHRPA)
Government-to-government coordination (tribal coordination)
Sponsor's failure to provide necessary information
The necessary information cannot be secured within a specified timeframe
IRT members failing to provide timely reviews
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Terminology
Advance Credits: Credits of an approved ILF program that are available for sale prior to being fulfilled
(implementation of a mitigation project) in accordance with an approved mitigation project plan. Advance
credit sales require an approved ILF program instrument that meets all applicable requirements (33 CFR
332.2/40 CFR 230.92).
Assessment methodology: The mechanism or tool used to evaluate the loss of functions or services at
the permitted impact site as well as the gain in functions or services provided at the compensation site.
Assessment methods vary by aquatic resource type (i.e., wetlands, streams) and between districts/states.
Compensatory mitigation methods: There are four compensatory mitigation methods, restoration,
establishment, enhancement, and preservation:
Restoration encompasses two types of actions, re-establishment of aquatic resources in a place where
those resources formerly occurred (e.g., prior converted cropland) and rehabilitation of degraded
aquatic resources. Much of the stream mitigation implemented involves the rehabilitation of degraded
streams;
Establishment (creation) is the development of an aquatic resource where one did not previously
occur;
Enhancement is the manipulation of one or more characteristics of an aquatic resource to improve or
intensify one or more aquatic resource functions; and
Preservation means removing any threat of destruction or adverse modification to an aquatic resource
through appropriate physical and legal mechanisms.
Compensation Planning Framework (CPF): The watershed-based planning framework or tool used to
select, secure, and implement aquatic resource restoration, establishment, enhancement, and/or preservation
activities. All ILF projects used to provide compensation for Department of the Army (Corps) permits
must be consistent with the approved compensation planning framework (CPF) (33 CFR 332.8(c)(1)).
Credits: A unit of measure (functional, areal, or other suitable metric) representing the accrual or
attainment of aquatic functions or services at a mitigation site. The measure is based on restored, established,
enhanced, or preserved aquatic resources. Credits are the currency that an ILF program utilizes for trading.
District: Refers to an Army Corps of Engineers (Corps) district office.
Fees: The cost of compensatory mitigation credits provided by an ILF program are determined by the
ILF program Sponsor (33 CFR 332.8(o)(5)(i)/40 CFR 230.98(o)(5)(i)). The district engineer may evaluate
fee schedules for ILF programs to determine whether those fees satisfy the criteria in 33 CFR 332.8(n)(5)
(ii)/40 CFR230.98(n)(5)(ii) and are sufficient for providing the required compensatory mitigation (see
preamble to the Mitigation Rule, Federal Register / Vol. 73, No. 70 Thursday, April 10, 2008, page 19609).
Credit prices may vary based on mitigation resource type (e.g., wetland or stream). The cost per unit of
credit must include the expected costs associated with the restoration, establishment, enhancement, and/
or preservation of aquatic resources in that service area. These costs must be based on full cost accounting
and include, as appropriate, expenses such as land acquisition, project planning and design, construction,
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plant materials, labor, legal fees, monitoring, and remediation or adaptive management activities, as well as
administration of the ILF program (33 CFR 332.8(o)(5)(ii)/40 CFR 230.98(o)(5)(ii)).
Functions: Functions are the physical, chemical, and/or biological processes that occur in ecosystems
(e.g., denitrification or carbon sequestration).
Fulfillment of Sales of Advance Credits from an ILF Program: Application of credits released in
accordance with a credit release schedule in an approved mitigation project plan to satisfy the mitigation
requirements represented by the sale or debit of advance credits (33 CFR 332.2/40 CFR 230.92) Only
after any advance credit sales within a service area have been fulfilled (through the application of released
credits from an ILF project) may additional released credits from that project be sold or transferred to
permittees (33 CFR 332.2/40 CFR 230.92).
Hydrologic Unit Codes (HUCs): A nationwide hierarchical mechanism used to delineate watersheds
based on surface hydrologic features. This system first developed by the USGS divides the country into
21 regions (2-digit), 222 subregions (4-digit), 370 basins (6-digit), 2,270 subbasins (8-digit), -20,000
watersheds (10-digit), and -100,000 sub-watersheds (12-digit). HUCs are often used in the definition of
mitigation bank and ILF program service areas.
ILF Program: Mitigation that occurs when a permittee purchases credits from an ILF Sponsor (a public
agency or non-profit organization). The Sponsor commits to utilizing those funds to perform mitigation
activities. Typically, the Sponsor collects funds from multiple permittees in order to pool the financial
resources necessary to build and maintain the mitigation site. The ILF Sponsor is responsible for the success
of the mitigation. Like banking, ILF mitigation is also typically off-site; however, unlike mitigation banks,
ILF mitigation typically occurs after the permitted impacts. Like banks, ILF program operation is governed
by an instrument drafted by the Sponsor, often based on district or state provided templates, and is subject
to review and approval by the Corps and the IRT.
ILF Project: A compensatory mitigation project developed by an ILF program to offset permitted
losses of aquatic resource functions and services. ILF projects are required to follow the same standards,
development, and approval process as mitigation bank sites. The 12 required elements for mitigation plans
(33 CFR 332.4(C)(2)-(14)/40 CFR 230.94(C)(2)-(14)) apply to bank, ILF, and PRM projects.
ILF Project Site Plan Review: Also referred to as ILF project (development) plan, site development plan, etc.
In-kind: A resource of a similar structural and functional type to the impacted resource.
Instrument: Refers to the ILF program and all associated exhibits/attachments. In some cases, the
instrument is all-inclusive. In other cases, the instrument is the framework, and the exhibits/attachments
provide the detail on each element (monitoring, site selection, etc.). Each ILF project site plan is considered
a modification of the approved instrument.
IRT (Interagency Review Team): An interagency group of federal, tribal, state, and/ or local regulatory and
resource agency representatives that reviews documentation for and advises the co-chairs (Corps district
and any other agency chairing the IRT) on the establishment and management of a mitigation bank, an
ILF program, or ILF project (33 CFR 332.2/40 CFR 230.92). The reference to the IRT or IRT reviewer in
this workbook is a reference to the IRT co-chairs (Corps and any other counterpart state, tribal, or federal
agency with independent regulatory authority) as well as other IRT members (other federal, tribal, state, or
local agency included on the IRT).
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Multiple authority ILF projects: Also called "Joint Projects." These are ILF projects that provide
compensatory mitigation for resource impacts under more than one regulatory authority Examples
include ILF projects that provide compensation for resources regulated under CWA section 404 and the
Endangered Species Act. Each regulatory agency has authority over credits providing compensation for
impacts authorized under its jurisdiction.
Out-of-kind: A resource of a different structural and functional type than the impacted resource.
Released Credits: Those credits generated by an ILF project meeting performance milestones. The district
engineer, in consultation with the IRT, may determine that those credits are available for sale or transfer,
once any debited advance credits have been fulfilled. A proportion of projected credits for a specific
mitigation bank or ILF project may be released upon approval of the mitigation plan, with additional credits
released as milestones specified in the credit release schedule are achieved (33 CFR 332.2/40 CFR 230.92).
Resource type: The type of aquatic resource considered. Examples include wetlands, streams, or subsets
like vernal pools, pine savannas, tidal marsh, intermittent streams, lagoons, etc.
RIBITS: The national web-based application used by a number of federal agencies to track mitigation
bank and ILF activities. Sponsors and regulators use RIBITS for the management of ledger and reporting
activities. To access it, go to: https://ribits.ops.usace.army.mil/ords/f?p=107:2
Service area: The geographic area within which impacts can be mitigated at a specific ILF program and/or
ILF project site, as specified in the ILF instrument and/or ILF project site (33 CFR 332.2/40 CFR 230.92.2).
Services: The benefits that human populations receive from the functions provided by ecosystems (e.g.,
flood flow attenuation or water quality improvement).
Sponsor: ILF project Sponsor; any government or non-profit conservation organization responsible for
establishing and operating an ILF program or ILF project. The ILF Sponsor is responsible for the success of
the ILF program and all associated project sites.
Subordination agreement (in context of other interests in property): In compensatory mitigation, a
subordination agreement makes any previously recorded easements, liens or encumbrances take second
place in the mitigation site protection instrument. For example, suppose a mitigation site protection
instrument was recorded after a deed to secure a debt, and the land was subsequently foreclosed upon
to settle the debt. In that case, the site protection instrument could be terminated. Subordination makes
the compensatory mitigation interest the primary property interest ("first in right") and allows greater
assurance that the mitigation site will withstand adverse actions such as foreclosure.
Temporal Loss: The time lag between the loss of aquatic resource functions or services caused by the
permitted impacts and the replacement of aquatic resource functions or services at the compensatory
mitigation site
Watershed approach: An analytical and strategic approach for selecting compensatory mitigation projects
that consider the needs of a watershed and how the location and types of compensatory mitigation projects
within the watershed address those needs. This same approach can be applied to other landscape/seascape
units.
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Commonly Used
Acronyms
Bank Enabling Instrument (BEI)
Banking Instrument (BI)
Compensatory Planning Framework (CPF)
Environmental Protection Agency (EPA)
Geographic Information Systems (GIS)
Hydrologic Unit Codes (HUCs)
Initial Evaluation Letter (IEL)
In-lieu fee (ILF)
Interagency Review Team (IRT)
Letters of Intent (LOI)
Long-term management (LTM)
Mitigation Banking Instrument (MBI)
Permittee Responsible Mitigation (PRM)
Regulatory In-lieu Fee and Bank Information Tracking System (RIBITS)
United States Army Corps of Engineers (Corps or USACE)
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Project Establishment
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1. Project Goals and
Objectives
Goals are the general guidelines that explain what you want to achieve and the rationale (why) for doing
a project (Figure 3). Objectives identify a specific element of the goal and may define the strategies or
steps needed to attain the stated goals (Ossinger 1999). Goals and objectives reflect the project's purpose
and need (goal), functions and services to be addressed (goal), and how the project will meet the defined
performance standards (objective - measurable and quantifiable).
Figure 3. An example of a goal and associated objectives
Performance standards developed to measure attainment of objectives
GOAL:
Restore 10 acres of
cropland to emergent
and scrub-shrub
wetland. The restored
wetland will:
1. Be consistent with
nearby reference
wetlands
2. Provide ftoodflow
attenuation and
storage
3. Provide food chain
support and
breeding habitat for
spotted salamanders
Objective #1: Restore 10 acres of land to wetland
Performance standard: By year 5 a post construction
delineation determines there are at least 10 acres of
wetland.
Objective #2: Provide for flood storage/retention
Performance standard: Post-construction, 10-20% of
the site should have shallow depressions less than 12"
depth and has received and held flood waters
following 1-year storm events.
Objective #3: Provide suitable breeding habitat for
spotted salamander
Performance standard: Post-construction, at least 25%
of the depressions in a typical year should have
standing water for at least 120 consecutive days in
winter-spring, and are dry for at least 45 consecutive
days in the summer/fall
la.Does the project site fit within the goals and objectives of the CPF for the service area?
Hie CPF's aquatic resource goals and objectives should discuss the type(s) of aquatic resources the ILF
program is focused on restoring for each service area. It should also include general locations (statewide to
project site) and amounts of aquatic resources the program will seek to provide (33 CFR 332.8(c)(2)(v)/40
CFR 230.98(c)(2)(v)).
The Sponsor may also include the overall goals of the ILF program (e.g., provide an alternative to
permittee responsible mitigation, expand ILF mitigation to apply to larger scale projects/impacts, provide
compensation for scarce or at-risk resources, contribute to environmental sustainability within the
watershed, MA DFG 2014), or connect the programs goals to the agency or organizations overall mission
(e.g., "provide effective and responsible levels of protection and restoration of New Hampshire's aquatic
resources through an efficient regulatory program..." NH DES 2018).
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The selected project site should have specific goals and objectives that are consistent with the ILF programs
CPF. For example, an ILF project conducted by the Maine Atlantic Salmon Restoration and Conservation
Fund must further the programs goals of facilitating the passage of Atlantic salmon and contributing to the
species recovery (ME DMR 2018).
lb. Does the project site plan include a description of the resource type(s) and approximate amount(s) that
will be provided?
The type and amount of resource(s) to be provided by the project must be identified to enable reviewers to
evaluate whether resources are consistent with the site's compensatory mitigation potential. On occasion,
ILF project site plans may propose establishing resource types (wetlands or streams) that are not consistent
with the landscape setting of the project site or that would not be sustainable. Those proposals are generally
discouraged and should be reviewed carefully. The IRT reviewers can consider whether the desired resource
types and amounts specified in the workplan are consistent with the district/states credit determination
mechanism.
An ILF program may have multiple project sites. Each project site will have its own site plan, which should
provide a description of the resource type(s) and amount(s) to be provided by the ILF site.
lc. Does the project site plan identify functions and services to be provided by the project site?
The functions and services to be provided by the site should be clearly identified to ensure they are relevant
to the project and as mitigation required for unavoidable impacts. Descriptions should be focused on the
functions and services targeted for improvement or preservation by the project. Seasonal wetlands may
perform denitrification, which is a function; the service associated with this function is the resulting water
quality improvement. Different resource types provide different functions and services. Seasonal palustrine
wetland restoration may not provide the same functions as tidal wetland restoration.
Id. Does the project site plan include the methods used for compensation?
For each resource type(s) that would be provided on the project site, the project site plan should include the
amount of re-establishment, rehabilitation, establishment, enhancement, and preservation proposed (see
33 CFR 332.2/40 CFR 230.92).
le. Does the project site address ecological resource needs within the watershed or landscape setting in
which the project site is located?
The ILF project site plan should include a list of ecological resource needs within the watershed or landscape
setting and an explanation of how the site will address those needs. The project site plan should address
identified ecological resource needs in the watershed, such as water quality and quantity issues (e.g.,
TMDLs, persistent flooding and property damage), at-risk species habitat, lost or diminishing wetland
habitat types, and the project site plan should explain how the site will address those needs. With respect
to federally and state-listed species and habitat, the mitigation project should address limiting factors,
including habitat, in the respective recovery units such as watersheds, estuaries, and marine basins. This
information can be found in documents such as recovery and conservation plans.
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2. Site Selection
How was the ILF project site selected, and is it appropriate for the
mitigation type/needs? What does it mean to be an appropriate
ILF project site? Information regarding site selection can be found
in multiple locations within the regulations, as it is applicable to
many of the elements/components of mitigation. This is because
the selection of a mitigation site is the single most important factor
in determining a mitigation projects future success. The selection
of a project site may influence other factors, such as the ability to provide durable site protection, the
likelihood of meeting ecological performance standards, credit yield from the project, and even potential
long-term management needs. To ensure all components of site selection are identified and discussed,
citations for the major regulatory components are included below. Note, ILF project sites must also be
fully consistent with the site selection elements laid out in the ILF programs Compensation Planning
Framework (33 CFR 332.8(c)/40 CFR 230.98(c)).
Type and location of compensatory mitigation (33 CFR 332.3 (b)(l)/40 CFR 230.93(b)(1)):
Project sites should be located within the same watershed as the impact site, where they are most likely
to replace lost functions, and should take into account the site's watershed scale features.
For marine and estuarine mitigation, project sites should be located within the same marine ecological
system (basin, littoral cell, or bay) where they can replace the same functions and services.
Compensation for impacts to aquatic resources in coastal watersheds should also be located in a coastal
watershed where practicable.
Watershed approach (33 CFR 332.3(c)/40 CFR 230.93(c)). Application of the watershed approach to
site selection means that project sites should take into consideration the following features within the
watershed:
Habitat requirements of important species
Habitat loss and conversion
Trends in land use
Compatibility with adjacent land uses
Ecological benefits
Whether the project addresses watershed, estuarine, or marine needs
The suite of functions to be provided
Degraded aquatic resources and identification of immediate and long-term aquatic resource needs
within the watershed
Site Selection (33 CFR 332.3(d)/40 CFR 230.93(d)) considerations:
Hydrologic conditions, soil characteristics, and other physical and chemical characteristics
Size and location of the site relative to hydrologic conditions (including water rights)
Watershed scale features such as aquatic habitat diversity and habitat connectivity
Whether the project site may be incompatible with adjacent land use activities (i.e., development
around site, the site may pose localized flooding or mosquito issues)
Site Selection
A description of the factors
considered during the site
selection process (33 CFR 332.4(c)
(3)/ 40 CFR 230.94(c)(3))
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Reasonably foreseeable effects the compensatory mitigation project will have on ecologically
important aquatic or terrestrial resources (e.g., shallow sub-tidal habitat, mature forests), cultural
sites, or habitat for federally or state-listed species
Other relevant factors such as:
o Upstream/downstream watershed conditions,
o Likely future conditions (i.e., more development proposed or anticipated effects of sea level rise
or climate change),
o Anticipated land use trends,
o Local or regional goals for resource restoration or protection,
o Re-establishment of corridors or habitat for at-risk species,
o Water quality and floodplain management goals, and
o Relative potential for chemical contamination of aquatic resources.
Mitigation Type (33 CFR 332.3(e)/40 CFR 230.93(e)):
In general, in-kind mitigation is preferred to-out-of-kind because it is more likely to compensate for
functions and services lost at the impact site.
For difficult -to-replace resources (e.g., bogs, springs, streams, Atlantic white cedar swamps), if further
avoidance and minimization are not practicable, then the required compensation should be provided
through in-kind rehabilitation, enhancement, or preservation.
Some additional site selection considerations in other portions of the Mitigation Rule:
Public and Private lands - Project sites can be situated on private or public lands, with some different
requirements associated with each option (33 CFR 332.3(a)(3)/40 CFR 230.93(a)(3)).
Private vs. public lands...
~ On private land, a project site is required to protect the land through a conservation easement
or other protection documents.
~ On public lands, the land may already be considered conserved and, as such, may not require
additional protections.
Exceptions to this include federal lands that are subject to uses incompatible with conservation, like
grazing, timber, and mining activities. These lands may not be the best choice for mitigation projects
unless additional protection measures can be put in place (see section on-site protection). Intertidal
and sub-tidal lands are often state-owned. These areas may require additional measures to ensure their
use for mitigation is consistent with the state agency's mission and state code. On a side note, some
federal agencies may not allow compensatory mitigation actions on their lands (i.e., U.S. Fish and
Wildlife Service Final Policy on NWR System and Mitigation, 1991).
Preservation - Incorporating areas of preservation in a project site must comply with the five criteria
for preservation discussed in (33 CFR 332.3(h)/40 CFR 230.93(h)).
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Preservation Land Criteria
All of the following five criteria must be met:
1. Resources to be preserved provide important physical, chemical, or biological functions for the
watershed,
2. Resources to be preserved contribute significantly to the ecological sustainability of the watershed,
estuary, or marine area,
3. Preservation is determined to be appropriate and practicable,
4. The resources are under threat of destruction or adverse modification, and
5. The preserved site will be permanently protected through an appropriate real estate or other legal
instrument (e.g., easement, title transfer to a state agency, or land trust).
Buffers (33 CFR 332.3(i)/40 CFR 230.93(i)) - Both upland buffers and riparian areas may contribute to
sustainability, and ecological functioning of project sites - consider whether the project would establish
or augment a conservation corridor.
Financial assurances (33 CFR 332.3(n)(2)/40 CFR 230.93(n)(2) - Factors influencing the amount of
short-term assurances required for a project include the size and complexity of the project, likelihood
of success, and degree of project completion.
Site protection (33 CFR 332.7(n)/40 CFR 230.97(n)) - The ability to provide durable long-term
protection of a mitigation project is a key consideration in site selection. Key considerations for site
protection include:
o The potential protection mechanism (easement, declaration of restrictions, title transfer, federal
facility management plan, etc.)
o Whether the mechanism used would prohibit incompatible uses of the property
o Whether there are any conflicting uses of the property itself (i.e., mineral or timber extraction)
Sustainability (33 CFR 332.7(b)/40 CFR 230.97(b)) - The project must, to the maximum extent
practicable, be sustainable after performance standards have been met.
Long-term management (33 CFR 332.7(d)/40 CFR 230.97(d)) - The requirement for long-term
management of mitigation projects, including the associated financing, may influence site selection. For
example, foreseeable management needs, including structures like gates, fencing, and water controls
or ecological management, such as prescribed fire or control of invasive species, may be important
considerations in site selection.
The section of the Mitigation Rule devoted to third-party compensatory mitigation also restates some of
the site selection factors discussed in earlier sections of the federal regulations. For example, regulations
discussing requirements for a prospectus (33 CFR 332.8(d)(2)(vii)(B)/40 CFR 230.98(d)(2)(vii)(B)) state
that the prospectus must include consideration of potential ecological benefits that the project may provide
as well as the relationship of the proposed project site to hydrologic sources (including the availability of
sufficient water rights to the long-term sustainability of the project).
In summary, the project site plan should include:
A brief rationale for how a certain project site was selected and an explanation for why it is a suitable
candidate for fulfilling mitigation needs. The narrative should clearly state the aquatic resource
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functions/services proposed and identify any supporting information used in site selection, such as
State Wildlife Action Plans, watershed plans, water quality improvement plans, conservation plans,
recovery plans, etc.
Discussions on the critical watershed conditions/characteristics (including those mentioned above)
that could influence the success of the proposed project goals and objectives. The project site plan
should provide specific, concrete examples/criteria.
For project sites that include mitigation for state and federally listed species, site selection should take
into consideration recovery goals and limiting factors for the target species
A case example is provided to aid the reviewer (Figure 4). The headings (black text) represent project site
selection factors, and the bullets (blue text) explain the importance of these factors. While all criteria may
not be included, a majority should be included and addressed for a complete proposal.
Figure 4. A case example of site selection factors
Lewis Farm: a 250+ Ac mitigation bank site located on converted cropland
Sites selection factors and their importance {S}
Site located on ditched cropland
S Cropland = hydric soils
S Site was former wetland area
S Wetland hydrology can be easily
restored
Located within bird migration route
S Corridor provides contiguous
forest interior, expands migratory
bird habitat
Site located in black bear habitat
S Keystone species for this area
S Increased availability for foraging,
expands bears' habitat
Site located in canebrake rattlesnake and
southeastern shrew habitat
S Protecting at-risk state listed
species, expanding their habitat
Evaluating the questions below, the reviewer should consider the extent to which site selection addresses
the ILF Sponsor's goals and objectives.
Site located in a watershed with TMDLs for
sediment, nutrient, E. coli
^ Targets a watershed in need of water
quality improvement
Reforestation of forested wetlands
S contributes to carbon sequestration
in soils and vegetation biomass
Site abuts the Great Dismal Swamp NWR
a well-developed and protected
wetland
S Site buffers the refuge from
incompatible activities/other
development
S Forms a connected corridor with the
refuge and a separate 30+ Ac PRM
project located immediately
downstream
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2a. Is the ILF project site located within the watershed or landscape position where it is most likely to either
replace lost functions and services or enhance existing, compromised functions and services as described
in the approved ILF program instrument and/or CPF instrument?
This question asks whether the ILF project site is located where it is likely to provide at least some of the
functions and services typically lost as a result of permitted actions (33 CFR 332.3(b)(l)/40 CFR 230.93(b)
(1)). These functions and services should be identified in the projects goals and objectives. The IRT reviewer
should consider whether those functions and services are likely to be provided at the site. For example,
a wetland restoration project located adjacent to existing wetlands may be more likely to contribute to
watershed biodiversity (function); restoration of a seasonal wetland in the watershed headwaters may be
more likely to support denitrification (function); and floodplain restoration in higher order floodplains
may be more likely to contribute to floodwater abatement (service).
If an ILF program purchases mitigation bank credits to fulfill its mitigation obligations, the location of the
bank site providing those credits must be consistent with the site selection strategy identified in the ILF
programs CPF.
2b. Does the project site include areas that were formerly aquatic resources or are currently degraded
aquatic resources?
Review the proposed project site to determine if it is or ever was an aquatic resource. The likelihood of
success for a compensatory mitigation project is greater when restoring (re-establishing or rehabilitating)
or enhancing degraded aquatic resources than when establishing (creating) an aquatic resource where one
did not previously occur. The reviewer should consider if the landscape would support the aquatic habitat
(33 CFR 332.3(a)(2)/40 CFR 230.93(a)(2)). Is evidence provided to document former aquatic resource
conditions? Such evidence may include historic aerials, historic soil surveys, and/or historic USGS
topographic maps. See also Element 3: Baseline Information for more information.
2c. Does the project site include buffers that would protect it from its surroundings? Does it help buffer
other conserved aquatic resources from potentially incompatible activities?
Project sites may also include wetland and/or upland buffers. Buffers may be restored, established,
enhanced, or preserved. They may be required to ensure the viability of mitigation sites as well as provide
habitat or corridors for ecological functioning of the aquatic resources. Buffers, when proposed, should
provide meaningful ecological value and generate compensatory mitigation credit.
The first question refers to whether the project site has adequate buffers to ensure the integrity of the site.
The second question addresses whether the site itself is buffering other aquatic resources (i.e., a project site
located adjacent to a national wildlife refuge is buffering the refuge) (33 CFR 332.3(i)/40 CFR 230.93(i)).
The IRT reviewer should refer to any local district or state guidelines regarding buffer requirements and
crediting.
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2d. Is the project site adjacent to other conserved aquatic resources or does it help establish, or extend a
conserved corridor?
Similar to the above question, the intention is to determine if the project site is part of a larger network of
conserved aquatic resource habitat. Consideration should be given to whether the proposed ILF project
site helps to establish or extend a planned conservation corridor or is within areas designated as critical
fish and wildlife habitat or other state, regional, or local natural resource designations (e.g., National Wild
& Scenic rivers, outstanding waters, aquatic reserves, imperiled habitats, etc.). For example, expansion
of contiguous protected aquatic resource habitat may provide greater ecological value than an isolated
wetland (33 CFR 332.3(d)(3)/40 CFR 230.93(d)(3) and ((33 CFR 332.3 (b)(l)/40 CFR 230.93(b)(1)).
Additionally, the reviewer should consider the proximity of the project site to protected lands or waters.
2e. Has the proposed project site addressed the ecological priorities and needs identified in the CPF for the
project landscape/watershed, such as chronic environmental conditions (flooding, impaired water quality,
insufficient habitat for important aquatic species, etc.) (33 CFR 332.3(c)(3)/40 CFR 230.93(c)(3))?
The CPF functions to strategically select and prioritize ILF compensatory mitigation sites. The proposed
project site should be fully consistent with the CPF. The reviewer should consider whether the proposed
ILF project site addresses ecological needs for the project site and its surrounding (upstream/downstream)
watershed. For example, if the receiving water has a TMDL for sediment, a proposed project site that
includes stream restoration would likely have a goal to reduce sediment input into the system. The same
applies for systems that suffer from chronic flooding, low dissolved oxygen levels, or have high nutrient
loading. Restoration of wetland and/or streams could improve water quality and better manage storm
flows, which in turn helps improve downstream conditions (33 CFR 332.3(c)(3)/40 CFR 230.93(c)(3).
Reviewers should also consider the susceptibility of the site to risk factors like climate change or sea level
rise. This is particularly relevant for estuarine projects where sea level rise will likely affect design elevations
and target habitats.
For proposed ILF project sites located in marine or estuarine environments, consideration should be given
to whether the project is likely to address identified ecological needs within the same ecological system
(e.g., same reef complex, estuary, littoral drift cell, embayment, wave climate, etc.) (33 CFR 332.3(c)(2)
(v)/40 CFR 230.93(c)(2)(v). For example, has the ILF project site plan addressed any identified ecological
needs within a certain coastal habitat or across a matrix of coastal habitats (e.g., vegetation such as salt
marsh, mangroves, or submerged aquatic vegetation, reef structures such as oyster reefs or corals, and/or
unvegetated/unstructured intertidal or subtidal areas such as mudflats and sandflats). See also question 7c
in Element 7: Service Area.
2f. Are there any apparent potential constraints and/or limitations to the proposed project site? Are any of
these critical to successful project establishment or operation?
Are there any factors that complicate design, development, and/or implementation of a proposed ILF
project site? For example, adjacent development activities or historic districts, which could limit the
amount of property available to implement the project site and/or the types of mitigation activities that
can occur on the property, existing easements limiting activities on the parcel(s) where the project site
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is proposed, sensitive fauna/flora species or archaeological/cultural sites, environmental contaminants,
utility crossings, drainage canals, or severed sub-surface rights that could constrain project viability. Also,
proximity to airports may increase risks to aviation by attracting wildlife to areas where aircraft-wildlife
strikes may occur (e.g., near airports) (33 CFR 332.3 (b)(l)/40 CFR 230.93(b)(1).
Constraints should be evaluated in the context of the proposed mitigation activities on the project site. In
a number of states (e.g., Texas and Louisiana), severed sub-surface (oil, gas, and mineral) rights are the
norm. Use of a minerals management plan is one way to ensure that the project will not be disturbed by
future mineral development activity.
Factors that could be considered critical to project establishment and operation may include the following:
Questions/concerns about the adequacy of appropriate water rights to support a wetland project,
The net effects of the project design and management on federal or state listed species,
Other interests in the project site property (e.g., severed mineral rights, drainage easements, prior-
recorded easements), or
Consequences of local/state laws and ordinances (e.g., law or ordinance that restricts conversion of
agricultural land to wetlands).
These factors should be addressed in the project site plan with supporting documentation provided in the
plan or accompanying exhibits (e.g., title reports or property assessment and warranty documents).
2g. Is this project site ecologically suitable for providing the desired aquatic resource functions/services
within the subject watershed or landscape position?
This is a critical question in evaluating site selection. It is all encompassing, tying together all components
and considerations discussed in the introduction to this element. To address this question comprehensively,
the reviewer should consider each of the criteria in the bulleted list at the introduction to this element (33
CFR 332.3(d)(l)/40 CFR 230.93(d)(1)).
This question builds on the first question in this element (2a), which asks if the site is located where it has
the potential to replace lost functions and services. Even though the project may be appropriately located,
it may not have the capacity to provide those desired functions and services. Other factors - e.g.,
adjacent land uses, future development plans, severed oil and gas rights, or limited water rights - could
disqualify the site as being suitable to provide the intended functions/services.
Suitability includes many elements, including an appropriate hydrologic source and regime to support the
desired aquatic resource type (i.e., seasonal wetland, intermittent stream). For example, the hydrologic
regime for a seasonal wetland may be characterized by seasonal saturation or temporary inundation for a
seasonal wetland, and the hydrologic regime of an intermittent stream has flows part of the year but is not
supported solely by precipitation. Also refer to question 3a under Element 3: Baseline Information.
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3. Baseline Information
The baseline condition is needed to evaluate whether
a site is appropriate for the type of compensatory
mitigation proposed as well as for comparing pre-
project (baseline) and post-project conditions. This
comparison can then be used to determine degree
of change in function or condition (uplift) and the
actual credit yield (33 CFR 332.8(o)(3)/40 CFR
230.98(o)(3)).
3a. Does the ILF project site plan include a description
of the baseline watershed/landscape, and ecological
characteristics of the proposed project site?
The project site plan should have a section or dedicated narrative discussing the watershed and landscape
characteristics for a proposed site and its surroundings (upstream and downstream) that provides the
context of the project site, such as sources of hydrology and existing topography (33 CFR 332.3(d)(l)/40
CFR 230.93 (d)(1)).
Types of Information that may be included:
Most recent soils mapping and classification
Historic aerials and soils mapping and classification
Wetland delineation information (ID per USACE wetland delineation manual criteria)
USGS topography or LiDAR imagery
Historic USGS topo maps and USGS or state/local level surrounding land use map
Watershed scale map showing location of site relevant to other named aquatic features and public/
private conservation lands and other protected lands
Critical habitat for site and surrounding areas
FEMA floodplain maps
Natural areas inventory maps of the site and surrounding areas
Historic extent of shellfish beds, coral reefs, or submerged aquatic vegetation (SAV) areas
Historic extent of estuarine areas
3b. Is the baseline data applicable and comparable to data that will be collected post-construction
(performance standards)?
The baseline information should include information such as groundwater well data, surface water stage
data, estimated or measured hydroperiod data, stream bank stability and channel morphology data,
vegetation data, and, if applicable, water quality data (e.g., temperature, conductivity, oxygen levels) that
can be measured consistently to establish the existing condition, pre-construction, and the restored state,
Baseline Information
A description of the ecological characteristics of
the proposed compensatory mitigation project
site. This may include descriptions of historic
and existing plant communities, historic and
existing hydrology, soil conditions... should
also include a delineation of waters of the
United States on the proposed compensatory
mitigation project site (33CFR 332.4(c)(5)/ 40
CFR 230.94(c)(5)).
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post-construction. The data collected pre-construction would be considered a benchmark for the degree
of change in function the post-construction state achieves.
3c. Do the baseline conditions support the project's goals and objectives?
Prior to reviewing the designs/improvements proposed, the reviewer should make certain that the selected
site(s) has a high likelihood of meeting its goals and objectives. A palustrine forested wetland should not
be proposed for a desert environment, as desert conditions (i.e., lack of consistent hydrology, unsuitable
soils, etc.) are not suitable for this habitat type. If the re-establishment of a vernal pool is proposed where
there isn't a restrictive soil layer. In this case, the mitigation work plan (Review Element 4) would have to
address this constraint. Similarly, reviewers should examine the site conditions and compare them with the
project's mitigation goals and objectives to determine if the site is appropriate for the proposed resources.
3d. Does the project site plan include or reference a delineation of wetlands/waters?
A wetland/waters delineation is a required component of the ILF project site plan (33 CFR 332.4(c)
(5)/230.94(c)(5)). It is an important source of data that, like the example baseline data sources listed in 3b,
is used for comparing the baseline wetland/waters condition and extent to its post-mitigation condition
and extent (e.g., for any new wetland creation or enhancement of existing wetlands).
Note, a delineation is used to determine whether the project site meets technical criteria for consideration
as an aquatic resource (e.g., wetland, stream). Delineations are typically not synonymous with jurisdictional
determinations. Whether an aquatic resource is jurisdictional or not is a separate matter from whether a
project site meets wetland or stream technical criteria.
3e. Does the project site plan include information related to at-risk fauna and flora species and/or other
regulated resources (cultural/archaeological)?
Baseline information should include a review of presence/absence of state and federal rare, threatened,
or endangered (RTE) species and regulated state and federal historic and archaeological resources for
the proposed project area and its surroundings. If any sensitive fauna/flora species are identified, their
associated state/federal regulatory status and habitat requirements should also be included. Part of
determining whether a site with sensitive resources is an appropriate mitigation site is to evaluate the
effects to these resources. Will the site conserve and protect sensitive cultural or archaeological resources
or, in the case of fauna/flora, provide an opportunity to enhance/expand their current habitat?
3f. Does the project site plan include the location and extent of any utilities and other infrastructure in the
project vicinity?
The presence (or absence), location and extent of utilities, and other infrastructure should be noted, as they
may not be compatible with the project's goals and objectives. If a sewer line runs through the middle of
a proposed wetland mitigation site, what are the requirements for maintenance access to this sewer line?
If the site needs to be graded down to access the water table, will increasing surface hydrology affect the
sewer line?
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Similarly, for projects in marine or estuarine environments, are underwater utilities present? The ILF
project site plan should identify all existing and proposed infrastructure. The plan should also consider the
potential impacts (direct or indirect) of this infrastructure on the ILF project site as well as any proposed
measures that allow for attainment of project goals and objectives without future impacts to the site. For
more detail, see also Review Element 6: Site Protection Instrument.
3g. Does the project site plan include the location and information related to any existing easements,
rights-of-way (ROWs), or other property restrictions?
This question builds on question 3f. and is discussed in greater detail in Review Element 6: Site Protection
Instrument. If there are any existing easements (such as utility or drainage), ROWs, or other interests in
the project site property, such as liens or mortgages, they should be clearly identified and explained, as they
may not be compatible with the project's goals and objectives. Mitigation often requires overlay easements,
deed restrictions, or even subordination of existing easements to the easement (refer to Terminology and
Review Element 6: Site Protection) to better ensure a mitigation site is protected in the long-term; existing
easements may allow or prohibit an overlay easement. Any restrictions should not impede or inhibit the
design, construction, or post-construction condition of the proposed mitigation site. If any of these apply,
the site is not adequate for conducting mitigation.
Note, if drainage or utility easements or ROW are present, consider whether they have been excluded from
the credit calculations. The IRT reviewer should also evaluate these features in the context of the project
(whether they have a negative effect on the proposed mitigation project). The presence of ROWs does not
necessarily disqualify a site from consideration.
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4. Mitigation Work Plan
Mitigation Work Plan components may include project boundaries,
construction methods, sequence, grading, elevations, slopes, soil and
vegetation management, stream planform geometry, channel form,
design discharge, etc. (33 CFR 332.4(c)(7)/40 CFR 230.94(c)(7)). The
mitigation work plan may be used as an oversight tool; it is a reference
that the IRT can use in reviewing construction, reviewing as-builts,
and identifying needs for maintenance, remediation, and/or adaptive
management.
Other resources have been developed specifically to support the review of mitigation work plans such as
the Natural Channel Design Review Checklist (Harman and Starr 2012) and the Wetlands Engineering
Handbook (USACE ERDC 2000). A number of district- or state- specific tools have also been developed, for
example: Charleston Districts 2010 Mitigation Plan Template, the New Orleans District resource-specific
template mitigation workplans (Bottomland Hardwood, Swamp, Marsh, and Pine Flatwood), and the New
England District's 2016 Mitigation Compensatory Mitigation Guidance, which includes guidelines to assist
in the review of mitigation plans for a number of resource types. Other districts/states are in the process of
developing mitigation work plan guidelines.
4a. Does the project site plan include the required work plan components? Do these components have
detailed specifications and descriptions?
The mitigation work plan should contain detailed written specifications and work descriptions for the
project (33 CFR 332.4(c)(7)/40 CFR 230.94(c)(7)). The work plan may include but is not limited to
the geographic boundaries of the project; construction methods, timing, and sequence; source(s) of
water, including connections to existing waters and uplands; methods for establishing proposed plant
communities; plans to control invasive plant species; proposed grading plan, including elevations and
slopes of the substrate; any berms or water control/water management structures, soil management; and
erosion control measures. Refer to local state and/or district guidelines and any established templates for
specific components included in a mitigation work plan.
For stream compensatory mitigation projects, the mitigation work plan may also include other relevant
information, such as planform geometry, channel form (e.g., typical channel cross-sections), watershed
size, design discharge, and riparian area plantings (33 CFR 332.4(c)(7)/40 CFR 230.94(c)(7)).
4b. Are the work plan components reflective of the projects goals and objectives?
For example, it would not be appropriate for a wetland restoration work plan on a mineral flat, where
the primary hydrologic inputs are a seasonally high-water table and precipitation to include elements
associated with stream restoration (e.g., cross-sections, design discharge). The work plan should reflect the
type of aquatic restoration proposed, the functions and services proposed to be provided, and be consistent
with the manner of project implementation.
Mitigation Work Plan
Detailed written
specifications and work
descriptions for the
compensatory mitigation
project... (33CFR 332.4 (c)
(7)/ 40 CFR 230.94(c)(7)).
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4c. Do the work plan components follow established best practices or provide an explanation discussing
why the approach is appropriate?
For example, a restoration designer may propose to use a new design or material for temporary bank
stabilization during vegetation establishment; this should be supported by an explanation of why the design
and/or material is appropriate and how it will work. Additionally relevant references supporting the work
plan approach should be cited in the ILF project site plan.
Consider whether work plan components are appropriate to the baseline conditions. In the past, some
stream restoration projects entailed more extensive work to re-establish channels than the conditions
warranted. Relevant references supporting the work plan approach should be cited in the project site plan.
4d. Does the work plan consider the presence of any existing infrastructure (i.e., utilities) or easements?
Existing infrastructure and any easements should be identified in both the baseline and mitigation work
plan sections of the project site plan and associated exhibits. The mitigation work plan should take this
information into consideration because of the potential for incompatibility with the ILF project site's goals
and objectives. See Element 3f. and 3g. above for more on this topic.
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5. Project Budget Review
The ILF program credit fees are required to be based on full cost accounting; that is, they must be sufficient
to cover the full cost of project selection, design, implementation, management, and contingency costs
(to address uncertainties) (33 CFR 332.8(o)(5)(ii)/40 CFR 230.98(o)(5)(ii)), associated with restoration,
establishment, enhancement, or preservation of aquatic resources. The full cost of selection, design,
implementation, monitoring, site maintenance, and adaptive and long-term management of an ILF project
should thus be reflected in the ILF project budget.
The ILF project budget should include all the elements necessary for ILF program operations, including
project implementation and management. The funds available for the mitigation projects are typically
limited to funds in the ILF program account for the service area in which the project is located. Mitigation
funds for projects may not be commingled with funds from other sources (i.e., grants, donations) that
cannot be used to generate mitigation credits (33 CFR 332.8(i)(l)/40 CFR 230.98(i)(l)).
The Preamble to the Mitigation Rule (Federal Register
/ Vol. 73, No. 70 Thursday, April 10, 2008, page 19657)
states that,
"The district engineer does not need to authorize
each individual disbursement from the account, but
must provide written approval for the project, based
on a review of the project mitigation plan, which will
include a description of activities and projected costs.
Once the project is authorized, funds disbursed from
the account must be spent for the project in a manner
consistent with the approved project mitigation plan."
The project budget is part of the project site plan package submitted to the IRT Chair or co-chairs
for review.5 The Chair or co-chairs are charged with approving the project site plan and the associated
project budget following coordination with the IRT. Note, the ILF Sponsor (through full cost
accounting) is responsible for ensuring that a project satisfies the ILF program's advance credit
liability and is funded with available funds.
There is considerable variability in the approach that IRT members take in reviewing ILF project budgets
in different states/districts. When reviewing the project site plan, IRT members tend to focus and comment
on the technical aspects of a project, including site selection, project design elements, and long-term
management (and associated funding). Once a project site plan is approved, the IRT may review overall
costs per credit and compare this to current credit prices using the data from annual reports submitted by
the ILF program.
5 It is good practice for the ILF program to submit a preliminary budget to the Chair or co-chairs and IRT at the project pro-
spectus phase, (project costs may only be approximate at that point and subject to revision).
Proposed ILF Project Review
The Sponsor must submit proposed in-
lieu fee projects to the district engineer for
funding approval. Disbursements from
the program account may only be made
upon receipt of written authorization
from the district engineer, after the district
engineer has consulted with the IRT (33
CFR 332.8(i)(2)/40 CFR 230.98(i)(2)).
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Some IRTs, such as those in the Nashville District, focus on the cost per credit associated with proposed
projects (Joshua Frost, Pers. Comm). They consider the total project cost and divide that by the proposed
credit yield to obtain an estimated cost per credit. That cost per credit is compared against the current credit
fee schedule to help determine whether the fee schedule is capturing the full cost of project implementation.
In some districts, this evaluation is conducted while the project is being implemented rather than prior to
project approval, using annual report data.
Some Approaches Used by IRTs to Evaluate Proposed Budgets Include:
a. The Sponsor walks the IRT through the budget to see if it is logical, reasonable, or whether some
elements are missing or insufficiently covered.
b. Compare the proposed budget to similar projects in the program service area. Districts/states with
considerable experience with ILF projects may have robust data sets from previous projects to
draw upon when evaluating proposed project budgets. Data from previous projects implemented
through request for proposals (RFPs) may also prove useful in budget evaluation.
c. Use software-based applications like The Nature Conservancy's (TNC) Stewardship
calculator6 (2016) or the Center for Natural Lands Management's (CNLM) Property Analysis
Record©7 (2018). These applications have proved especially useful in evaluating proposed long-
term management expenses for ILF projects.
d. Use agency cost engineers (such as those associated with each Corps District) to evaluate project
budgets using standard tools like Micro-Computer Aided Cost Estimating System (MCACES) or
RSMeans and determine whether the proposed budget is reasonable.
e. Require the ILF Sponsor to provide a third-party estimate of the construction, monitoring, and
maintenance costs to verify that the proposed costs are reasonable.
Other IRTs, such as the Seattle District, which oversees the King County ILF program, focus more on
the budget line items rather than the cost of credits for permittees (Suzanne Anderson, Pers. Comm.).
These IRTs tend to focus on construction costs. For projects involving at-risk species like salmonids, state
wildlife agencies, NOAA Fisheries, and Tribal members are actively involved in reviewing project design
and costs and considering potential trade-offs between desirable ecological elements (i.e., fish habitat
elements) and those ecological elements required of the project site to offset permitted impacts such as
freshwater wetlands. According to several ILF program Sponsors and IRT co-chairs, IRTs are increasingly
focusing on specific budget elements such as stream construction work and long-term management
(Suzanne Anderson, Joshua Frost, Karen Johnson, Devin Schenk, Pers. Comm). Another approach might
be to consider the budget as a whole and divide it by the number of anticipated credits to compare the per
credit price to advance credit prices (or even bank credit prices where that information is available). If the
calculated price is less than advance credit, then IRT members may want to consider whether the project
budget is consistent with full cost accounting (ERBA, Pers. Comm).
6 https://www.conservationgateway.org/ConservationPlanning/ToolsData/Pages/stewardshipcalculator.aspx
7 https://www.cnlm.org/par/
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Several IRTs focus on ensuring all costs, including long-term management, are captured in project budgets.
The project site plan should include a budget that lists the various aspects of project implementation and
management, such as acquisition, design, construction, monitoring, maintenance, long-term management,
and contingency costs. An example of this can be seen in the preliminary budget for a proposed ILF project
in Ohio (TNC 2020). This preliminary budget was used for planning purposes only but is a good starting
point/example for those developing and/or reviewing an ILF project budget.
It is important to note that as the ILF project site plan is developed, reviewed by the IRT, and refined, the
project budget develops accordingly. Typically, each aspect of the project is further divided into logical
tasks, whether the project is implemented by the ILF program in-house or contracted through a RFP
process. The Ducks Unlimited (DU) Mclntyre mitigation project (DU 2018a) is an example of a budget for
a project designed and implemented in-house by an ILF program (DU 2018b). This project budget covers
land acquisition, planning, protection, construction, monitoring, maintenance, financial assurances, and
long-term management. Another in-house example is the Flying M Ranch Vernal Pool Preservation Project
plan developed by the National Fish and Wildlife Foundation (NFWF 2019). The plan has a robust project
budget that details anticipated expenses for full project implementation, including easement acquisition
and long-term management (Attachment 9, NFWF 2019).
The Pixieland ILF project is an example of a budget for a project implemented through an RFP issued
by the Oregon Department of State Lands (OR DSL 2012). The pre-implementation phase of the project
includes development of a grading plan and soil balance calculations, development of a contract, and
baseline monitoring.
Very few project budgets are publicly available, as most ILF programs and/or Districts consider their
content to be proprietary or confidential information, not subject to release under the Freedom of
Information Act (FOIA, see 5 U.S.C. § 552). In some cases, final and approved project budgets may be
accessed through RIBITS, usually as part of a larger approved project site plan. Summary project data are
also typically available in ILF program annual reports. Examples include annual reports for the Virginia
Aquatic Resources Trust Fund (TNC 2021), Maine Natural Resource Conservation Program (ME DEP
2021), and New Hampshire's Aquatic Resource Mitigation Fund (NH DES 2018).
5a. Does the IRT have an established procedure/methodology for reviewing project budgets at the project
site plan stage, and if so, does the plan follow it?
While established procedures or guidelines for IRT review of project budgets are not readily available on
public websites such as RIBITS or district web pages, the IRT reviewer should check whether the district
or state has established project budget review procedures/methodologies, and if so, verify the plan follows
those guidelines.
5b. Does the project site plan include information supporting the budget, such as a narrative or tables?
The plan should include some form of a budget. That budget may be presented as a separate document or
spreadsheet that is available for consideration by the IRT, as a part of the plan, or as an appendix or exhibit.
The Virginia Aquatic Resources Trust Fund submits project budgets to the IRT as separate non-releasable
documents (Karen Johnson, Pers. Comm.). The project site plan for Keys Restoration Fund's (KRF) Crane
Point project includes a brief budget narrative discussing total costs, including construction, monitoring,
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long-term management, and contingencies (KRF 2015). The budget for the Mclntyre Road Mitigation Plan
developed by the DU New York ILF Program covers the range of estimated project costs, including site
acquisition, plan development, construction, monitoring, and management costs (DU 2018a).
5c. Does the project budget consider the potential cost/credit for the project and the extent to which the
project would help the ILF program satisfy any advance credit liabilities?
A number of IRT co-chairs and ILF Sponsors have indicated that their IRTs were interested in potential
costs/credit for a project and/or the extent to which a project satisfied advance credit liabilities (Leslie Day,
Joshua Frost, Devin Schenk, Pers. Comm.). In some cases, the ILF Sponsor provides that information to
the IRTs with the project budget and plan (Karen Johnson, Pers. Comm.). Otherwise, IRTs may be able to
estimate per credit cost by taking the estimated project cost found in the project budget and dividing that
by the estimated number of credits generated by the project. For example, the total estimated cost of the
DU Mclntyre Road project (DU 2018a) was $1,090,149, with 17.25 credits estimated total yield, resulting
in an estimated per credit cost of $63,197. The 2018 ILF instrument reported advance credit costs in this
service area of $90,022 per-credit, including administrative fees. These advance credit costs are considered
an average value intended to cover the range of costs associated with ILF projects in the service area. By
calculating estimated total costs and credit yields, an IRT may be able to anticipate a close approximation
of actual per credit costs. In this case, the actual credit costs were much lower than advance credit costs,
which benefited the ILF program by providing an additional financial cushion against unforeseen expenses
and/or allowing the ILF program to consider more complex or costly projects in the future.
5d. If the projected project cost exceeds available funds, does the budget identify where the additional
funds would be secured?
It is important that if the cost of the project exceeds available funds that a source of additional funds is
identified. Many ILF programs have established sub-accounts for individual watersheds (e.g., KY DFWR
2018), reserve funds (KY DFWR 2018), proceeds from investment earnings, or sales of released credits
(i.e., TNC 2019) that may provide additional funds to finance a project. Refer to question 5e on the use of
grants or other sourced funds in project implementation.
The KRF Crane Point Hammock (2015) project budget is an example of a narrative that estimated project
costs, the funds available for the project, and because costs exceeded available funds, identified where
those funds might be secured to cover the shortfall. In this case, the ILF program proposed making up
the difference by drawing funds from sub-accounts for land acquisition and for another project, subject to
IRT approval. Note, it is important that the ILF program instrument indicates how use of funds from sub-
accounts will be accomplished, documented, and communicated with the IRT.
5e. Does the budget for the project include any non-mitigation funds such as grants, donations, and/or
appropriations? Does it discuss whether those non-mitigation funds will generate mitigation credit?
Some ILF programs, such as the Maine Natural Resource Conservation Program (2020) and Montana
Aquatic Resources Services (2020), encourage development of projects that involve other sources of funds,
because the additional funds can result in larger and more ecologically valuable projects. However, these
programs only allow for credit generation from mitigation fees collected from the sale of credits. Other
sources of funds (grants, donations, appropriations, etc.) do not generate mitigation credits and cannot be
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used to fulfill mitigation obligations. The Sponsor must clearly distinguish between mitigation fee and grant
or other funding sources used in project implementation. This has been accomplished by either
basing mitigation credits on 1) only the project costs (including long-term management) funded with
mitigation fees; or 2) the portion of the project acreage fully funded with mitigation fees. These two
approaches are consistent with the requirements in the Mitigation Rule for separate accounting of other
sources of funds (33 CFR 332.8(i)(l)/40 CFR 230.98(i)(l)). Non-mitigation funds must not be
commingled with mitigation fees for any purpose, including long-term management. Federal grants and
appropriations as well as other non-compensatory mitigation funds may not be used to generate
mitigation credits (see 33 CFR 332.3(j)(2)/40 CFR 230.93(j)(2)). such as a preservation project then
financial assurance amounts may be low), pastperformance/experience of mitigation provider/Sponsor,
the costs associated with obtaining the land, planning and construction of the project, and monitoring
post-construction (33 CFR 332.3(n)(2)/40 CFR 230.93(n)(2)). Districts vary widely in their
requirements for financial assurances, with some requiring separate assurances for each stage of
project implementation (separate assurances for construction, monitoring, and maintenance), while
others allow a single assurance. Assurances may be reduced (phased release) and/or released at the end
of a project's operational life (end of monitoring), or when clearly defined milestones are met such as
completion of construction or approval of as-builts. The conditions for reduction/release of assurances
will be specified clearly in the project site plan.
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6. Financial Assurances
Financial assurances are a mechanism that helps ensure resources are
available to correct or replace unsuccessful projects during an ILF project's
operational phase (covers both construction and monitoring during the
performance phase of project). Financial assurances are intended to
limit but cannot eliminate the risk of project failure. Third party claims
on assurances are rare and drawn upon only if a Sponsor is unwilling or
unable to correct an issue, also known as default (see section on default).
It is the IRT reviewers responsibility to review the Sponsors financial
assurance estimates and determine if they are accurate/sufficient. With
sufficient financial assurances, the reviewer may have greater confidence
that the project will be successfully completed and meet its performance
standards. Key considerations for financial assurances include estimating
the assurance amount, implementing the assurance, and understanding
the different types of assurances.
The Corps' Institute for Water Resources (IWR) has published a useful reference on financial assurances
for compensatory mitigation projects (Scodari et al. 2016). It includes a discussion of the requirements
for financial assurances, approaches to estimating the amount of assurances, different types of financial
assurance mechanisms, and implications of federal fiscal law.
Estimating Amount of Financial Assurance Needed
Considerations for estimating the amount of financial assurance needed include: size and complexity of a
project, degree of completion of a project, the likelihood of success (e.g., if project has low risk of failure,
such as a preservation project, then financial assurance amounts maybe low), past performance/experience
of mitigation provider/Sponsor, the costs associated with obtaining the land, planning and construction of
the project, and monitoring post-construction (33 CFR 332.3(n)(2)/40 CFR 230.93(n)(2)). Districts vary
widely in their requirements for financial assurances, with some requiring separate assurances for each
stage of project implementation (separate assurances for construction, monitoring, and maintenance),
while others allow a single assurance. Assurances may be reduced (phased release) and/or released at the
end of a project's operational life (end of monitoring) or when clearly defined milestones are met, such as
completion of construction or approval of as-builts. The conditions for reduction/release of assurances will
be specified clearly in the project site plan.
There are two basic approaches to determining the amount of assurances a Sponsor will provide for their
project site, on-site remediation and off-site replacement. On-site remediation estimates the amount of
assurances from the amount of resources needed to undertake corrective actions to the existing project
site. These estimates include the cost to complete construction and meet performance standards. On-site
estimates are typically itemized by proposed actions such as planting, monitoring, or controlling invasive
species. Off-site replacement estimates the amount of assurances from the cost of finding and implementing
a new, separate mitigation project or purchasing credits from a bank or ILF program. This is generally a
Financial Assurances:
A description of financial
assurances that will be
provided and how they
are sufficient to ensure a
high level of confidence
that the compensatory
mitigation project
will be completed, in
accordance with its
performance standards
(33 CFR 332.4 (c)(13)/
40 CFR 230.94 (c)(13)).
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more expensive and intensive alternative, in part because it may include the cost of securing an alternative
project site as well as developing and implementing a mitigation plan for that site. A number of districts
may require assurances for a project to be based on the off-site replacement estimate if they have questions
regarding the suitability or accessibility of the original site.
Implementing Financial Assurance
Federal fiscal law dictates that absent explicit statutory authority federal agencies cannot directly or
indirectly receive or use the proceeds from a claim on financial assurances. This would be a violation of the
Miscellaneous Receipts statute (31 USC 3302(b)). So how does a federal agency ensure that the proceeds
from an assurance may be applied to a project if needed? Assurances must be payable to a non-federal
beneficiary (a third party such as a non-profit, government/quasi-government, land trust, or private entity)
who agrees to complete the approved mitigation project. The beneficiary would ideally be an entity that
is qualified and has a reputation and/or experience with administering and implementing compensatory
mitigation projects. The ILF project site plan should address how claims on assurances may be made. If a
claim is made on the financial assurances, the beneficiary would be responsible for developing a plan of
corrective actions (e.g., remediation plan) for review and approval by the Corps in consultation with the
rest of the IRT. Finally, the assurance mechanism must require notification to the Corps at least 120 days in
advance of expiration/revocation of the assurance. This allows the Corps to take any action necessary (e.g.,
pursuing a claim on or renewal of the assurance).
Financial Assurance Mechanism
There are a number of acceptable types of financial assurance a Sponsor may use, subject to Corps approval.
Each type has its considerations and varies in duration and cost. See Table 1 below for more information
on and considerations for the most common assurance mechanisms used (information from Scodari et al.
2016).
Table 1. Types of financial assurance
Assurance
Mechanism
Duration
Price/Cost
Collateral
Claims &
Performance
Other
Considerations
Cash in
Escrow
As long as
needed
100% of
assurance
amount
No
Provides payment
only
Beneficiary necessary
Performance
Bond
Typically 1-2
years, may
be renewed
1.5-5% of
bond dollar
amount
Yes - up to
full bond
amount
Payment or
performance, is
the decision of the
bonding company
Designee needed to
make claim; potential for
disputes with bonding
company
Letter of
Credit
Typically 1-2
years, may
be renewed
1-3% of letter
amount
Yes - up to
full letter
amount
Provides payment
only
Beneficiary necessary;
original unaltered letter
must be presented at
time of claim
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Assurance
Mechanism
Duration
Price/Cost
Collateral
Claims &
Performance
Other
Considerations
Casualty
Insurance
Up to 10
years
Often $50K
(non-
refundable)
+ 2-4%
of policy
amount
No
Payment or
performance
Insurer conducts
evaluation of Sponsor
before insuring; multiple
claims can be made
but total cannot exceed
policy limit
Self-
Assurance
Up to 10
years
Typically a
% of total
project
No
Performance
Sponsor sets resources
aside to undertake
corrective actions
Typically, an ILF program allocates a portion of the funds in the account to either 1) set aside as a guaranty
of future performance (a type of financial assurance) or 2) used to secure conventional financial assurances
(i.e., letter of credit or performance bond). The exceptions are ILF projects implemented by third parties as
a result of request for proposal (RFP) processes. In those cases, the project proponents are responsible for
posting appropriate financial assurances. Examples of ILF programs that utilize the RFP process include
North Carolina's Division of Mitigation Services, Maine's Natural Resource Conservation Program, or New
Hampshire's Aquatic Resource Mitigation Program.
Financial Assurance Estimate Case Examples
Below are two examples representing a more general ("Monitoring and Maintenance Phase") and more
detailed ("Stream and Wetland Restoration Site Engineer's Estimate") financial assurance estimate.
The "Monitoring and Maintenance Phase" estimate provides total costs and cost breakdown for the
monitoring/maintenance actions itemized (Table 2). The list of actions and cost breakdown are generalized,
lacking detail on, for example, what kind of monitoring is planned, the type of road maintenance anticipated
(patching? grading? repaving?), or quantities for which to better understand the estimated costs. This
approach may not be suitable for estimating financial assurance amounts for more technically difficult or
complex mitigation projects. For example, a wetland establishment project in a landscape position where
wetlands do not occur. A project of this sort might require highly engineered water controls, geotechnical
materials, and soil amendments, all of which need to be reflected in the assurance estimate.
Table 2. Example of financial assurance estimates - Monitoring and Maintenance Phase
Description
Cost
Cost Breakdown
Prescribed Fire
$144,000
4 burns, 1,200 acres @ $30/acre
Fire lane
$64,000
4 burns, 8 miles @ $2,0000/mile
Road Maintenance
$8,000
10 yrs @ $800/yr
Exotic species control
$100,000
200 acres/yr @ $50/acre/yr for 10 yrs
Monitoring
$50,000
($5,0000/yr for 10 yrs)
Contingencies (10%)
$36,600
Total
$402,000
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The construction assurance estimate, "Stream and Wetland Restoration Site Engineers Estimate," includes
a comprehensive list of construction actions, providing quantities and unit costs along with the total costs
that demonstrates the construction process has been well thought out and planned (Table 3).
Table 3. Example of financial assurance estimates - Stream and Wetland Restoration
Stream and Wetland Restoration Site Engineer's Estimate
Description
Quantity
Unit
Measure
Pay Unit
Unit Price
Total Fee
Construction Survey
1
LS
LS
$3,500
$3,500
As-built survey
1
LS
LS
$2,500
$2,500
Temp construction entrance
2
LS
LS
$1,500
$3,000
Grading
1
LS
LS
$45,000
$45,000
Invasive species control
1
LS
LS
$5,000
$5,000
Woody debris structure
13
EA
LS
$500
$6,500
Surface water diversion
1
LS
LS
$12,500
$12,500
Sediment bags
4
EA
EA
$200
$800
Impervious dikes
5
EA
EA
$500
$2,500
Silt fence
3200
LF
LF
$2.00
$6,400
Wattles
100
LF
LF
$5.50
$550
Temp seeding
36
AC
AC
$750
$27,000
Permanent seeding wet/sunny
0.9
AC
AC
$1,200
$1,080
Permanent seeding dry/sunny
2.6
AC
AC
$1,200
$3,120
Bare root seedlings
238
Stem
Stem
$2.25
$5,355
Fencing
1200
LF
$4.00
$4,800
Clearing and grubbing
33
AC
$1,500
$49,500
Incidental stone
2
Ton
$50.00
$100.00
Subtotal
Mobilization
1
LS
$9,185.25
$9,185.25
Total Fee
$192,890.25
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6a. Does the project site plan include the basis for the financial assurance, either corrective action on the
project site, or replacement compensation at another site? Is this consistent with district/state requirements?
Refer to the discussion in "Estimating Financial Assurances" above for on-site remediation versus off-site
replacement. Refer to the local district/state requirements for determining the approach to estimating
assurances.
6b. Does the project site plan include an itemized list of work associated with construction, monitoring,
and maintenance provided in support of the financial assurance estimate? Does the itemized list include all
the component parts associated with the project?
Does the project site plan include an itemized list of work associated with construction, monitoring, and
maintenance provided in support of the financial assurance estimate? Does the itemized list include all the
component parts associated with the project?
6c. Does the site plan include specific conditions for reduction/release of financial assurances?
There may be a single assurance for the life of the project, or there may be separate assurances for different
operational stages of the project (e.g., construction, monitoring, and maintenance) or phases/units if the
entire project is not constructed concurrently. The project site plan needs to specify under what conditions/
circumstances an assurance will be reduced or released.
6d. Do the assurances identify a non-federal beneficiary in the event that a claim is made on the assurances?
Refer to the discussion in the introduction to Review Element 6 above under the heading "Implementing
Financial Assurance." The financial assurance mechanism must identify an appropriate beneficiary.
6e. Does the type of assurance provide for payment, performance, or both in the event that a claim is made?
Refer to Table 2 and Table 3, above. Letters of credit and escrow provide for payment only. Appropriations
provide for performance only, performance bond and insurance provide for payment and performance,
and self-assurance usually provides for performance by providing funds to the Sponsor to guarantee
corrective action.
6f. Does the assurance include notification to the Corps at least 120 days before expiration/revocation of
the assurances?
As noted in the introduction to Review Element 5 above under the heading "Implementing Financial
Assurance," notification of a change in assurance status must be provided to the Corps at least 120 days in
advance.
6g. Does the project site plan or associated exhibit specify that the Sponsor will provide a financial assurance
mechanism prior to an initial release of credits?
An initial release of credits (see Review Element 10 for more on credit release) may be allowed once the
project site plan and mitigation plan have been approved, the project site has been secured, and financial
assurances have been established (33 CFR 332.8(m)/40 CFR 230.98(m)).
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7 Site Protection Instrument
Site protection instruments are the legal mechanisms
that protect a site from encroachment or degradation.
The site protection instrument will require
coordination with the district or state counsel to
ensure that the mechanism is adequate and compliant
with state law
The site protection instrument should identify prohibited and restricted activities as well as those property
rights reserved by the landowner (e.g., hunting or fishing, passive recreation, etc.) Both prohibited/restricted
uses and reserved rights should be reviewed to ensure that the property has adequate legal protection.
State laws govern real estate and site protection, so it is important to work with an attorney or office of
Counsel that is familiar with the laws governing real estate where the ILF project is located. The IWR
publication on-site protection for compensatory mitigation (Wood and Martin 2016) provides a good
introduction to this topic.
7a. Does the project site plan include a proposed long-term site protection mechanism (conservation
easement, declaration of restrictions, etc.)? Is the protection mechanism consistent with current district/
state guidelines (including template instruments)?
The reviewer will want to be certain a site is being given long-term protection as required in the regulations
(33 CFR 332.7(a)(l)/40 CFR 230.97(a)(1)). The purpose of site protection is to ensure that the functions
and services provided by the project will continue after monitoring is completed and the project enters into
the period of long-term management.
District/state guidelines (including template instruments) have been developed to be consistent with
state laws governing real estate, as well as federal and state regulations governing long-term protection of
compensatory mitigation sites.
7b. Does the mechanism protect against interests/activities that are incompatible with the project's goals
and objectives?
Interests may be financial (liens, mortgages, contracts), drainage/utility/access easements, ingress/egress,
conservation/other ownership, or mineral/timber/water rights. These interests have the potential to impede
the long-term protection of the site. The regulations (33 CFR 332.7(a)(2)/40 CFR 230.97(a)(2)) state that
the mechanism providing long-term protection of the site must, to the extent appropriate and practicable,
prohibit incompatible uses, such as timbering or mineral extraction. In many cases, areas under easements
or utility rights-of-way that are subject to maintenance may be excluded from the ILF project site acreage
utilized to calculate mitigation credits.
Site Protection Instrument
A description of the legal arrangements and
instrument, including site ownership, that will
be used to ensure the long-term protection
of the compensatory mitigation project site
(33CFR 332.4(c)(4)/ 40 CFR 230.94(c)(4)).
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7c. Does the site protection instrument (or associated exhibits) list any other interests in the property
(financial, mineral/timber, water rights)? Does the instrument (or exhibits/attachments to the ILF project
site plan) include an explanation as to how those other interests may affect the project site?
It is important for the reviewer to conduct an initial screening of the site protection instrument and
associated documents to determine whether the Sponsor has identified any other property interests present
within the proposal/project site, and if so, to list all of those interests, and whether the holders of those
interests have the potential to affect the long-term protection of the site (Table 4). The IRT reviewers should
consider surface and subsurface (i.e., groundwater) interests and if the project controls the surface and
subsurface (mineral, oil, or gas) rights of the site. Someone exercising these other rights can affect an ILF
project site. In some cases, these other interests may not disqualify a site if the areas covered by the interests
are not included within the project acreage used to determine mitigation credits and if exercising those
interests would not adversely affect the project site. These interests should be subordinated/managed prior
to execution of the site protection instrument; otherwise, these other interests may take precedence over
the site protection instrument (i.e., "first in time first in right").
Mineral Rights:
There are many states where mineral interests are separate (severed) from the fee title (or surface) interests.
Wood and Martin (2016) identify a number of approaches to address this situation.
One approach is to consider whether the site protection instrument (or associated exhibits) documents
the nature of the mineral ownership, the feasibility of acquiring those interests, and those efforts to
acquire the interests. Note, it may not be feasible for the Sponsor to acquire all of the mineral interests
within a project site.
In some cases, holders of mineral rights have agreed to restrict disturbance within some distance of the
project site ground surface (e.g., within 200 feet of ground surface) in order to limit impacts to the site.
The Sponsor, in conjunction with the owner of the mineral rights may develop a minerals management
plan which assesses the feasibility of mineral extraction and designates areas for access and extraction
(most applicable to oil and gas) that will not adversely impact the restored/enhanced/preserved acreage
of the ILF project.
Another approach used occasionally is for the program Sponsor to base financial assurances on the
cost of full site replacement if the threat posed by unresolved interests in the property cannot be offset
or managed.
It may take a combination of these four approaches and/or other approaches to resolve any concerns about
mineral rights and the ILF project site.
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Table 4. Examples of how other interests in property may affect site protection
Interests
Attribute Measured
Maintaining a drainage easement that
crosses a wetland mitigation bank site,
which could drain existing wetlands or
inhibit wetland restoration.
State and local municipalities are generally responsible
for maintaining these drainage easements that manage
flows from impervious surfaces/roadways (state and
local highway), stormwater flow/transport (public
works) and/or mosquito control (public works, health
department).
A utility company may choose to
maintain a right-of-way (easement)
crossing a bank site by mechanical
(mowing, bush hogging) or chemical
(herbicides) means.
This could adversely affect portions of the bank site, for
example if the site is intended to develop into forested
wetlands.
Subsurface (Mineral/oil & gas) rights
are often owned separately (severed)
from surface rights.
In many states, a site protection document like a
conservation easement cannot be recorded unless the
owner of the subsurface rights agrees to the easement.
In other states the subsurface rights owner is not
legally bound by an easement on the surface. Exercising
subsurface rights (mineral or oil & gas extraction) could
have an adverse effect on the mitigation bank site.
7d. If the site is located on public lands, is the Sponsor proposing additional long-term protection measures?
Do they seem adequate?
Publiclands, for example, many ofthose managed by the U.S. Forest Service and Bureau of Land Management,
allow for multiple uses of the land, including mining, timbering, grazing, and other activities. Are these
or any other uses of the ILF project site allowed? Are those other uses compatible with the objectives
of the mitigation project? If other uses are likely to be incompatible with the mitigation project, is the
Sponsor proposing additional mechanisms, such as a federal facility management plan or conservation
land use agreement that would provide additional long-term protection of the project site? Site protections
for compensatory mitigation projects on public lands is addressed in further detail in the regulations at
33 CFR 332.7(a)(4)/40 CFR 230.97(a)(4) as well as in Wood and Martin 2016 on pages 9-10.
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Case Example: Public Land and Long-term Protection
Bahia Honda State Park (Park) is owned by the State of Florida and managed by the Division of
Parks and Recreation. The State of Florida has established numerous provisions regarding the
continued ownership and management of Florida State Parks, including the establishment of non-
lapsing endowments created in Title XVIII, Public Lands and Property, of the Florida State Statues;
more specifically Chapters 258 (State Parks and Preserves) and Chapter 259 (Land Acquisitions for
Conservation or Recreation), which provide funding allocations for the continued management of State
Parks. In addition, FS Section 259.032(10) requires that all State Lands must develop, maintain, and
update a management plan that specifically details the key management activities necessary to achieve
the preservation and protection of its natural resources. Prior to construction, the Keys Restoration
Fund ILF program (KRF), which is managing the Parks' wetland restoration and enhancement project
(identified as Bahia Honda Projects A and B), and the Park will enter into an agreement that authorizes
KRF to carry out the restoration and enhancement activities and binds the Park to maintain the restored
ILF project sites in perpetuity.
7e. Does the site protection mechanism include the requirement to provide the Corps with 60-days
advanced notification if there is a proposed amendment or termination of the site protection mechanism?
Over the life of a project there may be proposals to modify the site protection mechanism for example,
to accommodate a planned pipeline or roadway, to remove land that is unnecessary for compensatory
mitigation purposes8, or to accommodate other uses of the project land. The real estate instrument,
management plan, or other long-term protection mechanism must contain a provision requiring at least
60-day advance notification before any action is taken to void or modify the instrument, management
plan, or mechanism, including the transfer of title or establishment of other legal claims over the project
site (see 33 CFR 332.7(a)(3)/40 CFR 230.97(a)(3)). This 60-day requirement enables the Corps and IRT to
review the proposal, determine the effect of the action on the project site, provide feedback to the Sponsor,
and determine whether additional action is necessary.
8 Any request to remove lands from an existing mitigation project (ILF project bank' or PR1VP should be reviewed carefully
When these areas are included in mitigation projects' they are typically either mitigation areas or buffer areas needed to support
mitigation functions or services onsite- Areas that have been credited by the regulatory agency for any reason should not be
removed from site protection-
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8. Geographic Service Area
The service area should be appropriately sized to offset permitted
impacts and replace lost functions/services. A service area
may be a watershed and/or landscape unit (HUC 6, HUC, 8,
ecoregion, physiographic province, or administrative area) in
which compensation would be provided (33 CFR 332.8(d)(6)(ii)
(A)/40 CFR 230.98((d)(6)(ii)(A)).
An ILF program generally has more than one service area. A service area typically encompasses the (sub)
watershed, ecoregion, or landscape unit where the resource impact occurs. ILF programs may also have
different service areas for different credit types, such as wetlands, streams, different types of wetlands, and/
or other resource types, including listed species.
The service area must be appropriately sized to ensure that the aquatic resource compensation provided by
the ILF program will effectively offset permitted impacts and/or replace lost functions/services across the
entire program service area (33 CFR 332.8(d)(6)(ii)(A)/40 CFR 230.98((d)(6)(ii)(A)).
Most ILF project sites do not have service areas that are distinct from ILF program service areas. One
exception is the Virginia Aquatic Resources Trust Fund (2019), where each ILF project has its own smaller
service area that is consistent with the Virginia Code. In this situation, an ILF project may not offset all
project impacts within a larger program service area.
The project site plan should include the following for all credit types:
A map or other electronic representation (e.g., shapefile, kmz file, etc.) and a written description
identifying the extent of the service area(s),
Environmental factors (e.g., watershed, resource type, landform, at-risk species) used in determining
the service area,
Any specific district, state, local, or tribal requirements (e.g., law, regulations, policy, management
plans, etc.) used to determine the service area,
Any economic considerations (e.g., expansion of a service area to increase credit availability) that may
factor into determining the service area, and
Clear documentation of the rationale for the location and extent of the service area.
Refer to the mitigation regulation for additional information on service areas (33 CFR 332.8(d)(6)(ii)
(A)/40 CFR 230.98(d)(6)(ii)(A)).
8a. Does the proj ect site plan or associated exhibits include a clearly defined service area(s) for the proj ect site?
Service area boundaries may not be as precisely defined as depicted on maps. Some service areas are based
on ecoregions or on HUCs such as HUC 8 or HUC 6. For example, HUCs are periodically revised, often
changing extents in relatively flat areas like coastal plains. So, it is important that the project site plan
provides both a description of the service area(s) and associated map(s). Where possible, the boundaries of
Service Area
The geographic area within which
impacts can be mitigated at a
specific ILF program, as designated
in its instrument (33CFR 332.2/ 40
CFR 230.92).
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the service area should be clearly defined (i.e., use readily recognizable features for limits like an adjacent
roadway state line or county boundary or geographic features like a stream or mountain chain) to minimize
future disputes between the Sponsor, the IRT members, and regulators (non IRT members) over whether
proposed permits are within an ILF project's service area(s). In most cases, the project service area will
be the same as the program service area, but the ILF program instrument may allow the establishment of
different service areas for individual sites.
8b. Are there multiple service areas or service area types defined? Is this consistent with district, state, or
local requirements?
A project site may have more than one service area. Project sites may have different service areas for
different credit types, including wetlands versus streams, different types of wetlands, and/or specific to
other resource types, including listed species.
Some project sites may have a secondary service area adjacent to the primary service area, which can be
used to provide compensation in otherwise under-served areas. There are typically restrictions on use of
ILF credits within the secondary service area. For example, the use of credits within a secondary service
area may require higher compensation ratios or be used only for general permits. District, state, or local
requirements should be referenced when reviewing a proposal for a secondary service area.
8c. Does the project site plan or associated exhibits specify the watershed or landscape units used to define
the service area?
The service area is typically defined by the watershed and/or landscape units (HUC 6, HUC 8, ecoregion,
ecological drainage unit, physiographic province, or administrative area) in which it occurs (33 CFR
332.3(b)(l)/40 CFR 230.93(b)(1)). Note, HUCs do not necessarily represent entire watersheds; often, they
compose a subpart of a watershed. Additionally, in coastal watersheds, compensation for impacts should
be located in coastal watersheds or within a legislatively defined coastal zone, which may be subject to
additional state regulations (e.g., Louisiana).
Where watershed boundaries do not exist (i.e., marine areas), an appropriate spatial scale should be used
to replace functions/services within the same ecological system (marine basin, reef complex, wave climate,
embayment, drift cell, etc.).
8d. Does the service area comply with local, district, and/ or state requirements (scale, size, or resource type)?
Service area requirements differ by agency/government. In many cases, the local/state government will
have laws, regulations, or ordinances shaping the boundaries of a service area. The IRT reviewer should
reference district and local/state government regulations on service area boundaries when reviewing the
project site plan. Service areas are often regulated by multiple government agencies, making it appropriate
to defer to those agencies on matters of compliance. Consider whether the project site plan provides
adequate service area mapping and descriptions consistent with any local, state, or district requirements.
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8e. Is the rationale for the location, size, and extent of the service area clearly documented in the project
site plan and/or exhibits?
The Mitigation Rule requires the Sponsor to justify the location, size, and extent of the service area to
ensure that it is appropriately sized to offset permitted losses. The Mitigation Rule states that "the basis for
the proposed service area must be documented in the instrument" (33 CFR 332.8(d)(6)(ii)(A)/ 40 CFR
230.98 (d)(6)(ii)(A)). The size of the service area can be related to the extent of the functions and services
provided by the project site for those ILF projects that have service areas separate from program service
areas. For example, a riparian project that reconnects a floodplain to its river may merit a larger service
area than a riparian project that does not reconnect the floodplain because of the additional functions/
service provided (flood storage, sediment sequestration, fish nursery habitat, etc.).
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Project Operations
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9. Credit Determination
The number of credits a compensation project generates
should reflect the difference between pre- and post-
compensatory mitigation project site conditions (33
CFR 332.8(o)(3)/40 CFR 230.98(o)(3)). There are a
number of strategies used to determine how much
credit a compensation project should receive. Credit
determination approaches all use some combination
of a unit of measure (typically acres or linear feet), an
assessment of change, function, or condition (qualitative
or quantitative), and adjustment factors to address policy
and ecological priorities (e.g., proximity to impacts,
threatened and endangered species, temporal lag).
The resulting approaches range from simple based on best professional judgment to more sophisticated
approaches based on published assessment methodologies incorporated into credit/deb it quantification
tools developed by districts, states, or others. In all cases, credit determination methodologies should be
consistently applied to both assess impacts (debits) and compensation (credits) while sensitive enough to
reflect the change in aquatic resource functions and services.
9a. Is the Sponsors credit determination methodology consistent with the reviewer's current district/state
standards?
Most districts/states have some form of credit determination methodology, whether qualitative, quantitative,
or a combination thereof. Those methodologies may range from ratios to standard operating procedures,
rapid assessment methods, as well as assessments of function and/or condition. Many districts/states have
different credit determination methods for different aquatic resource types (e.g., streams vs. wetlands or
for different types of wetlands).
It is important to determine whether the credit methodology proposed in the project site plan is consistent
with established standards for that resource type in the district/state. If a Sponsor implements the district
and/or state's established standards, it should only be reviewed by the IRT member for accuracy of
calculation. Individual project review is not the medium through which an IRT member should question
or disagree with use of established credit methodologies. If a Sponsor proposes a credit determination
method that differs from the applicable district/state's standards, it should be discussed by the IRT with the
Sponsor.
9b. Is the proposed generation of credits consistent with district/state policy, and is it applied accurately?
Is the application of the assessment methodology consistent with district/state policy? Does it yield the
credit type/quantity that would be expected as a result of the application of the methodology based on
documented district/state practices and guidelines?
Determination of Credits
A description of the number of credits to
be provided, including a brief explanation
of the rationale for this determination. For
permittees intending to secure credits from
an approved ILF project site... it should
include the number and resource type of
credits to be secured and how these were
determined (33CFR 332.4 (c)(5)/ 40 CFR
230.94 (c)(5)).
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It is critical that the correct assessment method(s) has been used in credit determination, the resource
has been classified appropriately (e.g., stream flow or thermal regime or wetland community type), any
applicable incentive factors associated with the methodology have been applied, and the credit calculations
are accurate. Incorrect applications of assessment methodologies or incorrect calculations may lead to
future disputes between the IRT and the Sponsor.
It is important that the reviewer focus their attention on whether the approach used for the project is
consistent with the regulations as well as current district/state policy and practices.
Note: IRT members should strive to speak with one voice regarding the interpretation and
application of credit methodologies to limit any conflicting messages provided to the Sponsor. The
IRT should also communicate in a timely manner with the Sponsor to ensure all parties come to
a common understanding. These principles are applicable to all elements of a project site plan.
In some cases, district/state assessment methods may not explicitly address or apply to specific mitigation
projects. For example, some credit determination methods may be designed to assess single-thread
channels and may not be directly applicable to multi-thread channels. Credit determination methods may
not clearly address crediting for the removal of dams or impoundments. The reviewer should recognize
these situations and be prepared to discuss them with the IRT and Sponsor.
9c. Does the proposed number of credits reflect the difference be tween ba seline an d p st-construction
conditions?
In otherwords,arethenumberofproposedcreditsconsistentwiththeproposed amount ofuplift, as calculated/
determined by the applicable district/state's credit determination methodology? The number of credits
generated by a project must reflect the difference between pre- and post-compensatory mitigation project
conditions as determined by the appropriate assessment method (33 CFR332.8(o)(3)/40 CFR230.98(o)(3)).
9d. Are any of the proposed credits based solely on preservation?
A higher mitigation ratio should be applied for compensation based on preservation compared to
compensation based on restoration, establishment, or enhancement. In other words, a specific amount
of preservation (acres or linear feet) should generate fewer credits than the same amount of
restoration, establishment, or enhancement acreage or stream length (33 CFR 332.8(o)(6)/40 CFR
230.98(o)(6)).9 Preservation may be used to provide compensatory mitigation when it satisfies the
following conditions:
Provides important functions for the watershed;
Contributes substantially to the ecological sustainability of the watershed;
Is determined to be appropriate and practicable by the Corps;
Is under threat of destruction or adverse modification*;
Will be permanently protected; and
To the extent appropriate and practicable, done in conjunction with restoration, establishment, and/or
enhancement of aquatic resources (30 CFR 332.3(h)/40 CFR 230.93(h))
9 In a few districts/states the credit determination methodology does not convert all mitigation activities into a standardized
credit. In those areas, credit types are assigned by mitigation method (e.g., preservation credits, rehabilitation credits, etc.)
instead.
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^District or state-specific guidelines may clarify what is meant locally by threat of destruction or adverse
modification.
9e. Are credits proposed to be generated through restoration, enhancement, or preservation of riparian
areas, buffers, or uplands? If so, are those riparian areas, buffers, or uplands considered necessary to
maintain the ecological viability of aquatic resources?
Riparian areas, buffers, and uplands are part of many, if not most, ILF project site proposals. Credits
associated with these areas may be specified in acres, linear feet, or other suitable metrics. Riparian areas,
buffers, and uplands can be used to generate credit when they are essential to maintaining the ecological
viability of aquatic resources (33 CFR 332.8(o)(7)/40 CFR 230.98(o)(7)). For example, riparian buffers are
integral to some aquatic resources such as stream systems, and uplands or buffers around vernal pools may
be vital to the hydrologic regime of these systems and for supporting important life stages of associated
fauna like amphibian species. In estuarine mitigation, buffers can be essential to allow for landward
migration of estuarine habitat types in response to sea level rise.
The inclusion of riparian areas, buffers, or uplands should be consistent with regulations and district/state
policy.
9f. Does the project site plan include a table identifying credits that will be generated by resource type and
is there a corresponding map identifying those locations?
Each site plan should include a table specifying the amount of credits to be generated for each resource or
credit type (i.e., stream or wetland resource restored, preserved, enhanced, established, or preserved) as
well as corresponding maps depicting where these specific mitigation actions will be located on the project
site. The table will be used in part to help determine initial and subsequent credit releases and the map(s)
will be used to evaluate project performance.
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10. Credit Release Schedule
The credit release schedule details the release of credits to a Sponsor based on the achievement of
performance-based milestones (such as construction or attainment of performance standards).
Similar to a mitigation bank, as an ILF project meets its ecological performance standards, it generates
credits. These project-specific credits are known as released credits, which are distinct from advance
credits. Released credits are only released by the Corps in consultation with the IRT and only when the
Corps determines that the appropriate milestones have been met. Once credits are released, it is still the
districts responsibility to determine whether the credits are appropriate compensation for a specific permit.
Advance credits are associated with a program service area, not a project site. They represent mitigation
credits that can be purchased before a project site has been constructed, and the funds from their sale
are used to finance the project site. Once a project site has been constructed, the advance credits must be
accounted for/debited before any released credits (credits available from the construction of the site) may
be debited. Once the advance credit mitigation obligation is met, released credits are then available to debit
until all available credits have been fulfilled.
Interplay between advance and released credits:
The debit/sale of advance credits is a promise or commitment to provide compensatory
mitigation in the future. That commitment is fulfilled/satisfied through the debit of released
credits generated by a project site meeting its performance standards. That commitment
must be satisfied before any released credits may be debited/sold. Released credits are used
to fulfill the debit of advance credits (this fulfillment must occur first) as well as to provide
compensatory mitigation for separate permitted losses (33 CFR 332.8(n)(3)/40 CFR 230.98(n)(3)).
10a. Does the project site plan or associated documents specify a credit release schedule?
The project site plan must provide a credit release schedule (33 CFR 332.8(d)(6)(iii)(B)/40 CFR 230.98(d)
(6)(iii)(B)), which is often dictated by district/state practices or guidelines.
10b. Is the credit release schedule consistent with the mitigation type and resources being proposed? Does
the projects credit release schedule differentiate between mitigation methods and resource types?
The release schedule may vary by district, mitigation method (restoration vs. preservation, etc.), resource
type (stream vs. wetland restoration), and the likelihood of success (preservation is "safer" than restoration).
A project site that has multiple credit types, such as wetland and stream credits, may have a different release
schedule for each resource (Table 5; Table 6). In some cases, the credit release schedule for two related credit
types, such as vernal pool (CWA section404) and federally listed aquatic invertebrates (Endangered Species
Act), may also be combined into a single release schedule. Releases only take place when the performance
criteria for resources within a release schedule have been met. The release schedule may take place over a
longer period of time for slower-developing resource types (e.g., forested wetlands vs. emergent wetlands)
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and for certain mitigation methods (e.g., restoration credits may be released more slowly than preservation
credits).
Two example credit release schedules (wetland and stream) are provided below.
Table 5. Example wetland credit release schedule for an ILFproject site
Release
% of Credits to Be
Released
Requirements
Construction
25%
Upon completion of all initial work and
approval of as-built report by IRT
2nd release
60%
Meeting performance standards for year
monitoring occurred
3rd release
15%
Meeting year 5 performance standards
Source: Norfolk District & Virginia DEQ Site Development Plan Template
Table 6. Example stream credit release schedule for an ILF project site
Release
Percentage of Credits
to Be Released
Requirements
Construction
25%
Upon completion of all initial work and
approval of as-built report by IRT
2nd release
10-20%
Meeting Performance Standards
Upon the occurrence of a bankfull event
3rd release
10-20%
Meeting Performance Standards
Upon the occurrence of a bankfull event
4th release
10-20%
Meeting Performance Standards
Upon the occurrence of a bankfull event
5th release
Maximum 15%
Meeting Performance Standards
Upon the occurrence of a bankfull event
Source: Norfolk District & Virginia DEQ Site Development Plan Template
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10c. Does the release schedule specify incremental milestones (e.g., construction completion, meeting
performance standards) to be achieved for credit releases?
The schedule of releases should be laid out incrementally (timing and amount of credits to be released) in
the ILF project site plan. Refer to the two example credit release schedules above, which specify the release
stages and percentage of credits that would be released at that stage if the associated requirements are met.
An initial release consisting of a percentage of total potential credits is allowed once the project site or
mitigation plans are approved, the site is secured (protected), financial assurances have been established,
and any other requirements established by the district have been met (33 CFR 332.8(m)/40 CFR 230.98(m)).
lOd. Will a significant amount of credits be withheld until all performance standards have been met?
A significant share of total credits must be reserved (unreleased) until all performance standards are met
(33 CFR 332.8(o)(8)/40 CFR 230.98(o)(8)). What is considered a significant share is left to the district to
determine.
lOe. Is the release schedule consistent with current/accepted practices in the district or state?
Refer to the local district and/or state practices for consistency.
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11. Assumption of Mitigation
Responsibility
The treatment of mitigation liability is one of
the defining factors separating ILF programs/
projects (and banks) from permittee responsible
mitigation (PRM). When permittees conduct their
own mitigation, they retain full responsibility/
liability for the success of the project/mitigation.
When permittees purchase credits* from an ILF
program/project site, they are paying to transfer
their mitigation responsibility to the ILF Sponsor.
(This is also true when credits are purchased from
a bank).
For a successful transfer of mitigation liability, the following regulatory requirements must be satisfied:
The ILF project site plan must include a provision stating that the Sponsor assumes the permittee's
mitigation liability,
The permittee has secured a permit that approves the use of a certain amount and type of credits for
satisfying their mitigation requirements, and
The Sponsor has notified the Corps that the appropriate amount and type of credits have been secured
by the permittee.
Note: Some districts have developed forms to be used to transfer mitigation responsibility from the
permittee to the bank or ILF program Sponsor. A good example of this has been developed by the
Wilmington District (2013).
11a. Does the project site plan include a provision stating that the Sponsor assumes the permittee's
mitigation liability?
Refer to the explanation above and the regulatory language on this requirement (33 CFR 332.8(d)(6)(ii)
(C)/40 CFR 230.98(d)(6)(ii)(C)).
lib. Does the project site plan include a provision stating that the Sponsor will notify the district of each
transaction?
As stated above, the instrument must specify that the Sponsor will notify the Corps for each approved
credit transaction (33 CFR 332.8(p)(l)/40 CFR 230.98(p)(l)).
11c. Does the project site plan specify the timing at which the district is notified of a transaction?
As stated above, thepermittee retains responsibilityforthemitigation until theCorps receives documentation
confirming the Sponsor has accepted responsibility. Copies of this documentation are retained in the
permit and project site file (33 CFR 332.3(l)(3)/40 CFR 230.93(1)(3)). Failure to provide documentation
would be considered non-compliance with the project site plan.
*Side Tip: An applicant has two options for
utilizing ILF credits as compensation:
1. Credits may be secured/purchased once a
permit has been issued
2. Credits may be secured in advance of permit
issuance
For both options, the applicant must obtain a
permit before liability may be transferred to
the ILF Sponsor and associated credits may be
applied for compensation.
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12. Accounting Procedures
Accounting procedures are a mechanism for tracking debit and credit transactions. Credit transactions
come in the form of:
Release of credits (making available) to the Sponsor for sale
Withdrawal/debit of credits to offset permitted losses
12a. Does the document have a credit accounting procedure outlined?
The project site plan must include a provision requiring the Sponsor to establish and maintain a credit
ledger to account for all credit transactions (33 CFR 332.8(p)/40 CFR 230.98(p)). A better understanding
of the fulfillment and interplay of advance credits through released credits can be gained through review of
the following RIBITS website help/user guide manuals, Understanding the Credit Ledger and Sub-Ledger
- June 2021 and Understanding the ILF Advance Credit Ledger - June 2021 (RIBITS 2021).
Current practices vary between districts. Some use RIBITS as the ledger, and copies of the RIBITS ledger
are acceptable; others require the Sponsor to maintain a separate ledger for each project site. Additionally,
many districts' ILF project site plans require submittal of (annual) credit ledger updates with the ILF
project's monitoring report, as discussed in Review Element 13: Reporting Protocols
RIBITS credit classifications:
ILF project credit types do not always correspond directly to credit classifications in RIBITS ledgers.
District RIBITS administrators are responsible for translating credit types in ILF projects to credit
classifications in RIBITS. It may be helpful for the IRT and Sponsor to coordinate with the district
RIBITS administrators to better understand how the credits for the ILF project site translate to the
RIBITS ledger. A recommended practice would be to include a table in the project site plan that links
credit types to RIBITS credit classifications.
12b. Does the document indicate when transaction notifications will be provided to the Corps?
Each time a transaction occurs, the Sponsor must notify the Corps (33 CFR 332.8(p)/40 CFR 230.98(p)). If
RIBITS is used to track ledger activity and email has been enabled, then each time a transaction is entered
into RIBITS all of those with permissions for that project (Corps Manager, IRT, Sponsor, etc.) receive
email notifications. In many districts that automated notification is considered acceptable (check with local
district to see if acceptable).
12c. Does it indicate what information will be provided in the notification?
Transaction documentation should include date of transaction, permittee name, project, permit number,
credit type(s), and amounts of credits. Some states/districts (e.g., California, Chicago, Savannah) have
developed forms to be used to document transactions that identify all the information they require in each
notification transaction. Check with local district/state for document transactions templates/forms.
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13. Reporting Protocols
Sponsor is required to submit periodic/annual monitoring (33 CFR 332.8(q)(2)/40 CFR 230.98(q)(2) and
ledger account reports (33 CFR 332.8(q)(l)/40 CFR 230.98(q)(l)). These reports are then typically posted
on RIBITS. The reports provide a mechanism to monitor a projects progress and activity
The information required in project monitoring reports varies by aquatic resource type, district, and by
state. A number of districts/states have developed monitoring report outlines or templates including Fort
Worth, Maryland, Rock Island, and Wilmington. Check with local district/state for monitoring report
templates/forms.
The Corps may also require reports on financial assurance and long-term management funding (33
CFR 332.8(q)(3)/40 CFR 230.98(q)(3). The need for this type of reporting arose from experience with
compensation projects where corrective action was necessary and the resources needed (i.e., financial
assurances) were not available. Similarly, past projects were approved that did not have enough funds to
manage the closed site long term (see Review Element 19: Long Term Management Plan). As a result, the
annual/periodic funding report helps the IRT reviewer evaluate if:
Short-term financial assurances are still in place for project completion, monitoring, and management
in the operation phase, and
Long-term management finances are funded as identified in the project site plan and are sufficient for
management and maintenance after project operations have ceased.
13a. Does the project site plan specify requirements for submittal of reports to the Corps, such as:
Project monitoring reports?
A Sponsor must submit project monitoring reports (often annual) providing the results of monitoring a
project's development and potential attainment of performance standards (33 CFR 332.8(q)(2)/40 CFR
230.98(q)(2)). Refer to local district/state monitoring and reporting guidelines and policies, which may
specify sampling/analysis methods for specific performance standards. A number of districts will allow
submittal of reports electronically, for instance in RIBITS. If email has been enabled for the project site
in RIBITS, then all those associated with the project (Corps project manager, Sponsor, IRT) will receive
automated email notification from RIBITS.
Annual ledger account reports or RIBITS ledger updates?
The annual ledger account report must be submitted to the Corps, which distributes it to the IRT, and must
also be made available to the public on request (33 CFR 332.8(q)(l)/40 CFR 230.98(q)(l)). Annual ledger
account reports, which should include:
A listing and summary of all credit and debit activity for the project site - a mechanism of transparency,
where the IRT reviews and ensures all ledger activity is clearly documented
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Beginning and ending balances of available credits and permitted losses (debits) based on resource type
All credit additions and subtractions and other changes (releases, adjustments by the Corps, credit
suspensions)
Annual ledger account reports should differentiate data for separate project sites.
Annual financial assurance and long-term management funding reports?
These reports must include (33 CFR 332.8(q)(3)/40 CFR 230.98(q)(3)):
Beginning and ending balances of financial assurances and long-term management funding
All deposits and withdrawals
Total amounts of required assurances and long-term management funding
Status of financial assurances including expiration date
Status of long-term management funding (how close to reaching the desired target; is it fully funded
or partially funded?)
Additionally, annual financial assurance and long-term management funding reports should differentiate
information for separate ILF project sites.
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14. Default and Closure Provisions
Default is when an ILF Sponsor fails to comply with any aspects of the project site plan. In general, the
presumption is that any non-compliance with the plan may be considered a default. The Corps and IRT
will always attempt to resolve any noncompliance issues/situations that arise with the Sponsor and project
site prior to undertaking actions to correct a default.
Closure indicates that a project site has been successful in satisfying its responsibilities laid out in the
project site plan.
14a. Does the ILF project site plan (or associated exhibits) specify what is meant by default?
An ILF project site plan must include default provisions (33 CFR 332.8(d)(6)(ii)(D)/40 CFR 230.98(d)(6)
(ii)(D)). However, the regulations do not specify what must be included in these default provisions, so the
IRT reviewer is advised to consult local district or state guidelines.
14b. Does the project site plan identify options available to address default?
These are the range of actions that may be implemented in response to default. The actions below are listed
in order of easiest to most difficult for an IRT program Chair to implement:
1. Delay release of credits;
2. Corrective Action Plan - e.g., repair/replace damaged structure that was not maintained;
3. Additional monitoring - perhaps no monitoring has occurred, a monitoring period was missed, only
part of a site was monitored, or portions of the site failed to meet performance standards (33 CFR
332.6(b)/40 CFR 230.96(b));
4. Adaptive management - implementation of the adaptive management plan
5. (33 CFR 332.8(l)(2)/40 CFR 230.98(1)(2));
6. Decrease available credits - decreasing the number of credits available to debit (33 CFR 332.8(l)(2)/40
CFR 230.98(1)(2));
7. Suspend part or all of operations - suspension of credit availability to debit, notice provided via official
letter from district (33 CFR 332.8(o)(10)/40 CFR 230.98(o)(10));
8. Notice of non-compliance - official notification of non-compliance, opens door to administrative or
legal action;
9. Making a claim on financial assurances - only when Sponsor is unable or unwilling to resolve issues;
beneficiary/district makes the claim to attempt to resolve issues;
10. Suspending project operations; and
11. Terminate project site plan (most severe option) - When all other actions fail. Chair/co-chair action (33
CFR 332.8(o)(10)/40 CFR 230.98(o)(10)).
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14c. Does the project site plan (or associated exhibits) define ILF project closure and what actions must be
completed in order for closure to take place?
A project site plan must include closure provisions (33 CFR 332.8(d)(6)(ii)(D)/40 CFR 230.98(d)(6)(ii)
(D)). However, the regulations do not identify what elements must be met in order for a project to close, so
the IRT reviewer is advised to consult local district or state guidelines.
Project closure is generally defined as taking place when all of the below conditions are met for an entire
project site:
Performance standards are met10,
All available credits are debited/relinquished by the Sponsor,
Long-term management plan is implemented and revised if/when needed to reflect any changes in
practice or availability of funding,
Long-term steward/long-term manager is identified, and
Long-term management plan is fully funded.
District or state standards may also specify conditions that must be met before a project site may close.
10 In the course of project operations, the IRT and the Sponsor may find it necessary to adjust or modify some performance
standards as a result of corrective actions in order to accommodate the situation when certain initial performance
standards cannot be met. This adjustment or modification of standards may often entail a concurrent adjustment in
credits.
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Performance and
Management
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15. Performance Standards
Performance standards are used to evaluate whether a project
is evolving into the intended natural resource and providing
desired aquatic resource functions/services/conditions.
Performance standards must be simple, objective, verifiable,
unambiguous, understandable, measurable (quantitative OR
qualitative), repeatable, based on best available science, and
measured with a reasonable amount of effort.
Additionally, performance standards may be:
incremental or interim
derived from reference data
used to measure development toward reference conditions
Elements of a mitigation proj ect such as hydrologic or vegetation management have associated performance
standards to better evaluate the need for project management or maintenance. For example, an observed
reduction in fish passage in a restored perennial stream system could indicate obstructions or constrictions
in flow inhibiting passage. In a pine flatwood community, tree canopy cover in excess of 15-25% may
indicate the need for additional prescribed fire.
Performance standards can be developed for any resource and should include three elements that
demonstrate how each project objective will be achieved: attribute measured, level that constitutes success,
and time period to achieve success (Table 7).
Table 7. Examples ofPerformance Standard 3 Elements
Performance Standard
Attribute
Measured
Level that
Constitutes
Success
Time Period to
Achieve Success
Hydrology of Floodplain Wetlands
Hydrology shall consist of a water
table 12" or less to inundation
up to 6" for a minimum of
28 consecutive days, during
the growing season under
normal and wetter than normal
hydrological conditions.
Wetland Soils
Soil has documented evidence of
recent redoximorphic features
developing by the third year after
construction
Redoximorphic
features
Evidence of
development
Year 3 post-
construction
Performance Standards
Ecologically based standards that will
be used to determine whether the
compensatory mitigation project is
achieving its objectives (33CFR 332.4
(c)(9)/ 40 CFR 230.94 (c)(9)).
Hydrology
shallow
groundwater
level
Hydrology
ranging from 12"
below ground
surface to 6"
above ground
surface
Minimum of 28
consecutive days OR
two periods of 14 or
more consecutive days
within some specified
timeframe following
construction
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15a. Does the mitigation plan contain performance standards to evaluate attainment of project objectives?
Are performance standards explicitly stated or included in the project site plan's narrative? Performance
standards should be clearly identifiable and pertain to the desired aquatic resource outcome (and project's
goals and objectives). Many project site plan/instrument templates have designated performance
standards, which may be presented in a template table or narrative.
15b. Does the district have performance standards for the proposed aquatic resource(s)? If the district does
not have performance standards, proceed to questions 15d-15h. If the district has performance standards,
proceed to questions 15c-15h.
If the district has applicable performance standards, the IRT reviewer should refer to these standards when
reviewing the project site plan.
In districts or states with no performance standard guidance or guidelines, the reviewer will need
to determine the suitability of the Sponsor's proposed standards laid out in the project site plan. The
Sponsor may adapt or incorporate standards from established or existing criteria or create their own
set of performance standards. Regardless of how they are developed, performance standards should be
relevant to the resource, understandable, measurable, include a timeframe component for evaluation and
be compared to a reference site or existing reference data.
15c. Are the standards proposed by the Sponsor consistent with current district practices?
The reviewer will compare the applicable district or state's practices and ensure consistency with the
standards proposed in the project site plan and/or associated exhibits. If any inconsistencies are identified,
ensure the Sponsor has provided a robust and logical explanation for any changes, and discuss with
members of the IRT.
15d. Are the performance standards ecologically based (e.g., entail comparison to reference sites/data,
based on functional or condition assessment methodologies, and/or have measurements of hydrology or
vegetation indices)?
Performance standards are intended to provide objective, measurable data that determine if a project
is meeting its goals and objectives, typically measured in incremental stages. As such, the performance
standards should focus on the relevant ecological conditions of a site, including hydrology, water quality,
soils, vegetation, and fauna.
Performance standards should also include multiple assessments post-construction, which are compared
to the baseline pre-restoration condition, and will track incremental changes over time (bank stabilization,
vegetation growth, etc.).
15e. Are the standards derived from the project's goals and objectives? Are they verifiable and well-defined?
Are the standards clear enough that a third party would understand them?
As mentioned in 8d., the performance standards need to reflect the purpose of the project and the project
site's potential. If a palustrine emergent wetland is proposed, the standards may revolve around assessments
for determining if a site meets the three criteria composing a wetland, generally: wetland vegetation,
wetland hydrology presence, and hydric soil condition. However, meeting the technical standards for a
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wetland (hydrophytic vegetation, hydric soils,
and the technical hydrologic standards) is often
insufficient to develop the desired wetland type.
Instead, performance standards should be tailored
to the requirements of the specific wetland type(s)
to be provided by the project. This approach
is exemplified in Minnesota (St. Paul District
USACE 2019), where hydrologic performance
standards differ for a palustrine emergent wetland
depending upon whether the wetland is classified
as deep marsh, hemi marsh, sedge meadow, or wet
meadow. In this case, each marsh type has a different
hydrologic regime and thus a different set of
hydrologic performance standards. The standards
should be repeatable for multiple assessments and
use methodologies that are generally recognized
and accepted amongst professionals in the industry.
15f. Do the Sponsors standards include three elements: attribute measured, level that defines success, and
time period to achieve success? See example table 7 above.
The Sponsor should include each of these elements in their performance standards.
The attribute is the indicator being measured in the field (percent cover, water table elevation,
duration or frequency of flooding, soil characteristics, etc.), level is the threshold that defines success
(range or specific number, presence/absence of the attribute), and time is the interval or period during
or following construction that data on the attribute is collected and within which the attribute is
reasonably expected to be achieved. For additional information see Ossinger 1999.
15g. Do the standards evaluate incremental progress toward project objectives?
It is important to track a projects incremental progress, as it assists the Sponsor and IRT reviewer
in evaluating attainment of its performance standards across the site. Some districts or states also
require achievement of incremental standards.
15h. Do the performance standards compare project/site development to reference sites/data?
A site should be compared to one or more reference site(s)/data to accurately evaluate the site's
performance. Relevant reference sites (perhaps located upstream or within same watershed) will have the
same range of variability that would be expected for the proposed aquatic resource (Sueltenfuss and
Cooper 2019).
15i. Where applicable, are there separate performance standards for different habitat or resource types?
For example, estuarine/marine compensation may include open water, intertidal habitat, and/or
shallow subtidal habitat as part of a matrix of other habitats like salt marsh, SAV, mangrove, etc. These
areas may be assigned water quality, sediment quality or fish/ biota performance standards specific to the
compensation habitat or community type. Note, some districts or states have specific guidelines for
estuarine and marine compensation, including performance standards (i.e., eelgrass performance
standards, CA; NOAA Fisheries 2014).
Case Example - Performance standards for
listed species
Where one of the objectives is to create or
enhance habitat for listed species, performance
standards may contain requirements regarding
the presence and/or a minimum abundance of
the target species. For migratory species such
as salmonids, minimum abundance targets
need to be carefully correlated with the regional
abundance of the target species. Performance
standards for salmonid habitat are generally based
on habitat surrogates such as the removal of dikes,
re-establishment of tidal channels, minimum
flow, and maximum temperature conditions.
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16. Monitoring Requirements
Monitoring is used to determine if the mitigation project is
meeting its performance standards and achieving its objectives.
Monitoring is also used to:
Evaluate compliance with the project site plan and the
work plan,
Evaluate the outcome of management and maintenance
activities,
Help determine whether a credit release is appropriate
(refer to element 14 for information on credit releases), and
Help to determine whether adaptive management activities
are necessary (e.g., addressing the effects of climate change and sea level rise).
16a. How long will the site be monitored?
A site must be monitored for a minimum of five years, though the length of required monitoring can vary
depending on the project resource and district protocols. Reviewers should refer to their district/state's
standards for monitoring. Monitoring can be conducted for longer periods of time for those resources that
develop more slowly such as forested wetlands (33 CFR 332.6(b)/40 CFR 230.96(b)).
16b. What parameters/criteria will be monitored? Are they sufficiently detailed to evaluate attainment of
performance standards?
The nature of the project and associated district protocols will dictate which parameters/criteria should
be monitored for a project. These will vary by the aquatic resource type (e.g., bottomland hardwood
intermittent stream, or vernal pool). Due to the diversity of aquatic resources, the reviewer should
reference their district/state's protocols to determine what monitoring requirements are appropriate for a
given project. The required parameters should relate to the project's performance standards and objectives,
and be consistent with district, state, or local policies and guidelines. For example, the monitoring plan
should detail sample sizes, monitoring locations, timing, required statistical analyses, etc. Local monitoring
guidelines for the intended aquatic resource should be incorporated in the plan.
16c. Does the project site plan specify the content of the monitoring report?
The reviewer should refer to their district/states agreed-upon protocols for monitoring report content and
submittal frequency when evaluating a Sponsors monitoring plan. The monitoring plan should identify
the content requirements for monitoring reports as well as when those reports need to be submitted.
Many districts/states (e.g., Fort Worth, Maryland, Mobile, Rock Island) have developed monitoring report
templates or outlines to standardize reporting and monitoring results and to facilitate review of those
reports.
Monitoring Requirements:
A description of parameters to be
monitored in order to determine if the
compensatory mitigation project is on
track to meet performance standards
and if adaptive management is needed
(33CFR 332.4 (c)(10)/ 40 CFR 230.94
(c)(10)).
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Additionally, the Regulatory Guidance Letter (RGL) 08-03 issued by Corps Headquarters may be of interest
to the IRT reviewer as it establishes minimum monitoring requirements for compensatory mitigation
project narrative reports. Note, for mitigation banks and ILF project sites this RGL may serve only as
a supplemental reference to local guidelines/templates. The RGL may not provide sufficient data for a
complete IRT reviewer evaluation, particularly if a credit release is being requested and documentation is
necessary to demonstrate that the project is meeting performance standards.
16d. Does monitoring include the use of reference sites or data to evaluate performance?
Districts/states differ in their performance standards for monitoring requirements. Some depend on
technical standards, while others require reference data be used to evaluate a projects performance. The
reviewer should ensure that the monitoring plan adheres to their district/state's agreed-upon protocols.
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17 Maintenance Plan
This is the description and schedule of a Sponsors management
requirements for the project that ensures it remains viable once
construction is completed and throughout the monitoring period.
A maintenance plan may include infrastructure (water control
structures, data loggers, fencing, signage, gates) and/or ecological
management components (invasive species control) within the
project area and it should identify regular or recurring actions needed
for the upkeep of the project site until it transitions into long-term
management.
The maintenance plan is a component considered in the development of short-term financial assurances,
which are used to guarantee effective project management and successful achievement of performance
standards. The IRT members can reference the maintenance plan to determine whether the project is
appropriately maintained.
17a. Does the project site plan contain a description and schedule of maintenance requirements to ensure
the project remains viable once it has been constructed and throughout the monitoring period?
The description and schedule of maintenance are required components of the project site plan, and they
assist the Sponsor and IRT reviewer in identifying what will be needed (e.g., materials, labor, etc.) for
maintaining the proposed site until it transitions into long-term management (33 CFR 332.4(c)(8)/40 CFR
230.94(c)(8)).
17b. Does the description cover all relevant aspects of maintenance including ecological and infrastructure
maintenance?
The plan should provide a complete list of
maintenance measures to ensure that the site is
managed to retain its integrity and continue to
provide the desired functions and services.
17c. Does the description identify regular or
recurring actions?
This might include measures such as nuisance/
exotic species treatment schedule, fence repair,
or prescribed fire. These recurring actions are
Maintenance Plan
A description and schedule of
maintenance requirements to
ensure the continued viability
of the resource once initial
construction is completed
(33CFR 332.4 (c)(8)/ 40 CFR
230.94 (c)(8)).
Includes:
Measures to control predation/grazing of
mitigation plantings
Nuisance/exotic invasive species abatement
measures and treatment schedule
Temporary irrigation for plant establishment
Invasive species control
Replacement plan (e.g., replacement
plantings) and structure maintenance/repair
Other applicable maintenance plan
components
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18. Adaptive Management Plan
Aquatic resources are complex. The outcome of mitigation
project implementation is often uncertain so management
adjustments (i.e., adaptive management) may be necessary
to address unforeseen circumstances (e.g., changes in site
conditions or other components of the compensatory
mitigation project) and better ensure that the project
is successfully completed and meets its performance
standards. Adaptive management requires coordination
between the responsible party, Corps, and IRT to ensure
agencies' approval of proposed adaptive measures by the
Sponsor or long-term steward. Adaptive management
may be necessary at any point in project implementation,
including construction, performance phase (monitoring),
and during long-term management (33CFR 332.4 (C)
(12)/40 CFR 230.94 (C)(12)).
18a. Does the project site plan or associated management plan document(s) include general guidelines for
adaptive management that encompass:
An adaptive management plan should address each of the components below. This ensures that a Sponsor
is more responsive to unforeseen project issues and changes while continuing coordination with the IRT.
Does the project site plan address:
Unforeseen circumstances, which may be defined at a national, state, or district level?
Coordination with the IRT?
The process for adjusting the project if it cannot be constructed according to plan?
Howthe project will be managed if it does not meet its performance standards or long-term management
goals?
18b. Do the monitoring and long-term management plans include provisions to determine whether any
adaptive measures are needed?
Comprehensive monitoring and long-term management plans will account for possible future revisions
based on unforeseen situations (e.g., a stream cuts a new channel, or a salt marsh restoration project erodes
following an extreme storm event). See Table 8 below for an example from a monitoring plan of how
adaptive management can be used to better meet performance standards.
Adaptive Management Plan
A management strategy to address
unforeseen changes in site conditions or
other components of the compensatory
mitigation project... The adaptive
management plan will guide decisions for
revising compensatory mitigation plans
and implementing measures to address
both foreseeable and unforeseeable
circumstances that adversely affect
compensatory mitigation success (33CFR
332.4 (c)(12)/ 40 CFR 230.94 (c)(12)).
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Unforeseen Circumstances
Many ILF project site plans refer to unpredicted events or phenomena negatively affecting an ILF project
site by phrases such as "force majeure", "Act of God", "act of nature", or unforeseen circumstances. These
terms reflect a recognition that there is a degree of uncertainty associated with implementation of any
ILF project no matter how well-thought out. Unanticipated events can occur on any project site, and
examples may include population explosion of herbivores, widespread drought, spills of hazardous
materials, fire, war, shoreline erosion, radical changes in salinity or water quality constituents, etc.
These clauses in ILF project site plan identify how extraordinary events or circumstances beyond the
control of the Sponsor to manage may be addressed. What may be considered to be an unforeseen
circumstance (or force majeure event) differs widely between districts/states, so it is vital to refer to
local guidelines and practices.
Table 8. Case example of how adaptive management applies to performance standards and monitoring
Objectives
Performance Standards
Monitoring
Adaptive
Management
Re-establish
78 acres of
tidal marsh
Yl: 80% planting survival
Y3: Average stem density,
by species, is > 75% average
reference.
Y5: 2 years since last invasive
treatment & <5% invasive
coverage
Annual: Measure
of live, standing
dead, & shoot
densities or
coverage in veg
plot transects
across entire site.
Additional treatment(s)
or changes in chemical
treatments may be
necessary to control
invasive species.
Site elevation ~ reference
elevation
Reference/
mitigation site
elevation surveys.
Adjust elevations due to
reworking of sediments
Consider whether district/state guidelines or practices address adaptive management implementation. If
local guidelines, policies, or practices have not been developed, then it may be useful for the ILF project site
plan to specify a process for adaptive management. Discussions should take place between the Sponsor and
IRT agencies to lay out potential options for addressing unforeseen circumstances, identification of available
resources for taking any necessary action, and/or monitoring the consequences of any corrective actions.
18c. Do the monitoring, management, or long-term management plans consider the potential for adaptive
management as a result of climate change or sea level rise?
Climate change, including changes in the amount or periodicity of precipitation or increase in likelihood of
wildland fire, may precipitate future adaptive management actions. The reviewer should give consideration
to future sea level rise for projects located in coastal, marine, or estuarine areas and in non-coastal areas,
increased frequency or intensity of flooding events, wildfire, or drought. The project site plan should also
acknowledge extreme events and sea level rise factors, incorporate sea level rise predictions, and consider
potential alternative states for future project condition. For example, does the plan allow for estuarine
vegetation migration with sea level rise?
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19. Long-Term Management Plan
mitigation projects are required to be designed, to the
maximum extent practicable, to be self-sustaining once
performance standards have been achieved (33 CFR
332.7(b)/ 40 CFR 230.97(b)). Merely protecting the land
through recordation of a conservation easement or other
long-term protection mechanism may not ensure that the
functions and services provided by a an ILF project site
will continue over the long term. Those functions and/or
services can be lost due to invasive species, trespass, urban
encroachment, changing environmental conditions (sea
level rise, changes in precipitation and temperature regimes,
etc.), changes in land use within the watershed, increases in non-point source pollution, sedimentation,
etc. (see Teresa, 2009). Some level of management or maintenance may be required to ensure that the
project site continues to provide the intended resource functions and services.
A long-term management plan (LTMP) is a fundamental element of every mitigation plan (33 CFR
332.4(c)(l l)/40 CFR 230.94(c)(l 1)) and must be part of the ILF project site plan, instrument, or associated
documents. Plans should identify the responsible party and include a description of management needs,
annual cost estimates for those needs, and the funding mechanism used to meet those needs.
Responsible Party and Management Activities
Long-term management planning requires the Sponsor and the IRT to consider what management
activities on the ILF project site will be necessary once all performance standards have been met. These
management activities are specific to each project site and depend upon the desired aquatic resource(s)
and the intended functions and services to be provided by the site. Practicability is a consideration in
determining what long-term management activities are necessary for an ILF project site. The LTMP should
include provisions for identifying the party responsible (Sponsor, long-term steward, etc.) to transfer long-
term management responsibilities (assigning responsibilities to another party) and periodically reviewing
and revising the LTMP over time based on changing resource needs or funding availability
The Sponsor is responsible for funding the LTMP, and this funding should be identified in the project site
plan or LTMP (33 CFR 332.7(d)(2)/40 CFR 230.97(d)(2)). The ILF program accounts is typically used
to fund the LTMP. Funds are generally transferred from the ILF program account into a trust account,
endowment, or other mechanism to generate returns that can be used to help fund future management
activities. The actual timing of the transfer of funds from the ILF program account is subject to district
practices and the specific program instrument.
Funding Long-term Management
Each long-term management activity entails an expenditure of funds. Recurring activities like fence
repair, posting property boundaries, or conducting prescribed fire entail periodic expenditures. The cost
associated with a management action is likely to increase over time because of inflation. The LTMP and
Long-term Management Plan
A description of how the compensatory
mitigation project will be managed
after performance standards have
been achieved to ensure the long-term
sustainability of the resource, including
long-term financing mechanisms and
the party responsible for long-term
management (33 CFR 332.4 (c)(ll)/40
CFR 230.94(c)(ll)).
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associated financing should take into account inflation (33 CFR 332.7(d)(3)/40 CFR 230.97(d)(3)). The
rate of inflation over time can be estimated at https://www.bls.gov/data/inflation caIculator.htm. Because
of the projected increase in costs of management over time, the ILF Sponsor and the IRT should give
careful consideration to the necessity of each long-term management task required in the LTMR
Unforeseeable costs may arise over time as well, such as costs associated with management of recently
established invasive species or substantial increases in material costs (like fuel or steel). Funds are often
provided in long-term management funding to address contingencies. Contingency rates may vary from
10-30% but 10% is typically the most common rate.
A number of useful tools have been developed to help estimate long-term management funding such
as TNC's Long-Term Stewardship Calculator and Accompanying Handbook (2016) and the Center for
Natural lands Managements Property Analysis Record© (2018). LTM costs are included as selection
criteria options in the TNC calculator and an estimation of costs of easement defense and stewardship is
discussed in a joint publication by the Environmental Law Institute and the Land Trust Alliance (ELI-LTA
2012).
Note, the actual cost of managing site protection instruments, like conservation easements, may not be
identified as a part of long-term management funding, because the cost of managing easements is often
negotiated between the Sponsor and the easement holder.
19a. Does the project site plan include a long-term management plan (LTMP)?
See discussion above.
19b. Does the project site plan or LTMP identify the party(ies) responsible for long-term management?
Can the responsibility for long-term management be transferred to another party?
The project site plan or LTMP is required to identify the party(ies) responsible for long-term management.
In many districts/states, the Sponsor may be identified in the project site plan as initially responsible for
implementing the LTMP, but transfer of responsibility to another party is allowable, subject to review by
the IRT and approval by the Corps (33 CFR332.7(d)(l)/40 CFR 230.97(d)(1)).
19c. Does the LTMP include a complete itemization of long-term management tasks to be conducted
periodically on a permanent basis?
The LTMP should include the ILF project site's long-term goals and objectives and a complete listing of all
anticipated long-term management activities. The long-term management activities should have a clear
connection to the project site's goals and objectives so that future land managers, regulators, landowners,
and easement holders understand the intent of the management activities. It is especially useful if the plan
identifies the component elements of each management task including labor and materials. For example,
periodic repair of fencing might include inspection of the fence and the repair of damaged fence segments
including labor hours and materials. This information helps the reviewer confirm that the LTMP has fully
considered the requirements for each management task.
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19d. Are the annual cost estimates for management activities broken down by task? Does the LTMP identify
references for cost information used in the plan?
As mentioned above, the LTMP should include a description of long-term management needs and annual
cost estimates for those activities (see also 33 CFR 332.7(d)(2)/40 CFR 230.97(d)(2)).
Annual cost estimates are useful for determining the total amount of funding the Sponsor must set aside
for long-term management. It is difficult to evaluate whether the cost estimates are complete unless
these estimates are broken out by specific management tasks (e.g., replacement of a gate or posting of
property boundaries) and their component parts including labor and materials. The assumptions made
when preparing specific task-by-task cost estimates should also be articulated. Tools like TNC's Long-
Term Stewardship Calculator (2016) and the CNLM's Property Analysis Record© (2018) help to clarify
assumptions and to more accurately identify annualized costs of LTM.
Finally, the LTMP should identify the source of information used in these cost estimates (e.g., Bureau of
Labor standard rates, Commerce Department data, industry standard cost estimation datasets such as RS
Means©, etc.). This will facilitate verification by IRT members.
19e. Does the LTMP provide information supporting how the total amount of long-term financing was
determined?
This information is critical to ensuring sufficient funds are available for long-term management of the
ILF project site when it reaches the long-term management project site closure phase. The mechanism for
Long-Term Management Funding (LTMF) is established when the ILF project site plan is approved by the
IRT co-chairs and the Sponsor. Any modifications to the funding mechanism require consent by all parties
involved in the ILF program (Sponsor, Corps, IRT, Long-term Manager) and may be challenging to secure.
The LTMP should identify how the total amount of long-term financing was determined. An effective way
used by many ILF programs is to first sum the total annual cost of all management activities required in the
project site (including contingency and estimated administration costs). The example in Table 9 identifies
annual management costs for a ten-acre mitigation project abutting a wildlife management area.
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Table 9. Case example ofLTMplan annual management costs
Task
Component
Unit
Number
Cost/
Unit
Recurrence
Interval
Annual
Cost
Signage
Inspect &
replace
Hour
4
$40
1
$160
Trash
Collect & dump
Hour
2
$40 1
$80
Annual
Report
Narrative
Summary
Hour
4
$75
1
$300
Fence
Labor
Hour
30
$40 1
$1,200
Fence
Installed
3 strand
barbed wire
Lin Ft
300
$4
1
$1,200
Sub-Total
$2,940
Contingencies
20%
$588
Admin
10%
$294
Total
$3,822
The annual cost of management is then divided by the expected earnings from investment of those long-
term management funds (adjusted for inflation).
In this example, if the long-term management funds were anticipated to earn an average of 7% annually
(gross earnings), inflation is estimated to average 3%/year, and administration (management) of the funds
is 0.5%/year, then the adjusted or net earning rate of those funds would be 3.5% (7% - [3% + 0.5%]).
Dividing this net earning rate (often called a Capitalization or Cap rate) into the annual cost of management
provides an estimate of the total amount of the initial funding amount of long-term management funding
(or principal amount) the Sponsor must set aside for the LTMP. In this case it is $109,200 or $3,822/0.035.
The average annual net rate of return or Cap rate for the long-term management funds is important. The
lower the cap rate or net rate of return, the greater the initial fund amount the Sponsor must set aside for
the LTMP (Table 10). In the table, a Cap rate of 5% would translate into a gross annual earnings rate of
8.5% (5% + 3% inflation + 0.5% administration). To achieve an earning rate that high would require active
investment of the LTMP funds in a balanced portfolio including stocks, bonds, mutual funds, and other
investment mechanisms. A Cap rate of 0.5% might be achievable through the use of less risky investment
mechanisms like Treasury bills and certificates of deposit but would mean that the Sponsor must establish
a much larger initial fund amount.
Refer to The Nature Conservancy. Long-term Stewardship Calculator Accompanying Handbook: Section
III Making Money for the Long-term. (2016), pages 51-58 for more information and examples of calculating
LTM funds.
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Table 10. Example cap rates for long-term management funds
Annual Cash Need
Cap Rate
Initial Fund Amount
$20,000
5%
$400,000
$20,000
3%
$666,667
$20,000
1%
$2,000,000
$20,000
0.5%
$4,000,000
19f. Does the LTMP allow for periodic adjustments in management priorities? Does this include adjustments
in spending?
The LTMP should allow the long-term manager to discuss with the IRT during the course of long-
term management any revisions to the LTMP necessary to reflect changes in management needs (e.g.,
management of a previously unknown invasive species that could affect the functions/services by the
project site) or management costs (e.g., additional unanticipated costs associated with management of
recently discovered/documented invasives species). Because the amount of LTMP funding is determined
at the time of LTMP approval it may be difficult to secure additional funds during long-term management.
So, if there are additional needs or additional expenses associated with long-term management it may be
necessary to reexamine management tasks and costs and prioritize them based on available funding.
19g. Does the LTMP describe how the LTMP will be funded (lump sum, installments, prior to credit
release, etc.)? Is that consistent with current practices in the district/state?
The project site plan and the LTMP should describe the LTMF mechanism including the timing of long-
term financing. A number of approaches have been used to finance long-term management. Each of these
practices has its own considerations, for example:
Single payment (or lump sum): Funding long-term management obligations with a single or lump
sum payment can be financially demanding for private sector ILF Sponsors.
Payment schedule: Series of payments over time. The challenge with a payment schedule is ensuring
the funding obligation is met in accordance with the ILF project site and LTMP.
Credit sale proceeds: Use of credit proceeds is a common practice (e.g., setting aside a portion of
proceeds from each credit sale for long-term management), however, full funding may prove difficult
if credit demand lags or if credits are sold at discounted rates.
Incremental funding of long-term management: Incremental funding of LTM as a milestone that
must be met prior to an incremental credit release. This approach has proved effective in a number
of states/districts (e.g., see Section VII Credit Release Schedule in the 2017 California Bank Enabling
Instrument Template [California Multi-Agency Project Delivery Team 2017]).
Conversion or roll over of financial assurances: Conversion or roll-over of financial assurances
(escrow, letters of credit, etc.) is required in a number of districts/states but so far there are no examples
of this in practice to review.
Annual appropriations/Capital improvement budgets and programmatic agreements: Long-term
management of project sites undertaken solely by public agencies on public lands are often funded
through appropriations or programmatic agreements. It can be challenging to fully fund LTM on
an annual basis. Some mitigation projects are undertaken on public lands but administered by the
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private sector such as non-profit organizations that may be better able to secure appropriate long-term
management funding.
Whichever practice is used, at a minimum, the initial funding amount for the LTMP should be fully funded
before the ILF project site plan moves into the long-term management phase.
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References
This includes literature referenced in the workbook as well as a sampling of templates, and instructions
issued by districts and states across the United States that were reviewed and at times referenced in this
review workbook. This list was current as of January 2022; however program instruments, templates, and
tools will be revised over time.
California Multi-Agency Project Delivery Team. 2017. Bank Enabling Instrument Template (Version Date
September 28, 2017). 59pp.
https://ribits.ops.usace.army.mil/ords/f?p=107:27:17115061474550::NQ::P27 BUTTON KEY:10
Center for Natural Lands Management (CNLM). 2018. Property Analysis Record Application, https://
www.cnlm.org/par/
Ducks Unlimited (DU). 2018a. Mclntyre Road Mitigation Plan. 73pp.
https://ribits.ops.usace.army.mil/ords/f?p=107:278::::RP278:P278 BANK ID:4863
Ducks Unlimited. 2018b (amended). New York ILF Program Instrument. 54 pp. https://ribits.ops.usace.
armv.mil/ords/f?p=107:378:::::P378 PROGRAM ID:1141
Environmental Law Institute and Land Trust Alliance. 2012. Wetland and Stream Mitigation: A Handbook
for Land Trusts. 155pp. https://www.epa.gov/sites/production/files/2015-08/documents/wetlands and
stream mitigation - a handbook for land trusts O.pdf
Harman, W., and R. Starr. 2011. Natural Channel Design Review Checklist. U.S. Fish and Wildlife Service,
Chesapeake Bay Field Office, Annapolis, MD and US Environmental Protection Agency, Office of Wetlands,
Oceans, and Watersheds, Wetlands Division. Washington, D.C. EPA 843-B-12-005
Kentucky Department of Fish and Wildlife Resources (KY DFWR). 2018. Modification of the Agreement
Concerning In-Lieu Fee Mitigation Fees Between U.S. Army Corps of Engineers and Kentucky Department
of Fish and Wildlife Resources. 79pp. https://ribits.ops.usace.army.mil/ords/f?p=107:378:::NO::P378
PROGRAM ID:921
Keys Restoration Fund (KRF) ILF Program. 2015. Crane Point Hammock Hydrological Enhancement
Project Mitigation Plan. 74pp. https://ribits.ops.usace.army.mil/ords/f?p=107:278::::RP278:P278 BANK
ID:3385
Los Angeles District, U.S. Army Corps of Engineers (USACE). 2012. In-lieu Fee Enabling Instrument.
https://ribits.ops.usace.army.mil/ords/f?p=107:27:13939249182439::NO::P27 BUTTON KEY:10
Maine Natural Resource Conservation Program (NRCP). 2020. Request for Letters of Intent Package. 23
pp. http://mnrcp.org/sites/default/files/MNRCP 2020 RFLOI final.pdf
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Maine Department of Environmental Protection (ME DEP). 2021. Maine Natural Resource Conservation
Program 2020 Annual Report. 54pp. https://ribits.ops.usace.army.mil/ords/f?p=107:378:::::P378
PROGRAM ID:261
Maine Department of Marine Resources (ME DMR). 2018. Atlantic Salmon Restoration and Conservation
Program ILF Instrument. 79 pp. https://ribits.ops.usace.army.mil/ords/f?p=107:378:::NO::P378
PROGRAM ID:2842
Massachusetts Department of Fish and Game. 2014. Final In-Lieu Fee Program Instrument. https://ribits.
ops.usace.armv.mil/ords/f?p=107:378:::::P378 PROGRAM ID:1241#
Montana Aquatic Resources Services. 2020. Montana State-wide In-Lieu Fee Program Instrument. 88pp.
https://ribits.ops.usace.army.mil/ords/f?p=107:378:::NO::P378 PROGRAM ID:1561
National Fish and Wildlife Foundation, Sacramento District California In-Lieu Fee Program. 2019. Flying
M Ranch Vernal Pool Preservation Project (SSF-1). 446pp.
https://ribits.ops.usace.army.mil/ords/f?p=107:278:3699263380289:::RP278:P278 BANK ID:5189
New Hampshire Department of Environmental Services (NH DES). 2018. New Hampshire Aquatic
Resource Mitigation Fund, Fiscal Year 2017 Annual Report. 26pp. https://ribits.ops.usace.army.mil/ords/
f?p=107:378:::::P378 PROGRAM ID:21
National Oceanic and Atmospheric Administration (NOAA) Fisheries, Western Region. 2014. California
Eelgrass Mitigation Policy and Implementing Guidelines. 48pp. https://www.fisheries.noaa.gov/west-
coast/habitat-conservation/seagrass-west-coast
Oregon Department of State Lands, (OR DSL) State-Wide In-Lieu Fee Program. 2012. Attachment D,
Watershed Restoration Budget for Pixieland ILF project.
https://ribits.ops.usace.army.mil/ords/f?p=107:278:3699263380289:::RP278:P278 BANK ID:2625
Ossinger, M. 1999. Success standards for wetland mitigation projects - a guideline. Washington State
Department of Transportation, Environmental Affairs Office. 31pp
Regulatory In-lieu Fee and Bank Information Tracking System (RIBITS). 2021. Understanding the Credit
Ledger and Sub-Ledger. 7pp. https://ribits.ops.usace.army.mil/ords/f?p=107:27:3407403922642::NQ:
:P27 BUTTON KEY:22
RIBITS. 2021. Understanding the ILF Advance Credit Ledger. 4pp. https://ribits.ops.usace.army.mil/ords/
f?p=107:27:3407403922642::NQ::P27 BUTTON KEY:22
Scodari, P., S. Martin, and A. Willis. 2016. Implementing Financial Assurances for Mitigation Project
Success. Institute for Water Resources White Paper. 43pp. https://www.iwr.usace.armv.mil/Portals/70/
docs/iwrreports/Financial Assurance.pdf
St. Paul District, USACE. 2019. Regulatory Branch Guidance, Target Hydrology and Performance Standards
for Compensatory Mitigation Sites. 22 pp. https://www.mvp.usace.army.mil/Missions/Regulatory/
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Public-Notices/Article/1789913/st-paul-district-corps-of-engineers-regulatory-branch-guidance-target-
hydrology/
Sueltenfuss, J.P., and D.J. Cooper. 2019. A new approach to hydrologic performance standards in wetland
mitigation. Journal of Environmental Management. 231:1154-1163.
Teresa, S. 2009. Perpetual stewardship considerations for compensatory mitigation and mitigation banks.
Stetson Law Review 38: 337-356.
The Nature Conservancy (TNC). 2021. Virginia Aquatic Resources Trust Fund (VARTF) Annual Report
47pp. + Appendices, Tables, Project summaries, and Maps.
https://ribits.ops.usace.army.mil/ords/f?p=107:378:::::P378 PROGRAM ID:1
TNC Ohio Mitigation In-Lieu Fee Program. 2020. Preliminary Budget for Walborn Reservoir ILF Project.
https://ribits.ops.usace.army.mil/ords/f?p=107:278:3699263380289:::RP,278:P278 BANK ID:5728
TNC. 2019. Virginia Aquatic Resources Trust Fund (VARTF) - Amended and Restated Program Instrument.
32pp. + Appendices
https://ribits.ops.usace.army.mil/ords/f?p=107:378:::NO::P378 PROGRAM ID:1
TNC. 2019. Virginia Aquatic Resources Trust Fund (VARTF) Exhibit D SDP Template and Exhibits.
https://ribits.ops.usace.army.mil/ords/f?p=107:378:::NO::P378 PROGRAM ID:1
TNC. 2016. Long-Term Stewardship Calculator and Accompanying Handbook. 115pp.
https://www.conservationgateway.org/ConservationPlanning/ToolsData/Pages/stewardshipcalculator.
aspx
USACE Engineer Research and Development Center (ERDC). 2000. Wetland Engineering Handbook.
Wetlands Research Program. ERDC/EL TR-WRP-RE-21. 719pp.
USACE. 2008. Regulatory Guidance Letter 08-0. Minimum Monitoring Requirements for Compensatory
Mitigation Projects Involving the Restoration, Establishment, and/or Enhancement of Aquatic Resources.
6pp.
https://ribits.ops.usace.army.mil/ords/f?p=107:27:14459055077397::NQ::P27 BUTTON KEY:0
Wilmington District, USACE. 2013. Wilmington District Compensatory Mitigation Responsibility
Transfer Form.
U.S. Fish and Wildlife Service. 1991. Final Policy on the National Wildlife Refuge System and Compensatory
Mitigation under Section 10/404 Program. Federal Register Vol 64 No 175: 49229-49234.
Wood, C. and S. Martin 2016. Compensatory Mitigation Site Protection Instrument Handbook for
the Corps Regulatory Program. Institute for Water Resources White Paper. 21pp. https://www.iwr.
usace.army.mil/Portals/70/docs/iwrreports/Site Protection Instrument Handbook August 2016.
pdf?ver=2016-08-29-082816-237
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Wilmington District, USACE. 2013. Wilmington District Compensatory Mitigation Responsibility
Transfer Form.
U.S. Fish and Wildlife Service. 1991. Final Policy on the National Wildlife Refuge System and Compensatory
Mitigation under Section 10/404 Program. Federal Register Vol 64 No 175: 49229-49234.
Wood, C. and S. Martin 2016. Compensatory Mitigation Site Protection Instrument Handbook for
the Corps Regulatory Program. Institute for Water Resources White Paper. 21pp. https://www.iwr.
usace.army.mil/Portals/70/docs/iwrreports/Site Protection Instrument Handbook August 2016.
pdf?ver=2016-08-29-082816-237
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APPENDIX A: REVIEW
CHECKLIST
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ILF Project Site Plan Review
Checklist Questions
The ILF Project Site Plan Review Checklist reflects the content of each element in the ILF Project Site Plan
Review Workbook. For each element, the checklist asks whether the question was addressed (yes/no),
whether the narrative is complete (yes/no), and the page numbers of the relevant narrative. A comment
section for reviewer input is also included.
Review Elements
Questions
Addressed
Yes/No
Complete
(Y/N)
Page
#(s)
Reviewer Comments
Introduction
Have the ILF program prospectus and
instrument been reviewed?
Are there any components unresolved
or unaddressed from the prospectus/
instrument?
1. Project Goals and Objectives
la. Does the project site fit within the
goals and objectives of the CPF for the
service area?
lb. Does the project site plan include
a description of the resource type(s)
and approximate amount(s) that will
be provided?
lc. Does the project site plan identify
functions and services to be provided
by the project site?
Id. Does the project site plan include
the methods used for compensation?
le. Does the project site address
ecological resource needs within the
watershed or landscape setting in
which the project site is located?
2. Site Selection
2a. Is the ILF project site located within
the watershed or landscape position
where it is most likely to either replace
lost functions and services or enhance
existing, compromised functions and
services as described in the approved
ILF program instrument and/or CPF
instrument?
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Review Elements
Questions
Addressed
Yes/No
Complete
(Y/N)
Page
#(s)
Reviewer Comments
2b. Does the project site include areas
that were formerly aquatic resources
or are currently degraded aquatic
resources?
2c. Does the project site include
buffers that would protect it from its
surroundings? Does it help buffer
other conserved aquatic resources
from potentially incompatible
activities?
2d. Is the project site adjacent to other
conserved aquatic resources or does it
help establish, or extend a conserved
corridor?
2e. Has the proposed project site
addressed identified ecological
priorities and needs identified in
the CPF for the project landscape/
watershed, such as chronic
environmental conditions (flooding,
impaired water quality, insufficient
habitat for important aquatic species,
etc.) (33 CFR 332.3(c)(3)/40 CFR
230.93(c)(3))?
2f. Are there any apparent potential
constraints and/or limitations to
the proposed project site? Are any
of these critical to successful project
establishment or operation?
2g. Is this project site ecologically
suitable for providing the desired
aquatic resource functions/services
within the subject watershed or
landscape position?
3. Baseline Information
3a. Does the ILF project site plan
include a description of the baseline
watershed/landscape, and ecological
characteristics of the proposed project
site?
3b. Is the baseline data applicable
and comparable to data that will
be collected post-construction
(performance standards)?
3c. Do the baseline conditions support
the projects goals and objectives?
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Review Elements
Questions
Addressed
Yes/No
Complete
(Y/N)
Page
#(s)
Reviewer Comments
3d. Does the project site plan include
or reference a delineation of wetlands/
waters?
3e. Does the project site plan include
information related to at-risk fauna and
flora species and/or other regulated
resources (cultural/archaeological)?
3f. Does the project site plan include
the location and extent of any utilities
and other infrastructure in the project
vicinity?
3g. Does the project site plan include
the location and information related to
any existing easements, rights-of-way
(ROWs), or other property restrictions?
4. Mitigation Work Plan
4a. Does the project site plan include
the required work plan components?
Do these components have detailed
specifications and descriptions?
4b. Are the work plan components
reflective of the projects goals and
objectives?
4c. Do the work plan components follow
established best practices or provide an
explanation discussing why the approach
is appropriate?
4d. Does the work plan consider the
presence of any existing infrastructure
(i.e., utilities) or easements?
4a. Does the project site plan include
the required work plan components?
Do these components have detailed
specifications and descriptions?
4b. Are the work plan components
reflective of the projects goals and
objectives?
4c. Do the work plan components follow
established best practices or provide an
explanation discussing why the approach
is appropriate?
4d. Does the work plan consider the
presence of any existing infrastructure
(i.e., utilities) or easements?
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Review Elements
Questions
Addressed
Yes/No
Complete
(Y/N)
Page
#(s)
Reviewer Comments
5. Project Budget Review
5a. Does the IRT have an established
procedure/methodology for reviewing
project budgets at the project site plan
stage, and if so, does the plan follow it?
5b. Does the project site plan include
information supporting the budget, such
as a narrative or tables?
5c. Does the project budget consider the
potential cost/credit for the project and
the extent to which the project would
help the ILF program satisfy any advance
credit liabilities?
5d. If the projected project cost exceeds
available funds, does the budget identify
where the additional funds would be
secured?
5e. Does the budget for the proj ect include
any non-mitigation funds such as grants,
donations, and/or appropriations? Does
it discuss whether those non-mitigation
funds will generate mitigation credit?
6. Financial Assurances
6a. Does the project site plan include the
basis for the financial assurance, either
corrective action on the project site, or
replacement compensation at another
site? Is this consistent with district/state
requirements?
6b. Does the project site plan include
an itemized list of work associated
with construction, monitoring, and
maintenance provided in support of the
financial assurance estimate? Does the
itemized list include all the component
parts associated with the project?
6c. Does the site plan include specific
conditions for reduction/release of
financial assurances?
6d. Do the assurances identify a non-
federal beneficiary in the event that a
claim is made on the assurances?
6e. Does the type of assurance provide
for payment, performance, or both in the
event that a claim is made?
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Review Elements
Questions
Addressed
Yes/No
Complete
(Y/N)
Page
#(s)
Reviewer Comments
6f. Does the assurance include
notification to the Corps at least 120
days before expiration/revocation of the
assurances?
6g. Does the project site plan or associated
exhibit specify that the Sponsor will
provide a financial assurance mechanism
prior to an initial release of credits?
7. Site Protection Instrument
7a. Does the project site plan include
a proposed long-term site protection
mechanism (conservation easement,
declaration of restrictions, etc.)? Is
the protection mechanism consistent
with current district/state guidelines
(including template instruments)?
7b. Does the mechanism protect against
interests/activities that are incompatible
with the projects goals and objectives?
7c. Does the site protection instrument
(or associated exhibits) list any other
interests in the property (financial,
mineral/timber, water rights)? Does the
instrument (or exhibits/attachments
to the ILF project site plan) include
an explanation as to how those other
interests may affect the project site?
7d. If the site is located on public lands, is
the Sponsor proposing additional long-
term protection measures? Do they seem
adequate?
7e. Does the site protection mechanism
include the requirement to provide
the Corps with 60-days advanced
notification if there is a proposed
amendment or termination of the site
protection mechanism?
8. Service Area
8a. Does the project site plan or associated
exhibits include a clearly defined service
area(s) for the project site?
8b. Are there multiple service areas
or service area types defined? Is this
consistent with district, state, or local
requirements?
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Review Elements
Questions
Addressed
Yes/No
Complete
(Y/N)
Page
#(s)
Reviewer Comments
8c. Does the project site plan or
associated exhibits specify the watershed
or landscape units used to define the
service area?
8d. Does the service area comply with
local, district, and/or state requirements
(scale, size, or resource type)?
8e. Is the rationale for the location, size,
and extent of the service area clearly
documented in the project site plan and/
or exhibits?
9. Credit Determination
9a. Is the Sponsor's credit determination
methodology consistent with the
reviewers district/state standards?
9b. Is the proposed generation of credits
consistent with district/state policy, and
is it applied accurately?
9c. Does the proposed number of credits
reflect the difference between baseline
and post-construction conditions?
9d. Are any of the proposed credits based
solely on preservation?
9e. Are credits proposed for generation
through restoration, enhancement, or
preservation of riparian areas, buffers, or
uplands? If so, are those riparian areas,
buffers, or uplands considered necessary
to maintain the ecological viability of
aquatic resources?
9f. Does the project site plan include
a table identifying credits that will be
generated by resource type and is there
a corresponding map identifying those
locations?
10. Credit Release Schedule
10a. Does the project site plan or
associated documents specify a credit
release schedule?
10b. Is the credit release schedule
consistent with the mitigation type
and resources being proposed? Does
the projects credit release schedule
differentiate between mitigation methods
and resource types?
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Review Elements
Questions
Addressed
Yes/No
Complete
(Y/N)
Page
#(s)
Reviewer Comments
10c. Does the release schedule
specify incremental milestones (e.g.,
construction completion, meeting
performance standards) to be achieved
for credit releases?
lOd. Will a significant amount of credits
be withheld until all performance
standards have been met?
lOe. Is the release schedule consistent
with current/accepted practices in the
district or state?
11. Assumption of Mitigation
Responsibilities
11a. Does the project site plan include
a provision stating that the Sponsor
assumes the permittees mitigation
liability?
lib. Does the project site plan include
a provision stating that the Sponsor will
notify the district of each transaction?
11c. Does the project site plan specify the
timing at which the district is notified of
a transaction?
12.Accounting Procedures
12a. Does the document have a credit
accounting procedure outlined?
12b. Does the document indicate when
transaction notifications will be provided
to the Corps?
12c. Does it indicate what information
will be provided in the notification?
13.Reporting Protocols
13a. Does the project site plan specify
requirements for submittal of reports to
the Corps, such as:
Project monitoring reports?
Annual ledger account reports or
RIBITS ledger updates?
Annual financial assurance and long-
term management funding reports?
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Review Elements
Questions
Addressed
Yes/No
Complete
(Y/N)
Page
#(s)
Reviewer Comments
14.Default and Closure Provisions
14a. Does the ILF project site plan (or
associated exhibits) specify what is meant
by default?
14b. Does the project site plan identify
options available to address default?
14c. Does the project site plan (or
associated exhibits) define ILF project
closure and what actions must be
completed in order for closure to take
place?
15.Performance Standards
15a. Does the mitigation plan contain
performance standards to evaluate
attainment of project objectives?
15b. Does the reviewers district have
performance standards for the proposed
aquatic resource(s)? If the district does
not have performance standards, proceed
to questions 15d-15h. If the district
has performance standards, proceed to
questions 15c-15h.
15c. Are the standards proposed by the
Sponsor consistent with current district
practices?
15d. Are the performance standards
ecologically based (e.g., entail
comparison to reference sites/data,
based on functional or condition
assessment methodologies, and/or have
measurements of hydrology or vegetation
indices)?
15e. Are the standards derived from the
project's goals and objectives? Are they
verifiable and well-defined? Are the
standards clear enough that a third party
would understand them?
15f. Do the Sponsors standards include
three elements: attribute measured, level
that defines success, and time period to
achieve success?
15g. Do the standards evaluate
incremental progress toward project
objectives?
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Review Elements
Questions
Addressed
Yes/No
Complete
(Y/N)
Page
#(s)
Reviewer Comments
15h. Do the performance standards
compare project/site development to
reference sites/data?
15i. Where applicable, are there separate
performance standards for different
habitat or resource types?
16.Monitoring Requirements
16a. How long will the site be monitored?
16b. What parameters/criteria will be
monitored? Are they sufficiently detailed
to evaluate attainment of performance
standards?
16c. Does the project site plan specify the
content of the monitoring report?
16d. Does monitoring include the use
of reference sites or data to evaluate
performance?
17.Maintenance Plan
17a. Does the project site plan
contain a description and schedule of
maintenance requirements to ensure
the project remains viable once it has
been constructed and throughout the
monitoring period?
17b. Does the description cover all
relevant aspects of maintenance
including ecological and infrastructure
maintenance?
17c. Does the description identify regular
or recurring actions?
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Review Elements
Questions
Addressed
Yes/No
Complete
(Y/N)
Page
#(s)
Reviewer Comments
18. Adaptive Management Plan
18a.Doestheprojectsiteplanorassociated
management plan document(s)
include general guidelines for adaptive
management that encompass:
Addressing unforeseen
circumstances, which maybe defined
at a national, state, or district level?
Coordination with IRT?
The process for adjusting the project
if it cannot be constructed according
to plan?
How the project will be managed
if it does not meet its performance
standards or long-term management
goals?
19.Long-Term Management Plan
19a. Does the project site plan include a
long-term management plan (LTMP)?
19b. Does the project site plan or LTMP
identify the party(ies) responsible
for long-term management? Can the
responsibility for long-term management
be transferred to another party?
19c. Does the LTMP include a complete
itemization of long-term management
tasks to be conducted periodically on a
permanent basis?
19d. Are the annual cost estimates for
management activities broken down by
task? Does the LTMP identify references
for cost information used in the plan?
19e. Does the LTMP provide information
supporting how the total amount of long-
term financing was determined?
19f. Does the LTMP allow for periodic
adjustments in management priorities?
Does this include adjustments in
spending?
19g. Does the LTMP describe how
the LTMP will be funded (lump sum,
installments, prior to credit release, etc.)?
Is that consistent with current practices
in the district/state?
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