Review Workbook
November 2022
EPA-840-B-22005
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. Bank Instrument Review
Workbook and Checklist. Document No. EPA-840-B-22005
Cover Image:
Erin Knauer - Constructed wetlands at an EPR designed Maryland wetland restoration site.
Mitigation Bank Instrument | Review Workbook
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Disclaimer: This document organizes technical and programmatic information to facilitate the efficient
review of a draft mitigation bank instrument. 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 mitigation bank 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 ii
Intro duction 1
Background 5
Terminology 9
Commonly Used Acronyms 12
Bank Establishment 13
1. Bank Goals and Objectives 14
2. Site Selection 16
3. Baseline Information 23
4. Mitigation Work Plan 26
5. Financial Assurances 28
6. Site Protection Instrument 33
7. Geographic Service Area 36
Bank Operations 38
8. Credit Determination 39
9. Credit Release Schedule 42
10. Assumption of Mitigation Responsibility 44
11. Accounting Procedures 45
12. Reporting Protocols 46
13. Default and Closure Provisions 48
Performance and Management 50
14. Performance Standards 51
15. Monitoring Requirements 55
16. Maintenance Plan 57
17. Adaptive Management Plan 58
18. Long-Term Management Plan 60
References 65
APPENDIX A: REVIEW CHECKLIST 67
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Table of Contents
Figures
Figure 1. Mitigation bank and ILF workbooks and checklists 2
Figure 2. Bank program development 7
Figure 3. An example of a goal and associated objectives 14
Figure 4. A case example of site selection factors 19
Tables
Table 1. Types of financial assurance 29
Table 2. Example of financial assurance estimates - Monitoring and Maintenance Phase 30
Table 3. Example of financial assurance estimates - Stream and Wetland Restoration 31
Table 4. Examples of how other interests in property may affect site protection 35
Table 5. Example wetland credit release schedule 42
Table 6. Example stream credit release schedule 43
Table 7. Examples of performance standards 51
Table 8. Case example of how adaptive management applies to performance standards and
monitoring 59
Table 9. Case example of LTMP annual management costs 63
Table 10. Example cap rates for long-term management funds 63
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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 the 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 the 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-workyconservation-leadership-networkyour-services/training-resources-3rd-par-
ty-mitigation-interagency-review-team
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Figure 1. Mitigation bank and ILF workbooks and checklists
ILF Review Steps
r B
Draft/Final
Prospectus
Draft / Final
Instrument
Draft / Final
Project Site Plan
r n
ILF Prospectus
r n
ILF Instrument
r n
ILF Project Site Plan
Review
Review
Review Workbook
Workbook and
Workbook and
and Checklist
Checklist
Checklist
V J
V J
v
Mitigation Bank Review Steps
r i
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 a
bank instrument and other documents associated with establishment and operation of the mitigation
bank. Banks are large and often complex projects with many elements required under regulations, local
guidelines, and practices. Accordingly, bank instruments are typically large and complex documents,
often with multiple supporting attachments or exhibits. The purpose of an IRT instrument review is to
determine if a proposed mitigation bank is an ecologically beneficial project that will compensate for
lost aquatic resource functions and services. This workbook and the associated checklist were developed
to facilitate the IRT review of bank instruments. It can be used to organize the bank instrument review
process specified in the Mitigation Rule (33 CFR 332/ 40 CFR 230.92). It describes the elements that make
up the banks mitigation plan and features that are necessary for bank operations. It is not intended to
provide local guidelines and policies or to replace any locally developed templates, tools, or guidelines used
to prepare and review bank instruments.
Prospectus Workbook Review Elements
1. Objectives of the proposed bank
2. How the bank will be established and operated
3. Proposed service area(s)
4. General need and technical feasibility of the proposed bank
5. Proposed ownership arrangements and long-term management strategy for the mitigation bank
6. Qualifications of the Sponsor to successfully complete the type of mitigation project(s) proposed
7. Ecological suitability of the site to achieve the proposed banks objectives
8. Assurance of sufficient water rights to support long-term sustainability of the proposed bank
(33 CFR 332.8(d)(2)/40 CFR 230.98(d)(2))
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Before delving into review of the draft bank instrument, the reviewer should examine the mitigation
bank prospectus workbook and checklist questions, which are separate documents used to facilitate IRT
review of the prospectus. This will aid the IRT reviewers in identifying and evaluating how any concerns
of the prospectus have been addressed in the bank instrument. The prospectus workbook and checklist
address the following eight elements of a bank proposal:
Workbook Organization
This workbook and associated checklist cover 18 separate review elements typically associated with
bank instruments. Twelve of these elements are required for all mitigation plans (permittee responsible,
mitigation bank, and ILF project proposals), the other six are specific to banks (and must also be addressed
in ILF program instruments or project proposals). Taken together, these 18 elements are used to reduce the
risk of potential bank failure, such as failure to complete construction, meet its performance standards, or
continue long-term management when banking operations cease.
Examples of how these elements function to reduce risk [follow] [include]:
• Financial assurances are used to help ensure that a bank has adequate resources available to guarantee
a site is constructed, managed, and monitored throughout its operational life.
• The site protection mechanism is used to ensure that incompatible activities are prohibited on a bank 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 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 a bank: Bank Establishment (denoted with a *), Bank 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 suggested logical grouping to facilitate an
efficient IRT review of the draft instrument.
12 Elements of a Mitigation Plan
6 Elements of a Bank Instrument
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*
Deafault & closure provisions*
Maintanance plan+
Performance standards+
Monitoring requirements+
Long-term management plan+
Adaptive management plan+
Financial assurances*
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Bank Establishment refers to those elements that must be resolved/in-place for the bank site to be iden-
tified 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
bank establishment as discussed in this Bank Instrument Review Workbook is NOT the same as what may
be used in other district or state guidance or template documents. For example, the California Bank En-
abling Instrument (BEI) template refers to bank establishment as once the instrument is signed, financial
assurances are in place, and site protection measures are recorded.
Bank Operations includes 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
instrument) and closure of the bank site.
Performance and Management includes those elements that ensure the bank 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
project (to ensure it is sustainable beyond the bank operations phase).
All of the mitigation bank instrument review elements are interrelated and will be referenced repeatedly
throughout this workbook. In many cases, one section in a workbook may refer the reader to another
section of the workbook. For example, a banks goals and objectives are the basis for performance standards
(performance standards are used to evaluate 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 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 typically required to replace the loss of wetland, stream, and other aquatic resource
functions in the watershed.2 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 a mitigation bank instrument.
• Mitigation Bank (bank): A mitigation bank is a project where aquatic resources have been
restored, established, enhanced, or preserved 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 to6 meet their
permit requirements for compensatory mitigation. The bank Sponsor (not 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.
2 For some resource types, it may be preferable to site compensatory mitigation projects using geographic units other than wa-
tersheds. 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 may be 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.
Organization of the mitigation rule
(Corps: 33 CFR 332/ EPA 40 CFR 230)
• The mitigation rule is divided into 8 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.
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• 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 prospectus templates 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 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.
Banks are 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 of
project success. Using released credits from banks and ILF projects is generally preferred over PRM or
advance credits from an ILF program because credits from each are available only upon implementation
and satisfying performance milestones. Additionally, banks consolidate compensatory mitigation projects
where ecologically appropriate, combining resources (including financial as well as agency resources), and
scientific and technical expertise (this may be more of a challenge or even impractical for small PRM
projects). Bank instruments may also be authorized to provide offsets under other regulatory authorities
such as state counterparts to CWA section 404, CWA section 402, or the Endangered Species Act.
Bank instrument development follows a four-step approval process (see Figure 2). The Sponsor is
responsible for preparing and submitting all documentation associated with the instrument 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 ILF program instruments as well as ILF projects 'project sites implemented by an ILF
program' follow the same fourstep process as development of bank instruments- An ILF project proposal is required to
provide the same information as a bank project-
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Figure 2. Bank program development
Draft
Prospectus:
The IRThas 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
Draft Prospectus submittal is considered an optional step in the Mitigation Rule, although many districts/
states require submittal. The purpose is to allow identification of any potential issues with the project early
in the process so the Sponsor can. address them prior to start of the formal process.
Prospectus submittal is required for all bank proposals. 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. Hie Corps will provide the Sponsor with
an initial evaluation letter (IET), stating the potential suitability of the proposal to provide compensatory
mitigation. If the proposal is suitable, the Sponsor may be directed to prepare a draft instrument. If the
proposal is deemed unsuitable, the Sponsor may revise the prospectus to address the deficiencies and
resubmit. An approved prospectus does NOT guarantee approval of a proposed bank. On a number of
occasions, the districts have determined that a proposed bank is not potentially suitable for providing
compensatory mitigation regardless of revision. In those cases, districts and/or Sponsors have withdrawn
those proposals from further consideration.
Draft Instrument is submitted to the IRT by the Sponsor for review and comment. Hie IRT 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 Bank Instrument. Review can be delayed for a number of
reasons, including:
• Endangered Species consultation
• Cultural/Historic resources coordination (Section 106 NHRPA)
• Government to Government coordination (tribal coordination)
• Sponsor's failure to provide necessary information
• Necessary information cannot be secured within the specified timeframe
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Final Instrument 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 Bank Instrument, the Corps must notify the rest 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 a bank (or ILF program)
instrument.
Delays in Instrument Review
Delays in the timelines specified in the Mitigation Rule for review and comment on the prospectus and
instruments can affect bank planning and feasibility. For example, purchase and sale agreements for land
purchases generally allow a limited time period for due diligence/feasibility evaluation. The Sponsor's
ability to develop program elements 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 specified timeframe
• IRT members failing to provide timely reviews
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Terminology
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.
Bank phases: A separate segment or stage of bank construction or development. In order to separate a
bank into Phases, the Sponsor should demonstrate, to the satisfaction of the IRT, that the initial Phase
would be ecologically viable and acceptable as a standalone bank if additional Phases are never constructed.
Subsequent Phases must build upon the ecological and aquatic resource functions of the initial Phase.
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.
Credit: a unit of measurement (functional, areal, or other suitable metrics) representing an accrual of
aquatic functions at a mitigation site. The measure of credits is based on the resources restored, established,
enhanced, or preserved. Credits are the currency that a bank has to trade in.
District: refers to an Army Corps of Engineers (Corps) district office.
Functions: Functions are the physical, chemical, and/or biological processes that occur in ecosystems
(e.g., denitrification or carbon sequestration).
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.
In-kind: a resource of a similar structural and functional type to the impacted resource.
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Instrument: Refers to the banking instrument 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.). It may also be referred to
as a mitigation banking instrument (MBI), banking instrument (BI), or bank enabling instrument (BEI).
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 Chair or co-chairs (Corps
district and any other agency chairing the IRT) on the establishment and management of a mitigation bank
or an ILF program. 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).
Multiple authority banks: Also called "joint banks." These are banks that provide compensatory
mitigation for resource impacts under more than one regulatory authority. Examples include banks that
provide compensation for resources regulated under CWA section 404 and state law or compensation for
impact to 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 authority.
Out-of-kind: A resource of a different structural and functional type than the impacted resource.
Resource type: The type of aquatic resource considered. Examples include wetlands, streams, marine
habitats, 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 in-lieu fee 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 bank or ILF Program,
as specified in the instrument (33 CFR 332.2/40 CFR 230.92.2).
Services: Are the benefits that human populations receive from the functions provided by ecosystems
(e.g., flood flow attenuation or water quality improvement).
Sponsor: Any public or private entity responsible for establishing and, in most circumstances, operating
a bank.
Subordination agreement (in the 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 and the replacement
of aquatic resource functions or services at the compensatory mitigation site.
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Umbrella bank instrument: Single mitigation banking instrument that may provide for future
authorization of additional bank sites. As additional bank sites are selected, they must be included in
the mitigation banking instrument as modifications to the original instrument (33 CFR 332.8(h)/40 CFR
230.98(h)). These modifications are subject to the prospectus and public notice requirements associated
with any proposed mitigation bank.
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.
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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)
Interagency Review Team (IRT)
Initial Evaluation Letter (IEL)
In-lieu fee (ILF)
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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Bank Establishment
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1. Bank Goals and Objectives
Goals are the general guidelines that explain what you want to achieve and the rationale (why) for doing
a project. Objectives identify a specific element of the goal and may define the strategies or steps needed
to attain the stated goals (Ossinger 1999; Figure 3). Goals and objectives reflect the projects 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 floodflow
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 instrument 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 bank must be identified to enable reviewers to
evaluate whether resources are consistent with the site's compensatory mitigation potential. On occasion,
bank instruments may propose establishing resource types (wetlands or streams) that are not consistent
with the landscape setting of the bank 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/state credit determination
mechanism.
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Each bank 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 bank site. An umbrella bank instrument (refer to Terminology element)
may have multiple bank sites.
lb. Does the instrument identify functions and services to be provided by the bank site?
The functions and services to be provided by the bank/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.
lc. Does the instrument include the methods used for compensation?
For each resource type(s) that would be provided on the bank site, the instrument should include the
amount of re-establishment, rehabilitation, establishment, enhancement, and preservation (see 33 CFR
332.2/40 CFR 230.92) proposed.
Id. Does the bank site address ecological resource needs within the watershed or landscape setting in
which the bank site is located?
Does the instrument include a list of ecological resource needs within the watershed or landscape setting
and an explanation of how the site will address the needs? The bank site 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 instrument
should explain how the site will address those needs. With respect to federally and state listed species and
habitats, 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 site selected, and is it appropriate for the mitigation
type/needs? What does it mean to be an appropriate bank 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 selection of a
mitigation site is the single most important factor in determining
a mitigation projects future success. 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.
Type and location of compensatory mitigation (33 CFR 332.3 (b)(l)/40 CFR 230.93(b)(1)):
• Bank 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, bank 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 bank 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 bank site may be incompatible with adjacent land use activities (i.e., development around
site, bank may pose localized flooding or mosquito issues)
• 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
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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• 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 is 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 - Banks 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 bank 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., Fish and Wildlife Service
Final Policy on NWR System and Mitigation, 1991).
• Preservation - Incorporating areas of preservation in a bank 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 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 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 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 bank to hydrologic sources (including availability of sufficient
water rights to the long-term sustainability of the project).
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In summary, the instrument should include:
• A brief rationale for how a certain bank 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
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 instrument should
provide specific, concrete examples/criteria.
• For banks 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 top lines of black text in each box represent
bank site selection factors, and bulleted blue text explains 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
Site located in a watershed with TMDLs for
sediment, nutrient, E. coli
S 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
•S 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
Sites selection factors and their importance (V]
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
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Evaluating the below questions, the reviewer should consider the extent to which site selection addresses
the bank Sponsor's goals and objectives.
2a. Is the bank 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 draft instrument?
This question asks whether the bank 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 in a specific service area (33 CFR
332.3(b)(l)/40 CFR 230.93(b)(1)). These functions and services should be identified in the project's goals
and objectives. The IRT reviewers 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 fioodwater abatement (service).
2b. Does the bank site include areas that were formerly aquatic resources or are currently degraded aquatic
resources?
Review the proposed bank 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 bank site include buffers that would protect it from its surroundings? Does it help buffer other
conserved aquatic resources from potentially incompatible activities?
Bank 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 bank site located
adjacent to a national wildlife refuge is buffering the refuge) (33 CFR 332.3(i)/40 CFR 230.93(i)). The IRT
reviewers should refer to any local district or state guidelines regarding buffer requirements and crediting.
2d. Is the bank 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 bank site is part of a larger network of
conserved aquatic resource habitat. Consideration should be given to whether the proposed bank helps
to establish or extend a planned conservation corridor or is within areas designated as critical fish and
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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 bank site to protected lands or waters.
2e. Has the proposed bank site addressed ecological needs that have been identified within 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))?
Very simply, does the proposed bank address 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 bank 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 banks where sea level rise will likely affect design elevations
and target habitats.
For proposed banks located in marine or estuarine environments, consideration should be given to
whether the bank 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 bank instrument 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 bank? Are any of these
critical to successful bank establishment or operation?
Are there any factors that complicate design, development, and/or implementation of a proposed bank?
For example, adjacent development activities or historic districts, which could limit the amount of property
available to implement the bank and/or the types of mitigation activities that can occur on the property,
existing easements limiting activities on the parcel(s) where the bank is proposed, sensitive fauna/flora
species or archaeological/cultural sites, utility crossings, drainage canals, or severed sub-surface rights that
could constrain bank 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).
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Factors that could be considered critical to bank 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 bank 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 instrument with supporting documentation provided in the
instrument or accompanying exhibits (e.g., title reports or property assessment and warranty documents).
2g. Is this bank 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 such as having 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 Conditions.
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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 bank instrument include a description
of the baseline watershed/landscape and ecological
characteristics of the proposed bank site?
The bank instrument 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 context
of the bank 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
• 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 (perfor-
mance 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,
post construction. The data collected pre-construction would be considered a benchmark for the degree of
change in function the post construction state achieves.
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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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 re-establishment of a vernal pool is proposed where there is not
a restrictive soil layer, the mitigation work plan (review Element 4) would have to address this constraint.
Similarly, a reviewer should examine the site conditions and compare them with the instrument mitigation
goals and objectives to determine if the site is appropriate for the proposed resources.
3d. Does the instrument include or reference a delineation of wetlands/waters?
A wetland/waters delineation is a required component of the banking instrument (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 instrument 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 effects to
these resources. Will the site conserve and protect sensitive cultural or archaeological resources or in the
case of fauna/flora, will the site provide an opportunity to enhance/expand their current habitat?
3f. Does the instrument 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?
Similarly, for projects in marine or estuarine environments, are underwater utilities present? The banking
instrument should identify all existing and proposed infrastructure. The instrument should also consider
the potential impacts (direct or indirect) of this infrastructure as well as any proposed measures that could
allow for attainment of bank goals and objectives without future impacts to the mitigation site. For more
detail, see also Review Element 6: Site Protection Instrument.
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3g. Does the instrument include the location and information related to any existing easements, rights-of-
way (ROW), or other property restrictions?
This question builds on question 3f. and is discussed in greater detail in Review Element 6: site protection. If
there are any existing easements (such as utility or drainage), ROW, or other interests in the bank property,
such as liens or mortgages, they should be clearly identified and explained, as they may not be compatible
with the projects 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 the 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 reviewers 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 and 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 in 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 2011) and the Wetlands Engineering
Handbook (USACE ERDC 2000). A number of district- or state-specific tools have also been developed, for
example: Charleston District's 2010 Mitigation Plan Template, the New Orleans District resource specific
template mitigation work plans (Bottomland Hardwood, Swamp, Marsh, and Pine Flatwood), and the New
England Districts 2016 Compensatory Mitigation Guidance, which includes guidelines to assist in 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 instrument or exhibit 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 project's 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 bank instrument.
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 bank instrument.
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 instrument and associated exhibits. The mitigation work plan should take this information
into consideration because of the potential for incompatibility with the banks goals and objectives. See
Element 3f. and 3g. above for more on this topic.
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5. Financial Assurances
Financial assurances are a mechanism that helps ensure resources are
available to correct or replace unsuccessful projects during a bank's
operational phase (covers both construction and monitoring during
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 an IRT reviewers responsibility to review the Sponsor's financial
assurance estimates and determine if they are accurate/sufficient. With
sufficient financial assurances, a 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 type 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 discussion of the requirements for
financial assurances, approaches to estimation of 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 may be 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 bank 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 instrument.
There are two basic approaches to determining the amount of assurances a Sponsor will provide for their
bank site, on-site remediation, and off-site replacement. On-site remediation bases assurances on the
amount of resources needed to undertake corrective actions to the existing bank site. These estimates
include the cost to complete construction and meet performance standards. On-site estimates are
typically itemized by proposed action such as planting, monitoring, or control of invasive species. Off-site
replacement bases assurances on the cost of finding and implementing a new, separate mitigation project
or purchasing credits from another bank or in-lieu fee program. This is generally a more expensive and
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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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, 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 bank instrument should address how claims on assurances may be made. In the
event that 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 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 yrs,
maybe
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 yrs,
maybe
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
yrs
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
Appropria-
tions
Up to life of
project
Up to full
cost of
implementa-
tion
No
Performance
Appropriation
by state or local
government; in a
claim, state or local
gov. agency use funds
for corrective actions
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 mon-
itoring/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 antici-
pated (patching? grading? repaying?), 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
Monitoring and Maintenance Phase
Description
Cost
Cost Breakdown
Prescribed fire
$144,000
4 burns, 1,200 acres @ $30/acre
Fire lanes
$64,000
4 burns, 8 miles @ $2,000/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
($5,000/yr for 10 yrs)
Contingencies (10%)
$36,600
Total
$402,600
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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
$2.0
$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 diy/sunny
2.6
AC
AC
$1,200
$3,120
Bare root seedlings
2380
Stem
Stem
$2.25
$5,355
Fencing
1200
LF
LF
$4.0
$4,800
Clearing and grubbing
33
AC
AC
$1,500
$49,500
Incidental stone
2
Ton
Ton
$50.00
$100.00
Subtotal
Mobilization
1
LS
LS
$9,185.25
$9,185.25
Total Fee
$192,890.25
5a. Does the instrument include the basis for the financial assurance, either corrective action on the bank
site, or replacement compensation at another site? Is this consistent with district/state requirements?
Refer to discussion in "Estimating Financial Assurances" above for on-site remediation versus off-
site replacement. Refer to local district/state requirements for determining the approach to estimating
assurances.
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5b. Does the instrument 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?
Refer to the above case examples for reference. Is the itemized list in the instrument sufficiently detailed to
determine whether it is complete relative to the mitigation work proposed and amount of the assurances
is sufficient?
5c. Does the instrument 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 bank is not constructed concurrently. The instrument needs to specify under what conditions/
circumstances an assurance will be reduced or released.
5d. 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 5 above under the heading "Implementing
Financial Assurance." The financial assurance mechanism must identify an appropriate beneficiary.
5e. Does the type of assurance provide for payment, performance, or both in the event that a claim is made?
Refer to the Table 1: Types of financial assurance above. Letters of credit and escrow provide for payment
only; appropriations provide for performance only, and performance bond and insurance provide for
payment and performance.
5f. 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.
5g. Does the instrument or associated exhibit specify that the Sponsor will provide a financial assurance
mechanism prior to an initial release of credits?
The bank instrument may allow for an initial release of credits (see Review Element 9 for more on credit
release) to the Sponsor once the bank instrument and mitigation plan have been approved, bank site has
been secured, and financial assurances have been established (33 CFR 332.8(m)/40 CFR 230.98(m)).
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6. Site Protection Instrument
Site protection instruments are the legal mechanisms that protect
a site from encroachment or degradation. The site protection
instrumentwillrequirecoordinationwithdistrictorstatecounselto
ensurethatthemechanismisadequateandcompliantwithstatelaw.
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 bank is located. The IWR publication
on site protection for compensatory mitigation (Wood and Martin 2016) provides a good introduction to
this topic.
6a. Does the instrument 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.
6b. Does the mechanism protect against interests/activities that are incompatible with the projects 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 bank 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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6c. Does the instrument list any other interests in the property (financial, mineral/timber, water rights)?
Does the instrument (or exhibits/attachments to the bank instrument) include an explanation as to how
those other interests may affect the bank site?
It is important for the reviewer to conduct an initial screening of the 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). An IRT reviewer should consider surface
and subsurface (i.e., groundwater) source inputs and outputs and if the project controls the surface and
subsurface (mineral, oil, or gas rights) of the site. Someone exercising these other rights can affect a
bank site. In some cases, these other interests may not disqualify a site if areas covered by the interests
are not included within the bank acreage used to determine mitigation credits and if exercising those
interests would not adversely affect the bank 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 instrument 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 bank site.
• In some cases, holders of mineral rights have agreed to restrict disturbance within some distance of the
bank site ground surface (e.g., within 200 feet of ground surface) in order to limit impacts to the site.
• The bank 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 bank.
• Another approach used occasionally is for the bank 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 bank site.
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Table 4. Examples of how other interests in property may affect site protection
Interests
How interest may affect
long-term protection of site
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 high-
way), stormwater flow/transport (public works) and/or
mosquito control (public works, health department).
A utility company may choose to main-
tain 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 ex-
ample if the site is intended to develop into forested wet-
lands.
Subsurface (Mineral/oil & gas) rights are
often owned separately (severed) from
surface rights.
In many states, a site protection document like a conser-
vation 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 ease-
ment on the surface. Exercising subsurface rights (mineral
or oil & gas extraction) could have an adverse effect on the
mitigation bank site.
6d. If the site is located on public lands, is the Sponsor proposing additional long-term protection measures?
Do they seem adequate?
Public lands, for example many of those held 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 bank site allowed? If so, 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 bank 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.
6e. 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 bank, there may be proposals to modify the site protection mechanism—e.g., to
accommodate a planned pipeline or roadway, to remove land that is unnecessary for compensatory
mitigation purposes5, or to accommodate other uses of the bank 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 bank 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 bank site, provide
feedback to the Sponsor, and determine whether additional action is necessary.
5 Any request to remove lands from an existing mitigation project (ILF project, bank, or PRM) 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 on-site. Areas that have been credited by the regulatory agency for any reason
should not be removed from site protection.
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7 Geographic Service Area
The service area should be appropriately sized to offset
permitted impacts and replace lost functions/services.
The instrument 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) factored
into the determination of the service areas, 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)).
7a. Does the bank instrument or associated exhibits include a clearly defined service area(s) for the bank?
Service area boundaries on the ground 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. HUCs are periodically revised, often
changing extents in relatively flat areas like coastal plains. So, it is important that the instrument provide
both a description of the service area(s) and associated map(s). Where possible, the boundaries of 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 feature like a stream, drainage divide, or mountain
chain) to minimize future disputes between the Sponsor, the IRT members, and regulators (non IRT
members) over whether proposed permits are within a banks service area(s).
7b. Are there multiple service areas or service area types defined? Is this consistent with district, state, or
local requirements?
A bank may have more than one service area. Banks 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 banks may have a secondary service area adjacent to the primary service area, that can be used to
provide compensation in otherwise under-served areas. There are typically restrictions on use of bank
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.
Service Area
The geographic area within which
impacts can be mitigated at a specific
mitigation bank or ILF program, as
designated in its instrument (33CFR
332.2/ 40 CFR 230.92).
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7c. Does the bank instrument 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.).
7d. 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 district and/or local/state
government will have laws, regulations, or ordinances shaping the boundaries of a service area. The IRT
reviewers should reference these regulations on service area boundaries when reviewing the instrument.
Service areas are often regulated by multiple government agencies, making it appropriate to defer to those
agencies on matters of compliance. Consider whether the instrument provides adequate service area
mapping and descriptions consistent with any local, state, or district requirements.
7e. Is the rationale for the location, size, and extent of the service area clearly documented in the instrument
and/or exhibits?
The Mitigation Rule requires the Sponsor to justify the location, size, and extent of the service area to
ensure the bank 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 bank. For example, a riparian bank that reconnects a floodplain to its river may merit a
larger service area than a riparian bank that does not because of the additional functions/service provided
(flood storage, sediment sequestration, fish nursery habitat, etc.).
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Bank Operations
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8. Credit Determination
The number of credits a compensation project generates is
supposed to 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 judgement to
more sophisticated approaches based on published assessment methodologies incorporated into credit/
debit 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.
8a. Is the Sponsors credit determination methodology consistent with the 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 instrument is consistent with
established standards for that resource type in the district/state. If a Sponsor proposes a credit determination
method that differs from the applicable district/state standards it should be discussed by the IRT with the
Sponsor.
8b. 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 application of the methodology based on
documented district/state practices and guidelines?
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 Sponsor.
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 mitigation bank... 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 important to note 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 bank instrument.
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.
8c. Does the proposed number of credits reflect the difference be tween ba seline an d p st-construction
conditions?
In other words, are the number of proposed credits consistent with the proposed amount of uplift, as
calculated/determined by the applicable district/state 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 CFR 332.8(o)(3)/40 CFR
230.98(o)(3)).
8d. 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)).6 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))
^District or state-specific guidelines may clarify what is meant locally by threat of destruction or adverse
modification.
6 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.) in-stead.
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8e. 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, bank 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.
8f. Does the instrument include a table identifying credits that will be generated by resource type, and is
there a corresponding map identifying those locations?
Each instrument 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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9. Credit Release Schedule
The credit release schedule details the release of credits to a Sponsor based on achievement of performance-
based milestones (such as construction or attainment of performance standards).
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.
Once a debit is incurred from the initial credit release, implementation of the approved mitigation plan
must be initiated within one (1) full growing season (approx. 1 year) (33 CFR332.8(m)/40 CFR230.98(m)).
9a. Does the instrument or associated documents specify a credit release schedule?
The instrument 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.
9b. Is the credit release schedule consistent with the mitigation type and resources being proposed? Does
the instrument's 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).
The release schedule may take place over a longer period of time for slower-developing resource types (e.g.,
forested wetlands vs. emergent wetlands) and for certain mitigation methods (e.g., restoration credits may
be released more slowly than preservation credits).
Two example credit release schedules, wetland (Table 5) and stream (Table 6), are provided below.
Table 5. Example wetland credit release schedule.
Release
% of Credits to be
Released
Requirements
Initial release 15% • Completion of initial release requirements
Construction
10%
• Approval of as-built by IRT
• Funding a minimum of 15% of long-term
management funding (LTMF) principal
3rd release
60%
• Meeting Performance Standards for year
monitored
• Funding a minimum of 50% of LTMF principal
4th release
15%
• Meeting Year 5 Performance Standards
• Funding a minimum of 100% of LTMF principal
Source: Norfolk District & Virginia DEQ MBI Template 2018
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Table 6. Example stream credit release schedule.
Release
% of Credits to be
Released
Requirements
Initial release
15% • Completion of initial release requirements
Construction
10%
• Approval of as-built by IRT
3rd release
10-20%
• Meeting Performance Standards
• Upon the occurrence of a bankfull event
• Funding a minimum of 50% of LTMF principal
4th release
10-20%**
• Meeting Performance Standards
• Upon the occurrence of a bankfull event
5th release
10-20%**
• Meeting Performance Standards
• Upon the occurrence of a bankfull event
• Funding a minimum of 85% of LTMF principal
6th release
Minimum 15%
• Meeting Performance Standards
• Upon the occurrence of a bankfull event
• Funding 100% of LTMF principal
Source: Norfolk District & Virginia DEQ MBI Template 2018
**10% if no bankfull event, 20% if bankfull & channel is stable
Note, some resource types (i.e., forested wetlands) may take longer than 5 years to achieve all required
performance standards.
9c. 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 bank instrument. 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 bank instrument and mitigation plan 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)).
9d. Will a significant amount of credits be withheld until all performance standards have been met?
A significant share of total credits are to 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.
9e. Is the release schedule consistent with current/accepted practices in the district or state?
Refer to local district and/or state practices for consistency.
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10. Assumption of Mitigation
Responsibility
The treatment of mitigation liability is one of the defining
factors separating 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 a bank, they are paying to transfer
their mitigation responsibility to the bank Sponsor. (This is
also true when credits are purchased from an ILF program.)
For a successful transfer of mitigation liability, the following regulatory requirements must be satisfied:
• The bank instrument 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
*Side Tip: An applicant has two options for utilizing bank 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 bank
Sponsor and associated credits may be applied for compensation.
10a. Does the instrument include a provision stating that the Sponsor assumes the permittees 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)).
10b. Does the instrument 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)).
10c. Does the instrument 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 bank file (33 CFR 332.3(l)(3)/40 CFR 230.93(1)(3)). Failure to provide documentation would
be considered non-compliance with the instrument.
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Assumption of Mitigation
Responsibilities
A provision stating that legal responsibility
for providingthe compensatory mitigation
lies with the Sponsor once a permittee
secures credits from the Sponsor (33 CFR
332.8(d)(6)(ii)(C))/40 CFR 230.98(d)(6)
(ii)(C)).
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11. 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
11a. Does the document have a credit accounting procedure outlined?
The instrument 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)).
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. Additionally, many districts' bank
instruments require submittal of annual credit ledger updates with the bank's annual report, as discussed
in review Element 17: Reporting Protocols.
RIBITS credit classifications:
Instrument credit types do not always correspond directly to credit classifications in RIBITS ledgers.
District RIBITS administrators are responsible for translating credit types in bank instruments 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 in the bank instrument translate
to the RIBITS ledger. A recommended practice would be to include a table in the instrument that links
credit types to RIBITS credit classifications.
1 lb. 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)).
11c. 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.
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12. Reporting Protocols
The Sponsor is required to submit periodic/annual monitoring and ledger account reports. These reports
are then typically posted on RIBITS. The reports provide a mechanism to monitor a projects progress and
activity.
The Corps may also require reports on financial assurance and long-term management funding. 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 without enough funds to manage the closed site long term (see Review Element 18: Long
Term Management Plan). Annual/periodic funding reports helps an 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 instrument and are sufficient for after
bank operations have ceased.
12a. Does the instrument 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.
• 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 should include:
• A listing and summary of all credit and debit activity for the bank - a mechanism of transparency,
where the IRT reviews and ensures all ledger activity is clearly documented
• 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 bank sites under umbrella banking
instruments and individual bank phases.
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• 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 bank sites under umbrella banking instruments and potentially individual bank
phases.
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13. Default and Closure Provisions
Default is when a bank Sponsor fails to comply with any aspects of the banking instrument or associated
mitigation plan. In general, the presumption is that any non-compliance with the instrument and plan
may be considered a default on the instrument. 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 bank site has been successful in satisfying its responsibilities laid out in the banking
instrument.
13a. Does the instrument (or associated exhibits) specify what is meant by default?
A banking instrument must include default provisions (33 CFR 332.8(d)(6)(ii)(D)/40 CFR 230.98(d)(6)
(ii)(D)).
13b. Does the instrument 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 hardest 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 (33 CFR 332.8(l)(2)/40
CFR 230.98(1)(2));
5. Decrease available credits—decreasing the number of credits available to debit (33 CFR 332.8(l)(2)/40
CFR 230.98(1)(2));
6. 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));
7. Direct Sponsor to provide alternative/replacement mitigation—fe.g., use of another bank or an ILF
program (33 CFR 332.8(l)(2)/40 CFR 230.98(1)(2));
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; and
10. Terminate instrument (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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13c. Does the instrument (or associated exhibits) define bank closure? In the case of an umbrella banking
instrument does it define closure for an individual bank site?
A banking instrument must include closure provisions (33 CFR 332.8(d)(6)(ii)(D)/40 CFR 230.98(d)(6)
(h)(D)).
13d. Does the instrument (or associated exhibits) identify what actions must be completed in order for the
bank to close?
Bank closure is generally defined as taking place when all of the below conditions are met for an entire
bank site:
• Performance standards are met7,
• 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 bank may close.
7 In the course of bank operations, the IRT and the Sponsor may find it necessary to adjust or modify some performance
stan-dards 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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14. 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 of performance standards
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)).
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.
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
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
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14a. Does the mitigation plan contain performance standards to evaluate attainment of project objectives?
Are performance standards explicitly stated or included in the instruments narrative? Performance
standards should be clearly identifiable and pertain to the desired aquatic resource outcome (and project's
goals and objectives). Many instrument templates have designated performance standards, which may be
presented in a template table or narrative.
14b. Does the district have performance standards for the proposed aquatic resource(s)? If the district does
not have performance standards, proceed to questions 14d-14h. If the district has performance standards,
proceed to questions 14c-14h.
If the district has applicable performance standards, IRT reviewers should refer to these standards when
reviewing the instrument.
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 instrument. 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.
14c. Are the standards proposed by the Sponsor consistent with current district practices?
The reviewer will compare the applicable district or state practices and ensure consistency with the standards
proposed in the instrument 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.
14d. 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.).
14e. 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
bank site's potential. If a palustrine emergent wetland is proposed, the standards may revolve around
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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 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 Army Corps of Engineers 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.
14f. 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.
14g. 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 reviewers
in evaluating attainment of its performance standards across the site. Some districts or states also
require achievement of incremental standards.
14h. 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).
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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14i. 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).
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15. 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 bank instrument 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).
15a. 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.
15b. 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.
15c. Does the instrument 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., Forth 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 the Corps Headquarters may be
of interest to an 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.
15d. 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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16. 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 mitigation bank 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.
16a. Does the instrument contain a description and schedule of maintenance requirements to en-
sure 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 instrument, and they assist
the Sponsor and IRT reviewers 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)).
16b. 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 re-
tain its integrity and continue to provide the desired functions and services.
16c. Does the description identify regular or recurring actions?
This might include measures like nuisance/exotic species treatment schedule, fence repair, or prescribed
fire. These recurring actions are necessary for the sustainability of the project.
Includes:
• Measures to control predation/grazing of mitigation plantings
• Nuisance/exotic invasive species abatement measures and treatment schedule
• Temporary irrigation for plant establishment
• Replacement plan (ex. replacement plantings) and invasive species control
• Structure maintenance/repair and other applicable maintenance plan components
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)).
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17 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)).
17a. Does the instrument or associated management plan document(s) include recommended general
guidelines for adaptive management?
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 instrument or associated management 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?
17b. 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 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
compensatorymitigationproject... 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 bank instruments refer to unpredicted events or phenomena negatively affected a bank 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 bank
project no matter how well-thought out. Unanticipated events can occur on any bank 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 bank
instruments identify how extraordinary events or circumstances beyond the control of the Sponsor to
manage maybe addressed. What maybe 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 bank
instrument to specify a process for adaptive management. It is important that discussions take place between
the Sponsor and IRT agencies to lay out potential options for addressing unforeseen circumstances and
identification of available resources for taking any necessary action as well as monitoring the consequences
of any corrective actions.
17c. 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. Considerations should be given
to future sea level rise for projects located in coastal, marine, or estuarine areas. In non-coastal areas,
considerations should be given to increased frequency or intensity of flooding events, wildfire, or drought.
The instrument 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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18. Long-Term Management Plan
Compensatory 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 bank 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 bank 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)
(ll)/40 CFR 230.94(c)(ll)) and must be part of the bank mitigation 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 bank site will be necessary once all performance standards have been met. These
management activities are specific to each bank site and depend upon the desired aquatic resource(s)
and the intended functions and services to be provided by the bank. Practicability is a consideration in
determining what long-term management activities are necessary for a bank. The LTMP should include
provisions for periodically reviewing and revising the LTMP over time based on changing resource needs
or funding availability and identify the party responsible (Sponsor, long-term steward, etc.) for identifying
any necessary modifications to the LTMP.
The Sponsor is responsible for funding the LTMP, and this funding should be identified in the instrument
or LTMP (33 CFR 332.7(d)(2)/40 CFR 230.97(d)(2). These long-term management funds are typically
invested to generate returns that can be used to help fund future management activities.
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
associated financing should take into account inflation (33 CFR 332.7(d)(3)/40 CFR 230.97(d)(3)). The
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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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 bank Sponsor and the IRT should give
careful consideration to the necessity of each long-term management task required in the LTMP.
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 the most common rate.
A number of useful tools have been developed to help estimate long-term management funding such
as The Nature Conservancy's (TNC) 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.
18a. Does the instrument include a long-term management plan (LTMP)?
See discussion above.
18b. Does the instrument or LTMP identify the party(ies) responsible for long-term management? Can the
responsibility for long-term management be transferred to another party?
The instrument or LTMP is required to identify the party(ies) responsible for long-term management.
In many districts/states, the Sponsor may be identified i n t he i nstrument a s i nitially r esponsible f or
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)).
18c. 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 bank 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 bank 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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18d. 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.
18e. 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
bank site when it reaches the long-term management bank closure phase. The mechanism for Long-Term
Management Funding (LTMF) is established when the bank instrument is approved by the IRT Chair or
co-chairs and the Sponsor. Any modifications to the funding mechanism require consent by all parties
involved in the bank (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 banks is to first sum the total annual cost of all management activities required in the
bank (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.
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.
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Table 9. Case example ofLTMP 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 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's 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.
Table 10. Example cap rates for long-term managemen t funds
Annual Cash
Cap Rate
Initial Fund
Needed
Amount
$20,000
5%
$400,000
$20,000
3%
$666,667
$20,000
1%
$2,000,000
$20,000
0.5%
$4,000,000
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18f. 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 bank
site) or management costs (e.g., additional permitting costs associated with conduct of prescribed fire).
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.
18g. 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 instrument 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, e.g.:
• Single payment (or lump sum): Funding long-term management obligations with a single or lump
sum payment can be financially demanding for private sector bank 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 bank instrument 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 banks 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 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 bank 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, bank 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/
Charleston District, USACE. 2010. Guidelines for Preparing a Compensatory Mitigation Plan, https://
ribits.ops.usace.army.mil/ords/f?p=107:150:10318356781941::NQ::P150 DOCUMENT ID:47829
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/2015Q8/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 U.S. Environmental Protection Agency, Office of
Wetlands, Oceans, and Watersheds, Wetlands Division. Washington, D.C. EPA 843-B-12-005
National Oceanic and Atmospheric Administration (NOAA) Fisheries, Western Region. 2014. California
Eeelgrass Mitigation Policy and Implementing Guidelines. 48pp. https://www.fisheries.noaa.gov/west-
coast/habitat-conservation/seagrass-west-coast
New England District, USACE. 2020. New England District Compensatory Mitigation Standard Operating
Procedures. https://www.nae.usace.army.mil/Missions/Regulatory/Mitigation.aspx
New Orleans District, USACE. 2018. Mitigation Work Plan templates for Bottomland Hardwoods, Swamp,
Marsh, and Pine Flatwood Savanna, https://ribits.ops.usace.armv.mil/ords/f?p=107:27
Norfolk District, U.S. Army Corps of Engineers (USACE). 2018. Mitigation Banking Instrument Template.
https://ribits.ops.usace.army.mil/ords/f?p=107:27:13939249182439::NO::P27 BUTTON KEY:10
Ossinger, M. 1999. Success standards for wetland mitigation projects - a guideline. Washington State
Department of Transportation, Environmental Affairs Office. 31pp
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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.army.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/
PublicNotices/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. 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/ELTR-WRP-RE-21.719pp.https://www.csu.edu/cerc/researchreports/
documents/WetlandsEngineeringHandbookUSACE2000.pdf
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.armv.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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Mitigation Bank
Instrument Review
Checklist Questions
The Mitigation Bank Instrument Review Checklist reflects the content of each element in the Mitigation Bank
Instrument 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
Has the prospectus been reviewed?
Are there any components unresolved
or unaddressed from the prospectus?
1. Bank Goals and Objectives
la. Does the instrument include a
description of the resource type(s)
and approximate amount(s) that will
be provided?
lb. Does the instrument identify
functions and services to be provided
by the bank site?
lc. Does the instrument include the
methods used for compensation?
Id. Does the bank site address
ecological resource needs within the
watershed or landscape setting in
which the bank site is located?
2. Site Selection
2a. Is the bank 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 draft
instrument?
2b. Does the bank site include areas
that were formerly aquatic resources
or are currently degraded aquatic
resources?
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Review Elements
Questions
Addressed
(Yes/No)
Complete
(Y/N)
Page
#(s)
Reviewer Comments
2c. Does the bank 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 bank site adjacent to other
conserved aquatic resources or does
it help establish or extend a conserved
corridor?
2e. Has the proposed bank site
addressed ecological needs that have
been identified within 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 bank? Are any of
these critical to successful bank
establishment or operation?
2g. Is this bank site ecologically
suitable for providing the desired
aquatic resource functions/services
within the subject watershed or
landscape position?
3. Baseline Information
3a. Does the bank instrument
include a description of the baseline
watershed/landscape, and ecological
characteristics of the proposed bank
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 project's goals and objectives?
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Review Elements
Questions
Addressed
(Yes/No)
Complete
(Y/N)
Page
#(s)
Reviewer Comments
3d. Does the instrument include or
reference a delineation of wetlands/
waters?
3e. Does the instrument include
information related to at risk fauna and
flora species and/or other regulated
resources (cultural/archaeological)?
3f. Does the instrument include the
location and extent of any utilities
and other infrastructure in the project
vicinity?
3g. Does the instrument include the
location and information related to
any existing easements, rights-of-way
(ROW), or other property restrictions?
4. Mitigation Work Plan
4a. Does the instrument or exhibit
include the required work plan
components? Do these components
have detailed specifications and
descriptions?
4b. Are the work plan components
reflective of the project's 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?
5. Financial Assurances
5a. Does the instrument include the
basis for the financial assurance,
either corrective action on the bank
site, or replacement compensation at
another site? Is this consistent with
district/state requirements?
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5b. Does the instrument 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?
5c. Does the instrument include
specific conditions for reduction/
release of financial assurances?
5d. Do the assurances identify a non-
federal beneficiary in the event that a
claim is made on the assurances?
5e. Does the type of assurance provide
for payment, performance, or both in
the event that a claim is made?
5f. Does the assurance include
notification to the Corps at least 120
days before expiration/revocation of
the assurances?
5g. Does the instrument or associated
exhibit specify that the Sponsor
will provide a financial assurance
mechanism prior to an initial release
of credits?
6. Site Protection Instrument
6a. Does the instrument 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)?
6b. Does the mechanism protect
against interests/activities that are
incompatible with the project's goals
and objectives?
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6c. Does the instrument list any other
interests in the property (financial,
mineral/timber, water rights)?
Does the instrument (or exhibits/
attachments to the bank instrument)
include an explanation as to how
those other interests may affect the
bank site?
6d. If the site is located on public lands
is the Sponsor proposing additional
long-term protection measures? Do
they seem adequate?
6e. 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?
7. Geographic Service Area
7a. Does the bank instrument or
associated exhibits include a clearly
defined service area(s) for the bank?
7b. Are there multiple service areas
or service area types defined? Is this
consistent with district, state, or local
requirements?
7c. Does the bank instrument or
associated exhibits specify the
watershed or landscape units used to
define the service area?
7d. Does the service area comply
with local, district, and/or state
requirements (scale, size, or resource
type)?
7e. Is the rationale for the location,
size, and extent of the service area
clearly documented in the instrument
and/or exhibits?
8. Credit Determination
8a. Is the Sponsor's credit
determination methodology
consistent with the current district/
state standards?
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8b. Is the proposed generation of
credits consistent with district/state
policy, and is it applied accurately?
8c. Does the proposed number of
credits reflect the difference between
baseline and post-construction
conditions?
8d. Are any of the proposed credits
based solely on preservation?
8e. Are credits proposed for generation
through restoration, enhancement, or
preservation of riparian areas, buffers,
or uplands? If so. are those riparian
areas/buffers/uplands considered
necessary to maintain the ecological
viability of aquatic resources?
8f. Does the instrument include a
table identifying credits that will be
generated by resource type, and is
there a corresponding map identifying
those locations?
9. Credit Release Schedule
9a. Does the instrument or associated
documents specify a credit release
schedule?
9b. Is the credit release schedule
consistent with the mitigation type and
resources being proposed? Does the
instrument's credit release schedule
differentiate between mitigation
methods and resource types?
9c. Does the release schedule
specify incremental milestones (e.g.,
construction completion, meeting
performance standards) to be
achieved for credit releases?
9d. Will a significant amount of credits
be withheld until all performance
standards have been met?
9e. Is the release schedule consistent
with current/accepted practices in
the district or state?
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10. Assumption of Mitigation
Responsibilities
10a. Does the instrument include a
provision stating that the Sponsor
assumes the permittee's mitigation
liability?
10b. Does the instrument include a
provision stating that the Sponsor will
notify the district of each transaction?
10c. Does the instrument specify the
timing at which the district is notified
of a transaction?
11. Accounting Procedures
11a. Does the document have a credit
accounting procedure outlined?
lib. Does the document indicate
when transaction notifications will be
provided to the Corps?
11c. Does it indicate what information
will be provided in the notification?
12. Reporting Protocols
12a. Does the instrument specify
requirements for submittal 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?
13. Default and Closure Provisions
13a. Does the instrument (or
associated exhibits) specify what is
meant by default?
13b. Does the instrument identify
options available to address default?
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13c. Does the instrument (or
associated exhibits) define bank
closure? In the case of an umbrella
banking instrument does it define
closure for an individual bank site?
13d. Does the instrument (or
associated exhibits) identify what
actions must be completed in order
for the bank to close?
14. Performance Standards
14a. Does the mitigation plan contain
performance standards to evaluate
attainment of project objectives?
14b.Doesthedistricthaveperformance
standards for the proposed aquatic
resource(s)? If the district does not
have performance standards, proceed
to questions 14d-14h. If the district
has performance standards, proceed
to question 14c-14h.
14c. Are the standards proposed by
the Sponsor consistent with current
district practices?
14d. 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)?
14e. 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?
14f. Do the Sponsor's standards
include three elements: attribute
measured, level that defines success,
and time period to achieve success?
See example table above.
14g. Do the standards evaluate
incremental progress toward project
objectives?
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14h. Do the performance standards
compare project/site development to
reference sites/data?
14i. Where applicable, are there
separate performance standards for
different habitat or resource types?
15. Monitoring Requirements
15a. How long will the site be
monitored?
15b. What parameters/criteria will
be monitored? Are they sufficiently
detailed to evaluate attainment of
performance standards?
15c. Does the instrument specify the
content of the monitoring report?
15d. Does monitoring include the use
of reference sites or data to evaluate
performance?
15e. Does monitoring include the use
of reference sites or data to evaluate
performance?
16. Maintenance Plan
16a. Does the instrument contain
a description and schedule of
maintenance requirements to ensure
the project remains viable once it has
been constructed and throughout the
monitoring period?
16b. Does the description cover all
relevant aspects of maintenance
including ecological and infrastructure
maintenance?
16c. Does the description identify
regular or recurring actions?
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17. Adaptive Management Plan
17a. Does the instrument or associated
management plan document(s)
include general guidelines for adaptive
management that encompass:
• Unforeseen circumstances, which
may be defined at a national, state,
or district level.Coordination with
IRT?
• Coordination with the 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?
17b. Do the monitoring and long-term
management plans include provisions
to determine whether any adaptive
measures are needed?
17c. 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?
18. Long-Term Management Plan
18a. Does the instrument include a
long-term management plan (LTMP)?
18b. Does the instrument or LTMP
identify the party(ies) responsible
for long-term management? Can
the responsibility for long-term
management be transferred to
another party?
18c. Does the LTMP include a complete
itemization of long-term management
tasks to be conducted periodically on
a permanent basis?
18d. Are the annual cost estimates
for management activities broken
down by task? Does the LTMP identify
references for cost information used
in the plan?
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18e. Does the LTMP provide
information supporting how the total
amount of long-term financing was
determined?
18f. Does the LTMP allow for
periodic adjustments in management
priorities? Does this include
adjustments in spending?
18g. 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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