The Board of the Missouri Levee and Drainage District Association (MLDDA) wishes to provide you with the following information about agricultural wetlands mitigation banks.  Enclosed are the sample documents for the first wetlands bank in the United States. Mr. Davis Minton of Dexter, Missouri developed this bank for the counties surrounding Stoddard County in the bootheel within the past year. 

The Board believes that wetlands banks are an ideal method for solving wetlands problems for individual farmers and levee and drainage districts. The Board believes that some of the advantages of a wetland bank for agricultural purposes are:  1) Cost; 2) Farmers get to move bothersome wetland places off of their farms so that they can be graded, drained and farmed to provide increases in net returns; and, 3) A levee/drainage district, when economically advantageous, can move bothersome wetland places away from levees, drainage ditches and facilities thereby realizing an initial savings for construction and avoiding future low return maintenance costs. 

Ideal locations are tracts near other wildlife areas.  Owners, either private or public entity (levee district?), are responsible for mitigating wetlands with agency approved plan (dirt work, water level control structures, plantings, etc).  Not the entire wetlands bank has to be developed at once but can be developed as parcels are sold off.  Operations of wetland banks are monitored for compliance by government agencies. Agencies indicate that from two to six wetland banks could ideally be developed along the Missouri River. Unwanted wetlands from a designated group of surrounding counties are moved to a locally developed wetland bank. 

After a bank is set up, individual farmers and/or public entities (levee/drainage districts) then purchase from the bank owner parcels equivalent or at ratios to the type of wetland designated land they wish to move out of the way or out of the district.  Payments for bank parcels go to the bank owner at his/her listed price.  The money is used to develop the wetland.  The bank owner operates the wetlands with approved activities (duck & goose blinds, etc. e.g.).  Land in the bank must be partially Prior Converted (PC) land and it has to be converted to wetlands.  Apparently there is no limit on size.

The biggest advantage for agencies is that a multitude of widely dispersed small wetland areas are moved to a few large wetland areas where they are easier to monitor and administer.  Generally these wetland banks are located near other agency operated wildlife areas thereby increasing the overall size and operating efficiency of the existing wildlife facility.

Consulting services for this wetlands bank was provided by John Magistro, American Farmland Trust, for a fee.  If the bank owner lacks skills for project development, his services provide for project/permit development including technical, legal and coordination of agency requirements.  When wetland bank owners do not have engineering and legal skills, they will probably have to pay someone for these skills.

Additional information is available from Davis Minton 573.624.2692, Cris Hamilton, Ph.573.876.9416, State of Missouri NRCS office in Columbia, Missouri, project leader/consultant John Magistro, American Farmland Trust, Ph.703.321.7444 in Springfield, Virginia and Joseph B. Gibbs, PE, MLDDA Board Member, 573.815.0347.

The Board hopes that you can use this information to good advantage in your community and district.

The Agricultural Conservation Innovation Center (ACIC), a private non-profit organization affiliated with the American Farmland Trust, proposes to establish a wetland mitigation pilot project, known as the Missouri Agricultural Wetland Mitigation Bank (Bank). The Bank is being established specifically to offset impacts associated with agricultural activities within the Bootheel Region of southeast Missouri. The Bank will provide a mechanism by which permit applicants can satisfy wetland replacement/mitigation requirements associated with Section 404 and Section 401 of the Clean Water Act and the 1985 Food Security Act, as amended. Background information on the purpose and need for agricultural-related wetland mitigation opportunities is provided in Attachment 1.

The goal of the Bank is to provide environmentally sound, economically efficient wetland mitigation opportunities for farming activities regulated under Sections 404 and 401 of the Clean Water Act and the 1985 Food Security Act, as amended. The Bank will ease the administrative and financial burdens associated with wetland replacement projects in the agricultural sector, while maintaining appropriate levels of environmental protection for significant wetland resources.

The Bank is being established specifically to offset impacts associated with the conversion of farmed wetlands, with incidental impacts to other wetland types within or immediately adjacent to the farmed wetland. All potential wetland impacts to be mitigated to the Bank will be reviewed and approved by an interagency committee, known as the Mitigation Bank Review Team (MBRT), concurrent with the 404 process. Wetlands listed in Attachment 2 will not be mitigated to the Bank, except in those rare instances where the MBRT determines that the public will benefit significantly from the proposed conversion activity.

The use of this Bank for compensatory mitigation may occur only after the relevant permitted activity has complied with federal and state regulations and policy regarding wetland avoidance, minimization and on-site mitigation.

The cost of mitigation is based on the cost of the easement acquisition; site restoration; short-term (3 - 5 year) mitigation monitoring; long-term land management and site maintenance; performance bond premiums; and project administration.

The mitigation site is located in Section 19, T24N, R9E in Stoddard County, Missouri (Figure 1). The geographic extent of the service area includes hydrologic units 08020203, 08020204, 08020302 and a portion of 1101007 that is bordered by U.S. 67 on the west and Highway 60 on the north (Figure 2). Priority will be given to eligible wetlands within this service area. Eligible farmed wetlands in the alluvial floodplain adjacent to the service area will be considered by the MBRT on a case by case basis. Mitigation debits and credits will be based on replacement ratios established by the MBRT consistent with current guidelines for measuring the functional capacity of affected wetlands and determining wetland mitigation requirements.

ACIC will be the sponsor and will manage the Bank. ACIC will be responsible for determining the transaction costs, identification and acquisition of the mitigation site easement, and coordinating the restoration, monitoring, and long-term management of the mitigation site.

The MBRT has been established to review and seek consensus on the banking instrument and the final plans for the restoration, monitoring, and management of wetlands at the bank site. The MBRT will be chaired by the Missouri NRCS and will include representatives from the US Army Corps of Engineers -Memphis District (Corps), US Environmental Protection Agency-Region 7 (EPA), US Fish and Wildlife Service - Region 3 (FWS), Missouri Department of Natural Resources (MDNR), and Missouri Department of Conservation (MDC). NRCS or the Corps can schedule MBRT meetings. Other MBRT members, ACIC, and/or the bank site landowner can request a meeting by contacting either NRCS or the Corps.

ACIC will provide funds to: (a) acquire a permanent conservation easement on the mitigation parcel; (b) implement the restoration activities; (c) conduct short-term mitigation site monitoring; and (d) conduct long-term mitigation site management. NRCS will hold the permanent conservation easement and ensure that the property is protected in perpetuity. The mitigation site landowner will be responsible for the restoration and long-term management, maintenance activities, and taxes on the property, as described in Attachments 3 and 4.

A Clean Water Act Section 404 permit and Section 401 certification are required to participate in the Bank. Consistent with Section 404 guidelines, all appropriate and practicable steps must be taken by the permit applicant to first avoid, then minimize adverse impacts to wetlands, and to identify on-site mitigation options. The use of the Bank is appropriate in those instances when on-site mitigation is either not practicable or when use of the Bank is environmentally preferable to on-site mitigation. Conversions of Wetlands to be mitigated to the Bank will not commence until the District Engineer determines that the mitigation site is at a point that he can be assured of adequate compensatory mitigation, as discussed in Section 5 below.

5. Mitigation Resources

Funds paid to the Bank sponsor will be used to acquire mitigation to compensate for the proposed wetland conversion activities. The funds will be held in an escrow account at a FDIC-approved banking institution upon the receipt of the first moneys directed to it through this agreement. Once sufficient funds have accumulated in the escrow account, the moneys will be transferred to the landowner for the purposes &easement acquisition and site restoration.

Attachment 3 provides a cost estimate to acquire and restore the mitigation site. The transaction cost submitted to the Bank sponsor is based on: (a) cost of the easement purchase; Co) cost of restoration; (c) mitigation monitoring; (d) administration costs (e.g., title transfer, survey costs); (e) performance bond costs; (f) long-term land management and site maintenance costs; and (g) the cost per restored wetland unit.

The mitigation site landowner has agreed to initiate the mitigation project when sufficient funds are committed to an escrow account to cover the cost of the easement acquisition. When sufficient funds are in escrow, ACIC will provide the mitigation site landowner with a written notice to proceed. NRCS will verify that the restoration activities have commenced and provide written notice to the Corps District Engineer at that point in time. The Corps will then provide written notice to those permit applicants, previously authorized by their Clean Water Act Section 404 permit to provide mitigation from the Bank, allowing the conversion of the affected wetlands. The MBRT members will be copied on all correspondence between ACIC, the Corps, NRCS, the mitigation site landowner, and the permit applicants.

If sufficient funds are not available to undertake the proposed restoration project within six months, the MBRT may: (a) direct that the funds be allocated to other wetland restoration projects within the service area; or (b) direct ACIC to reimburse the permit applicants an amount equal to the original mitigation fee plus any interest earned. If the funds are returned, the permit applicant will still be responsible for compensatory mitigation prior to undertaking any wetland conversion activities.

6. Mitigation Site Selection

Participation in the Bank will be limited to the Bootheel Region of Missouri. The geographic extent of the mitigation service area is based on the eight-digit watershed code (Figure 2), and includes either portions or in their entirety the following counties: Stoddard, Dunklin, Bollinger, Cape Girardeau, New Madrid, Pemiscot, Wayne, Scott, and Butler. Criteria for selection of the service area included an area large enough to have sufficient lands available for restoration activities, i.e., prior-converted croplands, and where there is sufficient demand for mitigation from the local producers to support the Bank.

The mitigation site, located in Stoddard County, was selected based on the percentage of restorable wetlands (prior-converted cropland), the type of wetlands to be restored (emergent, scrub-shrub, and forested) and location within the mitigation service area watersheds, i.e., adjacency to Otter Slough Wildlife Area, which is managed by MDC (see Attachment 3).

A wetland restoration site plan has been developed by ACIC and the bank site landowner, and reviewed and approved by the MBRT (Figure 3). The proposed plan involves the restoration of an 80-acre parcel of prior-converted croplands, and includes hydrologic manipulations, vegetation establishment procedures, and long-term management procedures. The goal of the mitigation effort is to establish a 73-acre wetland complex surrounded by a berm that occupies 7 acres. The complex will include approximately 7 acres of seasonal, shallow water areas; 20 acres of restored forested wetlands using tree plantings; with the remaining 46 acres of emergent and scrub-shrub wetland established through natural succession. A description of existing site conditions, a narrative of the proposed restoration measures, plan views and cross sectional drawings, short-term monitoring procedures, mitigation success criteria, long-term management measures, and compatible land uses are included in Attachment 3.

A cultural resources survey of the site will be completed prior to construction. If significant resources are discovered during this survey or during construction, NRCS procedures (GM Chapter 420, Part 401) for compliance with federal laws and executive orders will be implemented to protect important resource information. Archeological and historic concerns will be coordinated with the State Historic Preservation Officer (SHPO). Once SHPO concurs with the findings, they will provide written notice to the Corps, which in mm will satisfy the Corps' requirements under Section 404.

7. Determining Credits and Debits

Mitigation debits and credits will be based on the following ratios developed by the MBRT. One credit will be equal to one acre of restored wetland. These ratios are based upon the State of Missouri Aquatic Resources Mitigation Guidelines and are consistent with the Missouri Modified HGM method of assessing functional capacity of the affected wetlands. This effort has made determining wetland mitigation requirements more uniform. This same modified HGM method will be used to assess functional capacity of the restored mitigation bank site.

Mitigation Ratios

ACIC can sell the wetland credits when the 404 permit is issued. ACIC will maintain a ledger and produce a report of debit and credit activities which will be distributed to the MBRT members on a quarterly basis. ACIC will provide written notice to the MBRT when the mitigation credits have been exhausted.

8. Performance Standards, Monitoring, and Remediation

The mitigation site will be monitored on an annual basis until it can be demonstrated that the site has reached an ecologically sound, self-sustaining condition for three consecutive years. NRCS or their designated party will conduct the monitoring and provide the results to the MBRT after each monitoring visit. This data will be used to determine the level of mitigation success and to identify problems requiring remedial action. Performance standards, field measurement variables, monitoring frequency, and success criteria have been developed by ACIC and the bank site landormer, and reviewed and approved by the MBRT (Attachment 3).

Remedial measures will be taken by the landowner should the performance standards not be achieved, as determined by the MBRT. Measures taken to restore or improve the ske include, but are not limited to: replanting; regrading; excavating; placement of fill; hydrological alteration; and pest control for exotic species. Remedial measures will be submitted to the MBRT for review.

Since the landowner will also serve as the restoration contractor, he will be required to post a letter of credit or performance bond to cover the costs of any potential remedial measures, at an amount equal to the cost of the project restoration and short-term monitoring.

9. Long-Term Management

The mitigation site will be protected in perpetuity with a permanent conservation easement to be held by the Missouri NRCS. The landowner will be responsible for long-term vegetation management (maintenance of the vegetation on the berms and weed control), and water control structures. As mentioned in Section 8, remediation will not be required for adverse impacts that are due to changes in adjacent land use or natural disasters that are beyond the control of the landowner.

The landowner will be allowed certain uses of the site, such as hunting, provided that the activity does not adversely affect the functional integrity of the mitigation lands. A list of compatible and supplemental land uses is provided in Attachment 3. A copy of the easement document is included as Attachment 4.

10. Accounting Procedures

ACIC will maintain a ledger and produce a report of debit and credit activities which will be distributed to the MBRT members on a quarterly basis. Data entered into the ledger will include: CWA Section 404 permit number; location of the proposed conversion activity; extent of wetlands, by type, to be impacted; number of mitigation credits needed; the number of mitigation credits remaining in the Bank; the amount of money received from the permit applicant; and the name and location of the escrow account where the funds are held. ACIC will provide written notice to the MBRT when the mitigation credits have been exhausted.

11. Financial Controls

ACIC will hold any funds collected pursuant to this agreement in an interest-bearing escrow account in an investment instrument or banking institution in Missouri to earn interest while maximizing the safety and preservation of the principal amount of funds in the account. ACIC will provide the MBRT with an account statement on a quarterly basis which states the balance of the fund and the investment instruments in which the funds are enrolled.

ACIC will submit quarterly expense reports to the MBRT for approval prior to any withdrawal of funds necessary to cover operating expenses. All remaining moneys will be dedicated to the specific mitigation project (restoration, maintenance, management and monitoring). Funds left over from the mitigation project, and any interest earned will remain with the Bank and be used for additional mitigation projects within the Missouri Bootheel Region.

12. Authorities

1. Clean Water Act, Section 404 [33 USC 1344]

2. Council on Environmental Quality Implementing Regulations [40 CFR Part 1508.20]

3. Environmental Protection Agency, Section 404(b)(1) Guidelines [40 CFR Part 230] -Guidelines for Specification of Disposal Sites for Dredged or Fill Material.

4.  Department of the Army, Section 404 Permit Regulations [33 CFR Parts 320-330] -Policies for Evaluating Permit Application to Discharge Dredged or Fill Material.

5. Memorandum of Agreement between the Environmental Protection Agency and the Department of the Army Concerning the Determination of Mitigation under Clean Water Act Section 404(b)(1) Guidelines [February 6, 199].

6. Title XII Food Security Act of 1985 as amended by the Food, Agriculture, Conservation Trade Act of 1990 [16 USC 3801 ET seq.]

7. Federal Agricultural Improvement and Reform Act of 1996, Public Law 104-494. 16 USC 3801 ET seq.

8. National Environmental Policy Act [42 USC 4321 et seq.], including the Council on Environmental Quality's implementing regulations [40 CFR Parts 1500-1508].

9. Fish and Wildlife Coordination Act [16 USC 661 ET seq.]

10. Fish and Wildlife Service Mitigation Policy [46 FR pages 7644-7663, 1981]/

11. Federal Guidance for the Establishment, Use and Operation of Mitigation

12. Banks (FR, Vol. 60, No. 228, Pages 605-614, 1995)

13. 10 CSR 20-6.060. Missouri State Water Quality Certification
14. 10 CSR 20-7.031. Missouri State Water Quality Standards
15. National Historic Preservation Act, Section 106 [16 USC 470]