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Wetland Mitigation Banking: A Banker’s Perspective

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WETLAND MITIGATION BANKING: A BANKER’S PERSPECTIVE
By

Deborah L. Bailey

A THESIS

Submitted to
Michigan State University
in partial fulﬁllment of the requirements
for the degree of

MASTER OF SCIENCE
Department of Resource Development

2005

ABSTRACT
WETLAND MITIGATION BANKING: A BANKER’S PERSPECTIVE
By

Deborah L. Bailey

This research presents ﬁndings on the experiences of wetland mitigation bank managers
in the United States. Data were collected and analyzed for a project supported, in part, by
a Disciplinary Research Grant from the Michigan Agricultural Experiment Station.
During summer and fall of 2003, primary data were collected using semi-structured
interviews with wetland bank managers responsible for 59 percent of the nation's
mitigation banks. A stratiﬁed, random sample of potential participants was drawn from
380 wetland mitigation banks. After receiving a pre-notiﬁcation letter from the
researcher, the managers were contacted by the researcher by phone to arrange the
interviews. Altogether, 140 interviews were undertaken with mangers responsible for
about 250 established or proposed mitigation banks. The semi-structured interviews each
took about one-half hour to complete, followed a specially prepared script, used
qualitative interviewing protocols, were audio recorded, and were subsequently
transcribed. The 140 interviews resulted in more than 1800 pages of transcripts which
were sorted and coded by the researcher using iterative data analysis methods including
ATLAS.ti software. The result of this analysis is a rich proﬁle of the nation’s wetland
mitigation bank managers and their banks; manager’s backgrounds and professional
history and bank information on ecological types, service areas, and credit determination.
The study also examined wetland bankers’ ideas about keys for success, major obstacles,

agency support and possible changes within the banking industry.

Copyright by
DEBORAH L. BAILEY
2005

ACKNOWLEDGNIENTS

I would like to thank my major professor Dr. Michael Kaplowitz. His advice was
vital for the completion of this thesis. I would also like to thank my committee members
Dr. Frank Lupi and Dr. Jo Ann Beckwith. I truly appreciate the advice and assistance
you gave during the various stages of this work.

I would like to thank the MSU Agriculture Experiment Station for their generous
support that made this project possible.

I would also like to thank the many people who helped transcribe the massive amount
of data gathered in this research. Without their time and commitment this project would
not have been able to be completed in a timely fashion.

I would also like to thank my husband for his support and love through this entire
graduate school process.

I would also like to thank my parents for their encouragement, conﬁdence and
support. Without their unconditional love and support, this thesis would not be a reality.

I would like to dedicate this work to my loving parents.

iv

TABLE OF CONTENTS

LIST OF TABLES ........................................................................................................... viii

CHAPTER ONE — INTRODUCTION OF RESEARCH TOPIC
Introduction .............................................................................................................. 1
Statement of the Problem ......................................................................................... 2
Research Objectives ................................................................................................. 4
Signiﬁcance of the Study ......................................................................................... 5
Organization of the Study ........................................................................................ 6

CHAPTER TWO - REVIEW OF THE LITERATURE
Introduction .............................................................................................................. 7
Wetland Ecology; Emotions and Services .............................................................. 8
Early History of Wetlands in this Country .............................................................. 9
History of Wetland Protection in the United States ............................................... 10
Sequencing Guidelines for Mitigating Wetland Impact ........................................ 12
Wetland Mitigation what is it and how it works .................................................... 12
Development of Wetland Mitigation Banking ....................................................... l3
Uncertainty in Mitigation Banking ........................................................................ 14
Advantages of Mitigation Banking ........................................................................ l6
Wetland Mitigation Banking — Takings and Preservation ..................................... l7
Mitigation Banking and the Federal Highway Administration .............................. 18
Wetland Mitigation Banking and this Study .......................................................... 18

CHAPTER THREE - METHODS AND PROCEDURES

Methods
Introduction ................................................................................................ 20
Survey Instrument; Open or Closed ........................................................... 21
Open Survey Methods ................................................................................ 22
Type of Qualitative Interview .................................................................... 23
Semi-Structured Qualitative (Flexible) Interviews .................................... 23
Issues of Potential Bias .............................................................................. 25
Respondents’ Questions and Maintaining Focus ....................................... 26
Reliability ................................................................................................... 26
Validity ...................................................................................................... 27
Accuracy .................................................................................................... 28
Time ........................................................................................................... 29

Implementation Procedures
University Committee for Research Involving Human Subjects ............... 29
Sample Selection ........................................................................................ 30
Pre-notiﬁcation letter ................................................................................. 31
Informed Consent and Audio Recording ................................................... 31
Telephone Interviews and Transcriptions .................................................. 32
The Instrument ........................................................................................... 33

Discussion Guide Revisions ...................................................................... 34

Debriefmg Section ..................................................................................... 35
Analytical Procedures

Introduction ................................................................................................ 35

Analysis of Transcriptions ......................................................................... 36

Development of Codes ............................................................................... 36

Weighting of Variables .............................................................................. 37

Analytical Procedures-Miscellaneous Information .................................... 38

CHAPTER FOUR — RESULTS AND ANALYSIS

Introduction ............................................................................................................ 39
Study Response Rate .............................................................................................. 39
Interviews — General Observations ........................................................................ 40
Coding process and Thematic Codes ..................................................................... 40
Results: Wetland Mitigation Bank Manager Characteristics ................................. 42
Bank Ownership Type and Gender ........................................................................ 42
Background of Bank Managers ............................................................................. 44
How long has the banker been involved in the industry ...................................... V45
Results: Wetland Mitigation Bank Characteristics ................................................ 46
Type of Wetlands in Banks .................................................................................... 46
Location of Wetland Banks ................................................................................... 48
Size of Wetland Banks ........................................................................................... 52
Proposed Wetland Banks ....................................................................................... 54
Purpose of Bank ..................................................................................................... 56
Current Status of Banks ......................................................................................... 58
Wetland Creation Process ...................................................................................... 60
Original land use of the bank site .......................................................................... 62
Wetland Credits - Who calculates the credits given to each bank ......................... 63
Wetland Credits - How are wetland credits calculated by this entity .................... 65
Credit Price ............................................................................................................ 67
Credit Release Schedule ........................................................................................ 68
Future Funding ....................................................................................................... 71
Future of Wetland Bank Land ................................................................................ 73
Permits for the bank ............................................................................................... 75
Agencies ................................................................................................................. 76
Cost of creation ...................................................................................................... 78
Monitoring Schedule .............................................................................................. 79
Service Area ........................................................................................................... 82
How was the Service Area Determined ................................................................. 84
Success Criteria ...................................................................................................... 85
Agency Support ..................................................................................................... 87
Clients of Banks ..................................................................................................... 89
How do bank managers get their clients ................................................................ 90
Reasons for using the particular banks .................................................................. 92

vi

Bank Comparisons ................................................................................................. 93

Keys for Successful Wetland Banking .................................................................. 95
Obstacles to Wetland Banking ............................................................................... 98
Change one Thing about Wetland Banking ......................................................... 103
Conclusion ........................................................................................................... 105

CHAPTER FIVE — CONCLUSIONS AND RECOMMENDATIONS

Summary .............................................................................................................. 106
Implications of Findings ...................................................................................... 106
Study Method’s Reasonableness .......................................................................... 121
Research Limitations ........................................................................................... 122
Recommendations for Future Research ............................................................... 123
Concluding Remarks ............................................................................................ 124
APPENDICES
Appendix A .......................................................................................................... 129
Appendix B .......................................................................................................... 131
Appendix C .......................................................................................................... 134
Appendix D .......................................................................................................... 138
Appendix E .......................................................................................................... 145
Appendix F ........................................................................................................... 147
Bibliography ........................................................................................................ 170

vii

List of Tables

Table 1: Wetland Bankers Not Providing Data on Themes ............................................... 42
Table 2: Ownership of Banks and the Gender of Respondents ......................................... 43
Table 3: Background and Training of Bank Managers ..................................................... 45
Table 4: Number of Years Bank Manager Working in Wetland Banking Industry .......... 46

Table 5: Descriptive Statistics on the Number of Years Bank Managers in Wetland

Banking Industry ................................................................................................................ 46
Table 6: Ecological Type of Wetland Banks ..................................................................... 48
Table 7: Army Corps of Engineers District of Wetland Mitigation Banks ....................... 50
Table 8: State Location of Wetland Mitigation Banks ...................................................... 51
Table 9: Size of Wetland Mitigation Banks ....................................................................... 53
Table 10: Number of Proposed Wetland Mitigation Banks ............................................... 55
Table 11: Purpose of the Wetland Mitigation Bank .......................................................... 58
Table 12: Current Status of Wetland Mitigation Bank ...................................................... 60
Tab1e13: Process used to create Wetland Mitigation Banks .............................................. 61
Table 14: History of the Land occupying Wetland Mitigation Banks ............................... 62
Table 15: Entity conducting Credit Calculation for the Wetland Mitigation Banks ......... 64
Table 16: Credit Calculation Method used by Entities ...................................................... 66
Table 17: High/Low Wetland Mitigation Banking Credit Price ........................................ 68

Table 18: Number of Credits released to a Manager upon Signing of the Banking

Agreement .......................................................................................................................... 70
Table 19: Future Funding for Bank Maintenance .............................................................. 72
Table 20: Future of the Wetland Mitigation Banking Land .............................................. 74

viii

Table 21:

Table 23:

Table 24:

Table 25:

Table 26:

Table 27:

Table 28:

Table 29:

Table 30:

Table 31:

Table 32:

Table 33:

Table 34:

Time Frame for a Manager to complete the Permit or Banking Agreement. ....76

Monitoring Time ................................................................................................ 81
Entity Determining Monitoring Time ................................................................ 81
Service Area Determination .............................................................................. 83
Entity Determining Service Area ....................................................................... 85
Entity Determining Success Criteria ................................................................. 86
Perceived Level of Agency Support .................................................................. 88
Clients of the Wetland Mitigation Banks .......................................................... 90
Source of Wetland Mitigation Bank Clients ...................................................... 91
Reasons why Clients use Particular Wetland Mitigation Bank ......................... 93
Comparison of Mitigation Banks ....................................................................... 95
Keys to Successful Wetland Mitigation Banking .............................................. 98
Obstacles to Wetland Mitigation Banking ....................................................... 101

Table35: The One Thing Managers would like to Change about Wetland Mitigation

Banking ..

.......................................................................................................................... 104

ix

CHAPTER ONE
Introduction of Research Topic

Introduction

For a long time, wetlands in the United States were disregarded as the positive natural
resource that many people now understand them to be. Throughout US. history, people
have dredged, drained and ﬁlled the nation’s wetlands so that less than 50% of the
original wetlands in the country remain (Dahl, 2000). It is expected that as we move
through the next century that natural wetlands will continue to be subjected to the
increasing pressure of society’s continued growth and expansion. Relatively recently
there has been a growth in dialogue and understanding regarding wetlands and people’s
impact on these ecosystems. Scientists are now studying and learning about wetland
beneﬁts and the need to protect wetland ecosystems. This relatively new understanding
of wetland ecology and its protection has resulted in a struggle within some communities
as they continue to grow and expand. The recognition of the value of wetlands as well as
the need to grow has spawned the organized regulation of wetlands in this country. This
regulation has taken many forms from various congressional acts like the Endangered
Species Act (1973) and the Clean Water Act (1972) to local regulation of wetland areas
in some areas (e.g., municipal wetlands ordinances). Although there are various types of
requirements designed to protect wetlands in this country, one of the newer forms of
wetland protection measures is compensatory wetland mitigation.

Compensatory wetland mitigation includes many remedial actions that developers
and others seeking to adversely impact a natural wetland area can undertake to make-up

for or compensate for the wetland services being lost (Moriarty, 1999). The Michigan

wetland protection statutes (Part 303, Wetlands Protection, of the Natural Resources and
Environmental Protection Act, 1994 PA 451, as amended, Section 324.30301 et seq.) as
well as the US. Army Corps of Engineers and US. Environmental Protection Agency
(Section 404 of the federal Clean Water Act, 33 U.S.C. 1344) provide for several types of
mitigation. One way a developer can mitigate for potential adverse wetland impacts is
simply through avoiding the wetland. Another option for mitigation is for the developer
to minimize the amount of impacts to a wetland area. A third approach that a developer
can employ for mitigating potential wetland harm is “wetland replacement.” Such
replacement may take place by a developer restoring, creating, enhancing, or preserving
wetlands to make up for the wetlands being adversely impacted. If this replacement of
wetlands is performed at the site of the development, it is known as on-site mitigation.
Off-site mitigation takes place when wetland is created/enhanced/restored/preserved at
another locale. Off-site mitigation practices include in-lieu-fee mitigation, project-
speciﬁc off-site mitigation, and mitigation banking. Wetland mitigation banking is a
market-based system of off-site wetland mitigation that has been seen to have some
promising characteristics and features (NRC, 2001). This thesis focuses on the study of

the nation’s wetland mitigation banks.

Statement of the Problem
Wetland mitigation banking is “the restoration, creation, enhancement,
and in exceptional circumstances, preservation of wetlands and other
aquatic resources expressly for the purpose of providing compensatory

mitigation in advance of authorized impacts to similar resources” (Federal

Guidance for the Establishment Use and Operation of Mitigation Banks.

60 Fed Reg. 228 58605-58614. 1995).
It is a “subset of compensatory mitigation, in which ‘mitigation bankers’ are awarded
mitigation credits by the Corps or a state regulatory program for restoring, enhancing, or
creating wetlands” (Sapp, 1995).

Throughout the more than 15 years of mitigation banking development, there have
been some studies aimed at understanding how the wetland mitigation banking process
functions. Most notably, in this area, has been the work of the Institute for Water
Resources (IWR). From 1992 to 1996, the Institute for Water Resources as a part of the
Water Resources Support Center of the US. Army Corps of Engineers published, in
conjunction with various partners, a series of reports as part of their National Wetland
Mitigation Banking Study. IWR gathered data, mostly from regulatory agency personal
and documents, on how wetland banks were functioning in the United States. IWR’s
periodic reports provided a view of banking and its development in this country from the
perspective of the agencies involved and presented an emerging industry with extensive
room for grth and development

In 2002, the Environmental Law Institute (ELI) took over the work begun by IW R

and published their report Banks and Fees: The Status at Oil-Site Wetland Mitigation in

 

the United States. ELI examined how banks function by asking questions about how
banking credits are determined and service area delineation. Once again the primary
source of data was provided by agency personal and documentation. The work done by
ELI and IWR provide a foundation for other examinations into the wetland banking

industry (e. g. Scodari, ACOE, 2001; Scodari and Shabman, 2004). Many of these

articles and publications for the general public are discussed further in Chapter Two.
Since some studies have already been done, this study examines some of the issues
addressed in older studies (for comparison) but focuses on data from a wetland banking
source previously not well studied—wetland mitigation bankers. While some studies in
the past occasionally mention some interaction with bank managers, previous work has
not focused on the experience, knowledge, and insights of those individuals handling the
daily credit transactions. Therefore this project, in part, attempts to capture and analyze
the experiences and practices of wetland bankers as well as describe the current state of

wetland mitigation banking in the United States.

Research Objectives

The ﬁrst objective of this study is to learn from wetland bankers about some of the
issues examined by past banking studies. Doing so will not only allow for updated
information but also allow for a comparison of information from the different sources.
Secondly, the study seeks to directly document and analyze the experiences and
perceptions of those entrepreneurial individuals involved in the actual day-to-day process
of wetland banking. Lastly, the study attempts to create a proﬁle of the nation’s wetland
banks and management process as well as a proﬁle of the bankers themselves.

The focal point for this research is to characterize wetland banking from the
perspective of wetland mitigation bank managers, not agency documents or personal.
The approach complements those wetland banking studies that have focused on agency
personal and documentation. Data from the bank manager’s perspective will allow for

some degree of comparison of data as well as provide a voice for bank managers. The

primary data collected and analyzed for this study comes from more than 140 interviews
with bank managers about their experiences in the industry and their knowledge of their
particular bank(s). As a result, it is possible that some information in this thesis may
diverge from the understanding of wetland regulatory agency personal.

A unique feature of this study is the use of data gathered in “conversational-style”
interviews. The project used semi-structured, open interviews to obtain data of great
depth and richness on such topic areas as: banker’s incentives, interaction with agencies,
keys to success and obstacles found. These qualitative interview methods have been used
for years within the social sciences and are generally recognized for leading to rich, in-
depth data (Bryman, 1984; Gelling, 2003). While multiple formal hypotheses were not
speciﬁcally tested in this study, the data were sorted, coded, and analyzed to investigate
several research questions concerning mitigation banking. These research questions were
formed, in part, by previous studies as well as information that emerged from the iterative

analysis of the interviews.

Signiﬁcance of the Study

As previously mentioned, ELI and IWR interviewed US. Army Corps of Engineers
(ACOE) district offices as well as state wetland managers but only a very limited number
of bank sponsors. That is, previous studies did not collect information about wetland
bank sponsors and their experiences in wetland mitigation banking. Therefore, this study
addresses an important gap in the understanding of wetland mitigation banks--The
experience and perceptions of managers and operators of wetland mitigation banks.

These perceptions shed light on such issues as interaction with agency personal and

motivation of individual banks. This study was designed to provide a data collection
means that also encouraged wetland bank managers to express their experiences
regarding issues such as key obstacles, keys to success and issues they would like to see
changed within the industry. It is hoped that the detailed understanding of the status,
trends, and experiences of wetland mitigation bankers may help promote improved

wetland protection and possibly the protection of other natural resources.

Organization of the Study

This thesis is organized in ﬁve chapters — Introduction, Literature Review, Research
Methods and Procedures, Data Analysis and Results, as well as Conclusions and
Recommendations. Chapter Two discusses and reviews the scholarly literature regarding
wetland history and policy as well as wetland mitigation banking in the United States.
Chapter Three focuses on the research design including: methods, study population,
sampling, and data collection. Chapter Four presents and analyzes the collected
interview data, and Chapter Five discusses some implications of the ﬁndings,

conclusions, limitations and recommendations for further study.

CHAPTER TWO

REVIEW OF THE LITERATURE

Introduction

Wetlands are unique and diverse ecosystems which have the capacity to provide
numerous bio-physical functions for plants and animals as well as many beneﬁts for
mankind (Gaddie and Regens, 2000). It is only relatively recently that wetlands have
been studied as a separate ecosystem. Wetlands have not always been recognized as
diverse and important ecosystems. As the world population has grown the need for
further economic growth and land resources has also increased (Etchart, 1995). The
historic need for economic growth has, in part, led to a disregard for wetland functions
and diversity in the United States (Brown and Lant, 1999). In fact, public concern for
wetlands in this country has a relatively short history. For numerous years, public
attitude as well as government policy encouraged the destruction of wetland habitat
(Marshall, 2000). However, the former destructive view towards wetlands has slowly
begun to change in more recent times. With policies such as the Clean Water Act,
Section 404 (Federal Water Pollution Control Act, Public Law 92-500), the United States
has slowly advanced the development of various wetland regulations. This chapter
describes brieﬂy wetlands and their functions and then presents a short history of wetland
regulation. The chapter continues with an examination of the development of the wetland
banking industry. The chapter concludes by highlighting some issues faced within the

wetland banking industry.

Wetland Ecology; Functions and Services

Wetlands are characterized by many features including: vegetation, hydrology, water
chemistry, origin of water, soil types, landscape position and landforrn, wetland origin,
wetland size, and ecosystem fomi/energy sources (Tiner, 1999). All of these features are
important individually and in concert in the study of overall wetland functions
(Reenstiema, 1980).

Wetlands provide habitat to large ecosystems of aquatic and waterfowl populations
(Hey and Philippi 1999). In fact, as discussed later in this chapter, it was the desire to
protect waterfowl that ﬁrst brought about wetland protection in this country. Wetlands
support great biodiversity including large numbers of federally listed threatened or
endangered species (Gaddie and Regens, 2000). Wetlands also provide beneﬁts to
society via such services like ﬂood control, maintenance of water quality, and recharge of
ground water.

Wetlands also provide water quality functions and services. In some instances,
wetlands also allow for water to percolate into aquifers underground which store and
clean water for human use (Hey and Philippi, 1999). Erosion prevention is also supplied
by wetlands through the slowing down of water energy as well as allowing for the
establishment of wetland plant communities (NRC, 1995). Water pollutants are also
absorbed and ﬁltered out by well-functioning wetland ecosystems (NRC, 1995).
Wetlands also contribute to the support of a multi-billion dollar ﬁshing, hunting and
outdoor recreation industry nationwide (WWF, 1992).

The economic value of wetland functions such as ﬂood control, is often more difﬁcult

to calculate (Prince, 1997). In 1987, an estimated $120 million in damages occurred to a

few thousand residents living within DuPage County, Illinois (WW F, 1992). This county
has less than one percent of its original natural wetlands and the absence of wetlands in
the county resulted in the building of structures to divert ﬂoodwaters estimated to cost the
taxpayer 100 million dollars (WW F, 1992). One estimate of the global value of wetland
resources is 14.9 trillion dollars, which accounts for 45 percent of the value of all natural

ecosystems (Ducks Unlimited, 2001).

Early History of Wetlands in this Country

Early European settlers in North America recognized the value of wetlands just like
Native American Indians seeing marshy lands providing waterfowl and seafood as well
as ‘sea hay’ for harvest for their animal feed (Vilesis, 1997). However the need to
expand development soon brought the need to drain natural wetlands and in 1788 settlers
on the East coast received legal backing to drain wetlands by the New Jersey legislature’s
ﬁrst drainage law.

The need to expand coupled with new drainage technology quickly allowed for a
population explosion with the US. population increasing 300% from 1820 to 1860 (Hey
and Philippi, 1999). By 1862, the year of the Homestead Act, almost all of the land in
Ohio, Illinois, Indiana, and Iowa was already claimed bringing the need to convert
wetlands further westward (Prince, 1997).

It was the Louisiana Swamp Land Act of 1849 that transferred ownership of federal
swamplands to states in the lower Mississippi River Basin allowing states to sell the
swamplands within their borders to generate funds necessary for drainage and levee

building (V ileisis, 1997). This act was the ofﬁcial birth of our nation’s drainage districts.

Similar swampland acts followed for various states with most of this draining being
done to produce agricultural lands. States with large amounts of wetlands, such as
Illinois, Michigan, and Florida, where only half the land was considered suitable for
farming, joined a general move to have federal swamplands ceded to them. This national
desire to drain wetlands led Congress to pass the Swamp Land Act of 1850 (NRC, 1995)
and the affect was very successful. “Between 1870 and 1920 drainage districts drained
more than 48 million acres and between 1945 and 1965 another 24 million acres were
drained by districts, bringing the total up to 64.33 million acres” (Hey and Philippi,
1999). From the colonial period to the 1980’s the amount of wetlands in the contiguous
United States decreased by about 50% (Whitsitt, 1997). “During the drainage campaign
that reached its peak at the end of the nineteenth century, Illinois and Iowa lost ninety

percent of the original wetlands: California lost ninety-ﬁve percent” (Freyfogle, 1995).

History of Wetland Protection in the United States

Wetland protection has historically been linked to other types of protection in this
country (Gaddie and Regens, 2000). In the late nineteenth century Federal and state
governments, as well as private organizations, started to acquire wetland areas as
waterfowl sanctuaries (Schenck, 2000). These acquired areas include what is now known
as The National Wildlife Refuge System, which was designed to protect habitat for
migratory birds (NRC, 1995). The Federal Duck Stamp Program of 1934 provided
money for the purchase or protection of wetlands (Schenck, 2000). But it was the Rivers
and Harbors Act of 1899 that was really the ﬁrst ofﬁcial wetlands protection law in this

country with section 10 of the act prohibiting the dredge or discharge of material in the

10

navigable waters of the United States without a permit from the US. Army Corps of
Engineers (Marsh, 1996).

The National Environmental Policy Act (N EPA) of 1969 further expanded the scope
of the Corps’s jurisdiction to include wetlands (Neal, 1999). But Section 404 of the
Clean Water Act eventually had the most effect in protecting wetlands (Gaddie and
Regens, 2000). “The Clean Water Act was enacted to restore and maintain the chemical,
physical, and biological integrity of the nation’s waters” (Marsh, 1996). Section 404
states that it is unlawful to discharge dredged or ﬁll material into United States navigable
waters without permission from the Corps of Engineers (Federal Water Pollution Control
Act, Public Law 92-500). Section 404 does allow developments that have minimal
adverse impacts and disfavors larger projects that have ‘practicable alternatives’
(Karkkainen, 1997).

The Clean Water Act requires permits for dredging or ﬁlling of wetlands with certain
guidelines to follow. The (b)(1) guidelines state that ‘no discharge of dredged or ﬁll
material shall be permitted if there is a practical alternative to the proposed discharge
which would have less adverse impact on the aquatic ecosystem” (Marsh, 1996).
Practicable alternatives are presumed to exist if the proposed development is not
dependent on water (Marsh, 1996). These guidelines, established by EPA with later
revision, were ﬁnalized in 1980 (Sutton, 1998). The 404(b)(1) guidelines dictate that the
Corps requires applicants to provide documentation that there are not practicable
alternatives to the proposed project. In other words, a permit cannot be issued if there are
alternatives that would have a less adverse impact on the aquatic ecosystem and that steps

have been taken which will minimize adverse impacts on the aquatic ecosystem.

11

 

Sequencing Guidelines for Mitigating Wetland Impact

In 1990, the Corps wrote a Memorandum of Agreement (MOA) describing the type
and level of wetland replacement or mitigation that would be needed to comply with
Section 404(b)(l) guidelines (Siverstein, 1994). Under this MOA, a three-part process or
“sequencing” was designed to help with wetland mitigation decisions. The sequencing
guidelines set up by the EPA and followed by the Corps of Engineers include the
following steps:

1. “Avoid - “No discharge shall be permitted if there is a practicable alternative to
the proposed discharge which would have less adverse impact to the aquatic
ecosystem” (EPA; Corps, 1990)

2. “Minimize — If impacts cannot be avoided, steps must be taken to minimize the
adverse impacts through project modiﬁcations and permit conditions” (EPA;
Corps, 1990)

3. “Mitigate — “Appropriate and practicable compensatory mitigation for
unavoidable adverse impacts which remain after all appropriate and practicable
minimization has been required” (EPA; Corps, 1990)

Wetland Mitigation what is it and how it works

As mentioned, the objective of the Clean Water Act is “to restore and maintain the
chemical, physical, and biological integrity of the Nation’s waters” (Federal Water
Pollution Control Act, Public Law 92-500). Unless a permit is issued under Section 404
of the CWA, the Act prohibits the discharge of dredge or ﬁll material into waters in the
United States. The Clean Water Act is administered by the US. Army Corps of
Engineers or, if a state has US. Environmental Protection Agency approval, the CWA
can be administered by a state program. There are currently only two states with such

approval, Michigan and New Jersey (Gaddie and Regens, 2000). With the administration

of the CWA, the Corps or state agency has the authority to issue section 404 permits

12

following the sequencing guidelines, and they also have the authority to attach any
conditions to the permits.

There has been some concern regarding the compensatory nature of wetland
mitigation over the years. This concern is based on the fact that in many instances
promised wetland mitigation never actually has been undertaken (NRC, 2001).
Furthermore, wetland mitigation failures have occurred and have been blamed on poor
hydrology and vegetation (Lindquist, 1997). These concerns, among other things, have

given rise to interest in the possible beneﬁts of wetland mitigation banking.

Development of Wetland Mitigation Banking

Wetland mitigation is one way to try and balance the pressures from an ever growing
population with natural resource protection. The idea to protect wetlands through a
market-based system underlies the concept of wetland mitigation banking (Salzman and
Ruhl, 2000). The concept of banking goes back to the mid 19705 but it was the 1990
MOA sequencing guidelines that made the industry a reality (Hart, 1995). As discussed,
if a developer wishes to impact a wetland he/she must avoid, minimize and eventually
replace the wetlands to be impacted. The replacement of wetlands is the sequencing step
of mitigation that gives rise to the possibility of wetland banking. The replacement of
wetlands can take on various forms; the wetlands can be replaced on the same location as
the proposed project and wetland impairment (on-site mitigation), the replacement
wetlands may be, in some cases, be provided at a location distant from the protect site
(off-site mitigation), and in some casers the replacement wetlands may be provided based

on credits for wetlands in areas already constructed, enhanced or preserved (V eltrnan,

13

1995). This later type of mitigation activity, free market ‘buying into’ wetland areas that
already exist, is the central concept underlying wetland mitigation banking. While the
1990 MOA set the stage and framework for wetland mitigation banking, wetland banking
did not ﬂourish in the early 903 because of high costs and uncertainties in creating

wetland banks that would serve as the source of wetland mitigation credits (ELI, 2002).

Uncertainty in Mitigation Banking

When wetland mitigation began, there were many uncertainties concerning the
absence of suitable deﬁnitions of banking and its component parts as well as uncertainty
about its potential beneﬁts to developers, agencies and entrepreneurs. As a result, in
November 1995, the Corps, EPA, Fish and Wildlife Service (FWS), Natural Resource
Conservation Service (N RCS), and the National Oceanic and Atmospheric

Administration (NOAA) published the F edergl Guidance for the Establishment Use and

 

Operation of Mitigation Banks. This publication deﬁnes mitigation banking as,
“the restoration, creation, enhancement and in exceptional circumstances,
preservation of wetlands and/or other aquatic resources expressly for the
purpose of providing compensatory mitigation in advance of authorized
impacts to similar resources. Mitigation banking is authorized for use
when on-site compensation is either not practicable or use of a mitigation
bank is environmentally preferable to on-site compensation” (Federal
Guidance for the Establishment Use and Operation of Mitigation Banks.

60 Fed Reg. 228 58605-58614. 1995).

14

Since wetland mitigation banking began, there have been several articles on its use.
Some authors voiced concerns that banking would allow ‘permit selling’ (Sokolove;
Huang, 1992). Other articles address the possibility that some private wetland bankers
proﬁt on wetland protection (Gentry, 2001; Moriarty, 1999). Focusing solely on these
types of publications, it is easy to see how one might perceive wetland banking as only a
money making activity of permit selling.

Recently, the issue of what types of wetlands and wetland activities are subject to
mitigation requirements has introduced more uncertainty in wetland mitigation banking.
In 2002, a US. Supreme Court decision in a case involving a Chicago consortium
wanting to use an abandoned sand and gravel pit as a solid waste disposal site changed
how wetlands are protected and regulated in this country (Solid Waste Agency Of
Northern Cook County v. United States Army Corps Of Engineers, et al., 531 US. 159;
121 S. Ct. 675; 148 L. Ed. 2d 576 (2001). The site had, over the years, developed into a
wetland that supported migrating birds. The US. Supreme Court reversed the decision
denying the developers a 404 permit by interpreting the Clean Water Act’s language
deﬁning wetlands so that “waters of the US. only included navigable waters, their
tributaries and wetlands that are adjacent to these navigable waterways and tributaries”
(Solid Waste Agency Of Northern Cook County v. United States Army Corps Of
Engineers, et al., 531 US. 159; 121 S. Ct. 675; 148 L. Ed. 2d 576 (2001). This decision
effectively reduces the protection of isolated wetlands under section 404 of the Clean
Water Act because it limits what can be viewed as a wetland subject to federal protection
and regulation. This, in turn, may impact the wetland banking industry by reducing the

number of projects needing mitigation as a result of Section 404 permits.

15

Advantages of Mitigation Banking

Mitigation banking may have had some uncertainty in its development and use but
the approach has seemed to work well in some areas. Some of the advantages associated
with wetland mitigation banking include consolidation of wetland mitigation activity, and
pooling of ﬁnancial resources and scientiﬁc expertise. Wetland mitigation banks typically
consolidate compensatory mitigation into larger tracks of land thereby reducing the
number of small ‘postage-sized’ mitigation sites. This is beneﬁcial because the larger
tracts tend to provide better habitat and wetland services and many small wetland
mitigation projects have failed because of non-continuous hydrology. Wetland
mitigation banks can also provide opportunities to provide ﬁnancial resources and
planning and scientiﬁc expertise to developers needing project-speciﬁc compensatory
mitigation. There are some who believe that wetland banks have also been known to
reduce permit processing time and are able to provide more cost-effective compensatory
mitigation opportunities (IWR, 1993). Mitigation banks may also be seen as providing
wetlands and wetland services in advance of a permitted wetland impact, which reduces
the time lag between a wetland loss and the replacement of lost wetland services.
Mitigation banks may also make regulatory oversight easier, freeing regulatory agencies
from reviewing and monitoring numerous small mitigation projects. In general, some
argue that wetland mitigation banks may provide a important contribution towards the
nation’s goal of having ‘no net loss of wetlands’ (Haynes and Gardner, 1993, Whitsitt,

1997, Veltman, 1995).

16

Wetland Mitigation Banking - Takings and Preservation
Since approximately seventy-ﬁve percent of wetland areas in the continental United

States are privately owned (Gardner, 1996) increased federal regulation of our nation’s
wetlands and therefore permit denial has produced increased numbers of takings cases
based on claims that government regulations deny all economically beneﬁcial use of
private property. The relatively new idea of wetlands mitigation banking in the early
1990s brought to the forefront an interesting solution to the issue of government
regulatory takings. If additional options for wetland mitigation are available, overall the
Corps may have to deny fewer permits. Also if mitigation banks are economical viable,
then a parcel with wetlands may be thought of as a potential wetland bank and a permit
denial is less likely to destroy all economic value of that property (Gardner, 1996). This
option opened the door on discussions of whether preservation should be used for
mitigation banking credit. Many feel that offering the option of preservation of wetlands
for mitigation banking credit does not produce the ‘no-net loss’ objective set by the Bush
administration. However, it may be easier to create “new” wetlands on sites with extant
wetlands. Some believe preservation of intact wetlands for mitigation banks better serves
the public’s general goals of preservation because wetland preservation programs cost
taxpayers hundreds of millions of dollars (Ratner, 1994). Advocates of the preservation
of wetlands for credit issue like William Haynes of the Environmental Law Reporter
argue that:

“Affording credit for preservation is necessary if the government is to derive the

beneﬁt of protection from taking claims. It will be high-value wetlands that are

preserved, and these are the wetlands most likely to be involved in a permit

denial. Ensuring that there is economic value in keeping an environmentally
valuable wetland in its natural state is essential to protecting private property

17

interests and the regulatory program from an onslaught of takings cases” (Haynes,
1993).

Because of taking cases and the issue of preservation of existing wetlands it is expected
some bank managers will have created banks and possibly even speak of increased

economic use of their ‘wet land’.

Mitigation Banking and the Federal Highway Administration

The construction of highways and roads typically involve signiﬁcant wetland loss. In
1988, Pub. L. No. 105-178: the Transportation Equity Act for the 21St Century (TEA-21)
was signed into law. This Act endorsed the use of wetland mitigation banks in
transportation projects (Neal, 1999). The 1991 Intermodal Surface Transportation
Efﬁciency ACT (ISTEA) made the costs of wetland mitigation banks built for
transportation projects eligible for federal aid highway funds (ELI, 2002). Because
wetland banking had been shown to provide beneﬁts in mitigating wetland loss, the
Federal Highway Administration (FHW A) became involved in wetland mitigation
banking. The majority of wetlands banks in the early 90s were developed by public
agencies to meet transportation needs (Hart, 1995). Because of wetland banking has a
long history with transportation, it is expected that many wetland banks will be found to
be used for transportation project mitigation needs and that many wetland bankers will be

concerned with transportation needs and issues.

Wetland Mitigation Banking and this Study
Wetland protection in this country has undergone extensive changes throughout the

last few decades. Studies have examined wetland mitigation banking through the years —

l8

most notably IWR (1993) and ELI (2002). A recent study in Florida by the US. Army
Corps of Engineers continued the tradition of focusing on regulatory agency personal and
agency documents as the source of data (Scodari, ACOE, 2001). In all of these studies,
the primary information sources on wetland mitigation banking have been agency
personnel and banking documents. It is the intention of this study to examine some of the
same issues developed by IWR and ELI from the point of view of the wetland bank
managers themselves. The study will address such questions as credit determination and
service area delineation. This study will also directly question bank managers and give
them and their perspective a voice regarding wetland mitigation banking.

Some questions raised by this study and not previous addressed will include things
such as keys to successful wetland banking, obstacles faced by bankers and things they
would like to change about banking. It is expected that some differences will be seen
between the issues in this study and the studies from the ELI and the Florida Corps study.
These similarities and differences may shed light of previous studies as well as help
interpret the results obtained. It is true many experiences of bank managers can not be
predetermined or hypothesized. Therefore it is the intention of this study to use a
research plan designed to learn in-depth about wetland bank managers’ experiences. The

goal is an honest depiction of the wetland banking industry and its bank managers.

19

CHAPTER THREE

METHODS AND PROCEDURES

This chapter’s three primary sections address the general research methods, the
implementation procedures, and the analytical procedures used to achieve the research
objectives. Each section describes in some detail steps used to collect primary data from
the nation’s wetland mitigation bank managers about their mitigation bank experiences

and wetland mitigation banking in general.

Methods

Introduction

This section presents the general methods used to achieve the research objectives
including reanalyzing issues raised in previous studies using information gathered
directly from the nation’s wetland bankers. The choice and adequacy of research
methods must consider not only the methods used for obtaining lmowledge but also the
nature of knowledge and the nature of the phenomena to be investigated (Morgan and
Smircich, 1980). Qualitative methods are most often associated with phenomenology
“which seeks to focus upon the lived experience of people” (Bryman, 1984). Because
this study targeted the experience of wetland bank managers, qualitative research
methods were deemed appropriate. A quality of qualitative research is that it can be
ﬂexible and may provide means to access and generate discussions with key decision
makers in organizations and industry experts (Write, 1996). Since wetland mitigation

bank managers are usually the key decision makers within their bank, qualitative

20

approaches seemed viable as ways to access to these individuals and obtain the desired

data.

Survey Instrument; Open or Closed

The use of a written, close-ended questionnaire was also considered as an alternative
to a qualitative research method. However, as Howard Schuman and Stanley Presser
(1979, 693) have pointed out in their research on survey questionnaires, closed questions
“may fail to provide an appropriate set of alternatives meaningful in substance or
wording to respondents” and that “respondents are apt to be inﬂuenced by the speciﬁc
closed alternatives given, and that therefore a more valid picture of respondent choice is
obtained if they must produce an answer themselves” As Schober and Conrad (1997) put
it, “standardized wording may decrease response accuracy because it prevents the
conversational ﬂexibility that respondents need in order to understand questions as
survey designers intended.” An alternative to closed-ended survey questions is the use of
open-ended questions. Schuman and Presser (1979) found that 60% of open responses
fell outside of 5 pre-determined closed responses. Knowing the nature of this study was
the discovery of wetland mitigation banker’s experiences, it was decided that a closed-
ended questionnaire would be less than ideal as a primary data collection method.
Similarly, the use of a written questionnaire with open-ended questions was deemed to be
problematic since determining the meaning of respondents’ answers would be difﬁcult
and use of a written questionnaire would not allow for meaningful follow-up questions.

Therefore, the use of some type of more qualitative inquiry was studied.

21

Open Survey Methods

There are several different types of qualitative research methods and the
appropriateness of their use depends upon the type of respondents and the information
sought. Participant observation examines complex social relationships (Bryman, 1984).
This method allows for reporting of what a researcher sees people do, say or feel. The
research conducted in this wetland banking study, while possibly having some limited
elements of participant observation of bank managers speaking about their experiences,
did not rely upon participant observation. The few participant observations were based on
the telephone conversations with bankers and the focus of the study was not deep social
relationships.

Qualitative research can also include an examination of various sources of primary
data such as documents, ﬁles and other paper records (Strauss and Corbin, 1998). This
type of qualitative data collection on wetland mitigation banks has been done to some
extent by organizations such as ELI (2002) and the Army Corps of Engineers (2001).
Therefore, it was decided to examine another data source for the study. Since this
research hoped to explore banker’s experiences with wetland mitigation banks, it seemed
apparent that qualitative interviews should be implemented. As Britten (1995, 252) points
out:

Qualitative interviews try to be interactive and sensitive to the language
and concepts used by the interviewee, and they try to keep the agenda

ﬂexible. They aim to go below the surface of the topic being discussed,
explore what people say in as much detail as possible, and uncover new

areas or ideas that were not anticipated at the outset of the research.

22

Type of Qualitative Interview

Although qualitative interviews of some kind seemed in order, there are many types
of qualitative interviews that might have been used for the project. Nicky Britten (1995)
describes the universe of qualitative interviews as being made up of three main types--
structured, semi structured, and in-depth interviews. There has also been controversy
over the use of these varying types of interviews with proponents of the more ﬂexible
interview arguing that “the rigid adherence to survey scripts jeopardizes validity because
there is no guarantee that all respondents will interpret questions the same way”
(Schober and Conrad, 1997). Since this wetland banking research hoped for open free
opinions of bank managers on certain issues, heavily structured interviews were decided
to be too focused and not free enough to allow for rich, honest, and free-ranging
responses. However since this research makes no attempt to probe in-depth into
manager’s feelings and form theory on these insights, it was decided that in-depth
interviews would not be useful. However, since mitigation bank managers might be
more inclined to reveal more information in a conversational-type interview and since
there was a desire for increased ﬂexibility, the decision was made to use semi-structured

qualitative interviews.

Semi-Structured Qualitative (Flexible) Interviews

A beneﬁt of the conversational-type interview (also called semi-structured qualitative
interview and ﬂexible interviews) is that a sense of trust can develop between interviewer
and respondent (Write, 1996). Respondents are able to freely, in their own words, answer

questions and can thus provide researchers with a great deal of information (Converse,

23

1984). Lazarsfeld (1944) points out that in order to get a reasonable idea of people’s
complaints a rather detailed discussion is necessary and the open interview is a good
device to obtain such detailed information. Schober and Conrad (1997, 584) describe
such interviews as follows:
The ﬂexible interviewers were trained to read the question exactly as
worded (just as standardized interviewers do), but then they could say
whatever they wanted to assure that the respondent had understood the
question as the survey designer had intended. This included reading or
paraphrasing all or part of a question, reading or paraphrasing all or part of
a deﬁnition, and asking questions of the respondent to elicit information so
that the interviewer and respondent could jointly reach a correct response.
Interviewers could intervene at the respondent’s request or voluntarily;
that is, interviewers were licensed to intervene whenever they thought the
respondent might have misunderstood the question.

The wetland banking study did develop and follow a discussion guide of core issues
pertinent to wetland banking and the research. In keeping with semi-structured qualitative
interviewing methods, there were relatively few highly structured questions [see
Appendix C]. Due to this open, ﬂexible method, the order and wording of the actual
questions and topics discussed varied during each interview based on the respondents’
answers to previous questions. This is normal for ﬂexible interviewing. “Wording can
not be standardized because the interviewer will try to use the person’s own vocabulary
when framing supplementary questions” (Britten, 1996). Furthermore, the nature of

ﬂexible interviewing is that the research is able to follow and use the ﬂow of

24

respondents’ thoughts and information to conversationally raise topics of interest to the
researcher (Miles, 1979).

The very nature of qualitative research, including ﬂexible interviews, leads to the
discovery of information and topics during the process, especially as the researcher
becomes more familiar with the topic being discussed (Britten, 1996). This was true
during the interviews with wetland mitigation bankers. Even with extensive research into
the industry and policies of wetland mitigation banking, there always seemed to be new

issues or topics that emerged from conversations with managers.

Issues of Potential Bias

Qualitative research, including ﬂexible interviewing, does raise some research
concerns because of its personal nature. The most predominate problem associated with
qualitative interviews are concerns of bias-both researcher bias and participant bias
(Schober and Conrad, 1997). However, Gelling (2003, 21) points out that such biases
can be overcome by “carefully selecting participants, emphasizing issues such as honesty,
anonymity and conﬁdentiality, and by establishing a trusting relationship between the
researcher and the participant.” Therefore, the wetland mitigation banking study
addressed potential bias concerns by using pre-interview communication, informed
consent procedures, and a conversation style interview grounded in an interview guide.
For example, if during an interview a question of conﬁdentiality or anonymity was raised
by the respondent (after they had given informed consent), the respondent was reminded
that the procedures and protocols of the study would be followed strictly, that there

would be no association of their answers with their name or program name, and that

25

conﬁdentiality would be maintained to the maximum extent under the law. These types
of open and honest interactions between the subjects and the researcher appeared to foster
a trusting relationship between researcher and participant and thus helped reduce and

avoid bias.

Respondents’ Questions and Maintaining Focus

An issue often involved in qualitative interviews whether focus groups or individual
interviews is the questioning of the interviewer by the interviewee. Typically, the
conversational nature of the interview leads to respondents who either try to steer the
conversation away from the researcher’s intended direction or respondents who begin to
ask questions about the research and the researcher. These respondent behaviors
interrupt the ﬂow of the session and potentially introduce bias based on the interviewers’
responses. Use of redirecting, neutral prompts are one way interviewers can get the
interview back on track. Britten (1995) suggests asking respondents to save their
questions until the end of the interview. For the wetland banking project, participants
questions were answered during the informed consent phase and, if they were to clarify
the interviewer’s questions, during the interview session. Otherwise, all other respondent
questions were “saved” until the end of the interview. At that point, the interviewer

addressed those questions in appropriate ways.

Reliability

The concept of reliability, in the context of quantitative interviewing, refers to 1) the

consistency of a subject’s response, and 2) the consistency of the analyst’s rating of that

26

response (Winch and More, 1956). To promote researcher reliability, this study used the
same researcher to implement all the interviewers, code all the data, and conduct the
analysis. The same general techniques were used for every respondent interviewed. The
various techniques and their implementation were supervised by the researcher’s major
professor and approved by her advisors.

To address concerns about the reliability of the data itself, the researcher l) tape-
recorded all interviews, 2) transcribed the interviews, 3) used an iterative, evolving
discussion guide, and 4) asked respondents to explain their responses and repeat/confirm
their previous answers. The initial interview of a small subset of the universe of wetland
mitigation bankers used the ﬁrst iterative design of the study’s discussion guide. These
sessions were reviewed, respondent’s answers analyzed, and minor modiﬁcations to the
discussion guide were made. Such an iterative process enable the researcher to identify
strengths, weaknesses, redundancies, and needed changes in the interview guide so that
the questions used would lead to reliable results. In total there were 4 minor changes in
the interview guide. The changes facilitated more reliable responses. (See Appendix D

for various forms of the discussion guide)

Validity

Validity in qualitative research is, “the high degree of consistency in the answers of
each group indicated that the method provided for an adequate description of each
position” (King, 1944, 60). Therefore looking for consistency among responses might
provide a measure of validity. The internal consistency of most respondents’ answers

evidence some measure of internal validity. That is, most often respondents volunteered

27

the same information about subject matter when asked about it in more than one question
or in more than one way.

Regarding external validity, qualitative researchers typically adopt a strategy of
triangulation. Denzin (1978, 291) deﬁnes triangulation as “the combination of
methodologies in the study of the same phenomenon” Jick (1979, 602) points out that
“more than one method should be used in the validation process to ensure that the
variance reﬂected that of the trait and not of the method.” Since most research regarding
wetland mitigation banking has used methods based on agency personnel and documents,
it was possible to attempt triangulation with these various sources of data and methods.
The 2002 ELI study and a 2001 Army Corps of Engineers study done on wetland banks
and bankers within Florida (Scodari, ACOE, 2001) were used to triangulate this study’s
results. Both of those studies will allow for a certain degree of validation through

triangulation of results.

Accuracy

The degree of accuracy of responses in conversational interviewing has been raised as
a potential issue for qualitative research. Schober and Conrad (1997, 588) show that
“ﬂexible interviewing led to superior accuracy when it was not obvious to respondents
how the questions corresponded to their circumstances.” This supports the decision to
use the semi-structured, ﬂexible interview method for this study. Furthermore, Schober
and Conrad (1997, 589) demonstrate that even if interviewers provided “inaccurate

information it did not necessarily lead respondents to produce incorrect answers.” Once

28

again, these factors support the reasonableness of adopting the qualitative interview

method for this study.

Time

In general, and in the case of this study, ﬂexible, semi-structured interviews take a
great deal of time. This is especially true when extra care is taken to reduce bias, increase
reliability, and generate accurate and valid data. For example, the interviews in the
wetland banking study were designed to last approximately 1/2 hour. However, it was
common for many respondents to go into much greater depth than imagined and for

interviews to last upwards of an hour.

Implementation Procedures

University Committee for Research Involving Human Subjects

Since this research used human subjects to collect data, it was necessary to obtain
approval from Michigan State University’s University Committee for Research Involving
Human Subjects. The study titled “Learning About Wetland Mitigation Banks” was
assigned IRB number 03-305t. The project initially applied for approval in March 2003
and received approval to begin collecting data on April 17, 2003. The IRB approval was

renewed in February of 2004 with an approval expiration date of January 13, 2005.

29

Sample Selection

The universe of existing wetland mitigation banks in the United States was identiﬁed
throughout the course of 2002 using published and unpublished research as well as
contacts with individual district ofﬁces of the US. Army Corps of Engineers. The result
of this effort was a list of 380 wetland banks complete with bank name, ACOE district,
bank sponsor, and sponsor’s contact information.

It was not feasible to interview every wetland bank manager in the United States.
Therefore, a sub-sarnple of the nation’s wetland banks was needed. It was decided that a
stratiﬁed random sample by State of 146 wetland bank managers in the lower 48 states of
the United States would be more than sufﬁcient. This was the largest number of
interviews thought possible given the contrasts of time and money allocated for the
project.

The master list of list wetland banks and their managers revealed that not every state
had wetland mitigation banks and that some states had as many as 78 wetland banks.
Since a random, proportional selection of wetland banks might lead to no banks or only
one bank being selected in those states with few banks, it was decided to over sample
mitigation banks and bankers in those states with 5 or fewer wetland mitigation banks.
Twenty-ﬁve states with wetland banks had 5 or fewer banks. In those cases, the
researcher attempted to contact and interview all bank sponsors in the state. Mitigation
banks and bankers in the remaining 9 states with greater than 5 banks were randomly
sampled based on the proportion of wetland banks in their state.

Random numbers were generated, assigned to each wetland bank in the master list

and used to select the wetland banks/sponsors for the study. Some attempt was made to

30

increase heterogeneity of bank type in a state’s sample. For example, if it was obvious
that a particular state’s initial random sample were all private wetland banks, an attempt
was made to replace the last selection with the next random selection of a wetland bank
of a public type. Also, several wetland banks were managed/operated by the same
manager/sponsor. In those cases when a particular manager/sponsor had already been
interviewed for the project, the wetland bank/sponsor next in the order of random

selection was selected.

Pre-notification letter

Once the sample for study was ﬁnalized, each potential participant on the sample list
was sent a pre-notiﬁcation letter via ﬁrst-class mail informing them of the project, asking
them to participate and letting them know that they would be receiving a telephone call
from the researchers in the near future (See Appendix A for a copy of pre-notice letter).
The pre-notiﬁcation letter was sent to potential respondents at least 10 days prior to the

researcher’s ﬁrst attempt to call the potential participant.

Informed Consent and Audio Recording

After having sent the pre-notiﬁcation letter, the researcher called potential
participants, described the study, and asked for their informed consent to participant in
the study (See Appendix B). Consent was either granted or not granted for the interview
and for audio-recording using a Dictating/Transcribing System [Memo-Scriber TRC-
8800]. All together, 145 persons were successfully contacted with 142 consenting to

interview and taping, 1 contact consented to the interview but not taping, 1 contact chose

31

to give written responses, and 1 contact did not consent to participate. Two potential
participants of the 142 consented to participant but, in short order, turned out not to be
wetland banks or bankers. This resulted in 140 interviews that were able to be used in this

study.

Telephone Interviews and Transcriptions

One hundred forty ﬁve (145) telephone interviews could not be done by one person at
one time. Therefore, multiple waves of telephone interviews were conducted. Each wave
included the selection of the next unit of potential interviewees, the mailing out of pre-
notiﬁcation letters to them, and the subsequent initial telephone contact calls. The initial
telephone contact would oﬁen result in the scheduling of a subsequent date and time for
the interview. On occasion, the initial telephone contact led right to the interview. The
ﬁrst two waves only contained three wetland mitigation bank managers to allow for a
period of instrument testing and modiﬁcation. After this initial period, each wave of
telephone interviews contained 20 potential respondents with a new wave occurring
every two weeks or so.

Telephone interviews can have some limitations. These include coverage error (not
being able to reach all representative respondents by telephone), sampling error (over
sampling clusters), non-response error (respondents not wishing to participate) , and
measurement error (respondents less conﬁdent or correct in answering perhaps due to
‘social distance’) (Groves, 1990). Such limitations were accounted for by repeated

attempts to reach managers, paying particular attention to the stratiﬁed sampling frame,

32

and by trying to gain the conﬁdence of managers through conversational interviewing

techniques.

The Instrument

The discussion guide was originally developed by the researcher using an iterative
process and peer-review. However, the interview guide underwent various revisions and
additions as more information was learned from bank managers themselves. The purpose
of the discussion guide was to insure that the same questions/themes/topics were asked of
each respondent while, at the same time, allowing for ﬂexibility (See appendix C).

The research was interested in learning generalities about the individual wetland
banks including size and type as well as speciﬁcs about the manager’s experiences.
Therefore the questions were detailed in certain theme areas and more general in others.
For example, one question provided an opportunity for bank managers to describe their
wetland bank, location type and size. This question was intentionally leﬁ vague so that
managers could discuss their bank in their own words. This was also the case with the
question regarding wetland credits. These initial questions were open to allow bankers to
use their own words in describing the credit system in their bank. However, the
researcher followed-up seeking speciﬁc information such as credit price and credit
determination during the interview. Bankers also were asked about their background and
training as well as their interaction with agencies. The discussion guide questions can be

found in Appendix C.

33

Discussion Guide Revisions

As mentioned, the discussion guide used went through a series of minor revisions.
The initial interviews were used to gather the researchers’ observations as well as
suggestions and feedback from the initial participants for modiﬁcation of the discussion
guide. Some questions were not clearly understood by any participant and their wording
was changed or, in one case, a question was eliminated. The original question, “The
words wetland bank and wetland banking program can mean a number of things. Can
you tell me what these words mean in your experience?” proved too confusing to
respondents. The interviewees too often needed excessive clariﬁcation and explanation of
what was sought. Because respondents discussed the attributes of their wetland banks in
response to other questions, the problematic question was dropped from the discussion
guide.

The initial discussion guide changed by adding questions after the preliminary
interviews and the suggestions and inquires of initial interviewees. For example, some
bank managers were interested in learning more about differences across banks using
functional assessment methods and those using acre-based methods. Therefore, this
question was added to the discussion guide. As Britten (1995) pointed out, new
information was learned from the interviews and could subsequently be incorporated into
future interviews. Throughout the course of the interview process the discussion guide
went through one initial revision and four subsequent minor revisions. The various
iterations of the discussion guide can be found in Appendix D. There were a total of ﬁve
versions of the discussion guide with each version being used in 13, 10, 7, 50, and 60

interviews respectively.

34

Debriefing Section

Following each interview, the interview guide called for the interviewer to debrief
and record impressions, highlights, and other observations about the interview as well as
particularly interesting and notable comments made during the discussion. For example,
the debrieﬁng section was used to note if individuals seemed hesitant about particular
questions or if they did not want to be contacted further and to highlight key points or

comments so that they could be recorded for easy reference.

Analytical Procedures

Introduction

The data collection methods used resulted in both the researcher’s hand written notes
ﬁ'om the interviews and high-quality audio recordings from virtual all of the interviews
(139 of 140). These audio recordings were transcribed into electronic documents (i.e.,
text ﬁles) for subsequent use in word processing software (e. g., MS Word © and data
analysis software (e. g., ATLAS LI (0). There were more than 1800 pages of transcripts
that resulted from the interviews. To best handle this volume of data and the complexity
of emerging themes, the research made use of computer-assisted analysis. Podolefsky
and McCarty (1983, 886) point out that, “In the abundance of information [within in-
depth interviews], the absence of an adequate data management system, tends to
confound the analysis and obscure important information.” After reviewing several
qualitative data analysis soﬂware programs including QSR Nudist ©, HyperRESEARCH ©,

and QDA Miner ©, the researcher selected ATLAS LI © analytical software (ATLAS)

35

for use in this study. ATLAS proved readily available at Michigan State University,

ﬂexible, and very user-friendly.

Analysis of Transcriptions

The transcription process was completed in November of 2003 with 1876 pages of
transcriptions available for analysis. The open-ended nature of respondents’ answers
yielded rich and sometime complicated answers. These transcripts were converted into
appropriate ﬁle formats and entered into ﬁles for use of ATLAS. The transcript ﬁles

were individually read and iteratively coded.

Development of Codes

The coding procedure for the transcripts was iterative to allow for a process of
digesting of the data and developing themes and insights. Themes emerged from the
systematic coding of the transcripts. For example, examining the responses to the
question “What do you think are the keys to successful wetland banking?” eventually led
to a “theme code” labeled ‘Keys to Success’. To reach this ultimate axle code, the
iterative process roughly followed the multiple steps articulated by Corbin and Strauss
(1998). First, the transcripts were “open coded” so that virtually every word of a
transcript was coded (tagged with a label). Next, the transcripts were “axle coded” with
the axle codes designed to form categories and then into categorical codes or themes (i.e.,
groups of axial codes) found within the data. The ﬁnal iteration of the coding process

was the selective or categorical coding process that further grouped and categorized the

36

data in order to derive theories or make conclusive observations about the data. These
categorical codes roughly are equivalent with the themes analyzed in this study.

The process used a subset of transcripts for open coding to develop a set of axle
codes. The remainder of the transcripts was then initially coded using the axle codes with
new axle codes added as needed. As a result, the aggregate number of axle codes
increased throughout the analysis process as new themes were discovered. Also, as the
coding process proceeded, it became clear that some initial axle codes and themes would
not be used in further analysis. Therefore, not all the axle codes are discussed in the
results. The complete list of codes and ﬁnal list used in analysis can be found in

Appendix E.

Weighting of Variables
The collected data was also statistically analyzed. Since the sample was stratiﬁed
based on state and the proportions of bank location across states was not uniform, it was
decided to weight the variables in statistical analyses where appropriate. In other words,
the data were weighted based on state wetland bank frequency to more accurately
account for the variability of wetland banks in states. The procedure used to assign
weights was as follows:
Wm“) = T,/T * N/ Ns
Where: T = 380 (total number of banks)
N = 140 (total interviews completed)
T8 = number of banks within each state

Ns = number of banks actually interviewed within each state

37

Analytical Procedures-Wscellaneous Information

Two bank managers interviewed were not used in the analysis portion of this
research. These two participants were managers of governmental programs and were not
involved in actual wetland mitigation banks. The researcher used a code of “99” to
indicate that the respondent did not know the answer to the question being asked. The
code “88” was used to indicate that the response from the banker was unclear or that the
banker was not asked this question. A code of 88 necessitated that the data for that item
to be treated as missing. This occurred mostly with the questions that were added or
revised during the data collection process or where bankers were simply not clear in their
answer even with repeated probes. Due to time constraints, the difﬁculty in reaching
managers and the limited number of questions this affected, the undetermined value was
applied to this data set and it was decided not to return to these bankers to ask additional
questions. The following chapter discusses the research results and, in particular, the

codes developed and analyzed.

38

CHAPTER FOUR
RESULTS AND ANALYSIS
Introduction
This chapter presents results of the study and analysis of the individual interviews
with wetland bank managers and sponsors. Both qualitative analysis as well as some
quantitative analysis of the data are presented. This chapter is organized around thematic
categories, the products of the iterative coding process of the interviews that involved

successive open coding, axial coding and selective coding of the transcripts.

Study Response Rate

The initial list of 380 wetland banks and their managers was used to draw a stratiﬁed
random sample of 145 potential participants. Each potential participant on the list was
contacted multiple times. If deemed to be “unobtainable,” the potential participant was
eliminated from the sample and replaced with the next randomly selected participant
from that state’s wetland banks. For a wetland bank and its manager to be classiﬁed as
“unobtainable,” the interviewer must have attempted to contact them at least ﬁve times.
A total of 50 wetland banks/managers were replaced as “unobtainable,” one potential
participant refused and two members of the sample turned out not to be wetland banks or
bank managers. This resulted in a cooperation rate for this study of 99.3%, a contact rate
of 74. 1% and a response rate of 73.6% (American Association of Public Opinion

Research, 2004).

39

Interviews-General Observations

In general, participants seemed very open to the project’s questions and the research
methods used. Almost a quarter of participants (23%) speciﬁcally asked for copies of a
ﬁnal report or ﬁnished product and were told that they would receive a brief report when
the project was completed. This is in line with Write’s (1996) observation that
participants were more willing to cooperate with the research if the products of the
research were made available to them.

It became evident from the outset of the project that wetland mitigation bank
managers were interested in talking about their experiences. Initially, it was thought that
each interview would take about 1/2 hour. However, managers had a lot to say about their
banks and experiences. Even using re-directive prompts and other moderator
interventions, bank managers took longer than V2 hour to answer the questions contained
in the interview script.

One area of discussion proved to be problematic. This concerned wetland mitigation
credit prices and pricing. It seems that wetland credit price information is a sensitive
issue for many private entrepreneurial banks. This is not surprising and is in line with
Wright’s (1996, 59) experience that “in highly competitive markets, companies are often
reluctant to disclose information which is regarded as sensitive and pertaining directly to

their organizations.”

Coding Process and Thematic Codes

As previously mentioned, the interview transcripts were iteratively coded. The

coding process resulted in 44 thematic areas (categorical codes) (See Appendix E). The

40

reported analysis discussed here focuses on those thematic codes most relevant to this
study. For each thematic code area presented here, an attempt is made to:
1) Describe the thematic area and the process for deﬁning variables for quantitative
analysis;
2) Describe the qualitative data and provide some representative quotes;
3) Present some quantitative analysis;
4) Include, where appropriate, a comparison of results from other studies; and

5) Make some general observations about the theme’s data.

All statistical analyses presented here are based on data analyses adjusted (weighted)
to reﬂect the actual distribution of banks in each state. The method used to determine the
weight used is described in Chapter Three. Statistical analyses were undertaken using
SPSS © software. In addition to frequency analysis, cross tabulation with chi-square
analyses were undertaken to examine the signiﬁcance of apparent relationships
(differences) between thematic response categories and bank ownership type (public,
private, and non-proﬁt).

The chi-square test of association analysis is used to test the general hypothesis that
there is no relationship between ownership type and various codes within the thematic
categories. The alpha value used to test for signiﬁcant differences in this study is 0.05.
Such a 5-percent level of signiﬁcant difference is standard in social science research.

Since not every banker interviewed addressed every topic (e. g. questions not asked,

answer unclear, or didn’t know), Table 1 presents the percentage of interviewees that did

41

not respond to particular research themes. For subsequent statistical analyses these

responses were considered missing data.

Tabl e l : Wetland Bankers Not Providing Data on Themes

 

Theme Percent
Years in Banking 7.5
Background and Training 9.1
Ecological Type 8.9
Proposed Banks 30.3
Purpose Banks 0.7
Current Status 1.1
Process of Creation 21.5
History land use 2.9
Who Calculates Credits 3.4
Credits calculation method 10.8
Credits release 18.6
Future Funding 25.2
Future Land 21.3
Permit Time 14.6
Monitoring Schedule 23.6
Monitoring Schedule Method 29.1
Service Area 11.9
Service Area Determination 21.8
Success Criteria Determination 13.7
Agency Support 26.6
Source of Clients 24.0
Type of Clients 22.0
Reasons Using Banks 14.2
Comparing 25.8
Keys to Success 1.0
Obstacles 1.0
Change one thing 4.2

Results: Wetland Mitigation Bank Manager Characteristics
Bank Ownership Type and Gender

Typically, three types of ownership are associated with wetland mitigation banks—
public, private and non-proﬁt. Public banks are owned by government agencies, private
banks are considered entrepreneurial (i.e. for proﬁt banks) and non-proﬁt banks are run
by non-proﬁt agencies. The ﬁrst major grouping of the data sorted the interview data
based on bank ownership type. ELI (2002) added the additional ownership distinction of

public-private partnerships. However, the reported research results focused on the

42

experiences of the three major bank ownership types and did not make the public-private
distinction. The few wetland banks that might have been classiﬁed as public-private
partnerships were placed in the category of private banks. The data (conﬁrmed during

interview) also allowed for classiﬁcation of the gender of wetland banker sponsors.

Quantitative Results

Table 2 shows that about 70% of the banks in the study were of the private,
entrepreneurial-type; about 22% were government wetland banks; and 9% were non-

proﬁt mitigation banks. The results also show that most managers (about 90%) are male.

Table 2 Ownership of Banks and the Gender of Respondents
Bank Ownership Percent

 

Government 21 .7
Private 69.3
Non-Proﬁt 9.0
Gender Percent
Male 90.3
Female 9.7

External Validity & Comgarisons

The study result that most wetland banks are private, entrepreneurial types seems to
differ from studies of wetland banks in the early 19908. It has been reported that in the
early 19903, most wetland banks were government owned and operated (Marsh, 1996).
However, the changing nature of wetland bank ownership towards entrepreneurial types,
as found in this study, is in line with other recent studies. ELI (2001) reported an
increasing number of private commercial banks for the period between the early 1990’s
to 2001.

This project’s results are also in line with changes seen in Florida. In 1992, there was

only one private commercial wetland mitigation bank in Florida (ELI, 2001). However,

43

the recent Army Corps of Engineers Florida study showed that in 2001, 62% of the

wetland banks were private commercial banks (Scodari, ACOE, 2001).

Background of Bank Managers

Bankers were asked to speak about their own background and training. Subsequently,
this information was placed into the ATLAS © theme, “history of manager in wetland
banking.” Value codes pertaining to “highest level of schooling reported” were used for
quantitative analysis. The values used included: no formal schooling, associates degree,
Bachelors degree, Masters degree, PhD and other (e. g., JD, DO). The type of degrees
received or ﬁeld of study for bank managers was also noted and coded into ATLAS© as

“profession of bank manager.”

Quantitative Results

Table 3 shows data on the background education of bank managers with the highest
percentage of managers (50.3%) attaining their bachelors degree and about a quarter of
bank managers (24.2%) receiving a masters degree.

Professional background, as reported by managers, did not vary considerably. Most
managers’ bachelor and masters degrees were in Biology, Ecology, Environmental
Science, Natural Resource Management and Engineering (Civil or Environmental).
Interestingly, a few managers reported having degrees in Political Science, Accounting,
Journalism, Photography, Cultural Anthropology, Marketing and Business Management.

Some bank managers also reported expected PhDs in various areas including, Marine

44

Biology, Conservation Biology and Natural Resource Management. Five respondents

held degrees such as JD or DO.

Table 3 Background and Training of Bank Managers

 

Background and Training Percent

No Formal Schooling 11.4
Associated 3. 1
BS 50.3
MS 24.2
PhD 6.4
Other 4.6

How long has the banker been involved in the industry?

The number of years a banker reported to have been involved in the wetland banking
industry was coded as “history of manager in wetland banking.” This data provided
insight into whether the industry appears to be recruiting new professionals or retaining

those that have been involved since the beginning of the wetland banking industry.

mantitative Results

As Tables 4 and 5 illustrate, most wetland bankers have been involved in the industry
for some time. The vast majority of bankers (81.1%) have 5 or more years on the job
with the mean time reported as 9.08 years. The range of on-the-job wetland banking

experience for bankers is one year to 25 years.

45

Table 4 Number of Years Bank Managr WorkinﬂWetland Banking Industry
Number of Years Percent

 

One Year 0.8
Two Years 1.4
Three Years 10.2
Four Years 6.5
Five Years 6.7
Six Years 12.4
Seven Years 4.5
Eight Years 8.8
Nine Years 6.0
Ten Years 12.4
Eleven Years 4.5
Twelve Years 3.0
Thirteen Years 3.2
Fourteen Years 4.9
Fifteen Years 4.9
Fifteen Years Plus 9.6

Table 5 Descriptive Statistics on the Number of Years Bank Managers in Wetland Banking Industry

 

N Minimum Maximum Mean Std. Deviation
129 l 25 9.08 4.974

Summag—Mitigation Bankers

The data show that the majority of national wetland mitigation banks are the private,
entrepreneurial type with bankers predominately being male. It appears that individuals
working in wetland banking tend to have studied biological sciences, with a few focusing
on business studies. Most bankers report having been in the industry for 5 or more years.

The industry seems to be retaining wetland bankers, and not hiring many new ones.

Results: Wetland Mitigation Bank Characteristics
Type of Wetlands in Banks

Wetland bank managers were asked to describe their wetland bank—the ecological
type of wetlands in their bank, its location and its size. Information provided regarding
ecological type was coded as “type of wetland.” Respondents reported their banks to be

of varying ecological types including bottomland hardwood, pine savannah and vernal

46

pools. Some of the respondents knew their bank contained several different types of
wetlands and in some cases referred to their banks as a mosaic of wetlands. These
responses were subsequently coded as “varied.” In some cases, managers did not know
detailed ecological information and instead used such descriptors as emergent,

freshwater, created and preserved to describe their wetlands.

Qualitative Results

In total there were nine (9) codes used to capture the range of responses concerning
the ecological types of wetlands (see Table 6). The most frequent response was “varied.”
Managers gave responses such as,

“Well, we have 7 major wetland community types ranging from sub-emergent-

emergent marshes all the way up to hydro-pine ﬂat wood and riparian forest”

(0554).

The second most frequent response was “bottomland hardwoods” and responses
included statements like:

“Well, we focus when we can on bottomland hardwood restoration or bottomland

hardwood creation because that mainly what [has been] lost” (026).

A more complete representation of the range of responses can be found in Appendix

F, Section 1.

Quantitative Results
As Table 6 illustrates, about 31% of wetland banks were reported by wetland bank

managers to be of varied type and 28.0% were reported to be bottomland hardwood.

47

Table 6 Ecological Type of Wetland Banks

 

Ecological Type Percent "'
Varied 3 1 .2
Bottomland hardwood 28.0
Restored/enhanced 4.7
Preservation 0.8
Flatwood Savannah 1.6
Creation 0.6
Emergent/Freshwater 7.4
Vernal Pools 4.4
Other 21.3

* Does not total 100% due to multiple responses

External Validity & Comparisons

Previously, ELI (2001) looked at information on compensatory mitigation credit type,
not the ecological type of wetland banks. This study’s reported ﬁndings provide new

insight into the composition of wetland mitigation banks’ ecosystems.

Summary

The data revealed that the types of wetlands in mitigation banks seem to vary
dramatically across eco-regions in the United States. The high percentage of managers
reporting their ecological type as varied is logical, when one considers that banks with
varied ecological types enable bankers to meet the demand for replacement of a variety of
different ecological types of wetlands. The large percentage of wetland banks reporting
bottomland hardwood is also logical when considering this wetland type is prevalent in

the southern United States, the location of many banks and wetland losses.

Location of Wetland Banks
Data collected from participants regarding locations of wetland banks were coded as
“location of wetland.” This location information was often detailed. The US. Army

Corps of Engineer District managing each wetland bank was determined by the

48

researcher before the interviews using the master list of bankers compiled in 2000.

Managers conﬁrmed their bank’s location during the interview.

Quantitative Results

According to the initial list of wetland banks and bank managers in this study, the
study participants were working in 34 US Army corps of Engineers Districts. As Table 7
illustrates, the New Orleans ACOE district had the highest percentage of wetland banks
in this study with 20.5%, the Norfolk Virginia district had the second highest with 9.4%
and the Jacksonville Florida Corps district was third with 9.2%. The results of this study
revealed that bank managers are working in 36 states (See Table 8). Louisiana, Florida,
Virginia, and California were the states with the highest number of wetland mitigation

banks in this study with 20.5, 9.2, 8.7 and 8.4 percent respectively.

External Validity & Comparisons

The ELI study, done in 2001, reported wetland banks in 40 states. This study’s
different results may be due to differences in data collection methods. ELI (2001)
collected data using agency mitigation documentation, while this study used information
from personal communications with agency personnel. Apart from the differences in the
number of states with wetland mitigation banks, this study found equivalent distribution
of banks in Florida and California and more wetland banks in Louisiana as compared to

the ELI study.

49

Table 7 Army Corps of Engineers District of Wetland Mitigation Banks
ACOE District Percent

 

New Orleans 20.5
San Francisco 5.6
Jacksonville 9.2
Rock Island 4.0
Vicksburg 1.6
Mobile 3.9
Savannah 4.3
Charleston 2.9
Sacramento 1.9
Detroit 0.3
Nashville 1.1
St. Paul 2.4
Galveston 1.6
Norfolk 9.4
St. Louis 1.6
Buffalo 1.6
Louisville 1.3
Chicago 4.4
Omaha 3.6
Portland 1.8
State of NJ 2.6
Ft. Wroth 1.1
Nashville 0.7
Little Rock 0.7
Huntington 2.6
Kansas City 0.5
Los Angeles 1.4
Wilmington 3.4
Memphis 1.1
State of MI 0.3
Baltimore 1.6
Seattle 0.5
Albuquerque 0.3
Walla Walla 0.3

50

Table 8 State Location of Wetland Mitigation Banks

 

State Percent

AL 0.8
AR 0.8
CA 8.4
CO 1.6
FL 9.2
GA 5.0
IA 1.8
ID 0.3
[L 6.6
IN 0.8
KY 0.8
LA 20.5
MD 0.8
MI 0.3
MN 0.8
M0 2.1
MS 4.7
NC 3.4
ND 0.5
NB 1.3
NJ 2.6
NY 0.8
OH 3.4
OR 1.8
PA 0.8
SC 2.9
SD 0.3
TN 2.6
TX 2.6
UT 0.5
VA 8.7
WA 0.5
WI 1.6
WY 0.3

51

Summg

The precise location of individual wetland banks proved difﬁcult to summarize.
Some wetland bank managers could give information on the location of their bank, while
others could not. Some wetland bank managers owned and operated more than one bank.
For the purposes of this study, it was decided that a general location of bank, including
ACOE district and state, was adequate for a proﬁle of the nation’s wetland mitigation
banks. This study did not use mitigation paperwork in agency offices, which might allow
for mapping of wetland banks using GIS technology. The largest number of wetland
mitigation banks are in the New Orleans, Louisiana, Jacksonville, and Florida Corps
districts. This seems logical since these areas are densely populated and contain a large

percentage of wetland acreage.

Size of Wetland Bank

Data regarding size of wetland banks were coded into ATLAS as “size of wetland.”
The research revealed some managers owned more than one bank and that some
managers were able to systematically describe their banks in size order. Size data were
used to compute both an average and range of the nation’s bank sizes. A total of 126
managers provided speciﬁc, discrete bank sizes. In 51 instances, wetland bank managers
initially reported a range of bank sizes. In eight (8) cases, the respondents did not get
more speciﬁc than a size range. To compute the average size of mitigation banks, it was

decided to incorporate these 8 cases by using an average of the range reported.

52

Q1_1a_ntitative Results

As can be seen in Table 9, the mean bank size based on averages reported by
respondents was found to be about 963 acres. Where bank managers only reported a
range of their bank size, the mean range of wetland bank size was found to be

approximately between 232 acres and 1145 acres.

Table 9 Size of Wetland Mitigation Banks (acres)

 

N Minimum Maximum Mean Std. Deviation
Range Low 51 0.50 2600.00 231.9905 501.75020
Range High 51 3.20 18000.00 1 145.4992 2687.40206
Average 134 4.25 48000.00 962.7758 4337.71895

External Validig & Comparisons

ELI’s national study (2001) did not speciﬁcally examine the size of current wetland
mitigation banks. However, The ACOE found in their Florida study that “most active
banks range in size from several hundred to several thousand acres” (Scodari, ACOE,

2001,8)

Summary

The data obtained in this study revealed a wide range of wetland bank sizes, with the
mean bank size somewhere near 900 acres. There seems to be no minimum or limit on
wetland bank size set forth by the ACOE or EPA, and therefore a wide range of sizes was
not unexpected. The Florida study supports the research result of great variability in

mitigation bank sizes.

53

Proposed Wetland Banks

Data obtained from wetland bank managers regarding the number of proposed banks
or bank expansions under consideration were coded as “proposed banks” in ATLAS. For
quantitative analysis, if a manager had no immediate or future plans to build another
wetland bank, a zero was recorded while if the banker planned one bank or expansion, a
number one was recorded. The quantitative data set subsequently was augmented to

reﬂect the total number of planned banks or expansions mentioned by respondents.

Qualitative Results

There were ﬁve (5) qualitative code categories used to capture the various numbers of
proposed wetland mitigation banks revealed by participants. The most frequent code for
wetland bank expansions was “zero,” with respondents stating such things as,

“We have identiﬁed some properties but what’s happened is the isolated wetlands

ruling, which came down two years ago, absolutely drove a dagger into our

back...we have not sold any acres in 2 years” (22281).

The largest number of proposed banks was “Seven” with that one respondent stating the
following:

”Yes, there are about 7 of them that are currently being you know in various

stages, feasibility study we’ve got about three that we’re already putting up

money to purchase the land” (33376).

A complete representation of the range of responses can be found in Appendix F, Section

2.

54

Qpantitative Results

In the case of proposed banks, an analysis (see Table 10) revealed what appears as
more government banks with plans of one, two, and seven additional banks or bank
expansions as compared to private and non-proﬁts. To explore this, further analysis of
government, private and non-proﬁt banks regarding the number of proposed of banks
(zero vs. one or more) was undertaken using pair-wise cross tabulation (chi-squared
analysis). It was learned private banks are signiﬁcantly more likely to not have any
proposed banks when compared to government (p<0.025). No other signiﬁcant

differences were found among the data.

Table 10 Number of Proposed Wetland Mitigation Banks (percentage)

 

Number of Proposed Banks Government Private Non-Proﬁt

Zero 40.9 67.6 66.7
One 31.8 14.7 0
Two 23.8 16.4 22.2
Three 0 1.5 12.5
Seven 4.5 0 0

External Validity & Comparisons

The Corps of Engineers concluded in their 2001 Florida study that the wetland
banking industry appeared to be slowing: “Regulators indicate that at the present time
the bank development pipeline does not include a signiﬁcant number of viable bank
proposals” (Scodari, ACOE, 2001, 8). The results reported here, that a high number of
managers reporting zero new banks or expansions, appear to in line with the Florida

study.

55

Summg

The reported results do not evidence widespread growth of current wetland mitigation
banks. The research revealed there are few new wetland acres being contemplated as part
of banks’ expansion plans. Subsequent research may shed some light on the obstacles to

wetland banks and their expansion.

Purpose of Bank

Data from the interviews regarding the original purpose for banks and/or the changed
purpose for banks was placed in an ATLAS theme of “purpose of wetland.” Purpose
codes included: environmental purpose (to provide habitat value, water quality, or
wetland preservation); market demands (to meet an economic demand for credits in the
area); a proﬁt motive (to make money); or to meet a speciﬁc project’s mitigation needs

(government banks for transportation projects).

Qualitative Results

Five (5) codes captured the range of thematic responses concerning the purpose of
wetlands. The most mentioned purpose from government managers was “to meet the
mitigation needs of a speciﬁc project.” The most mentioned purpose from private
managers was “proﬁt.” Private wetland bankers describe the purpose of their banks by
saying that, “Those [wetland banks] were deﬁnitely established as mitigation banks to
create mitigation credits as a private sector kind of venture” (26307). Non-proﬁt wetland

bank managers reported the majority purpose of their banks was environmental, saying

56

such things as, “There is the critical conservation need” (12160). A complete

representation of the range of responses can be found in Appendix F, Section 3.

Qpantitative Results

An initial analysis revealed what looked like more government managers mentioning
speciﬁc project than did private and non-proﬁts and that more non-proﬁts seemed to
mention environment and demand as reasons as compared to private and government
banks. The frequencies also revealed what looked like more private banks mentioning
proﬁt and extra to sell than government and non-proﬁts.

To explore whether such observations were statistically signiﬁcant further analysis of
private, government and non-proﬁt regarding purpose was undertaken. Pair-wise cross
tabulation analysis of private, government and non proﬁt, as they related to particular
purposes was undertaken. With regard to proﬁt as a purpose, it was learned that
government banks are signiﬁcantly different from both private (p< 0.000) and non-proﬁts
(p<0.000). With regard to environmental purposes, it was learned that government banks
are signiﬁcantly different from non-proﬁts (p<0.002) but not private banks (p<0.165).
Also it was revealed that private banks with environmental purposes are signiﬁcantly
different than non-proﬁts (p<0.015). With banks developed for speciﬁc projects, it was
found that government banks signiﬁcantly differed from non-proﬁts (p<0.000) and
private (p<0.000). Government banks that cited demand as their purpose were

signiﬁcantly different from non-proﬁts with such a purpose (p<0.004).

57

 

Table 11 Purpose of the Wetland Mitigation Bank (percentage *)

 

Purpose of Banks Government Private Non-Proﬁt

Proﬁt 0 46.4 38.5
Environmental 24. l 38. 1 75.0
Speciﬁc Project 75.9 15.5 0
Demand 17.2 34.0 61.5
Speciﬁc Project with Extra to Sell 0 5.2 0

"' Does not total 100% due to multiple responses

External Validity & Comparisons

ELI’s national study (2001) did not speciﬁcally examine the purpose of individual
wetland mitigation banks. Instead ELI brieﬂy described their bank classiﬁcation
systems. When examining private commercial banks ELI found a wide range of private
sponsors that “does not lend itself to easy categorization” (ELI, 2001, 39). Private
commercial banks were found to “span the gamut from small banks sponsored by private
landowners seeking to make a proﬁt to private companies created solely for the purpose

for creating wetland mitigation banks” (ELI, 2001 39).

Summm

The data obtained in this study revealed a wide range of wetland bank purposes.
Knowing the nature of the wetland banking industry this result was not unexpected and

appears to be inline with other mitigation banking studies.

Current Status of Banks
Data from the interviews regarding the current status of banks was coded in ATLAS
as “current status of bank.” In instances where managers reported that they were working

on plans for a wetland bank, such responses were coded “concept phase.” Where banks

58

 

were currently under construction or had just completed the construction phase, those
responses were coded “construction.” Some banks were described by their managers as
being in the monitoring phase (post-construction establishment phase) and were thus
labeled as “monitoring.” Finally, wetland banks ﬁnished with monitoring and in the

maintenance phase were labeled as “complete.”

Qpalitative Results

The four (4) codes mentioned above were used to capture and analyze the range of
thematic responses concerning the current status of wetland mitigation bank(s). Most
respondents classiﬁed their wetland banks as being in the monitoring phase. A common
response was, “Normally it [is] like 3 people that maintain the site year around, it is still
under monitoring requirements” (0547). A complete representation of the range of

responses can be found in Appendix F, Section 4.

Quantitative Results

In the case of current status of wetland banks, an initial analysis of the frequencies
revealed what looked like more government banks mentioning banks being under
construction than did private and non-proﬁt. Further analysis of the government, private
and non-proﬁt data regarding current status of bank was undertaken. Pair-wise cross
tabulation revealed that government banks under construction signiﬁcantly differ from

private banks (p<0.004) regarding construction but not non-proﬁts (p<0.339).

59

 

Table 12 Current Status of Wetland Mitigation Bank (percentage *)
Current Status of Banks Government Private Non-Proﬁt

 

Monitoring 89.7 86.6 100.0
Construction 20.7 4. l 8.3
Concept 10.3 1 1.3 15.4
Sold Out/Complete 0 10.3 0

* Does not total 100% due to multiple responses

Sou—muggy

It proved difﬁcult to obtain precise information from respondents in this thematic
area. Managers typically had one or more wetlands banks, each in various stages of
development. A signiﬁcant number of government wetland banks reported being in the
construction phase. This is in line with previous research suggesting government banks

as one sector that proposes the most new banks (ELI, 2002).

Wetland Creation Process

The process used to create the wetland ecosystem of a mitigation bank varies
dramatically based on the bank’s eco-region and the type of wetland to be constructed
(i.e., created, enhanced, restored, or preserved). Assigning codes to each respondent’s
responses concerning wetland creation processes was difficult. Some bank managers
were either not sure or not very speciﬁc about the wetlands creation process employed in
the wetland bank. These managers typically had hired consulting or engineering ﬁrms to
do the majority of the work and thus were somewhat removed from personal knowledge
of the wetland creation processes. As a result of the ambiguity of many of the responses
in this thematic area, the data were summarized to record whether the particular wetlands
in banks were created, enhanced, restored, or preserved. If a manger reported there was

more than one type of creation process used, the data were coded into multiple categories.

60

Qpalitative Results

There were ﬁve (5) groups of responses in this thematic area (see Table 13). The
restored category was most frequently used to capture the information gathered by the
researcher. Typically, managers would share information about how their wetlands were
restored. For example, “We ﬁlled in some ditches that had been dug on the property to
drain it; we put in ditch blocks that would in effect restore the retention of water on the
property” (0552). A complete representation of the range of responses can be found in

Appendix F, Section 5.

Qpantitative Results

Restoration (73%) proved to be the most frequent wetland creation method in the
nation’s wetland mitigation banks.

T ablel3 Process used to create Wetland Mitigation Banks

 

Process of Creation Percent *
Restored 73.0
Enhanced 4.0
Created 8.6
Preservation 1.9
More than one mentioned 12.6

’ Does not total 100% due to multiple responses

Summm

The result of this theme, that the majority of banks use restoration as the primary
creation process, is logical since former wetlands typically have the necessary elements
to be relatively easily reconstituted once wetland hydrology is restored. This ﬁnding is in
line with previous research results that most wetland banks are being formed on land

previously in agriculture use (ELI, 2001).

61

 

Original land use of the bank site
Data obtained from respondents regarding the history of the land in their wetland
bank were coded within ATLAS as “history of land use.” Previous land use codes

included farmed/agriculture, timber/forest, grazed land, idle land and sand/gravel/clay pit.

Qualitative Results

Six (6) codes (see Table 14) were used to capture the range of thematic responses
concerning the original land use of bank land. The most predominate response
(agriculture) revealed that most wetland bank land was formerly in use as agriculture
with respondents giving answers such as, “No question, it was farmed from about 1850
up until 1980. Then it was mined for gravel in the 50S and 603” (09110) and “[t]ypically
most land use has been pasture, hayﬁeld, sometimes vineyard or other agriculture” (037).

A complete representation of the range of responses can be found in Appendix F, Section

 

 

6.
Table 14 History of the Land occupying Wetland Mitigation Banks
History of Land Percent *
Land was farmed or in agriculture 75.8
Timber or forestry 15.3
Land was used for grazing 7.3
Land was idle 12.5
Sand/gravel/clay pit 2.0
Other 2.8
* Does not total 100% due to multiple responses
Quantitative Results

The quantitative analysis reported in Table 14 show “farmed /in agriculture” being

mentioned most frequently (75.8%). The second most frequent previous land use was

62

“timber or forestry” (15.3%) and the third most frequently reported previous land use was

“land was idle” (12.5%).

External Validity & Comparisons

These ﬁndings about previous land uses are quite similar to those found by the 2001
ELI study. ELI reported that over 65% of wetland banks are sited on land with a history
of use in agriculture. Moreover, they support the ﬁndings about that 76 percent of bank
managers report using restoration as the primary means for “creating” wetlands for their

bank.

Summm

This quantitative result was expected as many managers spoke about restoration of
wetlands on former farm land during the interviews. This result also is logical
considering the history of wetlands in this country, and their subsequent drainage for

farm land.

Wetland Credits - Who calculates the credits given to each bank?

Bank managers were questioned on a range of wetland credit topics including who
calculates the number of credits for their bank. Data regarding wetland credit amount
determination as well as the entity conducting the credit calculation were coded in the
ATLAS theme “credit amount.” If a manager’s response regarding who determined the

amount of credit was that a federal or state agency determined it unilaterally, that

63

response was further coded as “agency.” If it was clear that a negotiated process between

the bank and the agencies was used that information was coded as “negotiated.”

Qpalitative Results

There were three (3) codes (see Table 15) used to capture the range of thematic
responses concerning what entity calculates the number of credits with the most
predominate response being “agency.” A typical response coded as agency was,

“The Corps did the whole thing, the Mitigation Review Team. We did nothing but

what they tell us to do. There is no negotiating over anything with them, nothing,

none, zero” (12178).

A representation of the range of responses can be found in Appendix F, Section 7.

Qaantitative Results
As Table 15 shows, 88.9% of government banks, 82.3% of private banks and 100%

of non-proﬁt banks have agencies as the main determining factor for the number of
credits given to their bank. A pair wise cross tabulation analysis of wetland ownership
type (government, private and non-proﬁt) and credit calculation did not reveal any

statistically signiﬁcant differences in the agency/negotiation mix for wetland banks.

Table 15 Entity conducting Credit Calculation for the Wetland Mitigation Banks (percentage)

 

Entity Conducting Credit Calculation Government Private Non-Proﬁt
Agency 88.9 82.3 100
Negotiation l l .1 17.7 0

64

Wetland Credits - How are wetland credits calculated by this entity?

Data regarding the determination process for the amount of credits given to banks for
their wetland acreage were complicated and elaborate. This information was recorded in
ATLAS under the code “credit amount”. The methods used by the various banks and
Corps districts ranged from complex mathematical formulas to simple acre conversions.
Most respondents discussed calculation methods in enough detail so that best
professional judgment could be used to categorize their responses as functional, acreage,
or acre/type calculations. “Acre/type” calculations used some form of acreage
conversion with an additional component of adjusting for type or quality. For example, a
banker who restored one acre of wetland might receive one credit (acreage one for one)
and perhaps receive and additional credit for enhancement (1/2 acre) or preservation (1/3
acre). Bankers not describing some acre/type computation process typically reported
their wetland credits being calculated based on acreage (e. g., one acre restoration equals
one credit); coded as “acre.” The “function” code category was used to capture instances
where credits were based on a functional or quality assessment. These functional
assessments varied between sophisticated assessments (e. g., WRAP, Charleston method)
to simple, best professional judgment quality assessment in the ﬁeld. In two cases, banks

did not seem to ﬁt any one of three categories and were coded as “other.”

Qpalitative Results

Four (4) codes (see Table 16) captured the range of thematic responses concerning
how wetland credits are calculated with the most predominate credit calculation

appearing to be acre/type. This type of credit calculation method was described by

65

 

responses such as, “They’re giving us one to one credit for each acre of restored wetland,
half of one for each acre of enhanced wetland and a third of a one for each acre
preserved” (23282). A complete representation of the range of responses for this theme

can be found in Appendix F, Section 8.

Quantitative Results

An initial analysis of the data revealed acre/type as the predominate method used.
Pair wise cross tabulation analysis of the ownership types with the credit calculation
methods revealed that use of acre/type credit calculation method by private banks is
signiﬁcantly different from that of non-proﬁt banks (p< 0.046) but not government banks

(p<0.496). No other statistically signiﬁcant relationships were found.

Table 16 Credit Calculation Method used by Entities (percentage)
Methods used for Credit Calculation All Banks Government Private Non-Profit

 

Acre 25 .2 28.0 25.0 18.2
Functions 24.6 20.0 28.4 8.3
Acre/Type 49.3 52.0 44.3 75.0
Other 0.9 O 1.1 0

External Validig & Comparisons

The 2001 ELI study found that functional assessment methods were used to deﬁne
credits for approximately 13% of all wetland mitigation banks and that 23% of banks
used some type of “combined approach, which relies upon best professional judgment to
scale wetland acreage according to some value of functionality” (ELI, 2001, 59). ELI’s
“combined approach” is comparable to this study’s credit calculation code of “acre/type.”
The ELI study found that 61% of banks used a credit deﬁnition of “acreage” and three

banks used only best professional judgment for their credit determination (ELI, 2001).

66

Summary

While the reported research found no banks that only used best professional judgment
for determining credit amount, the other results are in line with previous research. This
study found the number of banks using functional assessments (24.6%) to be slightly
higher than that of the 2001 ELI study (13%). It also found larger numbers of banks
using a combined acre/type approach (49.3%) than ELI (23%). It seems possible that
there has been an increase in using functional assessment methods and combined

approaches to determine bank credit amounts. More research in this area is necessary.

Credit Price

Data regarding credit price were coded in ATLAS as “credit price.” Actual credit
price was difﬁcult to summarize with some bankers reporting prices per acre while others
reported prices per credit. Data reported here only contains credit price when reported
per acre or the conversion from credit price to price per acre was clear. This type of
conversion was most frequently seen in California where credits tend to be sold at 1/10 of
an acre. Managers reported credit price per credit and the data was converted to a per
acre price for comparison. Further complicating data collection in this theme, some
bankers would only respond with a credit range. Respondents only reporting one price
were recorded in SPSS as “cost of credits.” Respondents reporting a range had their
lower amount entered as “cost of credits” and their upper amount entered as “cost of

credit high.”

67

Qaantitative Results

As can be seen in Table 17, the mean low credit price was approximately $43,519 per
acre with a standard deviation of 78,439, and the mean high credit price was

approximately $93,873 with a standard deviation of 157,202.

Table 17 High/Low Wetland Mitigation Banking Credit Price

 

N Minimum Maximum Mean Std. Deviation
Credit Low 99 1,000 400,000 43518.85 78439.36
Credit High 49 2,000 900,000 93873.08 157202.44

Summary

Capturing credit price data proved to be challenging, as many managers owned more
than one bank, with each having different prices. Also, most government banks did not
have a set credit price. Further complicating matters, credit prices vary dramatically
according to regional land prices. Also, due to the market nature of the industry, many
bankers were reluctant to report their wetland credit prices. Even having a national range
of credit prices does not necessarily accurately depict many factors (e. g., regional
differences, development pressures) contributing to wetland mitigation credit cost and
market prices. A more accurate picture of credit prices might include such factors as
geographic characteristics, region, proximity to metropolitan areas, and degree of market

saturation.

Credits Release Schedule

Data regarding credit release schedules were coded using the ATLAS theme “credit
release schedule.” Responses were recoded for use in SPSS based on the percentage of
the total number of credits received that had been released (for sale) to bank managers at

the signing of their banking agreement. If a manager received no credit at the signing of

68

their banking authorization, a value of zero was assigned. Successive values were
assigned to categories with the following ranges of percentages: “5 -29,” “3 0-50,” “51-

99,” and “100.”

Qualitative Results

There were a variety of responses to questions posed to bankers under this thematic
area. Most bankers had some idea about the percentage of credits released to them. A

complete representation of the range of responses can be found in Appendix F, Section 9.

Qaantitative Results

In the case of credit release, an initial analysis of the frequencies seemed to show that
more non-proﬁts mentioned receiving 30-50 percent of their credits for sale at the signing
of their banking agreements than did government and private banks. It also appeared that
more non-proﬁts and private banks received 100% of their credits at the signing of their
banking agreement than government banks, and that more government and non-proﬁts
received zero credits at the signing of their banking agreement than private banks. To
explore this, cross tabulation analysis of government, private and non-proﬁt
organizations’ credit release data was undertaken and revealed that government banks
were signiﬁcantly different from private (p<0.036) and non-proﬁt (p<0.044) regarding
the release of 100% of credits at time of singing. Government banks signiﬁcantly
differed from private (p<0.000) but not non-proﬁt (p<0.258) banks in those cases where

zero credits were released. No other signiﬁcant differences were found among the data.

69

Table 18 Number of Credits released to a Manager upon Signing of the Banking Agreement (percentage)

 

Credit Release Schedule Government Private Non-Profit

Varied 15.0 12.2 0
Zero 45.0 8.5 25.0
1-29 Percent 25.0 31.7 16.7
30-50 Percent 10.5 18.5 30.8
51-99 Percent 0 2.4 0
100 Percent 5.0 26.8 30.8

External Validity & Comparisons
In the 2002 ELI study, 92% of the nation’s wetland banks allowed credits to be
withdrawn from a mitigation bank before the bank was mature. However the ELI study
reported that:
“although a high percentage of banks allow release of credits prior to achieving
all performance standards, most banks retain at least half of the potential credits
for release after some performance standards have been met” (ELI, 2001, 63).
The ELI report did not delineate credit releases in the same way as this study, but they
did ﬁnd that,
“on average, banks allow for the advance debiting of 66% of credits prior to
meeting all performance standards and 42% of credits prior to achieving interim
performance standards or a portion of their standards” (ELI, 2002, 64).
They also reported that, “the percentage of credits release before achieving all
performance standards ranges from 15% to 100%” (ELI, 2002, 64). The reported

research ﬁndings are in line with the range of credit releases reported by ELI (2002).

Summary

This research result shows ownership type is a factor in credit release schedules.

Generally government banks have not received large amounts of credit releases at the

70

signing of their banking agreements. The general observation that private and non-proﬁt
banks receive considerably higher credit releases vis-a-vis government banks appears
logical since private and non-proﬁt bankers tend to be more interested in receiving funds

at the beginning of a banking project than do government entities.

Future Funding

Data regarding future ﬁrnding of wetland mitigation banks were coded under the
ATLAS theme “future funding of bank.” Bankers often thought that questions about
funding referred to ﬁnancial assurances for their banks in the proposal and monitoring
stages. Those types of bonds or escrow accounts are typically returned to the banker at
the end of the monitoring phase. Due to this established banking practice, it became clear
that it was necessary to clarify this question to'address only those funds that bankers set
aside for future, long-term maintenance. If it was clear that the respondent understood
this and responded yes to this question, then that response was coded as a “yes” value
(money would be set aside for long-term maintenance). If the banker clearly said that

there would be no future money for the bank, this was given the value of “no.”

malitative Results

A complete representation of the range of responses given for this theme can be found

in Appendix F, Section 10.

71

Qpantitative Results

Table 19 shows that bankers were evenly split between those responding yes and no
regarding future moneys for bank maintenance, regardless of bank ownership type. The
pair wise cross tabulation conﬁrmed that there was no statistically signiﬁcant differences

in future funding based on ownership type.

Table 19 Future Funding for Bank Maintenance (percentage)

 

Future funding for the bank Government Private Non-Profit
Yes 54.5 53.3 44.4
No 45.5 46.7 55.6

External Validity & Comparisons

Because the 2002 ELI study relied on bank documents ﬁled with the USACOE, it
was able to go into some depth regarding this type of question. The ELI study examined
sponsors’ ﬁnancial assurances in various stages of banks’ development. These stages
included bank establishment, bank oversight and long-term management. The reported
research focused on long-term funding for the bank which makes it difficult to compare
results with ELI results. However, ELI did ﬁnd that “fewer than half of the banking
instruments that contain information on long-term maintenance also contain speciﬁc

information on ﬁnancial assurances for long-term maintenance” (ELI, 2002, 68).

Summagy

The reported research revealed two points regarding future funding of a bank, (1) the
ownership of a bank does not seem related to long-term funding for a bank, and (2) only

50% of the nation’s banks have future funding for management.

72

Future of wetland bank land

Data regarding the future of the lands under control in the wetland bank were placed
in the ATLAS theme “future of wetland bank land.” Four types of future plans for
property in the wetland banks emerged ﬁom the interviews: 1) the land would be turned
over to a governmental resource agency (state, county, city or federal) [coded as
“agency”]; 2) the banker would retain ownership of the wetlands [coded as “still own”];
3) the land would be turned over to a non-proﬁt [coded as “non-proﬁt”]; 4) or the land in

the wetland bank was to be eventually sold [coded as “sell/sold”].

Qpalitative Results

There did not appear to be one predominate future plan for the property in the
nation’s wetland banking land. Some representative comments were:

“Still own”: “We actually still own all of our sites and we manage all of our

sites, even after all the credits are sold” (0320).

“Turn over to agency”: “We are turning them over to either the Fish and

Wildlife Service or the Game and Fish Commission for management” (024).

“Sell”: “It was just sold” (0689).

“Turn over non-proﬁt”: “We have title to the [land], but in the long term we

will eventually turn that over to the Nature Conservancy” (26305).
A complete representation of the range of responses can be found in Appendix F, Section

11.

73

Qu_an_titative Results

An initial analysis of the frequencies for the categories of this theme revealed what
looked like more government and private banks planning to turn their banking land over
to an agency than did non-proﬁts. It also appeared that more private and non-proﬁt banks
had plans on turning their banking land over to a non—proﬁt than did government banks.
The pair wise chi-square analysis of government, private, non-proﬁt bank ownership
regarding the future of wetland banking lands revealed that govemment—owned banks
signiﬁcantly differed from private (p<0.040) but not non-proﬁt (p<0.l31) regarding their
future plan for land currently in wetland mitigation banks being turned over to a non-

proﬁt organization.

Table 20 Future of the Wetland Mitigation Banking Land (percentage *)

 

Future wetland banking land Government Private Non-Proﬁt

Still Own Land 52.2 41.0 66.7
Turn Over to Agency 47.8 35.4 12.5
Turn Over to Non-Proﬁt 4.5 24.4 22.2
Sell/Sold 0 2.5 0

* Does not total 100% due to multiple responses

External Validity & Comparisons

The conversational interviewing in this study proved to be effective for learning about
and understanding bank managers’ plans for the future of wetland banking land. For
example, ELI ’s document-based analysis revealed that, “Of the 219 banking instruments
analyzed, 44% indicate information on long term management requirements” (ELI, 2001,
84). ELI did comment “the vast majority of the banks established today are not held in
perpetuity by the bank sponsor; rather they are transferred to a public agency or non-
proﬁt organization in the business of land preservation” (ELI, 2002, 84). Where there

were relevant data regarding the future disposition of land in banks, ELI did attempt to

74

gather it. Of the 65% of banks that had indicated some long-term management plan (44%
of all Banks), ELI found 56 banks identifying a public agency, 34 indicating the sponsor,
22 specifying a non-proﬁt organization, 16 stating that either a non-proﬁt organization or

a public agency, and 18 not specifying the future owner of lands in the wetland bank.

Summm

The number of government banks planning to keep their wetland banking land was
surprising considering that transportation agencies tend not to be land management
agencies. However, the limited amount of banks being sold was as expected considering
the limited development potential and uses for such property once restrictive easements

are in place.

Permits for the bank

Bankers were asked about the amount of time it took them to complete the permit
process, and also about the process and their interaction with agencies. The data were
collected under the ATLAS theme “permit time” and subsequently analyzed to determine
speciﬁc values. Data were categorized based on a range of time (similar to the scheme

used for categorizing the credit release schedule).

Qpantitative Results
Table 21 shows that the largest group of government banks (34.8%), private banks

(23.3%) and non-proﬁt banks (45.5%) need four years to be permitted while the largest

number of banks were permitted in l to 4 years. Further analysis of government, private

75

and non-proﬁt banks and their permit-issuance time was undertaken. It was learned that
government bank permit times were signiﬁcantly different from both private (p<0.020)
and non-proﬁt (p<0.03 5) when exploring the three year permit period. It seems that more
government banks are permitted by the fourth year of the wetland bank permit process

than private and not-for-proﬁt wetland banks.

Table 21 Time Frame for a Manager to complete the Permit or Banking Agreement (percentage).

 

Permit Time Government Private Non-Profit

One Year 8.7 14.0 18.2
Two Years 17.4 8.1 0
Three Years 0 19.8 18.2
Four Years 34.8 23.3 45.5
Five Years 4.3 3.5 0
Six Years 8.7 17.4 27.3
Eight Years 8.7 8.1 0
Nine Years 13.0 7.0 0

Summm

There was no previous information on permit process time for wetland mitigation
banks. The research results suggest that most wetland banks received their permits within

four years of initiated the process.

Agencies

Data regarding which agencies were involved in the creation of the wetland banks
were captured under the ATLAS theme “agencies worked with.” However this
information was almost impossible to code into value groups because every region of the
country seemed to work with a different set of agencies. Every Corps district appeared to
run the permitting of their wetland mitigation banks slightly different. Various areas of
the country with different coo-regions will also have different agencies that need or want

to be involved in the process (e. g. NOAA and/or The National Marine Fisheries Service

76

 

for coastal regions). Instead of trying to summarize this information, it was decided to
examine the data for difﬁcult or problematic agencies. However, since this was not a
direct question asked of all respondents, no statistical observation or summary is
presented. However, the conversational interviews did result in some bankers being

willing to express frustration regarding particular agencies.

Qualitative Results

Some managers mentioned problems or difficulties in dealing with the US. Fish and
Wildlife Service. For example, as one banker put it,
“The most difﬁcult problem we had was with the Fish and Wildlife. I
didn’t ﬁnd them bad people; I just found their goals and objections so
much different than ours and so much more demanding and stringent that
it was a tough job” (09109).
A complete representation of the range of responses can be found in Appendix F, Section

12

External Validity & Compaﬁma

The data gathered within this theme coincided with the data gathered in the study
done in Florida by the Corps where it was reported that some bank managers expressed
frustration with the US Fish and Wildlife Service. “Bankers single out the F WS as the
one Federal agency that most often impedes bank development through the MBRT

consensus requirement” (Scodari, ACOE, 2001, 23). This is not surprising since the

77

primary role of the F WS is to protect and provide habitat for animals and not the

expeditious processing of business’s application to operate.

Cost of creation

Questions about the cost of wetland creation were asked of many, but not all, of the
bank managers. A question concerning the cost of creation of wetland banks was
speciﬁcally added to the discussion guide because it appeared to be of interest to bank
managers. Data under this theme were coded in ATLAS as “cost involved in creation.”
Some respondents seemed to know their creation cost per acre, some reported total
project costs, with others reporting they did not know about the costs of their wetland
bank creation. Further complicating analysis of this theme, the component parts of the
costs of wetland bank creation varied between respondents with some reporting costs
associated with land acquisition only, construction costs only, or both. For many bank

managers, it was difﬁcult to distinguish various costs.

Qpalitative Results

Not surprisingly, many managers expressed concern about trying to determine and
report their cost ﬁgures. For example, bank mangers typically reported,
“That’s a hard number to come up with because you have the cost of the
land and you have the cost of the excavation, you know that’s a number
that I just, it depends on how you look at it. I got the beneﬁt of hauling the
dirt from the wetlands to help my development. But then it also cost me if

I was going to go and built the wetland and just make it a wetland itself it

78

 

would have cost me quiet a bit to do that. I would have been better off
developing that piece of ground and selling the lots off if, I could have
made more money that way so it depends on how I want to value the land
and how I want to put the numbers where, so there is not a real good

answer to that one” (20268).

Quantitative Results

Managers clearly had difﬁculty in reporting a cost of creation ﬁgure. It was also clear
the nature of compiling such a ﬁgure was complicated and involved many factors.
Therefore ﬁgures obtained from managers were not considered reliable and therefore

were not reported.

Summary

This theme proved there are many factors that go into determining total cost of
wetland bank creation including land, construction, engineering and consulting cost. It
seemed that many bankers could not give accurate estimates. A contributing factor may
be due to the nature of the conversational interviews. Bankers did not tend to have this

information “at the top of their head.”

Monitoring Schedule

Data collected from respondents regarding their banks’ monitoring schedules were
captured under the ATLAS theme of “monitoring schedule.” Data here showed some
bank managers reporting more than one monitoring time because mangers often own

more than one bank. For statistical analysis, monitoring time in this study is the longest

79

time reported by the manager. Managers who reported monitoring time as perpetual were
asked to clarify their response to include only the time in which reports needed to be
ﬁled. This theme also allowed for the capture of information on how monitoring times
were determined. The four principal methods for determining the required monitoring
time of mitigation banks were categorized as: negotiation, agency, state, and success

criteria.

Qpalitative Results

Table 23 shows the eleven (11) codes used to capture the range of thematic responses
concerning monitoring times and schedules. The most predominate monitoring time
period reported by respondents was 5 years. Respondents made such statements as:
“Yeah that is the standard. The agencies have decided that they want a minimum of ﬁve
years of monitoring” (03 7). Regarding determination of monitoring time (Table 24),
typical respondent statements (by category) were:
“Agencies” “That all came out of the MBRT process” (0566).
“State”: “That’s part of the Wetland Conservation Act, a state law that requires a
5 year monitoring period and the Corps went along with that” (15222).
“Negotiated”: “That was something that was negotiated as part of our operating
agreement” (0439).
”Met Criteria”: “Until you’ve met all your thresholds” (09108).

A complete representation of the range of responses can be found in Appendix F, Section

13.

80

Qpantitative Results

Table 23 shows the highest percentage of banks reported a monitoring time of 5
years. An initial analysis of the frequencies revealed what looked like more non-proﬁt
banks mentioning states and having met criteria as the determining factors than did
private and government. Further analysis revealed that private banks signiﬁcantly
differed from non-proﬁt banks (p<0.034) and government banks (p<0.043) regarding met
criteria determination of monitoring time. No other statistically signiﬁcant differences

were seen among the data.

Table 23 Monitoring Time (percentage)
Monitoring Time Percent

 

One Year 6.0
Two Years 0.8
Three Years 4.2
Four Years 4.2
Five Years 59.0
Six Years 1.9
Seven Years 9.0
Ten Years 7.2
Fifteen Years 3.5
Twenty Years 3.5
Perpetual 0.9

Table 24 Entity Determining Monitoring Time (percentage)

 

Entity Determining Government Private Non-Profit

Monitoring Time

Negotiated 14.3 26.5 0
MBRT/Corps 70.0 66.2 63.6
State 4.8 4.4 18.2
Met Criteria 15.0 3.0 18.2

External Validig & Comparisons

The results in this area were very similar to the data acquired by ELI. According to

ELI,

81

“The majority of banks (60%) require monitoring for ﬁve years. Twenty-one

percent of banks require more than ﬁve years with 16 percent requiring between

six to 10 years and 5 percent requiring anywhere from 11 to 50 years” (ELI,

2002,81)

When ELI examined the entity determining monitoring time they found that 12%
of banks examined required monitoring until performance criteria were met, 1% until

all the credits are sold, and 2% used some combination of these methods (ELI, 2001).

Summag

The results of this research theme were in line with the national guidance for
mitigation banks (Federal Guidance for the Establishment Use and Operation of

Mitigation Banks, Federal Register 228, 58605-58614 Vol 60, No. 43, 1995) that

suggests a ﬁve-year monitoring time.

Service Area

Data concerning wetland mitigation banks’ service areas were placed within the
ATLAS theme “location/service area.” The coding process resulted in the emergence of
the following service areas categories, “ﬂood plain/drainage basin/watershed”,

“Hydrologic Unit Codes”, “eco-region”, “county”, “state” and “other.”

Qpalitative Results

Six (6) codes (see Table 25) were used to capture the range of thematic responses

concerning the service area of wetland banks, with the most predominate response

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category being “Watershed/drainage basin/ﬂood plain.” A typical response within this
service area type was, “Well, our service areas here are determined by, well loosely
determined by watersheds” (0554). A complete representation of the range of responses

can be found in Appendix F, Section 14.

Qpantitative Results

An initial analysis of the ﬁ'equencies in this theme area revealed what looked like
more non-proﬁt and government banks reporting their state was their service areas as
compared to private banks. It also appeared that more government bank managers
mentioned “other” than did private and non-proﬁt bank managers. The pair wise cross
tabulation of government, private and non-proﬁt as they relate to service area mentioned
was undertaken. It was learned that private banks signiﬁcantly differ from government
banks (p<0.010) and non-proﬁt banks (p<0.010) regarding the use of states as service

areas.

Table 25 Service Area Determination (percentage)

 

Service area determination Government Private Non-Proﬁt

Watershed 50.0 51.8 46.2
HUC 19.2 31.8 25.0
County 8.0 12.8 23.1
State 7.7 0 7.7
Eco-region 4.0 3.5 0
Other 8.0 0 0

External Validigg & Comparisons
The 2001 ELI study found 53% of banks studied using the watershed as the

geographic service area which is similar to the above results. However ELI found 22%
of banks studied used the county, 11% used a hydrologic unit and 14% used some other

type of geographic delineation for a bank’s service area (ELI, 2001). The ELI ﬁndings

83

differ as compared to this study’s ﬁndings with the present study having more banks

mentioning hydrologic unit codes and fewer banks mentioning counties as service areas.

Summg

According to this data, in some instances service areas appears to be affected by the
ownership of a bank and may indicate a shift toward hydrologic service areas and away

from county service areas.

How was the Service Area Determined?
When bank managers were questioned about service area they were also asked to
comment on how or who determined their service area. Data regarding this question

were also placed within the ATLAS theme “location/service area.”

Qaaﬁtative Results

. Two (2) codes (see Table 26) were used to capture the range of thematic responses
concerning how the service area was determined. The most predominate responses were
that agencies determined service areas. For example, “Basically, we have a sphere of
inﬂuence. The regulatory agencies will determine that by how large our watershed is and
each mitigation bank has a speciﬁc watershed or sphere of inﬂuence” (0323). A
complete representation of the range of responses can be found in Appendix F, Section

15.

84

Quantitative Results

Examining who determines the service areas, resulted in an initial analysis of
frequencies that seemed to indicate more non-proﬁt banks seem to have their service
areas negotiated than do government and private. However, the pair wise cross

tabulation revealed no signiﬁcant differences within the data.

Table 26 Entity Determining Service Area (percentage)

 

Service Area Determination Government Private Non-Profit
Agency 73.9 72.6 46.2
Negotiated 26.1 27.4 53.8

Summm

This data show that wetland mitigation bank ownership type does not have a

signiﬁcant relationship with how bank service area has been determined.

Success Criteria

Data regarding a bank’s success criteria were placed in the ATLAS theme “success
criteria.” Managers often gave very detailed technical information regarding their own
bank’s success criteria. Success criteria varied greatly between the different regions
across the country. This variation may be attributable to the range and number of eco-
regions across the country, as well as the number of agencies involved in the
determination of success criteria. The conversational interviews resulted in open
discussions regarding whether banks’ success criteria were negotiated or determined by
the agencies. If it was clear that agencies determined a bank’s success criteria, those data
were coded “agency.” If it was clear that the success criteria were a negotiated

component of the permit process, those data were coded “negotiated.”

85

Qaalitative Results

Table 27 shows that the predominate response was “negotiated”, with these

bankers stating things such as the following:
“There are guidelines and then they make modiﬁcations dependent on
individual sites. We go in knowing what the guidelines are and then we
make modiﬁcation according to what we think appropriate for the site and
the site conditions, and whatever we are restoring or doing on that site and
then that’s where they are able to make their comments and we respond
back and we come to a negotiated decision” (18251).

A complete representation of the range of responses can be found in Appendix F, Section

16.

Mtitative Results

Initial examination of the ﬁequencies for this theme seemed to indicate that a smaller
number of private banks rely on negotiation as compared to government and non-proﬁt.
The pair wise examination of government, private, non-proﬁt regarding the various
mentions of who determined the success criteria revealed no statistically signiﬁcant

differences.

Table 27 Entity Determining Success Criteria (percentage)

 

Entity Government Private N on-Protit
Agency 28.6 45.7 25.0
Negotiated 71.4 54.3 75.0

86

External Validity & Compaﬂopa

In 2001, ELI found only two states (Florida and Maryland) that required some form
of performance criteria for banks in their statutes and regulations. Only two states (Iowa
and Virginia) have performance requirements in banking guidelines (ELI, 2001). ELI
used banking instruments rather than conversational interviewing and was able to go in-
depth using banking instruments to examine performance standards (vegetation,
hydrology or the presence of non-native species). ELI results are not directly comparable

with this study’s results.

Summary

Success criteria determination does not appear to be affected by ownership type. It
also seems that success criteria determination for mitigation banks is usually a negotiated
process. This is an interesting research result since a negotiated process may provide
evidence both bankers and agencies have access to a great deal of knowledge about the
ecology of wetland banks. Or this my simply signify the difﬁculty in determining a

wetland mitigation bank’s success criteria.

Agency Support

Bankers’ opinions on the level of support they received from agencies during the
banking process were coded in ATLAS as “interaction with agencies.” Agency support
was difﬁcult to simplify into categories, with managers often speaking at great depth
about the amount of support they did (not) receive. Two categories were used to describe

the mangers’ opinions of agency support, “not very supportive” and “very supportive.”

87

Qaalitative Results

The most prevalent response among all bank ownership types was “very supportive.”
Managers generally felt that the overseeing agencies had been very supportive in the
banking process. One manager reported that,

“I’d say very supportive. They’ve been encouraging us for a number of
years to get into the banking business. They have a ﬁrm grasp of that
there’s real ecological beneﬁts into mitigating a small impact at a large
site. The success is so much better; it’s so much more an efficient use of
taxpayer dollars so they’ve been very supportive” (07103).
A complete representation of the range of responses can be found in Appendix F, Section

17.

Qpantitative Results

Table 28 shows most managers felt the agencies had been very supportive in the
banking process. Pair wise cross tabulation of government, private and non-proﬁt bank
type with agency support conﬁrmed there was no statistical difference regarding the

amount of perceived agency support.

Table 28 Perceived Level of Agency Support (percentage)

 

Agency Support Government Private Non-Profit
Very Supportive 89.5 77.0 88.9
Not Very Supportive 10.5 23.0 11.1

88

Summg

This data show (1) ownership type is irrelevant in relationship to perceived agency
support and (2) a majority of bankers generally feel the agency staff support them in their

banking endeavors,

Clients of bank

Data regarding the clients who used wetland banks were classiﬁed within ATLAS as
“users of credits.” This theme area captured information on both the type of clients and
number of clients of wetland banks. The data analysis assigned values of “mostly
private”, “mostly public” and “SO/50 public/private split” as a way to characterize the

mix of client types.

Qaalitative Results

Three (3) codes (see Table 29) were used to capture the range of thematic responses
concerning the banks’ clients. The most predominate value was mostly private and can
be represented with the following quote: “I’d say 99% is private, I do very little like with
the state” (12142). A complete representation of the range of responses can be found in

Appendix F, Section 18.

Quantitative Results

Initial examination of the frequencies regarding the type of wetland bank clients
shows fewer government banks reporting to have mostly private clients. It also seems

that fewer private banks reported having mostly public clients than did government and

89

non-proﬁt banks. Further analysis revealed private banks to signiﬁcantly differ from
government (p<0.000) banks regarding the predominance of public clients. Not
surprisingly, government banks signiﬁcantly differed from private (p<0.000) banks
regarding the predominance of private clients and signiﬁcantly differ from non-proﬁt

banks (p<0.011) regarding the predominance of public clients.

Table 29 Clients of the Wetland Mitigation Banks (percentage)

 

Credit Clients Government Private Non-Profit

Mostly Private 21.1 71.8 53.8
Mostly Public 78.9 14.3 33.3
50/50 Private/Public 0 13.0 15.4

Summm

The results in this area make sense. Government banks tend to be used for
government projects. The collection of exact number of clients was beyond the scope
and capability of this study. Most managers did not know exactly how many clients they
had. Often it was only those managers that were either relatively new or had not sold
credits in a considerable amount of time that could report on the exact numbers of clients.
The probative questions regarding the type or size of client resulted in learning that
departments of transportation (DOTS) were typically the largest clients and private

homeowners the smallest clients.

How do bank managers get their clients?
Bank managers were also asked about how they generally attract their clients. Data
in this theme were coded in ATLAS as “clients coming from.” Responses included:

“consulting ﬁrm referrals , agency referrals”, “direct marketing”, “they were the only

bank available”, or “the bank had been only for their use.”

90

malitative Results

Five (5) codes (see Table 30) were used to capture the range of thematic responses
concerning how bank managers get their clients. Most clients, it seems, were a result of
“agency referrals.” A typical response in this area was, “[b]ecause of that credibility with
the agencies about 75% of our clients are referrals from the agencies and 25% are
referrals from engineering ﬁrms and consulting ﬁrms” (0554). A complete representation

of the range of responses can be found in Appendix F, Section 19.

Qpantitative Results

Table 30 shows that most bankers credit “agency referrals” as the source of their
clients (54.4%), with “direct marketing” (22.9%) and “only for their use” (20.1%) as the

next largest sources of wetland bank clients.

Table 30 Source of Wetland Mitigation Bank Clients

 

Source of Clients Percent *
Agency referrals 54.4
Engineering/consulting ﬁrm referrals 12.0
Direct marketing 22.9
Only bank available 6.0
Only for their use 20.1

" Does not total 100% due to multiple responses

Summm

These results show most bank clients are directed to banks from agency referrals, which

was expected, considering the interrelated aspects of permitting and mitigation.

91

Reasons for using the particular banks

Data regarding the reasons that bankers attributed to their clients use of their banks
were coded within ATLAS as “reason for using the bank.” While bankers described how
their bank was the “only available bank” or that they had the “best reputation” or were
probably the “cheapest” in the area, bankers for the most part did not talk about what
made clients choose THEIR particular bank. That is, most bankers credit section 404
permitting or regulations (wetlands law and regulation) as the reason for using their

wetland banks.

Qaalitative Results

In total there were seven (7) codes (see Table 31) used to capture the range of
thematic responses concerning reasons for using a particular bank. The most
predominate comment was “agency regulations” and the following is a good
representative quote of this type of response:

“We’ve use the bank for both 404 permit mitigation condition
requirements for mitigations for corps permits. We’ve used it for section
401 water quality certiﬁcation permit mitigation. We’ve used it for
violations” (03 16).
A complete representation of the range of responses can be found in Appendix F,

Section 20.

Qpantitative Results

As can be seen in Table 31, “regulations” was the most frequent respondent (49.1%).

92

Table 3] Reasons why Clients use Particular Wetland Mitigation Bank

 

Reasons for Using Percent *
Regulations 49. 1
Available 22.4
Cheapest 25.4
Reputation 10.6
Convenient 6.5
Fast to process credits 3.0
Other 3.3

"' Does not total 100% due to multiple responses

Sim—magi

The high number of bankers reporting regulations (404 permitting requirements)
might reﬂect the misinterpretation or difﬁculty with this question. It would be interesting

to gather more information at a future date regarding this question.

Bank Comparisons

Wetland bank managers were asked to comment on how their bank compares to
others in the region and that information was placed within the ATLAS theme
“comparing banks.” The information collected under this theme was grouped into the
following categories: “similar” (type/ size/ ecology), “none” (no banks around),

99 6‘ ,9 ‘6

“different type (owner/size/ecology) , cheaper ,

,9 ‘6

more expensive , not as good”
(ecologically/interaction with agencies) and “more than one response.” (banker gave
more than one of the previous responses). “Similar” represents the manager’s belief that
banks in the area are similar to the bank managers. “Different type” refers to managers
expressing other banks were owned by other types (government, private, non-proﬁt) or of
different size. “Cheaper” or “more expensive” refers directly to the difference in credit

prices. “Not as good” meant the ecological situation of the banks surrounding theirs was

93

better/worse or they had heard stories or knew they had a better/more difficult time
dealing with agencies. Finally they could have cemented on the fact there were no
other banks around to make a comparison (“none”) or they could have given more than

one comparison and were thus coded as “more than one response.”

Qpalitative Results

The seven (7) codes (see Table 32) used to capture the range of thematic responses
concerning the comparison of other wetland banks revealed that most bankers believe
that their bank is of a “different type” than others in the area. There were two types of
responses typical for this category as illustrated below:

“For the most part [it] is pretty much the same, but it is different in the
sense that they, what they are going to be left with is herbaceous where a

lot of our stuff is forested” (0545).

“The main difference is that ours will be exclusively for transportation
uses by public agencies” (07103).
A complete representation of the range of responses can be found in Appendix F, Section

21.

Q1_1antitative Results

Table 32 shows that, for the managers able to compare their bank to others, the

highest percentage reported the banks around them to be of a different type (31.2%).

94

Table 32 Comparison of Mitigation Banks

 

Comparison Percent 0
Similar 23.1
None 18.2
Different Type 3 1.2
More Expensive 3.3
Not as good 16.4
More than one response given 5.3
Cheaper 2.3

Summag

This is a difﬁcult theme to make any strong observations since many managers didn’t
know how to make comparisons of other banks and would often struggle with this
question. Also this question is difficult to make any comparisons since no other study

asked this type of question in this way.

Keys for successful wetland banking
The keys to successful wetland banking identiﬁed by bank managers fell into a range
of types. These key types included:
0 “technical knowledge”, referring directly to the need for wetland ecology
information;
0 “site selection”, referring directly to good soil and hydrology;
o “agency support”, referring directly to both support in the process of building
the bank as well as support in using the bank once built;
0 “design”, referring directly to the landscape design of the site;
0 “commitment”, referring to monitoring and willingness to give time to the
project;

0 “demand”, referring to the need for credit demands;

95

o “hydrology”, referring directly to the hydrology on the site;

0 “money”, referring to starting capital and enough money to keep a project
going;

0 “nature”, referring to no storms, droughts or other major disasters that would
destroy the bank once built;

0 “patience”, referring to the direct use of the word patience by the respondent
or their reference to giving the bank time to succeed;

0 “other”, was various other keys to success not ﬁtting into one of these value

groups.

Qaaﬂative Results
Eleven (1 1) codes (see Table 33) were used to capture the range of thematic
responses concerning wetland bank managers’ opinions on their “keys to success,” the
most frequent comment varied based on bank ownership type. Representative quotes of
the top three comments are:
“Agency Support”: “Having agencies supporting banks and allowing
clients to access banks as a primary option to do their mitigation so there’s

adequate sales potential so a bank is economically viable” (24295).

“Site Selection”: “Site selection, you have to have a really good

defensible site that’s able to provide the ﬁrnctions you think it will”

(32373).

96

“Hydrology”: “[A] Decent design and one that will establish the

appropriate hydrology. Without hydrology you’re dea ” (09110).

A complete representation of the range of responses can be found in Appendix F, Section

22.

Qpantitative Results

Initial analysis of the frequencies revealed what looked like more non-proﬁt banks
having mentioned technical knowledge, hydrology, money, design, patience and other
than did private and government. Site selection, commitment and agency support
appeared to be mentioned by more government than private and non-proﬁt wetland bank
managers. Demand and nature appeared to be mentioned by more private than
government and non-proﬁt. Pair wise cross tabulation of government, private and non-
proﬁt, as they related to the key to successful wetland banking mentioned was
undertaken. Indeed, private banks did signiﬁcantly differ from government (p<0.044)
and non-proﬁt (p<0.044) banks with regard to the role of hydrology as a key to success.
Non-proﬁt wetland banks signiﬁcantly differ from government (p<0.004) and private
(p<0.027) banks when identifying agency support as a key to success. It was also learned
that private wetland banks signiﬁcantly differ from non-proﬁt (p<0.001) but not
government (p<0.070) banks when attributing money as a key to their success.
Government bank managers signiﬁcantly differed from non-proﬁt (p<0.042) but not

private (p<0.086) wetland bankers regarding the role of site selection as a key to success.

97

Finally private bank managers signiﬁcantly differed from non-proﬁt (p<0.027) but not to

government (0.818) with regard to technical knowledge.

Table 33 Keys to Successful Wetland Mitigation Banking (percentage* )

 

Keys to Success Government Private Non-Profit

Technical Knowledge 17.2 15.5 41.7
Site Selection 48.3 30.9 15.4
Agency Support 44.8 28.1 0
Design 13.3 13.4 16.7
Commitment 26.7 15.5 25.0
Demand 10.3 24.0 8.3
Hydrology 20.0 7.2 25.0
Money 13.3 4.1 30.8
Nature 3.4 9.3 0
Patience 3.4 6.3 7.7
Other 13.8 15.6 25.0

* Does not total 100% due to multiple responses

Summm

The results of statistical data analysis show the initiating entity of a bank is
signiﬁcant. More governments and non-proﬁts see good hydrology as a factor that leads
towards success than do private banks. Also, non-proﬁts do not seem to be relying upon
agency support as a key for success as compared to government and private wetland
banks. The results also show that private wetland bankers feel less strongly than non-
proﬁt bankers, but not signiﬁcantly different from government bankers, that money is a
key to success. Government bankers attribute success to site selection more than non-

proﬁt bankers but not signiﬁcantly different ﬁ'om private bankers.

Obstacles to Wetland Banking
Obstacles to wetland banking were coded into the following values:

0 “In lieu fee” was a direct reference to in lieu fee programs for mitigation;

98

"requirements/regulation changes” refer to the constantly changing
regulations as well as wetland banks often having higher standards for success
than on-site mitigation;

“money/cost” is a direct reference to the cost of mitigation projects;

“public perception” is in regards to both the public’s view of mitigation banks
and wetlands in general;

“landowners” refers to those who will not allow their land to participate in
mitigation banking programs;

“right site” refers to ﬁnding the right site including the right soils and
hydrology;

“agency support” refers to agencies working with the development
community to support the use of banks once built;

“time” is simply the amount of time it takes to process a bank and get it up
and rrmning;

“inexperience of agency” refers to a consistent turn over in staff (managers
mentioning this obstacle often spoke of time spent educating agency staff);
“agency agreement” is a direct reference to the numbers of agencies involved
in this process and their need to agree;

“competition” is simply a reference to the other banks out there competing for
credit sales;

“science/nature” is a reference to knowing the ecology behind the process

and/or the natural disasters that could ruin a bank.

99

Qualitative Results

Fifteen (15) codes (see Table 34) captured the range of thematic responses concerning
the obstacles to wetland banking. The most frequent comments by governmental banks
concerned ﬁnding the right site (23.3%), private bankers reported difﬁculties with
regulations/requirements (26.8%) most frequently, and non-proﬁt wetland mitigation
bankers mentioned difﬁculties with science/nature (38.5%) most frequently. The

following are representative quotes of these three types of comments:

“Right Site”: “Site selection trying to ﬁnd the appropriate site that’s, we
are still looking for 2 to 3 and we are just having trouble ﬁnding the right

place to do it” (25302).

“Requirements/Regulation Changes”: “Mitigation banking has very high
standards. . .we are happy to live by them. The problem is that individual
mitigation banking today, in lieu fee accounts sometime advanced
mitigation, sometimes don’t have those same standards and when we as
bankers have to live by a certain standard that no one else does, it makes it

very difﬁcult to compete against in those situations” (0320).

“Science/Nature”: “I think our knowledge of these systems is still left

incomplete” ( 12 l 60).

100

A complete representation of the range of responses can be found in Appendix F, Section

23.

Qaaratitatjve Results '

The pair wise cross tabulation of government, private and non-proﬁt, as they related
to the obstacles to wetland banking mentioned was undertaken. Non-proﬁt banks
signiﬁcantly differed from private (p<0.002) and government (p<0.032) banks in
reporting science/nature as their primary obstacle. Non-proﬁt banks signiﬁcantly
differed from government banks (p<0.030) when attributing competition as an obstacle
but did not differ ﬁom private banks (p<0.093) in this regard. Interestingly, non-proﬁt
banks signiﬁcantly differed from government banks (p<0.024) but not private banks

(p<0.072) in reporting no major obstacles to wetland banking.

Table 34 Obstacles to Wetland Mitigation Banking (percentage *)

 

Obstacles to banking Government Private Non-Profit

In lieu fee banking 0 8.2 0
Regulations/requirements 20.7 26.8 16.7
Money 16.7 10.3 7.7
Public Perception 6.9 3.1 0
Landowners "‘ 10.0 3.1 0
Right Site 23.3 13.5 0
Agency Support 6.9 20.6 0
Time 16.7 9.4 16.7
lnexperience of Agency Staff 3.3 6.3 15.4
Disagreement within agencies 16.7 11.5 15.4
Competition 0 4. 1 15.4
Science * 10.3 8.3 38.5
Risk 10.3 6.2 0
Other 6.9 13.5 16.7
None 0 4.1 16.7

* Does not total 100% due to multiple responses

Summg

The large number of non-proﬁt bankers mentioning science/nature as an obstacle to

banking might reﬂect an absence of specialized knowledge of wetland ecological science.

101

However, it may also relate to other phenomena not fully understood. It is not surprising
that a large number of managers raise regulations/requirements as an obstacle to banking.
This is a regulated market and agencies are charged with the task of protection
ecosystems and ecosystem services, not necessarily with making the construction and

operation of wetland banks easy.

External Validity & Comparisons

The high percentage of managers in this study mentioning regulations/ requirements
as an obstacle for banks is consistent with the recent study in Florida by the Corps which
commented that bankers “express ﬁ'ustration that the regulatory regime continues to favor
on-site mitigation in the face of overwhelming evidence of its widespread ecological
failure in Florida and contrasting evidence of the success of mitigation bank projects”
(Scodari, ACOE, 2001, 34). Some bankers in this study as well as those in the Florida
study also mentioned ‘in lieu’ fee programs. Bankers expressed frustration with in-lieu
fee programs in Florida and pointed to the fact they create unfair competition for
mitigation banks (Scodari, ACOE, 2001).

The research reported here found 16.7% of government and non-proﬁt bankers
mentioning time as an obstacle to bringing a bank on line. Time was also mentioned in
the Corps Florida study. Like in Scodari (2001) bankers “expressed frustration over the
extended Federal timeframe for bank development and approval. They feel that the
Federal process is inefﬁcient and characterized by unnecessary delays” (Scodari, ACOE,
2001, 19). It appears that time is a factor all over the country when dealing with

obstacles to banking.

102

Also, this project’s results concerning the inexperience of agency personnel was

raised in the Florida study. “Bankers contend that the multi-agency nature of the MBRT

makes navigation of the bank development process more difﬁcult and time-consuming

than it need be” (Scodari, ACOE, 2001, 20). The reasons for the lack of training on the

part of the agency personnel and MBRT given by managers in this study and reported in

the Florida study include high turn-over of staff.

Change One Thing about Wetland Banking

The theme “change one thing about banking” was assigned to information collected

from wetland bank managers about their suggestions for making the wetland banking

system better. The categories used to code this information were:

the amount of “time” it takes to get a bank up and running;

the “higher standards” mitigation banks must follow (compared to on-site
mitigation);

the amount of “money” necessary for these projects;

the need for “banks to be used more often/ﬁrst” for mitigation needs;

an end to “in lieu fee” banking in this country;

the method used to create service areas or the size of “service areas”;

the “requirements” for banks and the process banks must go through in order
to get permitted;

the need for “agency agreement” in order to move forward with a bank;
“natural” a wish wetland mitigation banks could be built in a more natural

way; and

103

0 “other” for things some managers identiﬁed a change that did not ﬁt into other

grouping.

Qualitative Results

Eleven (11) codes (see Table 35) were used to capture the range of thematic
responses concerning what bank managers would change about wetland banking. The
most frequent response concerned the amount of time it takes to form a bank and can be
represented by the following quote: “I’m not sure. I guess it would be the time for
approval and the Corp of Engineer’s time they give permits. 1 wish it would go faster”
(29332). A complete representation of the range of responses can be found in Appendix

F, Section 24.

Qu_antitaaive Results
Table 35 shows that 21.2% of all bankers interviewed would like to change the
amount of time it takes to bring a bank on line. This was followed closely by a desire to

change the high standards that bank mangers perceive they must meet (20.8%).

T able35 The One Thing Managers would like to Changabout Wetland Mitigation Banking

Item wished to be Changed Percent *

Time it takes 21.2
High standards held up to banks 20.8
Amount of money it takes to form a bank 5.1
Like to see banks used more as a ﬁrst choice with 12.3
agencies for mitigation

End to in lieu fee banking 5.8
Nothing they would like to change 6.1
Service areas 6.8
Requirements of the banks or the process they had to 8.1
go through as a whole to form a wetland bank

Agencies not agreeing 5.7
Other 14.1
Wished more banks were more natural 4.9

* Does not total 100% due to multiple responses

104

Summm

Many of the desired changes expressed by bank mangers were expected. These
included comments such as the amount of time it takes to bring a bank on line and the
desire to use banks more for mitigation projects. One interesting and logical observation
in this data is the fact that the most mentioned desired changes (amount of time and high

standards) were also ﬁ'equently mentioned as obstacles to banking.

Conclusion
The systematic coding of the interview data enabled useful insights to be drawn from
the collected data. Furthermore, the statistical analysis of the data enabled the testing of

apparent relationships between bank ownership and key study variables.

105

CHAPTER FIVE
CONCLUSIONS AND RECOMMENDATIONS
Summary

The objective of this study was to learn about the nation’s wetland mitigation banking
industry from banker’s perspectives. To achieve this objective, more than 140 wetland
mitigation bankers responsible for 226 wetland mitigation banks were interviewed.

These interviews were in-depth, semi-structured interviews designed to learn about the
details of wetland mitigation banks and bankers’ experiences from bank sponsors and
managers in their own words.

The sample population selected for this study was obtained from a 2002 listing of all
known wetland mitigation bankers (Morzillo, 2001). The study sample was stratiﬁed
across state locations with a total sample size of 140 bankers; this list comprised of 59%
of known wetland banks and 56% of known bank managers. The vast majority of the in-
depth interviews were tape-recorded and subsequently transcribed. There were more than
1800 pages of transcripts produced from these interviews. These transcripts were
inputted into ATLAS (CD, a qualitative data analysis software, and later iteratively coded
(Corbin and Strauss, 1998) for emerging themes. These themes were analyzed both
qualitatively (with use of ATLAS © software) and quantitatively (with use of SPSS

software).

Implications of Findings
The data and analysis presented in Chapter Four demonstrates the range and depth of

information learned about the nation’s wetland banks and bankers.

106

Some key ﬁndings and their implications include:

o The nation’s banks are composed mainly of private entrepreneurial banks
(69.3%). Most bankers are male (90.3%), many have their bachelor’s
degree (50.3%), and most have 5 or more years experience working in the
banking industry (80.9%). On average, managers have been working in

the banking industry for 9.08 years.

These types of results are not surprising and are in line with prior studies which show
private entrepreneurial banks as the growing trend in the banking industry. The data
regarding the amount of time the banker has been working in the industry could not have
been predicted ﬁom previous studies. Most bankers possess ﬁve or more years in

banking and the industry does not appear to be growing.

0 The highest number of bankers reported the ecosystem of their bank as
“varied” (31.2%). This was followed closely with bankers reporting their

wetland banks to be “bottomland hardwood” (28.0%).

This study supports the idea that varied wetland mitigation bank types are viable. It is
also clear the proportion of the nation’s bank types is highly inﬂuenced by various eco-

regions of the nation.

107

0 A large portion of the nation’s wetland mitigation banks were found in the
New Orleans Army Corps of Engineers District (20.5%). Other frequently
reported districts were Jacksonville (9.2%) and Norfolk (9.4%). These
results corresponded to the states with the highest reported number of
wetland mitigation bank Operations; Louisiana (20.5%), Florida (9.2%)

and Virginia (8.7%).

This result was expected based on prior understanding of the wetland banking
industry. Many banks tend to be located in the south eastern part of the country and other

heavily populated wet areas.

0 Banks were found to range in size from a reported speciﬁc size of 0.50
acres to a reported average size of 48,000 acres. Some bankers had so

many banks they would often report just an average size for their banks.

This conﬁrms the idea banks are of various sizes throughout the nation. The inability
of managers owning several banks to report all bank sizes during the open conversational

interview, show this method was not the best to obtain precise national bank size data.

0 Many bankers reported having no proposed new banks or bank expansions
(government, 40.9%; private, 67.6%; non-proﬁt, 66.7%). Statistical
signiﬁcance was examined among bank ownership in relation to whether a

bank was proposing zero new banks or one or more bank or bank

108

expansion. Results revealed private banks are signiﬁcantly more likely to

not have any proposed banks when compared to government banks.

A large number of bankers have no plans for new banks. Therefore, it seems that the
wetland banking industry may be slowing down. Various factors may explain this; a

slowing economy, saturation of the market, and/or decreased demand.

0 The most frequently reported purpose of banks varied dramatically by
ownership type with government reporting “speciﬁc project” (75.9%),
private reporting “proﬁt” (46.4%) and non-proﬁt reporting

“environmental” (75.0%).

The statistically signiﬁcant differences show private and non-proﬁt bankers to be
more interested in proﬁt compared to government bankers while showing non-proﬁt
bankers to be more interested in environmental purposes compared to government
bankers. When bankers mentioned a speciﬁc project it was almost always a government
banker. Government bankers were also less interested in market demand for their
services than other types of bankers. This conﬁrmed the belief that governmental
wetland banks generally focus on the production of wetland credits for their other

projects.

0 The number of wetland bank managers reporting their bank to be in the

monitoring phase was also high (government, 89.7%; private, 86.6%; non-

109

proﬁt, 100%) for all ownership types. However statistical differences

were found.

The analysis revealed more government banks to be in the bank construction phase
than private but not non-proﬁt wetland banks. Once again, the inference may be drawn
that government banks lean toward creating their own wetland banks instead of buying

credits from private commercial bankers.

0 Most bankers reported their bank’s creation process was to restore former

wetland acreage (73%).

This conﬁrms previous research and the idea that reconstituted wetlands may be

easiest and most effective for creating wetland mitigation banks.

0 A large percentage of bankers (75.8%) reported their current wetland

mitigation bank site was originally in agricultural use.

This is not surprising since historically many wetlands were drained for agriculture
uses. Furthermore, marginally productive agricultural lands that were once functioning

wetlands may be among the most least costly acreage to purchase and transform into

functioning wetlands.

110

0 Data regarding credit calculation revealed 88.9% of government, 82.3% of
private and 100% of non-proﬁt bankers receive their allocation of

mitigation credits for their banks based on an agency determination.

Bank ownership appears to have no clear effect on credit calculation method. Since
the data reveal agencies determine a bank’s allocation of credits, it appears the national
banking industry has a uniform approach regarding the process of who calculates wetland

credits.

0 The method used most frequently for credit amount determination was
acre/type (49.3% of all banks), and this hold true for the results based on
ownership type with 52.0% of government, 44.3% of private and 75.0% of

non-proﬁt using an acre/type method.

While agencies may be doing the credit calculation across the industry, the methods
used by those agencies varied. Examination of the data revealed that non-proﬁts using
acre/type methods to be statistically different from the number of private banks using
acre/type methods. Since acre/type methods are arguably more ecologically sound, this
result might suggest non-proﬁt banks’ increased interest in an environmental purpose for
their banks. Other than the fact more non-proﬁts are using acre/type methods, this data
would again appear to demonstrate fair and equal treatment throughout the banking

industry.

111

0 Credit prices ranged from $1000 per acre to a $900,000 per acre. Most
banks reported the range for their credit process with the average of the
low end of the range being about $43,519 and the average of the high end
of the range being about $93,873 with both ﬁgures exhibiting considerable

variation.

Credit price is signiﬁcantly affected by location within the country. The method used
to report credit price also appeared to vary based on location. The data conﬁrmed this

and also revealed a large variation in credit prices throughout the country.

0 Statistical analysis of the data revealed the amount of credits released
upon entering into a banking agreement differed by ownership type. The
most frequently reported percentage of mitigation credits released varied
with 45.0% of government banks receiving zero credits, 31.7% of private
banks receiving between 1-29% of their credits, and 30.8% of non-proﬁt
receiving between 30-50% and 100% of their credits at the time they

entered into banking agreements.

As with other aspects of contracts, in general, banking agreements may reﬂect a
signiﬁcant amount of negotiation, in particular, concerning the amount of credits released
at the time the parties enter into the agreement. The analysis revealed that more private
and non-proﬁt wetland banks receive 100% of credits than government, supporting the

idea that more non-proﬁt and private mitigation bankers need the ability to raise capital

112

through the sale of credits at the beginning of a banking project than do government
entities. Further supporting this idea, it was observed that more government banks

reported zero credits being released as compared to private banks.

0 The theme used to investigate the availability of future funds for bank use
after wetlands were established revealed a fairly even split between
wetland banks that said that they would have money available for the bank
in the future and those that reported that no money will be available for the
bank in the future. This split was seen across all ownership types

(government, 54.5% yes; private, 53.3% yes; and non-proﬁt, 44.4% yes).

It is not clear what this result means. There does not seem to be uniform standards
across the wetland banking industry concerning the availability of funds for use by banks
once they have been completed. While there are a range of wetland banks with some
perhaps needing and others not needing funding for future maintenance, statistical
analysis did not reveal statistically signiﬁcant difference between bank ownership with

respect to availability of future funds for bank maintenance after bank completion.

0 Most wetland bank managers reported that their wetland bank property
was going to remain under their ownership (government, 52.2%; private,
41.0%; and non-proﬁt, 66.7%). However, there were statistically
signiﬁcant differences found among the different ownership types

concerning the future disposition of wetland banking land.

113

The results show high percentages of each ownership type planning to continue to
own the land. This contradicts the hypothesis that bank managers want to separate

themselves from the bank land after all proﬁt had been gained.

0 The most reported permit processing time was four years across all bank
ownership types (government - 34.8%, private — 23.3%, non-proﬁt —

45.5%). On average, permit times were reported to be 4.27 years.

The fact the most frequently reported permit time was four years for all ownership
types signals that wetland bank permitting is a time consuming process and perhaps some
additional standardization in the permit process may be helpful to both applicants and
review agencies. There is no published guidance on permit application time
requirements. However, bankers will appreciate the research ﬁnding that permit approval

times do not appear to differ based on ownership type.

0 The United States Fisheries and Wildlife Service (FWS) was the agency

most frequently mentioned by respondents as being problematic.

This information was volunteered by respondents during the conversational interview
as being a difficult part of the permitting process, not as a response to a direct question.
However, it is not surprising that the FWS, an agency charged with protecting species
and habitat, might be perceived as making the permit process more complicated or

expensive than wetland bankers might like.

114

o Bankers’ reported costs of creating wetland banks was extremely varied

and difficult to report.

Cost of creation varied considerably. This variation may reﬂect both various eco-
regions (regional differences in land acquisition costs, wetland creation costs) as well as
the inaccuracy in reported cost of creation ﬁgures. Obtaining an exact ﬁgure regarding
this cost often proved difﬁcult as managers accounted for various creation cost (land,
construction) and often did not know cost of creation ﬁgures during the interview

process.

0 Monitoring information obtained from wetland bankers show that most
banks have a ﬁve year monitoring schedule (59.0%). In aggregate, the
agency most frequently reported to be responsible for monitoring was the
Mitigation Banking Review Team/Corps (government, 70.0%; private,
66.2%; and non-proﬁt, 63.6%). Examination of the data revealed
signiﬁcant differences among ownership type only existed within the

mention of “met criteria.”

The amount of monitoring time required for wetland banks was as expected based on
the EPA/USACOE national guidelines for wetland mitigation banking. However, the
entity that determines the monitoring appears to differ signiﬁcantly based on bank

ownership type. More non-proﬁt and government banks have their monitoring time

115

requirements determined by meeting criteria. This might reﬂect more of an ecological

purpose to banks established by non-proﬁt and government organizations.

0 Information about the determination of wetland bank’s service areas
revealed that most banks’ service areas have been determined based on the
banks’ watershed/drainage basin/ﬂood zone (government, 50.0%; private,
51.8%; non-proﬁt, 46.2%). However signiﬁcant differences were

observed between different ownership types.

More government and non-proﬁt banks reported being able to use their entire state for
their service areas as compared to private bankers. This may reﬂect denser populations
and development pressures associated with regions supporting private banks as compared
to government and non-proﬁt banks. However, the data does show the largest percentage
of banks regardless of ownership type reporting their service area to be based on

watersheds.

0 Data revealed the highest percentage of all ownership types (government,
73.9%; private, 72.6%; non-proﬁt, 46.2%) had agencies determine their

service area. No signiﬁcant differences were seen within the data.

The data show that agencies play a signiﬁcant role in delineating banks’ service areas.

It also shows that bank ownership type does not seem to be a signiﬁcant factor in this

determination.

116

0 Success criteria were negotiated in 71.4% of government banks, 54.3% of
private banks, and 75.0% of non-proﬁt banks. No statistically signiﬁcant

differences based on ownership type were found.

The results show that wetland banks’ success criteria may be heavily negotiated. This
is a logical since success criteria are extremely varied, based on ecological, and other

factors that may be site and regionally speciﬁc.

0 The vast majority of all wetland bank managers, regardless of ownership
type, felt that agencies had been very supportive in the permitting process
(government, 89.5%; private, 77.0%; non-proﬁt, 88.9%). However, as

mentioned above, the one agency mentioned as being more difficult to

work with was the US FWS.

This result shows that most bank managers are pleased with the support they have
received from regulatory personnel. The result demonstrates that agency staff members

are perceived as non-biased when working with various type of bank owners.

0 The predominate clients of wetland banks varied based on the banks’
ownership type. Government banks reported mostly public clients
(78.9%) with private (71.8%) and non-proﬁt (53.8%) banks reporting to

have mostly private clients.

117

These data are not surprising and reﬂect the general character of the wetland banking

industry.

0 Most bankers reported that the source of their wetland bank clientele was
agency referrals (54.4%) with direct marketing (22.9%) as the second

most frequent source of clientele.

This result was expected as the literature shows that it is a general practice in the
banking industry to rely on agency referrals’ to get mitigation clients. However, what
was not expected was the relatively high number of bankers using direct marketing

techniques to acquire clients.

0 Bankers reported that regulations (49.1%) were the primary reason for

clients using a particular bank.

It would have been nice to learn more about what other factors bankers attributed to

clients’ choices. This may be an area where future research would be warranted.

0 When asked to compare their wetland bank to others in their region,

bankers most frequently responded that the other bankers were of a

“different type”, whether owner, size, or ecology (31.2%). Most bankers

118

reported information only very generally on this subject providing little

speciﬁcs about the banks around them.

Since most wetland bank managers reported that wetland banks around them to be
different in some way, it is possible that most managers feel that their banks are
somewhat unique. However, it did seem during the interviews that many respondents
had difﬁcultly answering this question and often could not provide speciﬁc details about
the other banks. This may show managers are not very knowledgeable about other banks

near them or, perhaps, may show a reluctance to reveal market information.

0 The most mentioned key to success raised by wetland mitigation bankers
varied depending on bank ownership type. Government bank mangers
reported “site selection” (48.3%) and “agency support” (44.8%) most
frequently. Private wetland bank managers reported “site selection”
(30.9%) and “agency support” (28.1%) as most important. However, non-
proﬁt wetland bank managers reported that “technical knowledge”

(41.7%) and “money” (30.8%) as the most important keys to their success.

Statistical analysis seemed to reveal that government and non-proﬁt bankers measure
success to include hydrological factors more than private bankers. Private and
government wetland bankers were more concerned with site selection of the wetland

mitigation bank as a key to success.

119

o The most frequent key obstacle to wetland banking raised by government
bankers were the selection of the “right site” (23.3%) and
"regulations/requirements” (20.7%). Private wetland bankers’ top two
obstacles were “regulations/requirements” (26.8%) and “agency support”
(20.6%). Non-proﬁt wetland bank managers’ most frequently mentioned
obstacles were issues related to the “science” (38.5%) of wetlands
followed by “none”, “other”, “time”, and "regulations/requirements” (all

16.7%).

The statistical analysis of the data revealed non-proﬁt bankers to be more concerned
with wetland science issues than other types of bankers. This is in line with some
previous research that suggests non-proﬁt bankers tend to be more concerned with the
ecological function of wetland banks than other types of bankers. Non-proﬁt bankers
also appear more concerned with competition for wetland credits compared to
government bankers but not when compared to private bankers. The data regarding
perceived major obstacles reveals there is huge potential for increased cooperation
between wetland mitigation bankers and regulators. Knowing many bankers perceive
their interaction with agencies (regulations, agency support, inexperience of agency staff,
and disagreement within agencies) as major obstacles to banking could help improve
communication between the two parties. The fact so many bankers appeared to view the
regulations currently in existence as an obstacle to banking (i.e. the steps a bank must go

through to be permitted) is also an interesting study result.

120

o The data highlighting changes that wetland bank managers would like to
implement in their industry revealed that 21.2% of all bankers interviewed
wished to change the amount of time it takes to bring a bank on-line,
20.8% wished to change what they perceived as more demanding
standards for wetland banks as compared to wetland mitigation performed

on site of a wetland impairment.

While a desire for expedited credit sales was expected based on prior research, it is
not something likely to be changed soon. The wetland mitigation banking process is time
consuming for many involved. The recognition of such issue by local, state, and federal
agencies may be a ﬁrst step in restructuring the industry and making wetland mitigation

options more efﬁcient and effective.

Study Method’s Reasonableness

The use of in-depth, semi-structured interviews proved quite effective for learning
about wetland mitigation banking from the perspective of wetland bankers. Possible
biases on the part of the researcher and participants that are noted in the literature have
been addressed by, among other things, careful selection of participants, emphases of
honesty, anonymity and conﬁdentiality, and establishment of trust between the researcher
and the participant (Gelling, 2003). The study implementation design of pre-interview
communication, informed consent procedures, and a conversation style interview helped

to address potential bias.

121

,,....._.........l

The study’s internal validity was advanced by training of the interviewer and the use
of the same researcher for interviews, coding, and analysis. Furthermore, the entire study
process was supervised by the researcher’s major professor and approved by her advisors.:
Reliability of the data itself was assured by tape-recording all interviews, transcribing all
interviews, using an iterative, evolving discussion guide, and asking respondents to
explain their responses or repeat/conﬁrm their previous answers. Such a process enabled
the researcher to identify strengths, weaknesses, redundancies, and needed changes in the
interview guide as the study made progress.

This research took longer to execute than a closed question survey but was preferred
to increase internal consistency by using the same interviewer, collecting data during one
relatively concentrated period of time, and randomly selecting a stratiﬁed sample of
participants. The studies results were examined for external validity by comparing them
to previous research that used different data collection methods (e. g., ELI 2002; Scodari,
ACOE, 2001). The results of this study’s ﬂexible interviewing appear robust and valid as
well as in line with previous research on the strengths of such approaches (Schober and

Conrad, 1997).

I Research Limitations
No research project is perfect. Some potential weaknesses in the reported research
include the following limitations:
1. The wetland bank master list used to draw the study sample was compiled in
2001. That list may not be as current or complete as possible. Other banks

and managers may have come into existence.

122

2. By focusing on collecting information ﬁ'om 140 wetland bankers, the

interviews by necessity had to be less in-depth and detailed than a study
design calling for fewer but lengthier in-depth interviews. The semi-structured
interviews did allow for the collection of a depth of information that exceeded

that of typical closed-ended survey questionnaires.

. The nature of the wetland banking industry as a competitive industry as well

as the diverse nature of bank managers made it difﬁcult to reach some
mangers and to obtain certain information from other managers.

The reported research presents no information on the characteristics of the
non-respondent population and how or if they differ from the respondent

population.

Recommendations for Future Research

While conducting this research, ideas for additional research emerged. Some ideas

for further study:

1.

Differentiating bankers’ views about the amount, type, usefulness, and
frustrations with agency support regarding the creation and maintenance of
wetland banks.

More and better investigation of the details and problems associated with
calculation of wetland mitigation credits.

Investigation using agency documents and/or agency interviews of the amount

of wetland mitigation fulﬁlled by the use of mitigation banks.

123

 

4. Use of the study’s current data to do a more qualitative analysis and

presentation of such complicated themes as interaction with agencies.

Concluding Remarks

The results of this study indicate wetland bank managers are knowledgeable
regarding their banks and the banking process. Bankers, in general, are concerned about
making positive environmental contributions with their wetland mitigation banks and
seem concerned with current industry practices.

Most wetland bankers manage private banks, are male, and have education and
experience related to the banking industry. Many banks are located in highly populated
wet areas of the country and are of various sizes and ecological types. The results also
show a possible slowing of the banking industry with a high number of bankers planning
no new banks or expansions and with most banks established and in the monitoring
phase.

Previous research demonstrates mitigation banks do have higher performance
standards compared to other forms of wetland mitigation. It became clear that some
managers were very concerned about the lack of agency support for using wetland banks
in lieu of poorly performing “on-site” mitigation. However, when asked directly about
overall agency support, a very large percentage of wetland bank managers reported the
agencies to have been very supportive.

A ﬁequently reported obstacle to permitting a wetland bank was the time element.
The time it takes to permit a wetland bank was also the issue the bank mangers would

most like to see changed. This is an expected research result as the process to permit a

124

bank is known to be tedious and time consuming. However, creating a wetland is not
easy nor is it speedy.

This research also revealed that wetland bankers have acquired a reasonable set of
ecological (technical) knowledge of the nation’s wetland ecosystems. For example,
wetland bank managers typically use marginal agricultural land to reconstitute the
wetlands they once were for banks. This demonstrates their understanding of the ecology
involved in creating a new bank, past success of this practice, and a relatively low cost
mechanism for restoring wetland ecosystems. Finally the amount of banker involvement
in service area and success criteria determination also appears to demonstrate
increasingly ecologically savvy managers.

The differences in the amount of initial credits released for sale by wetland bank
managers at the time of entering into wetland banking agreements varied by bank types.
The data showing an even split in the availability of future funding of wetland banks is
most probably attributed to the varied ecologies and maintenance needs of banks.
However, the project did reveal a relatively high number of bankers committed to future
bank maintenance as well as a high number planning to retain their bank land.

Finally the research revealed that most bank managers only gave the most general
information regarding other banks in their region and area but did not offer detailed
comments or descriptions. This may be due to the fact they did not want to speak of other
banks or they simply did not know any information on other banks.

The examination of wetland mitigation banks through direct conversational
interviews with the nation’s wetland mitigation bankers proved to be extremely useful.

Wetland banking is a relatively new industry; one that could possibly expand and

125

continue to develop over time. It is hoped that these research results may facilitate
communication between bankers, agencies, environmental groups, academics, and the
general public so that together we may better protect and preserve our nation’s precious

natural resources.

126

Appendices

127

 

 

Appendix A

Pre-notification letter

128

May 10, 2005

John Doe

Any State DOT

1234 Anystreet Blvd.
Anywhere, AL 36211

Re: Your Wetland Bank
Dear John Doe:

As someone with experience with wetland banking, you have been selected to participate
in a national study of wetland banking programs. This research is part of a project at
Michigan State University focusing on wetland mitigation banks.

In a few days, you will receive a telephone call from a researcher at Michigan State
University. All we ask is that you help us by answering a few questions about your
experience with wetland banking. We understand that you are busy and will be glad to
schedule a phone interview with you at a time of your convenience. We are writing to
you now since many people like to receive advance notice of these phone calls.

You have been carefully selected to be part of a scientiﬁc sample. The results of the
study will provide important input to policymakers from the people who have been
actually involved in wetland banking programs. Your participation is voluntary and we
will keep your responses conﬁdential to the maximum extent allowed by law. The
conversation should take no more than 30 minutes. You don’t have to answer any
question you don’t like and can refuse to answer at any time without repercussion.

If you have questions about the project, please contact me at the numbers below. If you
have questions or concerns about your rights as a study participant, please contact Ashir
Kumar, MD, Michigan State University’s Chair of the University Committee on
Research Involving Human Subjects. You may contact Dr. Kumar, anonymously if you
wish, at (517) 355-2180, by e-mail at UCRIHS@msu.edu, or by regular mail at 202 Olds
Hall, East Lansing, MI 48824.

Thank you very much. It’s only with your help that we can learn about how wetland
banks work. Thanks for helping us with this important and timely research.

Sincerely yours,

Michael D. Kaplowitz
Associate Professor

T: 517/355-0101

F: 517/353-8994

E: kaplowit@msu.edu

129

Appendix B

Informed Consent

130

 

In armed Consent

Hello. My name is Deb Bailey and I’m calling from Michigan State University. I would
like to speak with

 

I’m working on a national study of wetland mitigation banks for Michigan State
University. Did you receive the letter we sent to you last week describing the project?

[:1 Yes (1)
1] No (2)

D DNK (8)
C] Other (3)

[As the letter points out,] Researchers at Michigan State University are trying to learn
ﬁ'om individuals about their experience with wetland banks and banking programs across
the country. We are interested in learning about your perspective on how wetland
banking works.

If you have questions about the study, please contact Dr. Michael Kaplowitz at (517)
355-0101. If you have questions or concerns about your rights as a study participant,
please contact Ashir Kumar, MD, Michigan State University’s Chair of the University
committee on Research involving Human Subjects. You may contact Dr. Kumar,
anonymously if you wish, at (517) 355-2180, by e-mail at UCRIHS@msu.edu, or by
regular mail, 202 Olds Hall, East Lansing, MI 48824.

If it is Ok, I’d like to begin by sharing with you some information about this telephone
interview. OK?

El Yes (1) CONTINUE

D No (2) THANK AND TERMINATE

Your help is important for helping us learn about wetland banking. There is no right or
wrong answer. What you say will be completely conﬁdential. Your participation is

completely voluntary.

Our conversation should take about a half-hour or so. You don’t have to answer any
question you don’t like and can refuse to answer at any time without repercussion.

While we may use information from our conversation in research reports and
publications, your privacy will be protected to the maximum extent allowable by law.

If, at any point during our conversation, you need to go, just let me know and we can
make arrangements for me to call you back

So may I ask you some questions about your experience with wetland banking?

D Yes (1) CONTINUE

131

D NO (2) THANK AND TERMINATE

Since I don’t want to miss anything we talk about, would it be alright if I tape-recorded
our conversation? This will help me since it is hard for me to listen and write at the same
time? [If respondent hesitates, remind them of conﬁdentiality of interview and that the
interview will go faster without need to hand write notes. ]

[1 Yes (1) CONTINUE AND RECORD
[1 NO (2) CONTINUE AND TAKE WRITTEN NOTES

If a person has questions about the purpose of the call you may give them the
following additional information:

We ’re looking for people who have had some experience being involved in a wetland

mitigation bank You don ’t need to be a wetland expert or business owner. We simply
would like to learn about what you know and do regarding wetland banks. 0K?

132

Appendix C

Discussion Guide

133

Interview Record Form

 

 

 

 

 

 

Interview ID Interviewer Date Time
Respondent Name Phone
Address Gender: [:1 Male (1)

[1 Female (2)
City Zip

 

 

E-mail Address

Possible Response Code

 

134

Discussion Guide

1.

Ok ﬁrst tell me a little bit about yourself and what you do regarding the wetland
banking program.

Describe your wetland bank. Where is it? What is it like? How large is it? What
type of wetland its it? DO you have any others planned? Have any failed?

What was the original purpose Of your wetland bank, current purpose? What
stage is it in?

What was the original land use Of the bank site? Describe the general on the
ground work (construction, planting) you did to create wetlands in your bank?

Who determines how many credits are available for each bank? (individual
banker, agency?) How is this number Of available credits calculated? How much
do credits cost in your bank? Who sets this price? Describe the process for
releasing credits for sale? Who determined this process? What increments can
you sell credits? Who will have the land and/or easement after all credits are
sold? Is there any money set aside for future maintenance of the bank, how much
goes tO whom? What happens if bank fails?

Who manages and Operates your bank in its formation; credit selling period; and
after credits are sold? What kind Of background and training do they have? How
long have they been with the bank? How many people work on the various
aspects Of the bank?

What permits did you need to form your wetland bank? Describe the process
involved for getting these permits? How long did the whole process take from
start to ﬁnish? What was the total cost of putting this bank together? What
agencies did you work with? How supportive are the agencies?

What is the monitoring schedule and who determines this schedule? What is the
success criteria and who determines this criteria? What is the service area and
who determines this service area?

Who is the largest/smallest client? How are you getting your clients? Are your
clients public, private, how many Of each? What are some reasons your clients
use your bank? How far away is mitigation bank from impacted area?

10. Are they other wetland banks in your area? Tell me about them? How does your

program compare?

11. What are the keys for successful wetland banking?

12. What are the key Obstacles to wetland banking?

135

13. If you could change on thing about wetland banking what would that be?

14. Are there other things about your wetland banking program that you’d like us to
know?

15. DO you have any advice for us as we contact other programs to learn about
wetland banking?
Thank and Terminate
Thank you very much for your time and help. I know that you are busy and appreciate

your help. In the even that we have a few follow-up questions, we would like to be able
to contact you again. We can do so by telephone or e-mail. Is that OK?

[:1 Yes(1)CONTINUE
[:1 NO (2) THANK AND TERMINATE

We do not have an e-mail address for you. What is your e-mail
address?

 

OR

Let me conﬁrm that your email address is

 

Thanks again, if you think of something else about your wetland banking program that
you’d like to share with us or you have questions or concerns, please feel free tO call me
at 517-353-1919 or Dr. Michael Kaplowitz at 517 355-0101. I can also give you an email
address if you’d like. (kaplowit@msu.edu)

Thank you
Debriefing Section

What were the key points made?

136

Appendix D

Various Forms of Discussion Guide

137

6/2003 13 Interviews

1.

Ok [insert name], tell me a little bit about yourself and what you do [regarding
the wetland banking program]

The words wetland bank and wetland banking program can mean a number Of
things. Can you tell me what these words mean in your experience? Describe
your wetland bank. Where is it? What is it like? How large is it?

. What would you say is the purpose Of your wetland bank? Who started it and

why? How is it going?

How does your bank work? Tell me how wetlands are created in your bank?
What types(s) are they?

How do wetland credits work? Tell me how wetland credits are calculated? How
are wetland credits used?

Who manages and Operates your bank? What kind Of background and training do
they have? How long have they been with the bank?

How does your bank interact with regulatory agencies? Federal State, Local?

Who uses your wetland bank? What are some reasons your clients use your
bank?

Are they other wetland banks in your area? Tell me about them? How does your
program compare?

10. What are the keys for successful wetland banking?

11. What are the key Obstacles to wetland banking?

12. If you could change on thing about wetland banking what would that be?

13. Are there other things about your wetland banking program that you’d like us to

know?

14. .DO you have any advice for us as we contact other programs to learn about

wetland banking?

138

6//2003 -10 Interviews

1.

Ok [insert name], tell me a little bit about yourself and what you do [regarding the
wetland banking program]

The words wetland bank and wetland banking program can mean a number of
things. Describe your wetland bank. Where is it? What is it like? How large is
it?

What would you say is the purpose Of your wetland bank? Who started it and
why? How is it going?

How does your bank work? Describe the general process you went through to
create wetlands in your bank? What types(s) are they? (how many personal work
it, generally what is planted and what type of bank is it, generally)

How do wetland credits work? Who determines how many credits are available
for each bank? Tell me how wetland credits are calculated by this entity
(individual, agency. ECt.)? How much do credits cost in your bank? Who sets
this price? How are wetland credits used? Describe the process for releasing
credits for sale?

Who manages and Operates your bank? What kind of background and training do
they have? How long have they been with the bank?

What permits do you need to form your wetland bank? Describe the process
involved for getting these permits?

Who uses your wetland bank? How many clients do you have? Who is the
largest/smallest client? Are your clients public, private, how many of each?
What are some reasons your clients use your bank?

Are they other wetland banks in your area? Tell me about them? How does your
program compare?

10. What are the keys for successful wetland banking?

11. What are the key Obstacles to wetland banking?

. 12. If you could change on thing about wetland banking what would that be?

13. Are there other things about your wetland banking program that you’d like us to

know?

14. . DO you have any advice for us as we contact other programs to learn about

wetland banking?

139

6/23/03 - 7 Interviews

1. Ok [insert name], tell me a little bit about yourself and what you do [regarding the
wetland banking program]

2.

10.

11.

12.

13.

The words wetland bank and wetland banking program can mean a number of
things. What does the words wetland bank and wetland banking program mean to
your vs. the general public? Describe your wetland bank. Where is it? What is it
like? How large is it?

Who started it and why? What would you say is the original purpose of your
wetland bank, current purpose? How is it going?

How does your bank work? Describe the general process you went through to
create wetlands in your bank? What types(s) are they? (how many personal work
it, generally what is planted and what type Of bank is it, generally)

How do wetland credits work? Who determines how many credits are available
for each bank? Tell me how wetland credits are calculated by this entity
(individual, agency. ECT.)? How much do credits cost in your bank? Who sets
this price? How are wetland credits used? Describe the process for releasing
credits for sale?

Who manages and Operates your bank in its formation, credit selling period, and
after credits are sold? What kind Of background and training do they have? How
long have they been with the bank?

What permits do you need to form your wetland bank? Describe the process
involved for getting these permits? Included monitoring schedule, success
criteria.

Who uses your wetland bank? How many clients do you have? Who is the
largest/smallest client? Are your clients public, private, how many of each?
What are some reasons your clients use your bank?

Are they other wetland banks in your area? Tell me about them? How does your
program compare?

What are the keys for successful wetland banking?
What are the key Obstacles to wetland banking?
If you could change on thing about wetland banking what would that be?

Are there other things about your wetland banking program that you’d like us to
know?

140

14. . DO you have any advice for us as we contact other programs to learn about
wetland banking?

50 Interviews

1. Ok [insert name], tell me a little bit about yourself and what you do [regarding the
wetland banking program]

2. The words wetland bank and wetland banking program can mean a number of
things. Can you tell me what these words mean in your experience? Describe
your wetland bank. Where is it? What is it like? How large is it? DO you have
any others planned? Have any failed?

3. Who started it and why? What would you say is the original purpose of your
wetland bank, current purpose? How is it going?

4. How does your bank work? Describe the general process you went through to
create wetlands in your bank? What types(s) are they? (how many personal work
it, generally what is planted and what type of bank is it, generally) What was the
original land use of the site?

5. How do wetland credits work? Who determines how many credits are available
for each bank? Tell me how wetland credits are calculated by this entity
(individual, agency. ECT.)? How much do credits cost in your bank? Who sets
this price? How are wetland credits used? Describe the process for releasing
credits for sale? What increments can you sell credits? Is there any money set
aside for future maintenance of the bank, how much , goes to whom?

6. Who manages and operates your bank in its formation, credit selling period, and
after credits are sold? What kind Of background and training do they have? How
long have they been with the bank?

7. What permits do you need to form your wetland bank? Describe the process
involved for getting these permits? Included monitoring schedule, success
criteria, service area? How supportive are the agencies? What agencies did you
work with?

8. Who uses your wetland bank? How many clients do you have? Who is the
largest/smallest client? How are you getting your clients> Are your clients
public, private, how many of each? What are some reasons your clients use your
bank? What is the geographic area for credit market? How far away is mitigation
bank from impacted area?

9. Are they other wetland banks in your area? Tell me about them? How does your
program compare?

141

10. What are the keys for successﬁrl wetland banking?
11. What are the key Obstacles to wetland banking?
12. If you could change on thing about wetland banking what would that be?

13. Are there other things about your wetland banking program that you’d like us to
know?

14. Do you have any advice for us as we contact other programs to learn about
wetland banking?

60 Interviews

16. 0k ﬁrst tell me a little bit about yourself and what you do regarding the wetland
banking program.

17. Describe your wetland bank. Where is it? What is it like? How large is it? What
type of wetland its it? Do you have any others planned? Have any failed?

18. What was the original purpose of your wetland bank, current purpose? What
stage is it in?

19. What was the original land use of the bank site? Describe the general on the
ground work (construction, planting) you did to create wetlands in your bank?

20. Who determines how many credits are available for each bank? (individual
banker, agency?) How is this number Of available credits calculated? How much
do credits cost in your bank? Who sets this price? Describe the process for
releasing credits for sale? Who determined this process? What increments can
you sell credits? Who will have the land and/or easement after all credits are
sold? Is there any money set aside for ﬁrture maintenance of the bank, how much
goes to whom? What happens if bank fails?

21. Who manages and operates your bank in its formation; credit selling period; and
after credits are sold? What kind of background and training do they have? How
long have they been with the bank? How many people work on the various
aspects Of the bank?

22. What permits did you need to form your wetland bank? Describe the process
involved for getting these permits? How long did the whole process take from
start to ﬁnish? What was the total cost Of putting this bank together? What
agencies did you work with? How supportive are the agencies?

142

23. What is the monitoring schedule and who determines this schedule? What is the
success criteria and who determines this criteria? What is the service area and
who determines this service area?

24. Who is the largest/smallest client? How are you getting your clients? Are your
clients public, private, how many Of each? What are some reasons your clients
use your bank? How far away is mitigation bank from impacted area?

25. Are they other wetland banks in your area? Tell me about them? How does your
program compare?

26. What are the keys for successful wetland banking?
27. What are the key Obstacles to wetland banking?
28. If you could change on thing about wetland banking what would that be?

29. Are there other things about your wetland banking program that you’d like us to
know?

30. Do you have any advice for us as we contact other programs to learn about
wetland banking?

143

Appendix E

Thematic Codes from Analysis

144

Advice

Agencies worked with #

Agency documents

Anything else about your program
Change one thing about wetland banking # *
Clients coming from # *
Comparing banks # *

Cost involved in creation# *
Credit amount # *

Credit increments

Credit price # *

Credit release schedule # *

Credit type# *

Current status of bank # *
Distance ﬁ'om impacted sites
Endangered species credits

Failed banks

Future funding Of bank # "'

Future of wetland bank land # *
History Of land use # *

History of manager in wetland banking # *
How long the bank has been around
Impact ratio

Interaction with agencies # *
Location Of wetland
Location/service area # *
Obstacles to wetland banking # *
Others working with bank

Permit type

Process Of creation # *

Profession Of bank manager # *
Proposed banks # *

Public opinion of wetland banks

145

Purpose Of wetland # *

Reasons for using the banks # *
Size Of wetland # "'

Something other than banking
State law

Success criteria # *

Success for wetland banking # *
Time table for permit # *

Type of wetland # *

Users Of credits # *

What does wetland banking mean

# Codes examined in depth in this
study

* Codes examined also using
quantitative analysis

Appendix F

Representative Quotes

146

Representative Quotes
Section 1 - Type of Wetland

“Varied”
0 “Well we have 7 major wetland community types, ranging from
submergent-emergent marshes all the way up to hydro-pine ﬂat
wood and riparian forest” (0554).
0 It’s a combination of swamp, hardwoods, coastal plain hardwoods
and wet ﬂat hardwoods” (18249).
0 It’s actually got all phases. Its got everything ﬁ'om wet prairie all
the way down to submergent plants. So its got the whole thing”
(20267)
“Bottomland Hardwood”
o “The banks that I was developing were bottom wood hardwood
mitigation banks because there was a lot of impact to bottom wood
hardwoods” (12 153).

Section 2 — Number of Proposed Banks

“Zero”
0 “NO I wouldn’t do it again. Its too much a headache, to get
through all the regulatory and everything else, it’s a real pain”
(20268)
0 “Not at this time, there are getting to be quite a few other people
getting into the business” (29330).
“One”
0 “We have one, yes the permit application has been submitted”
(0558)
0 “We’ve got an expansion of it planned” (16230).
“Two”
0 “We got two more that are in the approval process that are also
commercial banks” (0681).
o “In fact I do, I have two other long leaf pine savannah banks
purposed of which 1 am a partner in” (12155).
“Three”

0 “I would say we have three right now” (23282).
o “l have three in the works now” (0315).

Section 3 - Quotes-Purpose Of Wetland

“Environmental”
0 “Slow impacts, or to help with wetland mitigation” (26306).

e “To try to ﬁnd a way to address, you know the environmental
needs that were out there” (0320).
0 “Traditional mitigation was not working; we needed to ﬁnd

something that would” (0554).

147

“Demand”
0

“Proﬁt”
0

“To restore vernal pool habitat” (039).

“We would like to rehabilitate and to be perfectly honest, we will
continue to rehabilitate them whether we get wetland bank credit
or not” (07101).

“To provide wetland mitigation credits in the drainage area”
(31351)

“It was incentive for economic development” (20267).

“To serve the sort of commercial need for mitigation down here”
(17236)

“There was no bank within the basin to turn to to mitigate the
impact that he had and it was a very costly and cumbersome task to
do mitigation prior to the bank” (17234).

“To utilize to offset mitigation needs that land owners and real-
estate developers were having as they developed their properties”
(22281)

“Mitigation banking can be a pretty good source of income for
farmland” (0684).

“We knew we were creating wetlands as a result of some of our
projects and we wanted to take credit for those” (20265).
“There was a desire on the family’s part of course to generate
income” (0552).

“I think that the people that put together the plan had economic
incentives because it is a private enterprise you know we are not
subsidized by anyone” (0545).

“Speciﬁc Projects”

0 “They’re both closed, they were for our internal purpose” (12138).

e “We needed up front mitigation and we wanted to try and
minimized project schedule delays” (26305).

0 “Compensation for wetland loss caused by DOT facilitated
projects” (33376).

O “The original purpose of course was to create wetlands that could
be used to Offset potential future impacts due to transportation
projects” (3 1340).

“Extra for sale”

0 “One would enhance the existing wetland by making a bank and
making a bigger wetland and turning that wetland into a bank so it
would be a total loss on my ground that I didn’t want to develop”
(20268)

0 “To create wetlands, establish additional wetland, and then we

would Obtain credit which we could sell on the Open market”
(21275).

148

Section 4 - Current status of wetland bank

“Monitoring”
0

“Concept”
0

“The restoration was completed at the end of 1997, and it is in the
phase as is generally known as trending toward success. We
believe, subject to completing the appropriate documentation, that
we can get what’s called a determination of success” (0567).
“Normally its like three people that maintain the site year around,
it is still under monitoring requirements right now, as soon as it
gets off monitoring requirements Obviously, the amount of
maintenance that is required out there will slow down” (0547).

“It’s still a concept. We haven’t bought any land yet. We have a
design that is almost complete but really the project is on hold
awaiting project needs” (07103).

“We’re in the process of getting the bank set up, its been a long
process so we don’t have the bank set up as of yet, but we do have
the wetlands established” (0440).

“Construction”

0 It’s just ﬁnished construction. It probably has got another three
years of monitoring so we need probably 3 to ﬁve years of
monitoring. It is in is ﬁrst year of growth” (20265).

0 “We’re just now completing up the ﬁnal phase of construction,. I

, mean it was multiple little contracts” (22279).
“Complete/Sold Out”

0 “We have some that we’re through with our ﬁve years of
monitoring and are up and running and well-established and we’ve
used or virtually used all of the credits out of them so there just out
there and we still own them and we’ll maintain them” (026).

0 “It’s sold out, there were some restrictions on it and we can’t sell

any more credits” (0555).

Section 5 - Process of Creation

“Enhanced”
o

“The truth of the matter is that it was always a wetland, portions of
it were relatively intact. . ..we had to do some physical feature
removal, removing roads, dikes, levees, things that impede the
natural follow of water, then we did exotic eradication and habitat
enhancement” (0567).

“The construction we did was excavation, lowering the ground
elevations in two or three different cells to provide inundation
areas, there’s a natural spring that feeds the area” (20265).

149

“Restored”
e

“We ﬁlled in some ditches that had been dug on the property to
drain it, we put in ditch blocks that would in effect restore the
retention of the water on the property” (0552).

“Basically all we did is there were wetlands that were considered
PC, or prior converted wetlands, so they were wetlands before.
They were put into agriculture and usually on marginal land, land
that honestly should have never been cleared, so basically all we
did was go back n and plant the trees as dictated by the Army
Corps of Engineers” (12143).

“Didn’t Know”

“Created”
0

“Preservation”
o

“I don’t know all the ins and outs, but I know we had engineers
speciﬁcally selected for their experience” (29332).

“Now that I can’t, I’m the ﬁnance and paperwork guy, I can not
even begin to tell you what they had to do” (17234).

“They go out and form our proposed plans we create vernal pools
by using heavy equipment and contouring the land to pond in
certain areas and runoff in other areas” (039).

“There was some soil testing to make sure we weren’t stirring up
anything and they basically had to build in the piping system and
install the pumps right at the intake area and massage the earth to
create those four ponds which are all at varying depths” (0442).

“Oh it was a wetland, we didn’t have to do anything to the land
itself to make it a wetland it was just considered a wetland”
(12177)

Section 6 - Original Land Use

“Farmed”
o

“It had been used just a little bit for some farming, some
watermelons had been raised on some of it” (0552).

“Just the other interesting note to this is its privately owned land, it
is land that we farmed for several years as a citrus Operation”
(0553)

“It was farmland. It was prior converted wetland” (10133).

“The only use of those two was timber. I think at one of the sites,
somebody had done some digging to see if it was worthwhile to do
some sand and gravel mining but it was two test holes, nothing
major” (17242).

“Uh some of it had been pastured, some of it had been farmed,
tirnbered, most of it I’d say the majority was in um timber, and it
had some pasture land where they’d run cows and some farming
not a whole lot of farming. And we restored all those opened areas,

150

where they you know had cattle and gone in and mowed and kept
it mowed we restored a lot of those areas” (29330).

o “It was a forest, it got cut by a timber company and it was getting
ready to be put back into pine” (31341).
“Abandoned/idle”

o “It was abandoned the property” (29334).
0 “Most of it was just idle where they would hunt” (12177).

o “It was just vacant land. It was undeveloped wetlands, but
degraded” (21269).
“Gazing Land”
o “I selected some areas that were pastures” (12153).

o “Probably in the late 5081116 farmer had installed ditches every
hundred feet across the entire property and effectively drained it
and put it into grass and it functioned as a pasture for several
decades before we acquired it” (0566).

“Gravel/Sand/ Clay Pit”

0 “Perhaps a 100 years ago it was striped mined for clay used for the
manufacture of bricks. They essentially mined it and left ponds,
you know 8 to 10 feet deep and swamps” (0686).

o “sometime in the early 60’s about 40 years ago a company came a
long and got a permit to mine sand and gravel from this property”
(0441).
“Don’t Know”
0 “I don’t know. It’s that old that I don’t know” (31340).
0 “I’m not sure what it was” (0563).
“Other”
0 “That was a former dredge disposal site” (21270).
o “The site was acquired. . . ..to be used for a nuclear power park”
(0567)

Section 7 - Who Determines Credit

“Agencies”

0 “The Corps of Engineers and the MBNRT determines that, the ﬁve
agencies” (1 1135).

o “The Corps, I really don’t know what they did, it depends on how
wet it is considered” (12176).

o “The Minnesota Department of Natural Resources. . .. I think it is
largely a sole agency decision. They do have to consult with the
local soil and county soil and water conservation district, however,
it is largely the DNR decision” (15220).

“Negotiated”

e “We had an engineer do all that for us and that was a negotiated
situation again. I’d say one thing that one problem we had was the
fact that we were basically one of the ﬁrst ones to establish, so

151

naturally a lot of the criteria had to be established so to speak”
(0687)
“We sit down with the resource agency and negotiate it” (27316).

Section 8 - How are wetlands calculated by this entity?

“Acre”
0

“Functions”
0

“Acre/type”

“Um, in all, let's see, I'm not so clear on that one. I have to think
about that one a little more but the pine sites, it's essentially acre
for acre. Um, there is a process in place to look at sort of
ecological values, but, because of the subjective nature of those
calculations, it was determined that it would be just a straight acre
for acre replacement in most cases” (12160).

“For wetland mitigation credits, it is just a matter of developing the
acres. . . .In this case, you have to satisfy the criteria that you
develop for a functioning wetland system and it is just sold by
acre” (12153).

“Now we’ve got into the HCM thing where we’re really in a new
stage now where we measure the functions and value of the
wetland, we may not do 2;] we may do it differently” (0316).
“They use Charleston methods, what that does, it just has four or
ﬁve different categories and you are given so many po8ints as to
what you do in each Of those categories and then they total that us
and multiply it by the number of acres that you have in each
category” (17234).

“They would look at the type of impact and then determine the
ratio. What we do is we look at the type of mitigation to determine
the ratio. SO if you are proposing to do a creation of wetlands from
upland, it’s a one and a half to one ratio - IMPACT to mitigation.
So if you impact an acre, you do an acre and a half of creation. If
you impact an acre and you CHOOSE to do ENHANCEMENT,
it’s 3 to 1. So you do 3 times as much ENHANCEMENT of
EXISTING wetlands by planting and sometimes, you know,
diverting water sources into a wetland area or what have you.
Whatever would be... whatever is DEGRADED in that wetland
that you can improve, may lead to an enhancement situation and
that would mean you’d do 3 acres for that one acre you’re
proposing to impact. And if you were doing restoration, which is
the most...the ONE we’d like...the approach we’d like to see done
more often, we have a 1 to 1 ratio and that’s because we’re talking
about, in restoration, taking an area that’s been drained or ﬁlled
that WAS wetland in the past and either reversing the activities
that drained it. In other words ﬁlling ditches, breaking drain tiles,
removing ﬁll and in those circumstances, Obviously you have all

152

the ingredients for a wetland right there and taking away the
stressors or the things that have eliminated its function is more
certain to produce the wetland that was there in the past” (24296).
“Well generally we’re always thinking about debit, but basically
credit is determined by acres restored by type and the reason why
we have this is basically the state was more than satisﬁed to just
consider acres as credit but the federal agencies have this need to
do replacement of wetland function. None of the methods for
determining how a wetland functions was acceptable in
establishing credit even though in the Patrick marsh bank I did
have a mechanism for computing replacement ratios based on
wetland function. Now what we have is replacing, and this was
done quiet awhile ago the only agreement we could come to ﬁnally
and it was compromise on all sides, but was that the if you replace
wetland in say the major drainage area within the ﬂoristic province
and by wetland type you that formed a ceraget for replacing
wetland function. Not that it really replaced wetland function but it
was the closest thing that anybody would agree to that would serve
the purpose of replacing wetland function. It could be argued in a
number Of cases that no you haven’t replaced wetland function but
it was the only thing that could really be derived. So we ended up
with a table of increasing replacement ratios depending on whether
you were in the drainage area or out of the drainage are or in the
ﬂoristic province or out Of the ﬂoristic province. So the ﬂoor of
this is one to one, if you’re with the drainage area, ﬂoristic are and
you’re replacing by type the replacement ratio is one to one but
depending on what you’re dealing with by type you have different
increment of increase where lets say if you were replacing a
wetland bog, if you were replacement an Open bog in the south part
of the state you might have a 3 to one replacement ration. Because
it’s out of drainage area, it’s out Of ﬂoristic province” (33376).

“If you create or restore an acre of wetlands, you typically get one
acre a credit. If you enhance one acre of wetland, you typically
get, typically you get .5. It can be anywhere between .25 and .5
credits” (0320).

Section 9 - Credit Release Schedule

“Varied”
O

“In the process of permitting the bank, you come up with a credit
stone, there will still be some negotiation that can take place on the
release schedule. The percentages to be released is pretty well set,
but I think that there is some room for negotiation in determining
what milestones at the sites will qualify us for release of a certain
percentage of credit” (17236).

153

0 “Well when I went through it they called it the standard release,
credit release schedule, so I ‘m sure on a case by case basis it could
be changed” (0684).
0 “Its completely different for every bank. I mean typically the
release schedules are fairly small and then it gets larger as the bank
meets success” (21274).
“Zero”
0 “That works on a case by case basis but our situation, we didn’t get
any pre-sale and after out second [year of] monitoring we got
30%” (10133).
0 “Now our statute says that we have to. . .we can’t allow any credits
to be released until we see the work has been done and there’s a
high chance of achieving wetland hydrology” (24296).
“5 percent — 25 percent”
0 “We got 15% when we signed the paperwork” (01321).
0 “Actually they allowed me, because I was doing so much work
with them, to sell about 25% of the projected credits before I even
began to plant the trees” (12153).
“30 percent - 50 percent”
0 “We’re allowed 30% of presale of credits before we do the ﬁrst
part of the work” (09107).
0 “They gave me 50% of that as immediate sale to fund the bank”
(11136)
“51 percent — 99 percent”
0 “So I got a majority, you know, probably close to 60-70 percent of
my credits released within the ﬁrst year” (06348).
0 “Yeah they’re giving anywhere for 90, I’ve heard 90%-50% of
your credits up front” (29330).

“100 percent”
0 “We got all ours at once” (29332).
o “In our bank essentially the credits were available upon the

approval of the prospectus” (17239).
Section 10 - Future Funding

“Yes”

0 “Whoever the long term mangers gonna be, we turn that land over
to them along with the long term trust fund” (0545).

0 “We have established this trust fund and the fund amount was
established with the intention of being able to supply the
management cost, uh funds needed to maintain this bank in
perpetuity” (0563).

66N093

0 “We’re not intending to give them any money. These are agencies

that are established and have ﬁmds to that that” (21275).

154

“NO, but the banking, conservation easements allow hunting and
there’s some rent that could come from it” (31351).

Section 11 - Future of Wetland Bank Land

“Still Own”

“We’ll continue to maintain that as a wetland it’s district and
public property” (20265).

“We actually still own all of our sites and we manage all of our
sites” (0320).

“Turn over Non Proﬁt”

“The land goes to a non proﬁt entity for long term stewardship”
(17236)

“The land itself gets dedicated into either a long term conservation
easement granted to a non proﬁt entity” (03 7).

“Turn over Agency”

S‘Sell”

Section 12 — Agencies

“We are turning them over to either the Fish and Wildlife Service
or the Game and Fish Commission for management” (024).
“What we did is we donated the land to the state of California
ahead of time so they own it they have title to it” (0317).

“It’s part Of a 4000 acre farm and the whole farm was sold” (0689).

“I’ll probably sell it Off for some recreational track for hunting”
(28319)

“US Fish and Wildlife”

“The permit had to come from the corps of engineers, but if the US
ﬁsh and wildlife service wasn’t happy, they would Object, they
would ﬁle a letter of objection to my application” (12153).

“Some of the other agencies that haven’t really taken an interest in
mitigation, particularly some of the resource agencies like Fish and
Wildlife or NOA Fisheries that haven’t really developed their own
policy have been very reluctant to engage the process, and it has
been very difficult to try to gain their involvement. They are not
totally committed to the idea that mitigation banking does really
offer better resource replacement than traditional mitigation and in
a lot of cased they would rather see no impact at all and they think
that any alternative is unacceptable” (21270).

“The team is pretty much driven by the US Fish and Wildlife. It

was whatever they said, whatever their feelings were, everybody

else bowed down and said Ok, Ok. The Corps technically had the
ﬁnal say but in essence if we didn’t agree with the US Fish and
Wildlife had to say the Corps said well we don’t agree with you”
(11136)

155

 

 

66C0rp839

S‘EPA”

“The Fish and Wildlife has been a little bit cantankerous to deal
with” (06348).

“Everything that they would want [Corps] he would get it for them
and yet we still had problems. Finally I went over his hea ”
(12185)

“We had to work with the EPA, did I mention that. The EPA was
the thorn in our side, they were the ones that were actively trying
to prevent this whole think ﬁom happening” (16230).

D: They were all very supportive? R: No, No, In fact EPA, I’ve
only seen. . .I saw them one time in 1998 and that’s been it”
(01321)

“Corps of Engineers was very supportive. Fish and Wildlife were
supportive. EPA never showed up here and they were supportive
by their signature, but they were usually the last one to sign”
(22281)

“The federal agencies we’ve dealt with, EPA has been virtually
non-existent in the process. I’ve heard that they have a very
limited traveling budget, so when we meet down here and look at
the site or have meetings, they don’t come. They sign off on all
these things but I’ve never met anybody from the EPA” (31344).

“State/Local Agencies”

“All of the agencies were supportive except for the [state] DNR
Division Of Wildlife” (23283).

“The County agency was hostile. D: Why was that? R: Because
they county is naturally almost by itself lOOpercent wetlands.
They don’t need any more created, and they expressed that attitude
many times. They saw this project as taking productive farmland
and making it back into swamp, we already got plenty of swamp,
we don’t need any more” (15220).

“It was somewhat adversarial the ﬁrst effort. I think the Service
came kicking and screaming. They DIDN’T want to do it, they
DIDN’T like to see banks. [The state] Fish and Wildlife Service.
And I think that they did it grudgingly because they saw that it was
something. . .the train was leaving the station without them in other
words. SO they jumped on just so that they wouldn‘t be left in the
dark” (31357).

“Most of them were supportive, EPD was obstructive. They were
just reﬁrsing to agree with what everybody else thought we should
do”(0686)

“Well the problem that we had is we got state, we got the approval
from the corps of engineers and they authorized our bank, however
DEQ and EPA, DEQ the department of environmental quality in
the state, did not join in as part of the management team and

156

therefore we had complications of trying to get the credits
approved for about another year until we got the DEQ and EPA
on” (17234).

Section 13 — How monitoring time was determined

“Negotiated”
0 “They’re negotiated up front” (0327).
0 “Basically it was a negotiated process” (0687).
“MBRT or Corps”
o “The agencies have decided that they want a minimum of ﬁve
years of monitoring” (037).
0 “That [monitoring time] all came out of the MBRT process”
(0566)

0 “That’s part of the Wetland Conservation Act, a state law that
requires a 5 year monitoring period and the Corps went along with

that” (15222).
o “I think it was the requirements of the State Wetland Conservation
Act” (15220).
“Met Criteria”
0 “Until you’ve met all your thresholds” (09108).
0 “[ﬁve years?] yes, or until the success criteria is met” (18251).
“Didn’t know”
0 “That’s probably a question for the coastal conservancy, I don’t
know that off hand” (0327).
o “I think they come once a year, but you might want to check with

the Corps of Engineers” (29332).

Section 14 — Service area
“Flood plain/Drainage basin/Watershed”

e “We service we have a service area and that service area is
designated, deﬁned by two things, one is that people have to be
within 20 mile radius of the bank itself and the second is that it has
to be in the watershed of the bank itself” (0317).

0 “Our service areas here are determined by well loosely determined
by watersheds” (05 54).
“Hydrologic Unit Codes”

0 “Its done by hydrologic codes so that the areas that are being
impacted have the same type of environment that you have in your
bank and those are determined in the hydrologic codes” (17234).

o “In Virginia, the code of Virginia states that you are only allowed
to mitigate within the HUC that you are in or an adjacent HUC, so
you can’t just go anywhere in the state” (31340).

157

“Eco-region”

“State”

“Other”

“For the ones that we’ve been doing, you have to be, whoever is
using them has to be on Santa Rosa Plain which is a fairly
contained area, it’s a ﬂat area between two mountain ranges. The
Santa Rosa plain is considered a special region” (0326).

“It was almost the entire delta ecO-region of AR” (024).

“In most parts Of the country service area is determined by
watershed. But in Florida, since land elevations here are fairly
level, service areas are often determined by political boundaries”
(0563)

“Seven Counties originally in the greater [metropolitan] area and
it’s been expanded a little bit in response to the adverse court
ruling and work that we’ve continued with the Corps of Engineers
and they’ve given us another county and a half or so” (293 32).

“We have an agreement with the banking review team to over
time, disperse the banks throughout the state, but we do withdraw
credits from the whole state on a bank with the idea that we can’t
simultaneously or immediately have banks established in all Of the
biotic regions” (19263).

“We can sell credits to any impacts that are within the urban gulf
boundary” (24298).

Section 15 - How the Service Area was Determined

“Agency”
O

“Negotiated”
o

“I don’t really know how far our service area will or won’t go.
Cause the Corps of Engineers will decide, you know, if they can or
can’t do that ........ The Corps of Engineers will decide yeah”
(20267)

“They established that early on in their process of forming the
mitigation bank review team they determined what the service
areas was before we applied a s banker” (07102).

“It’s another one of those things that is determined in the MBRT
process. The Mitigation bank review team. And again it was one of
those things that, you know obviously the owner of the mitigation
bank wants one that covers all of North America and the agents
want it to be small. Again it was a negotiation process” (0553).
“We negotiated that to some extent and it’s basically the existing
watershed” (1 0 134).

158

Section 16 - How the Success criteria was determined

“Agency”
0 “. . .the guideline gives a guideline for what it would be or close to
would be” (0545).
0 “That’s all in the permit,. . ..its pretty standar ” (31339).
0 “That was all established by the public hearing process and
through the MBRT” (10133).

“Negotiated”
o “The army corps played a hand in it but we proposed the criteria
and they said yay or nay and then we modiﬁed it or negotiated it
on what it ultimately would be” (091 10).
0 “We proposed it [success criteria] and they approved it, and we
had to talk about that a little bit” (26311).
o “The success criteria is negotiated with each bank although it’s

been fairly similar for each bank” (23282).
Section 17 —- Agency Support

“Very Supportive”

0 “I’d say very supportive. They’ve been encouraging us for a
number of years to get into the banking business. They have a ﬁrm
grasp of that there’s a real ecological beneﬁt into mitigating s a
small impact at a large site. The success is so much better, it’s so
much more an efﬁcient use of tax payers dollars so they’ve been
very supportive” (07103).

0 “I would say very [supportive] our experience with the agencies
was excellent. They, when I say they, I say the individual from the
Corps was very practical and very helpful” (15222).

“Not very supportive”

0 “Well, they were very reluctant. We had a lot of pressure from
environmentalists. We had two public hearings actually through
the process. The ﬁrst public hearing came with a lot of demands
and assurances. All it really did was drive up the cost of credits.
We have to guarantee success of course, we have to put ﬁnancial
assurances, but we actually had to increase all those monetary
values so what it did was push the cost of the credits up because
we always had to guarantee success of the credit creation. That was
a restoration project but by creating the credits the
environmentalists push the costs up so any potential developer and
basically our biggest clients, Indiana Dept. Of Transportation, and
so it just pushes up the costs to the taxpayers. We really went
round and round on that but we just ﬁnally gave them everything
they wanted and of course then they have to sign the agreement but
it makes it very hard for other bankers to get started in Indiana
because of the precedent and the procedures we set forth” (10133).

159

 

0 “It was push and pull, nip and tuck. Not everybody knew which
way to go or what to do because we were the ﬁrst to do it and I
think that lengthened the process. I think it’s more streamlined
these days because they’re several others doing it now. But, we
had to go through the process of invention and it was a lengthy
process with a lot of legal mumbo jumbo and paperwork” (29332).

Section 18 - Type of banking clients

“Mostly Private”
0 “If you just look at the number of clients, probably 90% are
private” (0553).
0 “Mostly private developers, there have been a couple of instances

where there have been some public agencies,,,,,oh 95 percent
private it not more” (12160).

“Mostly Public”
0 “These are proprietary banks, so they are for DOT projects only”
(26302)

0 “Different developers uh counties, municipalities, airports, things
of this nature, I’d say public would probably be 85 percent [of the
clients]” (0687).
“50/50 Split”

0 “Well we don’t do much, well I’d say its about 50/50” (17234).

O “I would say we’re probably, if you look at clients, obviously
we’ve only had a couple of public entities, in numbers most Of
them are private, but in dollar value, I’d say its probably 50/50”
(0558)

Section 19 - How do Bank Managers get their Clients

“Agency”

0 “The Corps of Engineers just, passes along our bank along with
any other banks in those areas as being suitable providers of
mitigation and then the applicants contact us directly to see if we
have acreage and to negotiate a price” (12160).

0 “Well the Corps of Engineers does the permitting, so when folks
go to the Corps for their permits and have to go to a mitigation
bank, they get a 18ist of operating banks in that area” (0684).

“Marketing”

0 “We market to the business community, to the public sector, we
are involved in trade functions, trade shows, we’re part of BIA,
we’re part of public interest groups that get together and talk about
restoration, we actively monitor all development that’s going on,
we monitor trends and grth patterns and all those kinds of
thing” (1220).

160

 

0 “Well we started advertising that we had credits for sale” (0552).
“Press”

0 “Gotten some press from the rest Of the homebuilders association”
(16227)
0 “There has been some newspaper advertisement — in terms of

articles not advertisements per se just articles about what was
happening on that piece of property” (31350).
“Firm referrals”

0 “Frequently through consultants, environmental consultant is
usually how they ﬁnd us” (23282).

O “The consultant that has worked on the permit with the person they
know that there’s the need for mitigation and they may be the
sponsors of a site or they may know Of another consultant in
another watershed that has, so a lot of it is consultant referral to
themselves or to another consultant” (13217).

“Other”

0 “The Corps depends on the public to call them and say John Doe, I
think that he is violating, you know in violation, more so then the
corps is out there actually pursuing violators. You have to have a
very diligent, you know aggressive program to stop violators or
you really don’t have much demand” (17234).

Section 20 - Reasons for using the particular banks

“Regulations”
0 “They had a negative environmental impact to a wetland
someplace and my wetlands would suffice to offset or mitigate that
impact” (12153).
0 “Some of the clients in the past that have used the bank. . .yeah,
we’ve used the bank for both 404 permits mitigation condition
requirements for mitigations for corps permits” (0316).
“Quality Of wetland”
0 “Our project is considered very important habitat zone to have save
and enhance” (22279).
0 “My having been in this business before 1 get a [of] agents who
want to do business with me because they know our bank is really
of high quality” (0439).
“Speed”
0 “It also speeds up the process. . . ..Particularly speed, cost and
practicality” (3 1350).
0 “Speed, they don’t, once they write a check and buy a credit, they
don’t have to spend ﬁve years monitoring it, we do” (28317).
“Convenient”
0 “Because they don’t want to ﬁddle with it themselves” (0315).
0 “Because they don’t own any land. . . .they don’t [want] to be
owners they don’t want to go through all the hassle with the

161

 

government agencies, they just want to write a check and be done
with it” (29330).
“Only available”
0 “It’s the only bank in the state of Iowa, primary reason” (07102).
0 “There’s not too many around the area, the size of ours” (20265).
“Reputation”

0 “Because they know we’re successful and that we are efﬁcient in
what we do. Most, a lot of our clients are return clients because
they know that when they call here and they need mitigation they
need it done quickly, you know I’ve had people come up here and
sign them, I’ve Fed Ex.’s them, I’ve faced them, I’ve had runners,
whatever, I mean whatever, whatever we’ve needed to do we been
able to do from a business standpoint” (12148).

o “I think we have a pretty good reputation, we do what we say, we
have been in business here 14 years and agencies know if we say
we are going to do something we are going to follow through and

make it happens” (3 1351).
“Cheap”
0 “Its cost effective it’s enormously expensive to do the engineering
the construction the monitoring” (10132).
0 “The primary reason is economic. . . .we can provide a service for

them at a lower price than what they can do otherwise” (24295).
Section 21 -Bank Comparisons

“Not as good/better ecologically/interaction with agencies”
0 “We’re the best there are, I mean you can ask the Corps. In our
efﬁciency, you know when the Corps calls here they want to show
a bank to the EPA, where do they come, they come here” (12148).
0 “There was one that I’ve seen in the literature that we would not
recognize. . . .it doesn’t meet anybody’s requirements” (24296).
“Similar”
0 “To the extent that I know, I think that the habitat types of the 3
banks on the coast are pretty similar and I think really in size I
think we’re all pretty similar” (17236).

0 “Yes they are very similar, minor differences most of the banks in
this area are very similar” (31351).
o “I would say that there are other banks that meet the same criteria
as ours and are adding valuable habitat to the areas” (039).
“Didn’t Know”
0 “I really don’t know anything about them. I’m not even sure on

some of the names of them. You’d probably have more
information on that than I would” (12143).

0 “I’m trying to think what I would know. I don’t know, I haven’t
even bothered to get that information” (0684).

162

 

 

 

“None”

0 “NO. There are no other banks in the watershed where we have
banks” (21274).
0 “None that I know of we’re the only one” (25302).
“Cheaper”
o “The Southwest and Southeast, we have competitors in both cases

they realized if they were going to get any business that they
needed to be more competitive” (12160).

0 “We’re more expensive because they are undercutting us” (24298).
“More Expensive”
0 “We’re probably one of the smaller ones based on the 2 or 3 that I
have any knowledge of, like I say we’ve been the cheapest I think”
(26306)
0 “Our rates have been less partly due to our success, we’ve been
able to achieve our results at a lower cost” (24295).
“Different type”

0 “Its different in the sense that they, what they are going to be left
with is herbaceous where a lot of our stuff is forested” (0545).

O “The main difference is that ours will be exclusively for
transportation uses by public agencies” (07103).

Section 22 - Keys to Success

“Technical Knowledge”
0 “Looking at it strictly from a biological perspective they keys are
to have a good understanding of what the system is that you’re

working in” (12160).
0 “You deﬁnitely need to know your wetland science” (24298).
“Site Selection”
0 “Location, location, location; you need to have an appropriate
piece of land that has a potential for restoration” (0549).
e “Location, location, location; that’s if you can ﬁnd the right

location for wetland restoration or wetland creation, it will make
your life a lot easier” (13218).

“Agency Support”
0 “Well in our case its to have a good relationship with the resource
agencies” (273 16).
0 “You have to have a regulatory environment where the Corps, the

EPA, the Fish and Wildlife service like banking and so they are not
standing in your way as clients come to you” (09108).

“Design”
0 “You have to know everything about the site to do a quality
design” (21269).
0 “One of the major components in wetland mitigation is that you
can design a great project, you can design a perfect project”
(0320)

163

“Commitment/Monitoring”

“Demand”
0

“Hydrology”
o

“For me the most important things and one of the great things in
mitigation banking is the attention to the long term stewardship
aspect” (0320).

“Long term commitment and understanding of the wetland”
(03148)

“Total commitment to the bank, if you’re not committed forget it”
(05109)

“You have to ﬁnd the property in the area where development
pressures are the heaviest” (0555).

“. . ..ﬁnding a site to restore wetland on that’s located in an area
where there are signiﬁcant amount of impacts where a lot of
mitigation is needed” (23282).

“Establish the appropriate hydrology. Without the hydrology
you’re dead” (09110).

“To ﬁnd the hydrology or an area that has hydrology that would
produce a wetland” (20265).

“Adequate hydrology, that kind of think makes or breaks it”
(10134)

“Bank developers commitment and depth of pockets” (29327).
“Being able to put the money upfront and get things started on the
ground” (19263).

Section 23 - Obstacles to Wetland Banking

“In Lieu Fee Programs”

“In lieu fee or donation programs where an irnpactor can just
simply write a check to the regulation agencies, government
agencies to get its permit” (0549)

0 “Some of these people take funds in lieu of, that’s a horrible
program” (28319).
“Regulations/Requirements”
e “We are at the mercy of the EPA regulations and those things are
changed quite regularly” (29332).
0 “There’s always the potential too of the unknown legislature
changing wetlands legislation” (24295).
0 “The rules have been constantly changing so people have not kept
up with the rules or don’t understand them” (15221).
“Money/Cost”
0 “Huge upfront cost, you have to ﬁnd somebody willing to do that”

(0326)

164

“Cost. I think it would be very difficult for a private individual to
take on something like this with the kind of monitoring and work it
takes” (07101).

“Public Perception”

“Landowners”
0

“Right Site”
O

“The biggest obstacle is the West Nile virus and those kinds of
things coming out now. People are scared of any standing water
let alone 50 acres of it” (07104).

“There’s a lot Of misunderstand about what it means. People will
call me out of the blue and say, gee, I want to do this work on my
site, and does that mean you will send me a check? They think of
it like a wetland reserve program. ...The Obstacle I’d say is
misunderstanding and not knowing exactly what banking is about”
(24296)

“Public perceptions, I think there is an inaccurate perception that
has been portrayed that is logical and kind of wide spread and
takes a lot of time to correct and that is that all mitigation banking
does is give developers the chance to make the same mistakes on a
much larger scale” (32372).

“If you want to do wetland restoration on the land and the land
owner doesn’t want to sell you land well you’re done as far as that
projects concerned” (33376).

“A project of similar in size to this one, we have a lot of different
landowners involved so we’ve really got a lot of complex issues
that take a considerable about of time to get through where as [if]
you’re a normal mitigation project you might be buying a small
piece of land from one land owner” (07103).

“Lack of suitable sites in urban areas, or in areas where mitigation
is needed, which are the urban and suburban areas” (13217).
“Finding suitable land that can generate the ecological lift
necessary to create credits” (0552).

“Agency Support”

“Time”

“Mitigation credits exist only as a commodity only because Of the
regulatory framework that has been established and so to the extent
of the regulatory agency support mitigation banks and their
permitting decision, they live or die on that issue” (26307).
“Getting the project managers who are writing the permits to
actually agree to allow to be used is the largest Obstacle” (0566).

“One thing, the key Obstacle to us are the time lines involved.
There’s got to be some sort of a streamlining you can do instead of
taking two years” (26305).

“There are so many ways that this could be streamlined and the
work could be accelerated” (07102).

165

 

 

0 “Actually a big obstacle is the time ﬁame that it takes to permit a

bank” (0563).
“lnexperience of Agency”

0 “They’re young, they don’t know what they’re doing and they’re
giving ridiculous advice and making stupid comments and when
they have control Of your project, you can’t call them ridiculous
and stupid or else you won’t go anywhere so you have to deal with
those kinds of things” (31357).

0 “Lack of agency understanding. . . .in ability of the agencies to look
at the plan and see the problems with it” (0315).

0 “You get a 23 year Old biologist in a position that is casting
judgment on your project and they can hold it up forever” (18249).

“Agency Agreement”

0 “Getting everybody together and getting them to agree on a design
and getting them to buy Off on it” (16226).

0 “The environmental agencies, you can never get them all to agree”
(33378)

“Competition”

0 “Competition within the service area between banks, the bank’s
prices stay fairly constant and not one begins to undercut one
another, but I think ultimately that will happen” (31350).

0 “Competition in the market for the cheapest available credits, the
cheapest way to process a permit” (17239).
“Science/Nature”

0 “Just the survival count, making sure that the trees didn’t fail
because that is all dependent on the weather” (12177).

o “Probably variable climate” (024).

e “That, trying to get trees to grow” (12185).

Section 24 - Change One Thing about Wetland Banking

“Standards”

0 “I would just say all impacts should have to mitigate under the
same standards and since we’re so regulated in the banking areal
whish all other mitigation would have to same standards” (10133).

c “There is not really a standard. It is highly subjective. It
sometimes comes down to personalities” (0563).

o “I guess I would say that mitigation banking the mitigation banks
are right now I think held at and an extremely high standard
compared to the site speciﬁc mitigation areas that are being
proposed and approved by just individual applicants. That’s to say
a mitigation bank is 3 Rolls Royce Of a type of mitigation and they
are often accepting Chevrolets for site speciﬁc mitigation”
(16227)

166

6‘Money99

‘6Time9,

“Use More”
0

“In Lieu Fee”
0

“That the agencies were better funded and had more man power.
They are very under funded and don’t have enough manpower. But
that’s across the board in all agencies and all the stuff that deals
with the environment. They need more money and more people”
(0317).

.....Part of that is directly related to lack Of funding and there’s not
enough personal and they don’t have time to think about it”
(01321)

“If there could be more funding for the state agencies and for the
federal agencies to have more people available to facilitate the
banking process” (0687).

“Probably again the time frame. Just make it easier to establish
you know they’ve been slowly coming up with templates and cut
and paste kind of stuff but its still very tedious” (037).

“I would put time constraints on the corps of engineers to respond
to permit applications, to respond to letter requests, that sort of
stuff” (0553).

I would like to see mitigation banking as the preferred choice for
all offsite mitigation” (0545).

“I think it would be that same thing. The regulatory agencies
recognizing the importance of the banks and encouraging the use
Of them. That’s basically it. I would emphasis that they should
encourage banks when the product is at least as good if not
superior to the alternative. I do not promote using banks if it
doesn’t provide the optimum of restoration beneﬁt” (24295).
“They don’t understand that people are suppose to get permits and
that its better to consolidate large blocks of wetlands than it is to
leave these little pockets siting out there” (30337).

“The ﬁrst thing that pops into my mind would be to have a better
education of the corps regulatory branch to use mitigation
banking... You're dependent upon the regulators at the corps of
engineers to give you business, to send customers your way and it
appears that they don't use mitigation banking as much as we feel
they should. Of course we're prejudice but we feel they try
everything else before they use mitigation banking. I think there
should be a little more education as to what goes into mitigation
banking to the regulators so they can recommend it more Often”
(16226)

“Well I think the only thing that I would change about banking in
general is that we prohibit the activities of regulators in the
banking area. That we would prohibit any regulator from owning
or operating mitigation banks. And I don't think there should be an

167

“Nothing”
O

in lieu fee fund either because it is a very easy way of losing track
of what we are trying to restore. I think the banking industry, the
way it is structured now has been very direct, fairly simple and has
been effective” (091 10).

Abolish in lieu fee program nationwide. That they are an absolute
total sham rip off of the environment, the taxpayer, the
environmentalist” (18250).

“Off the top of my head I don’t think there would be anything that
I would change I think it’s a pretty good balance” (23282).

1 don’t really feel strong on anything, one way or another. It’s
been ﬁne, it’s done well for us, we’re pleased with it” (12174).

“Service Area”

“Larger service areas and more generous credit ratios” (0549).

“I would choose service area to be expanded. And I choose that not
selﬁshly, but biologically. I think that if a BIG bank on a good site
is done well, the environmental beneﬁts are HUGE. And the small
service area drives smaller, less valuable banks, scattered across
the landscape. That's one thing I would change” (31357).

“Agency Agreement”

“I'd like to see a better coordination between the regulatory
agencies in the approval process. D: Ok, So the various agencies
that your working with? R: Yeah they need to work in harmony a
little better” (0323).

“Make the states’ law and the federal law congruent. There are
times that the two laws direct us in opposite directions” (15220).

“Requirements/Process”

“Other”

“Natural”
O

I would try to put less of a command and control structure, I would
try to I would have less of a regulatory structure” (0441).

“Fewer competitors I guess” (0689).

“Well I think, just like I said, being able to pick sites based on
where they should be ecologically instead of having them be sites
that people propose to us because they happen to have the land”
(24296)

“Well for us it would be to make more of a natural area that is less
engineered” (0440).

168

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169

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