Mitigation Bank

Status Update

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City staff presented a status update of the Mitigation Bank to Bellingham City Council during the Public Works and Natural Resources Committee meeting at 1 p.m. on Monday, September 16. Staff are nearing the end of the submittal process and are preparing for upcoming City Council action, including an enabling ordinance. Staff plan to return to Council in early 2025. Please visit the meeting agenda page to view a recording of the meeting.

The City of Bellingham’s mitigation bank application remains strong with no significant concerns. Previous delays were largely due to a shortage in federal agency staffing, we have seen quicker review timelines since the addition of federal staffing in 2023. We are hopeful these staffing changes will continue to hasten agency reviews.

We are preparing Mitigation Banking Instrument (MBI) documents for our first mitigation bank site, the Bear Creek Corridor Mitigation Bank Site. Since April 2023, we have achieved the following milestones:

  1. Continued to submit a series of required documents to the permitting agencies. We are integrating agency feedback and will re-submit for further review later in 2024.
  2. Initiated required local permitting for the proposed bank.

We will continue to submit the remaining required documents throughout 2024 and will begin negotiating the legal instrument in early 2024. We do not have an estimated date for bank opening at this time. We intend to share an estimated date when we have greater clarity on the timeline for final steps. Thank you for your patience as we navigate this complex, yet important approval process.

The City of Bellingham’s mitigation bank application remains strong with no significant concerns other than a delay in the agency review timeline. While this delay was largely due to a shortage in federal agency staffing, we are hopeful additional federal staffing added in 2023 will hasten future reviews.

The City is continuing to prepare Mitigation Banking Instrument (MBI) documents for our first mitigation bank site, the Bear Creek Corridor Mitigation Bank Site. Since October 2021 the City has achieved the following milestones:

  1. Obtained acceptance of critical area mapping and characterization.
  2. Received an invitation to begin preparing the first batch of MBI Appendices.
  3. Initiated Whatcom County mitigation bank permit approval.

The City is preparing the eight MBI Appendices and will submit them for sequential approval throughout 2023.

The City is preparing Mitigation Banking Instrument (MBI) documents for our first mitigation bank site, the Bear Creek Corridor Mitigation Bank Site. Although the agencies are actively reviewing our submittals, we anticipate their review process will take longer than expected, delaying our scheduled 2022 bank opening. We will provide an update when more information becomes available. 

The City’s bank application has reached three milestones:

  1. On July 7, 2020, the public comment period concluded per the Joint Public Notice issued by the Department of Ecology and the Army Corps of Engineers (Co-Chairs).
  2. On August 19, 2020, we received a positive Initial Evaluation letter from the Co-Chairs. The Co-Chairs determined that the City’s bank application is ecologically appropriate and has the potential to provide appropriate compensatory mitigation for future development projects.
  3. On November 19, 2020, the Co-Chairs held a virtual kick-off meeting with tribal, local, state, and federal entities with a substantive interest in the establishment and operation of the City’s proposed bank. 

The positive Initial Evaluation letter and kick-off meeting advanced the City’s bank application into the next phase of the certification process, developing the draft Mitigation Banking Instrument (MBI). This document will describe the bank’s physical and biological features, legal structures, and how it will be established and operated. The City is on schedule to submit this document to the Interagency Review Team (IRT) in the first quarter of 2022.

In April 2018, the City submitted our Bellingham Umbrella Mitigation Bank application to the Interagency Review Team (IRT) Co-chairs, the US Army Corps of Engineers and Washington Department of Ecology. On, April 16, 2020, the City received a completeness determination from both agencies. 

This completeness determination initiates the first of two review phases. The first phase is a review of the prospectus and serves as the IRT’s initial determination of key issues. The IRT is composed of the Co-chairs and representatives from federal, tribal, state, and local agencies. During this first phase, the IRT will conduct a public review process, starting with a public notice.

The second review phase is a review of the mitigation banking instrument (MBI). This review will occur once the IRT accepts the prospectus and the City submits a draft MBI. The purpose of the MBI is to detail the physical characteristics, legal obligations, operational procedures, monitoring, and maintenance requirements for the bank. Review of the MBI generally takes two years and includes a public review process. If approved by the IRT, the MBI will represent a formal banking agreement between the regulatory agencies and the City.

The City is committed to expediting review and approval processes. We look forward to comments and feedback generated through this process to ensure the resulting bank supports watershed functions and meets the needs of our community.

Overview

A primary component of the City’s mitigation program will be the Bellingham Mitigation Bank. The City is pursuing creation of a bank to provide another option for developers to meet their mitigation obligations. The goals of the bank are to:

  • improve the success of wetland and stream mitigation projects,
  • achieve regional restoration goals,
  • address temporal loss of aquatic resource functions,
  • address the mitigation needs for public and private entities, and
  • streamline the permitting process

A mitigation bank requires a lengthy, formal approval process lead by the US Army Corps of Engineers and the Washington State Department of Ecology. Development of a mitigation bank in Washington State has historically taken 5 to 10 years from application submittal. In 2018, the City purchased properties for a future bank and submitted initial application materials to state and federal agencies. The City continues to work with the US Army Corps of Engineers, Washington State Department of Ecology and other members of the Interagency Review Team to submit and receive approval of the required mitigation banking documents.

Additional Information

Wetlands and streams provide valuable ecological functions for our community. Federal, state and local regulations require development projects with unavoidable wetland, stream, or habitat impacts to compensate for the impacts to achieve no net loss in ecological function. Most commonly, developers provide compensatory mitigation by completing their own single-project on-site improvements. This is often referred to as “permittee-responsible” mitigation.

It is widely understood and documented that permittee-responsible mitigation results in high costs, high rates of site failure, low ecological value, project delays and inefficient land use. A mitigation bank is an alternative option for completing mitigation and is the preferred option in State and Federal mitigation regulatory guidance. A wetland and stream mitigation bank is an area of land where wetland, stream and upland habitats are restored, created, enhanced, and preserved in advance of unavoidable impacts. Bank sponsors offer credits for purchase by developers to compensate for their unavoidable wetland, stream and/or buffer impacts. In 1983, the federal agencies began supporting banking as a way to address shortcomings of permittee-responsible mitigation. In 2001, the National Research Council concluded third-party mitigation such as banks were more successful at achieving regulatory goals. Starting in 2007, state and federal agencies established a preference for the use of banks to compensate for development impacts due to the consensus that banks are the most reliable form of compensatory mitigation.

To help improve mitigation in our local region, the City of Bellingham (City) is pursuing creation of the Bellingham Mitigation Bank (Bank). The bank would offer another option for developers to meet their mitigation obligations. The Bellingham Mitigation Bank has the following goals:

  • improve the success of wetland and stream mitigation projects,
  • achieve regional restoration goals,
  • address temporal loss of aquatic resource functions,
  • address the mitigation needs for public and private entities, and
  • streamline the permitting process.

The term “mitigation” means to lessen the severity of an action. When a development project proposes impacts to wetlands, streams, and habitat areas; agencies require the project “mitigates” these impacts. Mitigation is done by avoiding, minimizing, and compensating for the impact.

Mitigating impacts is important because wetlands, streams, and habitat areas are central to wise land use. These resources are shared assets that benefit the community as a whole. They provide valuable functions for our community including flood control, ground water recharge, water quality improvements, erosion control, recreation, education, and habitat for commercially important species.

The desire and need to protect Bellingham’s ecological assets such as wetlands, streams, and habitat areas is reflected in numerous policies and regulations including Bellingham’s Critical Areas Ordinance (CAO), Shoreline Master Program (SMP), Comprehensive Plan, and the City Council 2009 Legacies and Strategic Commitments. These values are supported in federal and state laws including the federal Clean Water Act (CWA), the federal Endangered Species Act (ESA), the state Growth Management Act (GMA), the state Shoreline Management Act (SMA), the State Hydraulic Code (Hydraulic Code), state Water Pollution Control Act, and the State Environmental Policy Act (SEPA).

A mitigation bank requires a lengthy, formal approval process lead by the US Army Corps of Engineers and the Washington State Department of Ecology. Development of a mitigation bank in Washington State has historically taken 5 to 10 years from application submittal. The City’s proposed mitigation bank builds on previous foundational efforts.

In 2012, the City completed a review of mitigation program feasibility. The resulting City of Bellingham Mitigation Program Review and Recommendations report (Northwest Ecological Services LLC) recommended implementing an in-lieu fee program. Subsequently, the City worked with a team of consultants to complete the science-based 2015 Habitat Restoration Technical Assessment (Environmental Science Associates, Northwest Ecological Services, LLC; and Veda Environmental). This document identified and analyzed the City’s existing habitat conditions and future restoration opportunities in preparation for pursuing an in-lieu fee program or mitigation bank. In 2016, the City contracted with a consultant to complete ecological and economic analyses, confirm the appropriate mitigation program type, and prepare a mitigation program prospectus for agency submittal. As a result of this work, the City Council directed staff to pursue a mitigation bank.

In 2018, the City purchased properties for a future bank and submitted initial application materials to state and federal agencies. The City continues to work with the US Army Corps of Engineers, Washington State Department of Ecology and other members of the Interagency Review Team to submit and receive approval of the required mitigation banking documents.

As with traditional mitigation, a project proponent must first demonstrate they have avoided and minimized wetland and stream impacts to the maximum extent practicable according to a series of steps called “mitigation sequencing.” 

These steps are defined in the SEPA implementing rules both Chapter 197-11-768 Washington Administrative Code (WAC) and City of Bellingham Critical Areas Ordinance (CAO), Bellingham Municipal Code (BMC) 16.55.​250.

Mitigation Sequencing

  1. Avoiding the impact altogether by not taking a certain action or parts of an action
  2. Minimizing impacts by limiting the degree or magnitude of the action and its implementation, by using appropriate technology, or by taking affirmative steps to avoid or reduce impacts
  3. Rectifying the impact by repairing, rehabilitating, or restoring the affected environment
  4. Reducing or eliminating the impact over time by preservation and maintenance operations during the life of the action
  5. Compensating for the impact by replacing, enhancing, or providing substitute resources or environments
  6. Monitoring the impact and taking appropriate corrective measures

After completing steps 1 through 4, if a project still has unavoidable impacts the project proponent must provide mitigation. If the project is in a bank “service area” with available credits, the project proponent can potentially buy bank credits to fulfill their mitigation obligations. 

Contacts

Analiese Burns
Habitat and Restoration Manager
Public Works Natural Resources
acburns@cob.org
(360) 778-7968

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