The document discusses a proposal for the city council to establish a mitigation bank by selling credits for wetland and stream restoration on 1,226 acres of land purchased for water wells, which could generate millions in long-term income to offset water fund costs. An environmental study identified various aquatic resources across the three properties. The next step proposed is to solicit proposals from mitigation bankers to establish the bank and determine its commercial viability.

1. Mitigation Bank
for City Council
March 5, 2018

2. Why talk about Mitigation Banks?
• Short answer: To keep our Water Rates as low as possible.
• Council was updated on this item in April 2017
• Water Fund invested $4.95 million to purchase 1,226 acres for water wells
– Three properties, located northeast of Lake Bryan
– Mostly in the flood plain
– One property leased back to previous owners, very minor income
• Original Plan was to strip Water Rights, then re-sell the property
– However, potential value minus water rights was not very attractive
• Potential exists to use portions of the properties as Mitigation Bank
– Long term income could be a few million dollars
• Actual value as a Mitigation Bank is not completely known
• What is a Mitigation Bank?
• Section 404 of the Federal Clean Water Act requires mitigation for disturbance or
destruction of wetland or stream habitat (waters of the U.S.)
• Credits can be purchased for creation or restoration of a permanent wetland or stream
improvement at a different location, to replace (or mitigate) that disturbance or destruction
– For example, if a new road is constructed through a wetland, or crosses a stream, an equivalent
area elsewhere must be dedicated as a wetland to mitigate the adverse impacts
• Mitigation Banks exist to manage wetland or stream properties and sell Mitigation Credits.
They are chartered and run like typical financial Banks

3. Location

5. Environmental Study Performed
• In April 2017 Council directed staff to contract needed Environmental Evaluation
• We had a study prepared by our Consultant, Alan Plummer Assoc. for $75K
– For a Mitigation Banker to determine the value of our property for wetlands mitigation, we performed a
detailed evaluation to identify and delineate the aquatic resources on site, the level of functioning, and
prepare a Preliminary Index of Biotic Integrity (IBI).
– The IBI shows what potential aquatic habitat quality is possible for the Little Brazos River in particular.
– Documentation of the current state of delineated aquatic resources enables identification of
improvements can be made to create “Uplift” which provides Mitigation Credits that could be sold
– This study would be used to Request Proposals from Mitigation Bankers
• Brent Jasper, USACE Fort Worth District, manages mitigation bank projects in our area
– Brazos Valley is one of two areas in Texas without enough mitigation bank coverage
– Need is high for Stream Channel credits (Little Brazos & tributaries flow through our properties)
• Two Mitigation Bankers have initially expressed interest – variety of ways to structure a deal
• Would require a permanent Conservation Easement on property that is uplifted
– Concept would be to focus on the stream segments and former mining areas

6. Proposed Service Area

7. Aquatic Resources Identified on
North Tract
Identification Aquatic Resource Linear Feet Acres
Little Brazos River Perennial Stream 1,722 1.2
T4 Ephemeral Stream 2,932 0.3
T4A Ephemeral Stream 369 0.0
T4B Ephemeral Stream 1,157 0.2
T4C Ephemeral Stream 203 0.0
T5 Ephemeral Stream 137 0.0
Campbells Creek Perennial Stream 507 0.2
Herbaceous Wetlands Herbaceous Wetland - 1.8
Forested Wetlands Forested Wetland - 3.5
Open Water Ponds Open Water Pond - 1.0
Open Water Former Mining Areas Open Water Pond - 16.6
Totals 8,749 24.8

8. Proposed Conservation
Easements – North Tract

9. Aquatic Resources Identified on
the Middle Tract
Identification Aquatic Resource Linear Feet Acres
Little Brazos River Perennial Stream 3,815 3.0
T3 Intermittent Stream 3,668 0.9
T3A Ephemeral Stream 973 0.1
T3B Ephemeral Stream 1,208 0.1
Open Water Former Mining Areas Open Water Pond - 90.3
Woody Vegetation Former Mining Areas Forested Wetland - 3.3
Herbaceous Vegetation Former Mining Areas Emergent Wetland - 0.4
Forested Wetlands Forested Wetland 0.8
Emergent Wetlands Emergent Wetland 1.2
Totals 9,664 100.1

10. Proposed Conservation Easements
– Middle Tract

11. Aquatic Resources Identified on
the South Tract
Identification Aquatic Resource Linear Feet Acres
Little Brazos River Perennial Stream 2,522 2.0
T1 Ephemeral Stream 880 0.04
T2 Intermittent Stream 2,749 1.1
T2A Intermittent Stream 94 0.03
Larger Mine Pit west of LBR Open Water Pond - 31.9
Open Water Former Mining Areas Open Water Pond - 5.3
Emergent Former Mining Areas Emergent Wetland - 3.4
Forested Former Mining Areas Forested Wetland - 0.6
Totals 6,245 44.4

12. Proposed Conservation
Easements – South Tract

13. Next Step – Solicit Mitigation Bankers
• Met with Interagency Review Team on March 1st
– Reps from USACE, EPA, TCEQ, TPWD, USFWS at TPWD HQ in Austin
– Reviewed Alan Plummer’s Preliminary Draft Prospectus
– IRT provided initial feedback for consideration
• Well-suited for Stream Credits
• No other Mitigation Banks with Stream Credits in this Service Area
• Not well-suited for mitigation for impacts to Endangered Houston Toad habitat
• Recommend to adjust Service Area to stay within Fort Worth District boundary
• Aquatic resources on boundaries to be addressed
– Staff and our consultant are optimistic that the bank is commercially viable
• Staff recommends we Seek Proposals from Mitigation Bankers
– Minimal efforts to proceed to seek proposals
– A final decision would be made after review of all proposals received