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SPK-2014-01100, Proposed In-Lieu Fee Program, for the western slope of Colorado

Published June 17, 2015
Expiration date: 7/17/2015

Sacramento District

Comments Period: 17 June 2015 – 17 July 2015

SUBJECT: The U.S. Army Corps of Engineers, Sacramento District, (Corps) is evaluating a prospectus to establish a new In-Lieu Fee (ILF) Program for the western slope of Colorado. This notice is to inform interested parties of the proposal and to solicit comments. A copy of the prospectus is available online in the Regulatory In-lieu Fee and Bank Information Tracking System (RIBITS) at

AUTHORITY: This prospectus is being evaluated under 33 CFR Part 332.8.


US Forest Service, Ms. Susan Alden-Weingardt, Partnership Coordinator, Rocky Mountain Region, 740 Simms Street, Golden, Colorado 80401

National Forest Foundation, Mr. Marcus Selig, Director, Southern Rockies Region, 390 Union Blvd., Suite 400, Denver, Colorado 80228

PROGRAM NAME: Western Slope In-Lieu Fee Program (Program)

LOCATION: The proposed Program would cover the portion of Colorado west of the Continental Divide. No specific sites have been identified at this time.

PROJECT DESCRIPTION: The US Forest Service (USFS) and the National Forest Foundation (NFF) proposes to establish the Program to provide a compensatory mitigation[2] option to compensate for or replace functions and values of aquatic resources degraded or destroyed as a result of activities permitted by the Corps or in violation of Section 404 of the Clean Water Act within the western slope of Colorado (the "Program Area"). The ILF Program will be open to the public for projects within the ILF Program Area.


Instructions of accessing the Prospectus On-line. The prospectus is available in its entirety in RIBITS. 

1) Go to
2) Select “Sacramento District” in the lower left hand corner of your screen.
3) Click “ILF Programs” in the navigation bar on the left hand side of your screen.
4) Click on “Western Slope In-Lieu Fee Program.”
5) In the upper right hand corner, click on “Cyber Repository.”
6) Click on the “Prospectus” folder.


The objectives for the Western Slope ILF Program are as follows:

1. Develop a mechanism to fund the planning and implementation of stream and wetland establishment, restoration, enhancement and preservation projects on National Forest System lands and lands adjacent to National Forest System lands that the USFS and other land management agencies would not otherwise have the resources to plan or implement.

2. Collaborate with the USFS field offices, other land management agencies, nonprofit organizations, and private stakeholders (municipalities, land owners, user groups, etc.) to identify priority stream and wetland establishment, restoration, enhancement and preservation projects on National Forests System lands and lands adjacent to National Forest System lands that will help meet local and regional compensatory mitigation needs in an efficient and ecologically appropriate manner.

3. Provide a regional, watershed-based approach to compensatory mitigation that benefits the ecosystems in the identified Mitigation Service[3] Areas of the Program Service Area[4].

4. Establish an ILF program with accountability equivalent to mitigation banks.

5. Provide an effective and efficient alternative to permittee-responsible compensatory mitigation for losses to aquatic resources based on advanced planning and use of watershed approach.

6. Provide projects that meet current or expected demands for credits[5], especially at higher elevations and in watersheds or watershed segments that lack sufficient mitigation bank capacity.

7. Consolidate mitigation projects and funds to provide economies of scale and eliminate the cost-prohibitive nature of isolated, small, unconsolidated mitigation sites.

8. Allow for the funding and implementation of larger, more ecologically significant mitigation projects.

9. The Program shall seek out ILF Projects that will improve stream, wetland, and riparian ecosystems damaged by historic mining and oil and gas activities, restoring and enhancing hydrologic function, habitat, and minimizing further contamination of receiving waters.

10. The Program shall seek out ILF Projects that will improve stream, wetland, and riparian ecosystems damaged by poorly located or degraded road and trail systems, restoring and enhancing hydrologic function, habitat, and minimizing further contamination of receiving waters.

11. The Program shall seek out ILF Projects that will improve stream, wetland, and riparian ecosystems damaged by livestock grazing activities, restoring and enhancing hydrologic function and habitat, and preventing future degradation by unsustainable grazing management practices.

12. The Program shall seek floodplain restoration projects that will improve stream, wetland, and riparian ecosystems by expanding riparian corridors, developing vegetated buffers along waterways, re-connecting entrenched streams to their historic floodplains, and/or increasing sinuosity in straightened waterways, as appropriate.

13. The Program shall seek out ILF Projects that will improve stream, wetland, and riparian ecosystems damaged by heavy recreation use (e.g., camping and off-road travel), restoring and enhancing hydrologic function and habitat, and preventing future degradation by unsustainable management practices.

14. The Program shall seek ILF Projects that will improve stream, wetland, and riparian ecosystems damaged by the occurrence of catastrophic events (e.g., unnaturally severe wildfire and catastrophic flooding), restoring and enhancing hydrologic function and habitat.

15. Work with land management agency staff, private contractors, and local nonprofit organizations to plan and implement ILF Projects, building local capacity and knowledge to conduct similar projects into the future.

16. Provide long-term and permanent protection of all ILF Project Sites via amendments to applicable Forest Plans (when on National Forest System lands) or through legal instruments on properties retained by or transferred to a local/state land management agency or accredited land trust, and through long-term stewardship[6] and maintenance.

Proposed Service Areas

The Program Service Area is the geographic area within which the Program is authorized to provide compensatory mitigation. In order to simplify the regulatory review and oversight of ILF Project Sites to be implemented under this Program, the proposed Program Service Area boundary mimics the USACE Sacramento District boundary in the state of Colorado. The proposed service area for the Program includes the portion of Colorado west of the Continental Divide with the northern boundary defined by the state border with Wyoming, the western boundary defined by the state border with Utah, and the southern boundary defined by the state border with New Mexico, which supersedes the watershed boundaries. The eastern boundary of the Continental Divide follows defined 8-digit USGS HUC system.

General Need

Section 404 of the Clean Water Act (CWA) requires mitigation for unavoidable impacts to aquatic resources. The Corps and the US Environmental Protection Agency have jointly issued final regulations on Compensatory Mitigation for Losses of Aquatic Resources (Final Rule) that establish requirements for compensating for unavoidable adverse impacts to, or losses of, aquatic resources that are subject to Federal authority. The Final Rule authorizes the Corps to approve ILF compensatory mitigation programs with non-profit or governmental natural resources management entities to satisfy compensatory mitigation requirements. On January 12, 2015, the South Pacific Division of the USACE published a notice announcing Final Regional Compensatory Mitigation and Monitoring Guidelines to be followed in USACE South Pacific Division’s subordinate districts (Albuquerque, San Francisco, Sacramento, and Los Angeles districts) regarding procedures for compensatory mitigation as required for processing of DA permits. For CWA Section 404 permits, the USACE has determined that most permittee responsible mitigation projects for aquatic resource impacts are small and lack significant environmental benefit. Studies have shown high rates of failure and lack of performance at permittee responsible mitigation locations around the nation. In order to assure environmental benefits, including no net loss of wetlands, the Rule establishes a watershed approach for establishing mitigation projects, in which mitigation banks and ILFs may be prioritized over permittee-responsible forms of mitigation. Use of an ILF program to compensate for impacts to aquatic resources can be preferable to on-site mitigation for several reasons:

• Can reduce Agency time spent reviewing and processing permit applications;
• Eliminate the Permittee’s need to dedicate or acquire land and water rights for mitigation
• purposes;
• Eliminate the Permittee’s responsibility to design, construct, monitor and maintain mitigation sites; and/or
• ILF programs can result in a larger contiguous area of aquatic resources, capable of greater functions and values.

Currently, there are no approved ILF programs in the Corps Sacramento District for the state of Colorado. The historically observed lack of an ILF option to address impacts to aquatic resources within the proposed Program Service Area and the lack of high-elevation wetland mitigation opportunities, combined with the expectation mitigation needs will continue into the future, largely forms the basis for the proposed Program.

Ownership and Long-Term Management

The Sponsors (USFS and NFF) will administer the Program and perform all necessary work to establish and maintain aquatic habitats associated with ILF Project Sites participating in the Program, including implementation and any required remedial measures (even if those activities are conducted by other parties). All ILF Project Sites will be located on or immediately adjacent to National Forest System land in the USFS Rocky Mountain Region (Region 2) within the State of Colorado. Thus, the USFS and NFF will remain the responsible entities for the long-term management and protection of any portion of ILF Project Sites on National Forest System lands. The NFF, unless transferred to a third party, will be the responsible entity for the long-term management of any portion of ILF Project Sites on lands immediately adjacent to National Forest System lands.

Credit Generation

The Program proposed the generation of two types of credit. These credit types will be classified as either wetland or stream credit. Each approved Site-Specific Development Plan[7] will include the method for determining the Credits generated by individual ILF Project Sites. Likewise, the Sponsor may only generate Credits from an ILF Project Site where there is a net benefit to aquatic resources at the site, as determined by the pre- and post-project site conditions. Specifically, Credit Generation at each ILF Project Site will be based on ecological and/or functional lift as determined through the use of an appropriate functional or condition assessment methodology (FCAM), if available.

Inter-agency Review Team (IRT)[8]

The Inter-agency Review Team responsible for the review and approval of the proposed mitigation bank include representatives from the Corps, U.S. Environmental Protection Agency, State of Colorado Department of Public Health and Environment, and the State Colorado Parks and Wildlife.

Mitigation Approval and Permitting Process

Mitigation requirements for a particular project are negotiated between the project proponent and the Corps. The project proponent must therefore first submit a mitigation proposal to the Corps. That proposal will include the type of mitigation that will be implemented, which may include the use of an ILF Program or Mitigation Bank. If the project proponent and the Corps determine mitigation through an ILF is appropriate to compensate for the proposed impact, per the Rule, the project proponent will contact the Program sponsor to insure that credit is available for purchase.

Upon receipt of payment, the Program sponsor becomes legally responsible for initiating the necessary mitigation and monitoring within three growing seasons of receipt of payment. During this time, if a Mitigation Plan has not been submitted, the Program sponsor would submit a complete Mitigation Plan to the IRT as well as an application for Corps permit(s) should the proposed in-lieu fee mitigation project activities involve a discharge of dredge or fill material within waters of the U.S. or work within navigable waters of the U.S. The Corps would complete consultation, as appropriate, under the Endangered Species Act, the Magnuson-Stevens Fishery Conservation and Management Act, the National Historic Preservation Act and other applicable laws, prior to any permit authorization.

Program funds would be held in a Program account, and all credit sales would be tracked and reported by the Program sponsor to the Corps at a minimum on an annual basis, and also uploaded to the Corps’ Regulatory In-lieu Fee and Banking Information Tracking System (RIBITS).

EVALUATION FACTORS: The Corps is soliciting comments from the public, Federal, State, and local agencies and officials, Indian tribes, and other interested parties in order to consider and evaluate the impacts of this proposed activity. Any comments received will be considered by the Corps to assess impacts on endangered species, historic properties, water quality, general environmental effects, and other public interest factors. Comments are used in the preparation of an Environmental Assessment and/or an Environmental Impact Statement pursuant to the National Environmental Policy Act.

SUBMITTING COMMENTS: Written comments, referencing Public Notice SPK-2014-01100 must be submitted to the office listed below on or before 17 July 2015.

Kara Hellige, Senior Project Manager
US Army Corps of Engineers, Sacramento District
Durango Regulatory Office
1970 E 3rd Ave, Suite 109
Durango, Colorado 81301
Phone: 970-259-1604

Please note that all comment letters received are subject to release to the public through the Freedom of Information Act. If you have questions or need additional information please contact the applicant or the Interagency Review Team Chair, Kara Hellige, 970-259-1604,


[1] Sponsor means any public or private entity responsible for establishing, and in most circumstances, operating a mitigation bank or in-lieu fee program)
[2] Compensatory mitigation means the restoration (re-establishment or rehabilitation), establishment (creation), enhancement, and/or in certain circumstances preservation of aquatic resources for the purposes of offsetting unavoidable adverse impacts which remain after all appropriate and practicable avoidance and minimization has been achieved.
[3] Mitigation Service Area means the geographic area within which impacts can be mitigated at a specific ILF Program Site.
[4] Program Service Area means the geographic area that the Sponsor will be allowed to develop ILF Project Sites and sell Credits for compensatory mitigation under the Program.
[5] Credit, as defined in the Final Rule, means a unit of measure (e.g., a functional or areal measure or other suitable metric) representing the accrual or attainment of aquatic functions.
[6] Long-Term Land Steward means the responsible party designated to fulfill the requirements of the Long-Term Management Plan.
[7] In-Lieu Fee (ILF) Project Site means a Compensatory Mitigation site implemented under the Program for which Credits are being generated and sold. Monitoring, maintenance and long-term site protection of each ILF Project Site would be carried out as outlined in this Prospectus (and future Program Instrument) and in accordance with applicable Site-Specific Development Plans, Interim Management Plans, and Long-Term Management Plans.
[8] Interagency Review Team (IRT), as defined in the Final Rule, means an interagency group of Federal, Tribal, State, and/or local regulatory and resource agency representatives that reviews documentation for, and advises the District Engineer on, the establishment and management of an in-lieu fee program.