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PREMIUM LEGAL RESOURCES LEGAL FORMS ASK A LAWYER

By Peter G. Collins, CEP, CHMM

A wetland is neither fish nor fowl (although it can be a good habitat for both), it is not completely water nor is it entirely land. Some wetlands appear to be totally dry, while some areas with standing water are not wetlands. Some wetlands are entirely under water throughout the year; others are completely dry for weeks or months. Wetlands can suddenly come into being and just as suddenly disappear. For example, property that was clearly upland can suddenly become wetland because of development and changing drainage patterns on that land or on an adjacent site. As a result of this inherent ambiguity as well as the penalties and potential liabilities for failing to recognize the presence of a regulated wetland, issues of wetland delineation and management can often determine the ultimate success or failure of a project.

To reduce the likelihood of a project being derailed by the unexpected discovery of a wetland, it helps to understand the wetland delineation and management process and the role of the qualified ecologist on the site development team. The determination and delineation of wetlands on a site, prior to a final purchase agreement, can have a significant impact on the ultimate price as well as on the overall feasibility of the proposed project. For example, if wetlands are present, will enough land remain to accommodate the objectives of the proposed site plan? Can the development be built around the wetlands? Should a two-tier pricing system be negotiated, one price for upland and a lower price for wetland? If a wetland permit is required, how should it be prepared and what is the likelihood that it would be approved? An experienced ecologist, along with other members of the site development team, can help to answer these and many other important questions.

Wetland Delineation

Wetlands assume various forms such as meadows, forests, swamps, marshes, bogs and fens, but they all share the common feature of serving as an interface between land and water. Wetlands often fulfill vital functions in our environmental and economic health by attenuating storm run-off flows, providing a site for diversion of flood peaks, purifying water by filtering and settling sediments and pollutants before they can get into lakes and streams. However, wetlands vary as to their effectiveness in fulfilling these functions. They usually contain significant hydrological gradients and vegetational mosaics.

Determining the exact point at which a wetland ends and upland begins can be nearly impossible because of these gradients, but this task is critical from both the developer's and regulatory agency's perspective. The presence, location and exact size of a wetland on a site determines whether it is regulated or not. In Michigan, wetlands may be regulated at the local, state, and federal levels.

The most commonly accepted delineation criteria in use today is the Corps of Engineers "three-pronged" approach developed in 1987. The Corps identified three criteria to be used in determining wetlands under federal jurisdiction: the presence of characteristic vegetation, specific soil types, and evidence of hydrology in the form of surface or subsurface saturation. The Corps also identified various indicators to be evaluated at sites in order to determine whether the criteria are met.

On the other hand, procedures for delineating wetlands under state law are different. In Michigan, if two of the three criteria have indicators at a site, the site is considered wetland. In practice, then, at most sites, both the federal procedures and state procedures yield similar results, but there are instances where the Michigan approach can result in regulating more land as wetland, particularly at sites with atypical conditions.

The application of these criteria at a site, however, is often by no means straightforward. In lower Michigan, for example, a majority of sites have atypical conditions due to land clearing, agricultural practices and drainage improvement. In the southeast corner of the state, which is characterized by a flat topography, poorly drained soils and seasonal standing water, it is possible for plant species characteristic of wetlands to grow on a property that exhibits no other wetlands features or functions and so may not be classified as a regulated wetland. For example, much of the agricultural land in Michigan, which to most people today is indisputably upland, would revert to an obvious wetland state if left fallow for a decade.

The wetland status of any property, whether it be in Michigan or elsewhere, also can be affected by such atypical conditions as:
- development on adjoining property that can potentially alter land drainage patterns and convert an uplands site into a regulated wetlands;
- prior extraction of soil or minerals from a site; and
- the deposition of soil or fill material.

All these conditions cause changes by removing or adding indicator plants and soil types. These and a myriad of other variables make it necessary to conduct wetlands delineation on a case-by-case basis, applying the sciences of ecology, botany, hydrology and pedology (soils).

Subtleties such as these make it necessary to engage ecologists and biologists experienced at delineation under federal and state procedures. Moreover, competency in delineation must be matched by experience in the preparation of permits that meet agency standards for completeness and effectively address agency evaluation criteria.

Failure to properly identify and avoid regulated wetlands can result in significant penalties, ranging from $25,000 to $125,000, or even the abandonment of a planned project. Michigan's Wetland Protection Act is very stringent and provides mechanisms for enforcement, including levying of penalties. In the 14 years since the passage of the act, a number of property owners have seen state courts rule against them and stipulate penalties for illegal fills or other prohibited uses of wetlands.

Wetlands Permits

If a determination is made that a proposed development site has wetlands, then an appropriate permit application must be filed with the agency that exercises jurisdiction over the site. In Michigan, permit applications are filed with the MDNR, which makes the initial determination of other jurisdictional authority based on site location and nature of the proposed impacts on wetlands. If the wetland is in a coastal zone, specifically within 1,000 feet of the Great Lakes and connecting waterways, the application is also reviewed by the US Army Corps of Engineers. If the development of the wetland site requires 10,000 cubic yards or more of dredge or fill, 500 feet or more of stream re-alignment or 100 feet or more of stream enclosure, then the EPA also gets a copy of the permit application and may decide to comment on it.

The permit approval requirements of Section 9 of the Wetland Protection Act are very demanding and place the burden of proof on the applicant. Section 9 requires that other feasible and prudent alternatives be preferred to any alteration of the wetland. If the agency can find even a plausible alternative to the applicant's proposed action, it will deny the permit. Consequently, permit applicants, particularly for complex projects, prepare an Alternatives Analysis setting forth all alternative approaches and demonstrating why they are not feasible.

An Alternatives Analysis is essentially a comprehensive, technical document requiring the contributions of many disciplines, which could include:
- ecology -- to determine site quality, ecological significance and provide a functional assessment of the wetland,
- site design -- to present alternative designs, if any are feasible, that avoid wetlands impact,
- engineering (civil, geotechnical & traffic) -- to consider alternative design/construction approaches.

The combined competencies of these disciplines should demonstrate in the Alternatives Analysis document that some wetlands use is an essential part of an optimal solution.

Agency representatives, however, do not always grasp the number and variety of other performance criteria that must be satisfied in a development proposal and reflected as a successful design solution in the proposal. For example, a proposal may include a Remedial Action Plan developed to comply with other state laws such as Act 307 which sets forth procedures for satisfactory site cleanup, but the plan may entail necessary incursion into wetlands to put in an access road or to remediate contaminated soils. Or the proposal may be designed to optimize compliance with certain local master plan, zoning, wetlands, woodlands and watercourse ordinances as well as statutes. But frequently from the perspective of agency representatives the only applicable regulations are the state wetlands protection statutes and rules.

A good example of these conflicting requirements at different governmental levels is the case of a school district that needed to build a new school to accommodate a rapidly growing student population.

Projections clearly showed that only a "fast-track" schedule could bring it on-line in time for new students. Moreover, the school had to be located in a certain area in the district; the proposed site was virtually the only alternative. The proposed site was part oak woods and part "ATV and box spring" wetlands, which was fairly dry in late Spring and Summer but did have a stand of cattails. On the other hand, the oak woods was 50-70 years old, dominated by large trees which were protected by a local ordinance. This wetland was regulated under both state law and a local ordinance. The design of the school required certain standard features, i.e., building envelopes, parking facilities, access roads, sports fields, etc., which made it necessary to develop part of the wetlands.

In their Alternatives Analysis, the school district pointed out that:
- features of the school design were dictated by state-wide design standards and could not be scaled down;
- they were prohibited by local woodlands ordinances from cutting down the oak trees unless they replaced them;
- the oaks represented a 50-70 year natural development, the cattails only a 5-year natural development, and so the oak woods should be preferentially conserved; and
- they had no feasible alternative to impacting the wetlands.

The MDNR, nevertheless, denied the permit at first. The permit, however, was eventually issued after further negotiations and political pressure.

In another case, involving a manufacturing company, the MDNR was willing to grant a permit in accord with its administration of the wetlands statute and rules. The company applied for a permit as part of a remedial action plan for its property to comply with Act 307. It sought to clean up a contaminated site, part of which included a regulated wetland. Since the company was complying with a statute that was public policy and there was no alternative to disturbing the wetland, the permit was granted. However, compensation (per Section 10 of the statute) was required as part of the permit approval and the company had to construct wetland in a nearby upland. Typically, the replacement ratio for such mandated mitigation or compensation is 1 1/2 to 2 times the wetland property affected. The costs for constructing wetlands can range from $10,000 to $50,000 per acre depending on the site. In cases, where wetlands violations have occurred, the agency has stipulated compensation as much as 3 times the wetland loss.

To reduce the risk and uncertainty inherent in any development, especially one with a regulated wetland, it is best to bring together a site development team that includes a qualified ecologist in the earliest stages of the project, and certainly before a final offer is extended. As long as wetlands protection remains public policy, property owners, developers and industries will need to marshal all the knowledge and expertise available to them.

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