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SECTION III Natural Resources Revolving Fund Plan City of Lino Lakes WSB Project No. 2988-470 Page 10 B. Wetland Credit Compensation Evaluation Upon establishment of wetland banks, the City of Lino Lakes would be responsible for the sale of the bank credits. Selling wetland credits is typically the last step in the wetland permit application process. The first step includes the buyer (applicant) preparing a wetland impact application. During preparation of the application, the applicant will contact bank owners regarding wetland credits for sale in an area defined by the siting requirements that the WCA and/or ACOE determine. Once a bank owner and buyer agree over the purchase price of wetland credits, a Purchase Agreement will be completed and signed by both parties. An earnest money payment may be required. The buyer will then submit the completed applications to the regulatory agencies for review and comment. Following the application review, the agencies will either approve or deny the application. Following approval of an application, the parties will close on the purchase of the credits. During closing, the owner (City of Lino Lakes), buyer, and the Local Government Unit contact will each sign a Withdrawal of Wetland Credits form. These signatures can be electronic. The buyer or their representative will be responsible for obtaining the signatures from all parties and filing the form with BWSR. A transaction fee, in an amount determined by BWSR, will also be required to complete the transaction. The buyer will be responsible for the payment of this fee. Upon receipt of the withdrawal form and transaction fee, BWSR will review and certify the withdrawal and debit the owner’s account. If, following execution of a Purchase Agreement, the buyer does not follow through with the purchase of wetland credits, any required earnest money payment will be handled as follows: • If the permit is denied by the regulatory authorities, the earnest money will be returned to the buyer. • If the permit is approved by the regulatory authorities but the buyer chooses not to purchase credits for another reason, the bank owner (City of Lino Lakes) will keep the earnest money. The management of the wetland bank could be administered either internally or through a contract with a wetland bank broker. A wetland bank broker would work with sellers and manage the preparation of the purchase agreement and closing documents. A wetland bank broker would be paid a fee for their services. The cost of wetland bank credits varies throughout the state and within a county. There are a variety of pricing methods that could be used to determine the price of a bank credit once the bank is established. The price could also fluctuate from year to year based on supply and demand, and could also fluctuate based on volume of credits being sold to a purchaser. The city will adopt a fee for each wetland bank annually. Some methods that could be used to determine the selling price of credits include: • Cost plus– wetland credit price would be based upon the total cost of development, construction, and ongoing maintenance of the bank site plus a fixed fee that would be used toward the restoration of future natural resource areas. • Average bank price – wetland credit price would be based upon the current average bank price for Anoka county banks. Note that estimated sale potential is based on this method ($2/sf in 2016). • Land value – wetland credit price would be based upon the wetland bank fee schedule set by BWSR (Anoka County fee cost per credit/0.065). With regard to determining the cost of the establishment and maintenance of a wetland bank , the city will need to consider each of the following: 1. Acquisition expenses – sites that are not currently owned by the City of Lino Lakes will