02-04-2019 Council Packet - Laserfiche WebLink

Home Search

WS — Item 8 WORK SESSION STAFF REPORT Work Session Item No. 8 Date: February 4, 2019 To: City Council From: Michael Grochala, Community Development Director Re: Sale of Wetland Bank Credits Background The City Council accepted the Natural Resource Revolving Fund Plan in August of 2017. One of the overall goals of the plan was the establishment of the wetland banks to serve as a funding source to implement the City's greenway system. The City currently has two banks in place. Bank No. 1122 (Otter Lake) is located east of I-35E and south of CSAH 14. 1.482 acres of credit are available. This bank is not Army Corp of Engineers (ACOE) approved. Credits can only be used for wetland impacts not under ACOE jurisdiction. Bank No. 1601(Wollan Park) is located west of Lake Drive and north of Main Street. 3.6849 acres of credit are currently available in this bank. This bank is ACOE approved. Credits from both these banks are available for sale on the open market, much like a real estate transaction. Typically developers and/or government agencies, that have projects with wetland impacts, purchase the credits to meet mitigation requirements. The 2015-16 Average Cost per Credit for Major Watershed 20, which we are located in, was $33,377 per acre ($.76 per square foot). Locally, three known transactions over the past three years ranged from 2.40 to 2.75 a square foot. A recent inquiry from a Maple Grove project sold for $2.30 a square foot. ACOE approved credits have a higher value on the market. Proceeds from any sale are proposed to be used in the following way: 1. Repay establishment costs including restoration activities and monitoring. 2. 10% set aside for future maintenance of established banks. 3. New land acquisition and restoration. Credits are purchased throughout the year as project approvals are sought. The City's ability to make a sale is largely dependent on our ability to react to inquires and negotiate a purchase price. All sales are subject to execution of a purchase agreement which in the City's case requires City Council approval.