Coastal Resiliency

Developing an In-Lieu Sediment Remediation Fee Schedule for Elizabeth River

April 20, 2022 – Proceedings, Battelle Contaminated Sediments Conference

Ram Mohan, P.E., Ph.D., F. ASCE. (Anchor QEA), Mike Palermo (Mike Palermo Consulting), Mike Costello (Barr Engineering Company), Dave Koubsky, Joe Rieger, and Marjorie Mayfield Jackson (Elizabeth River Project)

ABSTRACT: The non-profit, Living River Restoration Trust (the Trust), was established in 2004 as the first sediment mitigation in-lieu fee program in the nation. The Trust is used by permittees to offset impacts associated with new dredging or filling of the river bottom, within the Elizabeth River in Southeastern Virginia, the proceeds of which are then used to fund sediment remediation projects. As part of a new EPA rule, all in-lieu fee programs are required to develop a fee structure for mitigation. To meet this mandate, the authors developed a comprehensive upfront fee structure for compensation in-lieu of executing sediment mitigation on the Elizabeth River. The in-lieu fee must cover costs for the Trust to execute the entire mitigation project, from site characterization through monitoring and maintenance, and also includes risk borne by the Trust when it takes over the responsibility; the challenge being that the “fee” must be set at the beginning of the project while many cost factors are unknown. One key aspect was the need to protect the long-term interests and minimize risk exposure to the Trust, yet develop an in-lieu fee structure that can effectively consider a variety of sites with potentially variable levels of available information. The authors reviewed published literature on cost data for remediation, other supporting documents available for local projects. The authors recommended a tiered approach for setting fees and determining project acceptance by the Trust. This paper discusses details of analysis methodology, recommended fee structure logic and plan for future modifications of the fee structure.

The goal of the Trust was to develop a cost estimate for restoration projects on the Elizabeth River that are in compliance with recent regulations governing in-lieu fees for mitigation. The costs are to cover the entire project from site characterization through monitoring and long term maintenance, if applicable. They are to include the risks born by the Trust when it takes over the responsibility for remediation at a given site, and the value must be set at the beginning of the project while many cost factors are unknown. This goal is especially challenging when estimating remediation in an estuary system with potentially varying river and sediment conditions between various areas/reaches of interest.

Inherent in our analysis is the recognition that the Trust will find itself in the middle between two parties in the in-lieu mitigation program. On one side are the Trust’s obligations which derive from contracts with the original permittee and from the permitting agencies. On the other side are the Trust’s contracts with its service providers Proceedings, 2010 Battelle Contaminated Sediments Conference New Orleans, Louisiana and suppliers. The authors agreed that it will be ideal for the Trust to be able to be able to consider and accept projects, even if additional studies are warranted to adequately characterize the future site risks. This means that it would be ideal to develop a tiered system of project review and acceptance, thus leaving the Trust the option to accept, reject, or defer decision on potential projects, based on site specific data and/or future data needs.