10-000016 Crp/Hlv Highlands Ranch, L.L.C. vs. St. Johns River Water Management District Status: Closed Recommended Order on Wednesday, May 26, 2010.

Summary: District's methodology for determining number of mitigation bank credits under Uniform Mitigated Assessment Method rule is permissible even though it differs from the methodology used by DEP.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

CRP/HLV HIGHLANDS RANCH, LLC, )

)

Petitioner, )

)

vs. ) Case No. 10-0016

)

ST. JOHNS RIVER WATER )

MANAGEMENT DISTRICT, )

)

Respondent. )

______________________________ )

RECOMMENDED ORDER

Pursuant to notice, this matter was heard before the

Division of Administrative Hearings by its assigned

Administrative Law Judge, D. R. Alexander, on March 10, 11, and

12, 2010, in Jacksonville, Florida.

APPEARANCES

For Petitioner: Frank E. Matthews, Esquire

Eric T. Olsen, Esquire

Julie M. Murphy, Esquire

Hopping, Green & Sams, P.A.

119 South Monroe Street

Tallahassee, Florida 32301-1529

For Respondent: Veronika Thiebach, Esquire

Lisa Zima Bosch, Esquire

St. Johns River Water Management District

4049 Reid Street

Palatka, Florida 32177-2529

STATEMENT OF THE ISSUE

The issue is the number of potential mitigation bank

credits that Respondent, St. Johns River Water Management

District (District), should award Petitioner, CRP/HLV Highlands

Ranch, LLC (Highlands Ranch), based on the application of

Chapter 373, Florida Statutes, 1 and the Uniform Mitigation

Assessment Method (UMAM) contained in Florida Administrative

Code Rule Chapter 62-345. 2

PRELIMINARY STATEMENT

On January 5, 2009, Highlands Ranch filed an application

for a mitigation bank permit to construct, implement, and

perpetually manage a 1,575.5-acre wetland mitigation bank to be

known as the Highlands Ranch Mitigation Bank. The project is

located in Clay County, Florida (County). On November 19, 2009,

the District issued an Individual Environmental Resource Permit

Technical Staff Report (Report), which recommended that the

application be approved and Permit Number 4-019-116094-2 issued

subject to certain conditions. The Report further recommended

that 204.91 total potential UMAM credits be assigned to the

bank. A point of entry to contest the Report was also offered

Highlands Ranch.

On November 25, 2009, Highlands Ranch timely filed a

Petition for Formal Administrative Hearing with the District.

In response to a Motion to Dismiss filed by the District, on

December 18, 2009, Highlands Ranch filed a First Amended

Petition for Formal Administrative Hearing (Amended Petition)

alleging generally that the District had failed to correctly

calculate the number of mitigation credits that should be

awarded, and that it should have been awarded 688.324 total

credits, rather than 204.91. The Amended Petition was referred

by the District to the Division of Administrative Hearings on

January 5, 2010, with a request that a formal hearing be

conducted by an administrative law judge. On February 18, 2010,

the District issued a second Report proposing that the applicant

be awarded 193.56 mitigation bank credits, rather than the

204.91 credits proposed in the first Report.

By Notice of Hearing dated January 13, 2010, a final

hearing was scheduled on March 10-12, 2010, in Jacksonville,

Florida. On March 5, 2010, the parties each filed a unilateral

Pre-Hearing Stipulation (Stipulation). In its Stipulation,

Highlands Ranch reduced the amount of mitigation bank credits

that it contended should be awarded from 688.324 to 425.

At the final hearing, Petitioner presented the testimony of

Timothy A. Hamilton, senior project manager with Environmental

Services, Inc., and accepted as an expert; Michael J. Saylor, a

certified planner and accepted as an expert; Dr. W. Michael

Dennis, president and a senior scientist with Breedlove, Dennis

& Associates, Inc., and accepted as an expert; Calvin Alvarez,

Environmental Administrator, Mitigation Section, Office of

Submerged Lands and Environmental Resource Permitting of the

Department of Environmental Protection (DEP) and accepted as an

expert; Marc Majed El Hassan, a representative of the owner of

the property; and John A. Banks, Jr., a professional engineer

with Geosyntec Consultants and accepted as an expert. Also, it

offered Petitioner's Exhibits 1g1, 1g2, 1g10, 1j, 1oo, 1pp, 1ss,

2-11, 13-18, 25, 26, 30, 32-34, and 36, which were received in

evidence. By agreement of the parties, Petitioner's substituted

Exhibits 18, 30, 32, and 33 were filed on April 27, 2010. The

District presented the testimony of Michelle Reiber, District

Mitigation Banking Technical Program Manager and accepted as an

expert; Jeffrey T. Elledge, Director of the District's

Department of Water Resources and accepted as an expert; Farley

J. Grainger, an appraiser and president of Broom, Moody, Johnson

& Grainger, Inc., and accepted as an expert; Dawn C. Sonneborn,

a certified land planner with the Genesis Group and accepted as

an expert; Joseph P. Loretta, a registered landscape architect

with the Genesis Group and accepted as an expert; and Harry

Clark Hull, Jr., Director of the Environmental Resource Program

with the Southwest Florida Water Management District (SWFWMD)

and accepted as an expert. Also, it offered District Exhibits 1

(consisting of a gopher tortoise relocation plan, hunt

management plan, final figure 9, and final figure 21), 2-5, 8-

10, 12, 13, 22, and 27-31, which were received in evidence.

Finally, the undersigned granted the District's Motion for

Official Recognition of the Applicant's Handbook: Management and

Storage of Surface Waters (Applicant's Handbook or A.H.),

February 16, 2010; Rule Chapters 40C-4, 40C-42, 62-113, and 62-

345; Parts I and IV, Chapter 373, Florida Statutes; the Clay

County Land Development Code; and the Clay County Comprehensive

Plan (Plan).

A Transcript of the hearing (three volumes) was filed on

April 13, 2010. Proposed Findings of Fact and Conclusions of

Law were filed by the parties on April 23, 2010, and they have

been considered in the preparation of this Recommended Order.

FINDINGS OF FACT

Based upon all of the evidence, including the parties'

Stipulations, the following findings of fact are determined:

A. The Parties

1. Highlands Ranch is a Delaware limited liability

corporation registered with the State to do business in Florida.

The application reflects that its offices are located at 9803

Old St. Augustine Road, Suite 1, Jacksonville, Florida.

2. The District is a special taxing district created by

the Florida Water Resources Act of 1972, as codified in

Chapter 373, Florida Statutes. It is charged with the duty to

prevent harm to the water resources of the District, and to

administer and enforce Chapter 373, Florida Statutes, and the

rules promulgated thereunder. These rules include, among

others, Rule Chapters 40C-4 and 40C-42, and the Applicant's

Handbook. In addition, the District is charged with

implementing Chapter 373, Florida Statutes, in part through

application of Rule Chapter 62-345, entitled Uniform Mitigation

Assessment Method and commonly referred to as UMAM. It has

Environmental Resource Permit (ERP) jurisdiction in this matter.

B. Background

3. On January 5, 2009, Highlands Ranch submitted to the

District permit application 4-019-116094-2 for approval of a

mitigation bank on its property located in the County.

4. On November 19, 2009, the District issued its notice of

intent to approve the application and to award 204.91 potential

UMAM credits.

5. On November 25, 2009, Highlands Ranch timely filed its

Petition challenging the proposed agency action. By an Amended

Petition later filed on December 18, 2009, it requested a formal

hearing to contest the District's proposal to award only 204.91

UMAM credits. Instead, it contended that 688.324 credits should

be awarded. In Highland Ranch's Stipulation, however, it

reduced the requested number of credits to 425. In a second

Report issued on February 18, 2010, the District has likewise

reduced the number of credits that it asserts should be awarded

from 204.91 to 193.56. 3 The sole issue in this case is the

number of UMAM credits the District should award Highlands

Ranch.

6. In its Amended Petition, Highlands Ranch generally

contends that the District has misapplied UMAM in evaluating the

application; that UMAM is a standardized procedure for

determining mitigation; that the District's application

incorrectly introduces other variables into the UMAM analysis

not contemplated by the rule; and that the District's

application of UMAM is different from the manner in which DEP,

SWFWMD, and the South Florida Water Management District apply

UMAM.

C. The Property

7. Highlands Ranch proposes to construct, implement, and

operate a mitigation bank on 1,575.5 acres in the County. (The

banking site is a part of a larger 1,800-acre tract purchased by

the applicant for $15 million.) The property is located in the

west central part of the County around three miles south of

County Road 218, southwest of the intersection of Louie Carter

Road and Palmetto Road, and approximately two miles east of the

Bradford County line. Jennings State Forest lies to the east,

Camp Blanding Military Reservation (a Florida National Guard

training facility) lies to the south, and a titanium mine abuts

the property to the west. The property is within the District's

jurisdictional territory.

8. The mitigation bank property consists of approximately

1023.50 acres of uplands and 552 acres of wetlands and is

located within the Northern St. Johns River and Northern Coastal

Mitigation Drainage Basins.

9. The bank site lies at the confluence of the proposed

Camp Blanding/Osceola Greenway and the proposed North Florida

Timberlands and Watershed Reserve. These greenways are

currently listed as desirable parcels for acquisition through

the Florida Forever program, a conservation and recreation land

acquisition program which is implemented by DEP, but acquisition

and implementation of these greenways have not been completed.

The acquisition of the Florida Forever parcels is intended to

conserve natural resources, provide habitat to a number of

listed species, and establish protected corridors between

previously-acquired public lands. The property has also been

identified as a Priority 1 category in the Century Commission's

Critical Lands and Waters Identification Project (CLIP), a

database of statewide conservation priorities which was

developed to rank the relative importance of the Florida

landscape in terms of biodiversity, landscape, and water

resources.

10. At the present time, portions of the site are utilized

for pine production, and have been for decades. Parts of the

property have been subjected to typical pine plantation

management activities including removal and suppression of

native vegetation, application of herbicides and fertilizers,

installation of bedding and furrows, construction of trail roads

and ditches, and fire suppression. Timber stands on the site

vary in age from ten to twenty-five years, and the planted pines

within parts of the property have been recently harvested.

11. Much of the community types present on the site have

been altered from their native community type by the above-

described historic and on-going silviculture activities. The

existing communities present on the site include approximately

991 acres of mesic and xeric pine plantation, 224 acres of

hydric pine plantation, 328 acres of isolated and contiguous

wetlands, and 32.40 acres of trail roads, electric easements,

and structures. Most of the onsite wetlands are associated with

two named creek systems, Boggy Branch Creek and the Tiger Branch

Creek, which are oriented in a west-to-east direction on the

property. Boggy Branch Creek is located in the northern portion

of the property, while Tiger Branch Creek is located in the

southern part of the site. Both of these creek systems flow

offsite to the east into the North Fork of Black Creek, which

flows northward, ultimately reaching the St. Johns River.

12. The current County land use designation of the

property is Agriculture. This designation allows the

construction of one dwelling unit per twenty gross acres with a

maximum cap of fifty residential building permits per site per

year. The County's Future Land Use Map (FLUM) indicates that

there are approximately thirty-seven acres of Conservation

Overlay on the property. The density of the overlay area is

limited to one dwelling unit per hundred acres.

13. The current zoning on the property is also Agriculture

(AG). This zoning category was established for the protection

of agriculture as a major industry. This includes the

prevention of encroachment on agriculture lands by incompatible

uses and the protection of watersheds, water supplies,

wilderness and scenic areas, and conservation and wildlife

areas.

14. The AG zoning category provides for a range of

acceptable permitted uses within that category, ranging from

single-family dwellings with agricultural accessory uses to

storage of heavy equipment and plant nurseries. There are also

a range of conditional uses within the AG zoning category, which

are allowable, subject to the satisfaction of additional

criteria specified within the zoning regulations, after approval

by the County. These include, among others, a Class III trench

sanitary landfill, in which debris is buried and leveled at the

ground surface.

15. In order to use the property for an above-ground Class

I landfill, rezoning of the property by the County would be

necessary. If it does not secure a desirable amount of

mitigation credits, Highlands Ranch has indicated it will seek

to use the uplands part of the property as a Class I landfill.

The County has issued a Request for Qualifications (RFQ) for

entities interested in operating a Class I landfill in the

County, but no site has been selected or rezoned as of this

date. See Petitioner's Exhibits 15 and 16. Pursuant to the

RFQ, and through its consultant, Highlands Ranch has performed a

preliminary site suitability analysis for the property. See

Petitioner's Exhibit 17. It has also received a "letter of

interest" from Waste Management, Inc., concerning the placement

of a landfill on the site. Whether Highlands Ranch's site would

be selected by the County, whether a rezoning application would

be successful, and whether a permit would then be issued by the

appropriate regulatory authority, is speculative at this point.

On the other hand, the District's experts opined that based upon

a highest and best use analysis, silviculture is a more likely

interim use of the property until market conditions change to

increase the demand for large-lot, single-family developments.

D. Mitigation Bank Permits

16. A mitigation bank is defined in Section 373.403(19),

Florida Statutes, as "a project permitted under s. 373.4136

undertaken to provide for the withdrawal of mitigation credits

to offset adverse impacts authorized" by an ERP issued under

Part IV, Chapter 373, Florida Statutes. (A mitigation bank

permit is a type of ERP.) Section 373.4136(1), Florida

Statutes, authorizes the District to require a permit to

establish, implement, and operate a mitigation bank. The bank

then stores credits, and when a developer fills wetlands, and is

legally required to replace them, he can purchase the banked

wetland credits from the "banker" (in this case Highlands Ranch)

and use them to meet the mitigation requirements. Mitigation

banks are intended to "emphasize the restoration and enhancement

of degraded ecosystems and the preservation of uplands and

wetlands as intact ecosystems." § 373.4135(1), Fla. Stat., and

§ 12.4.1, A.H. When establishing a bank, the District's ERP

rules specifically recognize preservation, enhancement, and

restoration as separate forms of mitigation. See §§ 2.0(r),

(pp), and (vv), A.H. Preservation as a form of mitigation "will

most frequently be approved in combination with other mitigation

measures." § 12.3.2.2., A.H.

17. Under Section 373.4136(4), Florida Statutes, a

mitigation bank is to be awarded a number of mitigation credits

by the permitting agency. A mitigation credit is a "standard

unit of measure which represents the increase in ecological

value resulting from restoration, enhancement, preservation, or

creation activities." Fla. Admin. Code R. 62-345.200(8). The

number of mitigation credits must be "based upon the degree of

improvement in ecological value expected to result from the

establishment and operation of the mitigation bank as determined

using a functional assessment methodology." § 373.4136(4), Fla.

Stat. Ecological value is defined in Rule 62-345.200(3) as:

the value of functions performed by uplands,

wetlands and other surface waters to the

abundance, diversity, and habitats of fish,

wildlife, and listed species. Included are

functions such as providing cover and

refuge; breeding, nesting, denning, and

nursery areas; corridors for wildlife

movement; food chain support; natural water

storage, natural flow attenuation, and water

quality improvement which enhances fish,

wildlife, and listed species utilization.

The District has adopted a substantially similar provision in

Section 12.4.5(b), Applicants Handbook.

18. After mitigation credits are awarded, a credit release

schedule is set for the mitigation bank. See § 373.4136(5),

Fla. Stat.

19. The statutory criteria for reviewing and acting on an

application for a mitigation bank permit are set forth in

Section 373.4136, Florida Statutes. The District has also

adopted rules governing the establishment and operation of

mitigation banks which are contained in Rule Chapter 40C-4 and

Section 12.4 of the Applicant's Handbook.

E. The Application

20. Highlands Ranch is proposing to place a conservation

easement over the mitigation bank property and to conduct

enhancement activities in those areas of the property needing

improvement as a result of current land uses. Generally, it

proposes to cease all pine production practices and cutting of

cypress and hardwood trees after the permit is issued. It has

also proposed to improve hydrologic conditions on the property

by removing a trail road, installing four low water crossings,

and removing pine bedding and furrows within all areas planted

with pine on the property. Finally, supplemental plantings of

appropriate canopy species will be conducted. The project will

be implemented in three phases: Phase 1 (554.52 acres); Phase 2

(547.42 acres); and Phase 3 (473.55 acres).

21. The parties agree that Highlands Ranch has satisfied

all requirements in the Applicant's Handbook relating to a

conservation easement, District access to the property, a letter

of credit, title insurance, a boundary survey, and mitigation

bank activities.

22. The parties further agree that Highlands Ranch has

provided reasonable assurance that all statutory and rule

requirements have been met, and that it meets the requirements

for the issuance of an ERP to establish and operate a mitigation

bank. The only dispute is the number of credits that it should

be awarded. The difference in the credits proposed by the

parties is based upon how they interpret and apply the UMAM

rule. Although conflicting evidence was presented by the

parties on this issue, the more persuasive evidence supports a

finding that the methodology used by the District is appropriate

under the facts presented herein, and that the number of credits

that it proposes to award the applicant should be accepted.

F. The UMAM Process

23. When an applicant proposes to establish a mitigation

bank, it must submit the necessary supporting information for

the application of Rules 62-345.400, 62-345.500, and 62-345.600.

This information generally includes the current site conditions,

the mitigation plan, and how the applicant expects the

mitigation plan to result in ecological gain.

24. Once an application is filed, the District's

responsibility is to verify this information and apply the

assessment method described in the UMAM rule to determine the

potential amount of mitigation credits to be awarded. See Fla.

Admin. Code R. 62-345.300(1). Here, before completing the UMAM

sheets, the District performed a review of the application,

conducted multiple site inspections, met with the applicant's

consultants, submitted requests for additional information, and

reviewed other resources such as the Natural Resources

Conservation Service soil maps for the area, the UMAM Training

Manual, aerial photographs, and the Florida Forever acquisition

list.

25. Section 373.414(18), Florida Statutes, provides in

part that DEP "and each water management district responsible

for implementation of the environmental resource permitting

program shall develop a uniform mitigation assessment method for

wetlands and other surface waters" that would provide "an

exclusive and consistent process for determining the amount of

mitigation needed." Once adopted, the method is "binding on the

department, the water management districts, local governments,

and any other governmental agencies." Id. In 2004, pursuant to

the mandate of the statute, DEP adopted Rule Chapter 62-345,

entitled UMAM. UMAM is the sole means for determining the

amount of mitigation credits to award to mitigation banks

receiving permits after 2004 and applies to Highlands Ranch's

application. See §§ 373.414(18) and 373.4136(4), Fla. Stat.

26. Highlands Ranch argues that the use of the words

"consistent" and "uniform" in Section 373.414(18), Florida

Statutes, means that DEP's methodology for implementing the UMAM

rule is the only acceptable method that can be used. However,

the DEP Environmental Administrator in charge of policy and

oversight for all rules relating to mitigation, including UMAM,

stated that the District's method, while different in some

respects from the method used by DEP, is still "allowable under

the rule," given the rule's variables. 201. The DEP expert

described UMAM as a "framework" in which a number of variables

come into play, and that besides using biological and ecological

data, the assessor must also use "reasonable scientific judgment

and [his or her] best professional judgment" in performing the

assessment. Therefore, even though UMAM is a "standardized" or

"uniform" procedure, it can be reasonably inferred that within

the rule's broad framework, an assessor, using reasonable

scientific judgment and his or her best professional judgment,

has some leeway in applying the rule, and as is the case here,

two assessors can obtain two different results on the same

property. Notably, the SWFWMD also interprets the rule in the

same manner as the District. The method used by the District in

this case and by SWFWMD, although different from DEP, has never

been questioned by DEP, and DEP has never advised either agency

to modify or change its approach. Further, there are no DEP

final orders or other precedent approving or disapproving either

methodology proposed by the parties. Finally, Highlands Ranch's

expert, Dr. Dennis, agreed, with certain limitations, that there

is "some flexibility" in the UMAM rules in terms of using

"reasonable scientific judgment."

27. In general terms, the UMAM is designed to assess any

type of impact and mitigation of wetlands and wetlands

functions, including the evaluation of mitigation banks, and it

provides a framework for statewide standardized wetland

assessment across community type. A qualitative

characterization of the property (known as a Part I evaluation)

is first conducted by the assessor by dividing the property into

assessment areas for wetlands and uplands and completing a Part

I evaluation and score sheet for each assessment area. See Fla.

Admin. Code R. 62-345.200(1) ("'[a]ssessment area' means all or

part of a wetland or surface water impact site, or a mitigation

site, that is sufficiently homogeneous in character, impact, or

mitigation benefits to be assessed as a single unit"). Under

Part I, the assessment areas must be described in sufficient

detail to provide a frame of reference for the type of community

being evaluated and to identify the functions that will be

evaluated. See Fla. Admin. Code R. 62-345.400. Each area

description must include the size of the area, its native

community type, and the functions it could optimally provide to

fish and wildlife and their habitat. Id. This Part must be

completed before scoring the assessment area in Part II, since

the frame of reference will be used to determine the degree to

which the assessment area provides those functions and the

amount of function lost or gained by the project. A correct

determination of the appropriate assessment areas is important

as this affects the acreages that will be scored in the Part II

evaluation, which in turn affects the determination of the

number of credits to be awarded to the bank.

28. Using the frame of reference established in Part I,

the assessor is then required to score the amount of functional

gain that will be achieved by implementation of the types of

mitigation to be conducted on the property. See Fla. Admin.

Code R. 62-345.500(1). Under the Part II evaluation, wetland

assessment areas are evaluated in three categories or indicators

of function, scored numerically on a scale from 0 to 10 (where

10 indicates a minimally impaired system): location and

landscape support; water environment; and community structure. 4

See Fla. Admin. Code R. 62-345.500(6). Upland assessment areas

are only scored for two indicators of function: location and

landscape support and community structure. See Fla. Admin. Code

R. 62-345.500(2). The rule then sets forth in a detailed manner

how the assessor calculates the functional gain for each area to

obtain the potential number of banking credits. The primary

reasons for the credit award differences by the parties in this

case are the District's use of a two-step approach, while

Highlands Ranch used a one-step approach, 5 and the fact that the

District gave a much smaller amount of functional gain for the

location and landscape support category for upland enhancement

mitigation activities than did the applicant.

G. The District's Assessment

a. Part I Assessment

29. The District first identified eleven geographic areas

on the property and grouped them into seven mitigation

assessment areas. It then completed a Part I evaluation and

score sheet for each assessment area. The District made the

determination that each assessment area was sufficiently

homogeneous in character to be assessed as a single unit based

on information received from the applicant during the review

process, including historic aerial photographs and soil maps;

observations during three, six-hour site visits in March and

June 2009 and January 2010; a review of literature and

information, including some related to community types; and

designations of the site as a potential acquisition parcel

through a program such as the Florida Forever program. All of

the assessment areas on the property are mitigation sites since

this is an application for a mitigation bank.

30. The seven assessment areas (and their target community

and acreage) identified by the District for the Part I

assessment are: Wetland Enhancement - Wetland Forested Mixed

Wetlands 1 and 2 (W1 and W2 - 223.8 acres); Bay Swamp -

Preservation with minor enhancement W3 and W4 (42.4 acres);

Stream and Lake Swamp - Preservation with minor enhancements W5

and W6 (239.8 acres); Wetland Enhancement - Wetland Forested

Mixed W7 and W8 (43.9 acres); Stream and Lake Swamp -

Restoration W9 (0.5 acres); Upland 1 (U1) Pine Plantation to

Longleaf Pine Xeric Oak (203.94 acres); and Upland 2 (U2) Pine

Plantation to Upland Pine Forest/Pine Flatwoods (786.98 acres).

The specific locations, native community type, and acreage for

each area are found in District Exhibit 3. (In contrast,

Highlands Ranch's expert, Dr. Dennis, identified eleven wetlands

and uplands areas grouped into the following six assessment

areas: W1 and W2 (257.44 and 2.86 acres); W7 and W8 (45.17 and

5.24 acres); W3 and W4 (28.28 and 1.57 acres); W5, W6, and W9

(209.85, 1.81, and 0.58 acres); U1 (291.69 acres); and U2

(699.21 acres). See Petitioner's Exhibit 11.) Despite the

differences in the size and characteristics of the parties'

assessment areas, another Highlands Ranch consultant,

Mr. Hamilton, agreed that the District's acreage and native

community type for each area were correct. The District's site

inspections were also attended by members of the Interagency

Review Team (IRT), made up of representatives of the District

(whose mitigation banking manager is co-chair), United States

Army Corps of Engineers, United States Fish and Wildlife

Service, National Marine Fisheries Service, and the United

States Environmental Protection Agency. The record does not

show that any IRT member objected to the District's identified

assessment areas or designated native community types.

31. Dr. Dennis disagreed with the native community type

identified by the District for several of the wetlands on site.

For example, on the Wetland Enhancement - Wetland Forested Mixed

W1 area, he identified the native community type of the wetlands

lying adjacent to Boggy Branch and Tiger Creek as wet pine

flatwoods, as opposed to the District's designation of Wetland

Forested Mixed/Hydric Hammock, which is a combination of pine

and hardwoods. However, Dr. Dennis' identification is not

consistent with the generally accepted description of a pine

flatwoods community, which generally occurs on flat terrain.

There is a 70-foot drop in elevation across the mitigation bank

property, and the slope is particularly significant in the W1

areas. Also, the current silviculture conditions on this area

are able to support hardwoods, and the natural vegetation

occurring in the area is a hardwood type of vegetation.

32. Dr. Dennis further criticized the District's use of

only a code number from the Florida Land Use and Cover

Classification System (FLUCCS) to describe the target community

on each area and contended that more detail was needed to comply

with the rule. The difference in descriptions used by the

parties can be found when comparing Petitioner's Exhibit 11 and

District Exhibit 3. Specifically, besides using a FLUCCS code,

Dr. Dennis also provided a more detailed description of the

plant species, soils, and canopy in the Assessment Area

Description section of the form. He also differed in his

descriptions of the functions, historic use, uniqueness, and

hydrologic connections of the property. While the District's

expert agreed that the lengthier descriptions used by Dr. Dennis

in his Part I assessment were "more helpful" to someone

unfamiliar with the UMAM process, she established that it is not

necessary to provide more detail here than a FLUCCS code and the

type of narrative used by the District on the Part I form.

These codes, together with the District's more succinct

assessment area descriptions, were sufficient information to

enable the District, as the assessor, to properly evaluate and

score the assessment area's functions, as required by the rule.

33. Dr. Dennis also identified different acreages for the

upland assessment areas U1 and U2 based on the boundaries of the

native community types. (Dr. Dennis determined the size of the

U1 and U2 areas to be 291.69 and 699.21 acres, respectively,

while the District determined the areas for U1 and U2 to be

203.94 and 786.98 acres, respectively.) However, community

boundary lines in the environment are not distinct lines or

boundaries as one would see on a map. Where the same plant

species are found in two adjacent communities, and the soil

types and characteristics are similar, it is not uncommon for

two ecologists to have a different interpretation as to where

community boundaries should be placed.

34. The evidence supports a finding that the District's

characterization and acreage for each assessment area were

reasonable, should be accepted, and provide a sufficient frame

of reference to use in the Part II evaluation of the property.

b. Part II Assessment of Wetlands

35. Using the frame of reference established in Part I,

the District was then required to score the amount of functional

gain that will be achieved by the implementation of the types of

mitigation to be conducted on the property. For each wetland

area identified under Part I, the District first evaluated the

functional gain of preserving the wetland assessment area and

then scored the additional functional gain that would result

from the enhancement or restoration activities proposed for that

assessment area. This type of process, which evaluates the

functional gain associated with each type of mitigation, is

referred to as a "two-step approach" under UMAM and is the

primary focus of the controversy. Using this approach, the

District prepared a Part II score sheet for both preservation

and enhancement. In contrast, Highlands Ranch used a "one-step

approach," which scored any area that would be both preserved

and enhanced (restored) only as enhancement (restoration) under

UMAM and did not apply or conduct the analysis for preservation.

While the two-step process is not specifically described in the

rule, given the variables in the rule, DEP's acknowledgement

that the District's methodology is "allowable," and the leeway

in the rule itself, the District's two-step methodology is found

to be permissible and has been accepted.

36. For preservation, the District evaluated each wetland

assessment area to be preserved under the "without preservation"

condition and the "with mitigation" condition with regard to

three indicators: location and landscape support; water

environment; and community structure. A "'with mitigation'

assessment means the outcome at an assessment area assuming the

proposed mitigation is successfully completed," while a

"'without preservation assessment' means the reasonably

anticipated outcome at an assessment area assuming the area is

not preserved." Fla. Admin. Code R. 62-345.200(11) and (12).

37. When assessing preservation, the "without

preservation" assessment evaluates an "assessment area's

functions with regard to the three indicators, considering the

extent and likelihood of what activities would occur if it were

not preserved, the temporary or permanent effects of those

activities, and the protection provided by existing easements,

restrictive covenants or state, federal and local rules,

ordinances and regulations." Fla. Admin. Code R. 62-

345.500(3)(a). When assessing preservation, the "with

mitigation" assessment is scored with regard to the indicators

after considering "the potential of the assessment area to

perform current functions in the long-term considering the

protection mechanism proposed." Id. The gain in ecological

value for each assessment area is determined by the mathematical

difference between the Part II scores for the "without

preservation" and the "with mitigation" conditions (referred to

as the "delta") multiplied by a preservation adjustment factor

(PAF). Id. For each of the three indicators, the District

evaluated the applicable considerations set forth in Rule 62-

345.500(6)(a)-(c).

38. For areas proposed to be restored or enhanced,

Highlands Ranch's one-step approach did not consider what would

happen to the property if it were not preserved. Under the

District's two-step approach, however, which considers

preservation as a form of mitigation, the "without preservation"

assessment considers "the extent and likelihood of what

activities would occur if it were not preserved." Fla. Admin.

Code R. 62-345.500(3)(a). On this issue, the evidence is

sharply conflicting. The more persuasive evidence supports a

finding that the property will more than likely continue to be

managed for timber production, and the adjacent uplands outside

of each wetland assessment area will in the long term more than

likely be developed as low density residential development. The

owner's contention that the most likely scenario for future use

of the property is a Class I regional landfill has been rejected

as being highly speculative at this point, given the difficult

hurdles the applicant must overcome in order to secure zoning

and permit approval for that type of activity.

39. Preserving the wetlands on the property will prevent

silvicultural activities within each assessment area and, with

the implementation of the proposed mitigation bank, each wetland

assessment area will be adjacent to protected uplands, rather

than residential development that would likely otherwise occur.

Therefore, the landscape support of each wetland assessment area

will improve. The District recognized this improvement by

awarding a one-point increase in the location and landscape

support indicator for the preservation of wetland assessment

areas W1 through W8.

40. The District also recognized improvements in the

community structure that would occur as a result of a wetland

assessment area's preservation by awarding a one-point and two-

point increase in the community structure indicator for wetland

assessment areas W1, W2, W5, W7, and W8, and for W3, W4, and W6,

respectively.

41. The District did not award any increase in the score

with regard to the water environment indicator for the

preservation of wetland assessment areas W1 through W8. In

areas W1 and W2, recording a conservation easement could improve

some of the water environment through natural erosion and

degradation of the silvicultural beds over a long period of

time, which would eventually fill the furrows. The water

environment would also be improved by successional vegetative

processes. However, Highlands Ranch has proposed to speed up

the lengthy natural process in these areas by vegetative

thinning and flattening the silvicultural beds and furrows.

Therefore, the District accounted for these improvements in the

water environment being implemented on a faster schedule when it

scored these areas for enhancement. No water environment

improvements will occur due to preservation of the remaining

areas.

42. No preservation value was awarded for assessment area

W9 (0.5 acres) since this is an existing road and gains in the

ecological value will be achieved through the restoration

activities proposed by Highlands Ranch.

43. After the scores for the preservation of areas W1

through W8 were prepared, the District determined the

appropriate PAF for each assessment area. Fla. Admin. Code R.

62-345.500(3)(a). The PAF is scored on a scale from zero (no

preservation value) to one (optimal preservation value) on one-

tenth increments. Id. The PAF is essentially a way to value

the preservation area. The District determined each PAF by

weighing the relative significance of each of the five

considerations set forth in Rule 62-345.500(3)(a)1.-5. These

considerations are not given equal weight since they are weighed

based on applicability and relative significance. Id. One of

the considerations is "[t]he extent and likelihood of potential

adverse impacts if the assessment area were not preserved."

Fla. Admin. Code R. 62-345.500(3)(a)5. The District gave

considerable attention to this criterion. In assessing the

potential adverse impacts, the District retained expert land

planners and appraisers to evaluate the threat of development.

Although Highlands Ranch pointed out that the District has never

before retained such experts to review mitigation bank

properties for this purpose, there is nothing in the rule that

prevents the District from doing so when considering this

criterion. The fact that land use considerations do not involve

pure "scientific judgment" does not invalidate the analysis

since an assessor must use not only "scientific judgment" in the

UMAM process, but also "professional judgment." By assuming

that a rural residential development was the most likely future

use, the District applied a PAF of less than one to every

assessment area except W9 (0.5 acres), an existing road and

bridge, which reduced the number of credits.

44. After scoring the functional gain associated with the

preservation of the wetland assessment areas, the District then

scored the functional gain that would be achieved from the

proposed enhancement activities in areas W1 through W8 and

restoration activities in area W9.

45. To determine the functional gain associated with

proposed enhancement or restoration activities, the District

scored the "current condition" and the "with mitigation

condition" with regard to the three indicators and then applied

an appropriate time lag and risk factor to each assessment area.

The District did not apply the PAF when it scored the functional

gain associated with the enhancement or restoration of an

assessment area.

46. Time lag is a measure of how long it will take to

achieve the scores given to the indicators in the "with

mitigation" condition. The District determined the time lag

after considering the activities proposed in a particular

assessment area. Fla. Admin. Code R. 62-345.600(1)(d). For

example, the time lag assigned to area W1 was 1.92 (which

equates to 21 to 25 years) since the native community is Wetland

Forested Mixed, and the applicant has proposed supplemental

planting with hardwood trees that will need time to grow and

develop a canopy and achieve the "with mitigation" conditions.

47. Risk is a measure of uncertainty that the proposed

conditions for an assessment area are going to be achieved.

This determination was made by the District in accordance with

the six factors set forth in Rule 62-345.600(2)(a)-(f).

48. The total functional gain of all of the wetland

preservation, enhancement, and restoration activities proposed

for the property is 45.76 credits. See District Exhibit 29, p.

2. The number of credits (functional gain) associated with each

area was derived by multiplying the relative functional gain for

each area by the acreage of the assessment area. The summary

table in District Exhibit 29 contains the scores for each of the

three relevant indicators and factors (PAF, risk, and time lag)

and the functional gain and relative functional gain. These

scores and values have been accepted as being the most

persuasive on this issue.

c. The District's Part II Evaluation of Upland Areas

49. Under UMAM, upland mitigation assessment areas are

scored using only two of the three indicators: location and

landscape support and community structure. See Fla. Admin. Code

R. 62-345.500(2). Scoring of these indicators must be based on

"benefits provided to the fish and wildlife of the associated

wetlands or other surface waters, considering the current or

anticipated ecological value of those wetlands and other surface

waters." Id.

50. Although there are two types of upland communities on

the property, for the Part II evaluation of upland areas, the

District combined the U1 and U2 assessment areas. The applicant

did not combine its two upland areas and contended this action

contravenes the UMAM rule. The areas were combined because the

District views the primary consideration under the rule to be a

determination as to how the uplands as a whole benefit the fish

and wildlife of the associated wetlands. The combining of the

two areas for assessment purposes was not shown to be

unreasonable or inappropriate.

51. Given the configuration and characteristics of the

property, the District determined that certain uplands on the

property provide greater benefits to the wildlife of the

adjacent wetlands than others. Accordingly, the District

determined that uplands located within 500 feet of the wetlands

provided greater benefits to the fish and wildlife of the

associated wetlands than those located more than 500 feet away.

Therefore, a further subdivision of the upland areas was made by

dividing the combined Part I upland areas (U1 and U2) into two

Part II assessment areas, one encompassing the uplands located

within 500 feet of the associated wetlands on the property and

the second encompassing uplands located more than 500 feet from

the associated wetlands on the property.

52. Highlands Ranch criticized this division of the upland

areas, contending that a 500-foot division line is arbitrary and

that the District has never made a similar division in prior

mitigation bank cases. The decision to divide the uplands into

areas within 500 feet of the wetlands and more than 500 feet

from the wetlands is supported by guidance provided in the UMAM

Training Manual. See Petitioner's Exhibit 18. The manual cites

a number of studies, including one in neighboring St. Johns

County, which indicates that of the approximately 200 wetland-

dependent native wildlife species listed, only about 25 percent

of the species have spatial habitat requirements that extend

more than 500 feet from the wetlands. Id. at p. 89. 6 The site's

unique characteristics provide further support for the

District's decision to divide an upland assessment area in this

manner. Approximately sixty percent of the property is uplands,

with a greater majority of the uplands more than 500 feet from

the adjoining wetlands. Finally, the approach recommended by

Highlands Ranch ( i.e. , no division) would mean that the uplands

closest to the wetlands provide the same amount of benefits as

those located further away. This produces an unreasonable

result, given that the majority of the uplands are more than 500

feet from the wetlands, and some are more than 1,000 feet away.

53. The District further subdivided each of the two Part

II upland areas by determining the acreage of "total impact" and

of "partial impact" based on the assumption that there would be

a rural residential development on the property if the site was

not preserved. This was done because the UMAM rule provides

that the assessor must evaluate assessment areas that are to be

preserved in a "without preservation" scenario. In the "without

preservation" scenario, Rule 62-345.500(3)(a) provides that the

District

shall evaluate the assessment area's

functions considering the extent and

likelihood of what activities would occur if

it were not preserved, the temporary or

permanent effects of those activities, and

the protection provided by existing

easements, restricted covenants or state,

federal or local rules, ordinances and

regulations.

54. In accordance with the rule, the District determined

that a low-density residential equestrian development was the

most likely harmful activity that would occur if the property

were not preserved. This determination was based on the

information provided by Highlands Ranch during the application

review process, which included a representation by the applicant

that one potential use of the property would be an equestrian

type low-density development; a review of aerial photographs;

observed activities in the area surrounding the property; review

of local ordinances; the County Plan, including the FLUM, and

zoning and density regulations; and information and analysis

provided to the District by both its expert appraiser and

planner.

55. The areas described as "total impact" refer to the

acreage of the upland assessment areas that would become

impervious surface and would have no functional value if the

property were developed as a low-density residential equestrian

development. The areas described as "partial impact" refer to

the remaining areas of the low-density development where some

impacts would occur because the areas would comprise portions of

the residents' lots. However, these areas would not result in a

complete functional loss and would still have some habitat value

for the wildlife utilizing the wetlands on the property proposed

for the mitigation bank.

56. To determine the acreage of total impact area, the

District identified and reviewed several residential equestrian

projects in northeast Florida that it had previously permitted.

It then performed an analysis to determine an average acreage of

impervious surface associated with these types of developments.

Using this approach, it was determined that 35.4 acres of

impervious surface would be associated with this type of

development on the property if it were not preserved. This

acreage was then used to determine the percentage of impervious

surface in the 1023.50 acres of uplands would be 3.46 percent.

This percentage was applied to the upland assessment areas.

57. The uplands without the proposed conservation easement

are anticipated to become impervious surface were assigned a

score of zero in the "without preservation" condition for the

two indicators applicable to uplands. As impervious surface,

these uplands will not provide any community structure

functions. Under Rule 62-345.500(2)(a), "when the community

structure is scored as 'zero', then the location and landscape

support shall also be 'zero.'" In the "with mitigation"

condition, these uplands would consist of preserved upland pine

forest and long-leaf pine oak communities that have been

subjected to pine-plantation silvicultural practices for many

years. For this condition, the uplands located greater than

500 feet away from the wetlands were assigned a score of six for

community structure and five for location and landscape support.

Likewise, the uplands located 500 feet or less away from the

wetlands were assigned a score of six for community structure

and nine for location and landscape support.

58. The uplands that would be partially impacted if they

are not preserved were also scored with regard to the location

and landscape support and the community structure indicators.

In both the "with mitigation" and the "without preservation"

conditions, the District scored the location and landscape

support of those uplands located within 500 feet of the

associated wetlands as nine and those uplands located greater

than 500 feet from the associated wetlands as five. The

community structure for those uplands was assigned a score of

four in the "without preservation" condition and six in the

"with mitigation" condition.

59. The District then scored the enhancement activities

proposed for each of those areas and applied a time lag and risk

factor to each enhancement area. It assigned the same score of

nine in the "current condition" and in the "with mitigation"

condition for the location and landscape support indicator for

those uplands located within 500 feet or less of the wetlands

and a score of five in those two conditions for those uplands

located more than 500 feet from the wetlands. The District

scored the community structure indicator as six in the "current

condition" and as nine in the "with mitigation" or enhanced

condition. The "current condition" scores for enhancement of

the uplands for both of these indicators reflect that these

uplands will have been preserved before they are enhanced.

60. Finally, the District determined that the functional

gain of the upland assessment areas associated with the

preservation and enhancement activities proposed by Highlands

Ranch is 147.80 credits, or 0.15 credit per acre. (In contrast,

Highlands Ranch's expert calculated 291.99 credits, or 0.29

credit per acre, for the U1 and U2 areas, almost twice as many

as the District.) The scores, including the relevant adjustment

factors (PAF, time lag, and risk) are set forth in District

Exhibit 29 and are hereby accepted.

61. Highlands Ranch criticized the District's decision to

not award any increase in score in the location and landscape

support indicator for preservation of the uplands that would be

partially impacted in the "without preservation" condition, and

the enhancement of the upland assessment areas. Of the eight

subdivided upland areas, six had the same score for the without

mitigation/without preservation condition and with mitigation

condition for the location and landscape support indicator.

This resulted in the District awarding zero "lift" (improvement

in ecological function provided by the proposed mitigation

activities) for improvements in location and landscape support

for approximately sixty percent (956.81 acres) of the site. In

contrast, Dr. Dennis awarded lift to the uplands primarily

because the site is located within the priority one parcel

category in the CLIP.

62. The District's determination not to increase the score

for the upland assessment areas was appropriate because the

focus of the evaluation of uplands under UMAM is the benefits

that they provide to the fish and wildlife of the associated

wetlands. The preservation of these uplands through a

conservation easement and their enhancement will not change the

level of protection of wetland functions that they provide due

to their location in the landscape. The District considered

this level of protection to be significant for uplands located

within 500 feet of the wetlands and moderate for uplands located

more than 500 feet away from the wetlands, both in the "without

preservation" and the "with mitigation" condition. On the other

hand, the District recognized that the easement and enhancement

activities will result in improvements in community structure

and gave credit for these improvements when it scored that

indicator for the uplands in the "with mitigation" condition for

preservation and then in the "with mitigation" condition for

their enhancement.

63. Highlands Ranch's Part II assessment generated more

than two-thirds (291.99) of its total requested bank credits

(425) from enhancement activities proposed in the uplands. If

this assessment were accepted, the amount of credits generated

from uplands would be sufficient to offset the destruction of

85 percent (496.2 acres) of the wetlands, including all of the

wetlands associated with Boggy Branch Creek and Tiger Branch

Creek. Because most of the value of this site comes from the

wetlands, with the uplands providing supplemental value,

preservation of the uplands cannot be worth more than the

wetlands they are protecting. In other words, uplands cannot

provide or replace all of the functions that wetlands provide to

fish and wildlife. For this reason, the applicant's assessment

of uplands is found to produce an unreasonable result.

64. Another significant difference between the parties'

scoring is found in the community structure indicator for the

upland areas. In its analysis, Highlands Ranch gave a score of

three for the community structure indicator of the areas

designated as U1. This would mean that the level of function

provided by the existing vegetative community to benefit fish

and wildlife in the associated wetlands is currently only thirty

percent of that provided by the optimal level. (A score of ten

is an optimal level of function.) To justify a score as low as

four for this indicator, or one point higher than the score

assigned by the applicant, the U1 area should have a

predominance of the following characteristics: the majority of

plant cover is by inappropriate, undesirable plant species,

invasive exotic plant species, or other invasive plant species;

minimal evidence of regeneration or natural recruitment;

atypical age and size distribution of the system; coarse woody

debris and the like; poor plant condition; alteration of natural

structures or introduction of artificial features; reduction in

extent of topographic features; a moderate degree of siltation

or algal growth in submerged aquatic plant communities; and only

a "moderate" level of support for fish and wildlife. See Fla.

Admin. Code R. 62-345.500(6)(c)1.c.I-X. Therefore, under UMAM,

a score of four would mean at least a minimal level of support

of wetland/surface water functions, while a three would

logically mean less than minimal. In scoring the combined U1

and U2 areas for this indicator, the District assigned higher

scores, depending on whether the uplands were identified as

total or partial impact, and more or less than 500 feet from the

wetlands. See District Exhibit 3, pp. 27-32. The greater

weight of evidence supports a finding that the current level of

support for fish and wildlife is at least minimal, and probably

closer to moderate, as reflected in the District's assessment.

See , e.g. , District Exhibit 4, p. 53. Therefore, the District's

assessment on this issue has been accepted.

65. The other contentions raised by Highlands Ranch have

been considered and rejected.

c. Summary

66. The preponderance of the evidence supports a finding

that the UMAM assessment used by the District, rather than the

assessment presented by the applicant, should be used for

awarding potential banking credits. When the credits for upland

assessment areas (147.80) are added to the functional gain

credits for the wetlands assessment areas (45.76), the total

number of mitigation banking credits to be awarded Highlands

Ranch is 193.56.

CONCLUSIONS OF LAW

67. The Division of Administrative Hearings has

jurisdiction over the subject matter and the parties hereto

pursuant to Sections 120.569 and 120.57(1), Florida Statutes.

68. As the applicant, Highlands Ranch has the burden of

establishing by a preponderance of the evidence that 425 credits

is the appropriate amount to be awarded rather than the

District's intended action of issuing a mitigation bank permit

with 193.56 potential mitigation bank credits.

69. Section 373.4136(1), Florida Statutes, authorizes the

District to require a permit to establish, implement, and

operate a mitigation bank. A mitigation bank is defined by

Section 373.403(19), Florida Statutes, as "a project permitted

under s. 373.4136 undertaken to provide for the withdrawal of

mitigation credits to offset adverse impacts authorized" by an

ERP issued under the authority of Part IV, Chapter 373, Florida

Statutes.

70. A mitigation bank implements various forms of

mitigation recognized by the District's rules. The rules

specifically recognize preservation, enhancement, and

restoration as separate and distinct forms of mitigation. See

uplands provide to wetlands, "the preservation of certain

uplands may be appropriate for full or partial mitigation of

wetland impacts." § 12.3.2.2.(d), A.H. It follows that

preservation and enhancement of uplands are acceptable forms of

mitigation. The UMAM rule does not supersede or modify these

ERP rules. See Fla. Admin. Code R. 62-345.100(4)("[t]his method

is not intended to . . . determine the appropriateness of the

type of mitigation proposed").

71. The statutory criteria for reviewing and acting on an

application for a mitigation bank permit are set forth in

Section 373.4136, Florida Statutes. The District has also

adopted rules governing the establishment and operation of a

mitigation bank, which are found in Rule Chapter 40C-4 and

section 12.4 of the Applicant's Handbook. Except for the number

of mitigation credits that it should be awarded, Highlands Ranch

has satisfied all other applicable criteria for an ERP.

72. In determining the number of credits to be awarded,

Section 373.414(18), Florida Statutes, provides the following

guidance:

The uniform mitigation assessment method

must determine the value of functions

provided by wetlands and other surface

waters considering the current conditions of

these areas, utilization of fish and

wildlife, location, uniqueness and

hydrologic connection and when applied to

mitigation banks, the factors listed in

s. 373.4136(4).

73. Section 373.4136(4), Florida Statutes, enumerates the

following factors that must be evaluated in determining the

degree of improvement in ecological value:

(a) The extent to which target hydrologic

regimes can be achieved and maintained.

(b) The extent to which management

activities promote natural ecological

conditions such as natural fire patterns.

(c) The proximity of the mitigation bank to

areas with regionally significant ecological

resources or habitats such as national or

state parks, Outstanding Natural Resource

Waters and associated water sheds,

Outstanding Florida Waters and associated

water sheds and lands acquired through

government or non-profit land acquisition

programs for environmental conservation; and

the extent to which the mitigation bank

establishes corridors for fish, wildlife or

listed species to those resources or

habitats.

(d) The quality and quantity of wetland or

upland restoration enhancement preservation

or creation.

(e) The ecological and hydrologic

relationship between wetland and uplands in

the mitigation bank.

(f) The extent to which the mitigation bank

provides habitat for fish and wildlife,

especially habitat for species listed as

threatened, endangered, or of special

concern or provides habitats that are unique

for that mitigation service area.

(g) The extent to which the lands are to be

preserved are already protected by existing

state, local or federal regulations or land

use restrictions.

(h) The extent to which lands to be

preserved would be adversely affected if

they were not preserved.

(i) Any special designation or

classification of the affected waters and

lands.

74. Factors (g) and (h) are specifically addressed in

Rule 62-345.500(3)(a), which sets forth the analysis to be

conducted under UMAM for areas to be preserved, and in Rule 62-

345.500(3)(a)5., which identifies "[t]he extent and likelihood

of potential adverse impacts if the assessment area were not

preserved," as one of the factors to be weighed in determining

the PAF. The rule affords the District considerable discretion

in determining the "applicability and relative significance" of

these factors when assessing preservation. For the reasons

previously found, the fact that DEP does not separately evaluate

factors (g) and (h) when performing its analysis of assessment

areas that are proposed to be restored or enhanced does not

invalidate the District's two-step approach. When performing a

UMAM evaluation of a mitigation bank, the District (and SWFWMD)

has opted to evaluate each assessment area's preservation value

under the rule, and if proposed to be enhanced or restored, to

then evaluate the enhancement value of the assessment area.

Under the evidence presented here, this interpretation of the

rule was reasonable. Therefore, the District's analysis used in

this case is not inconsistent with the statute or rule.

75. Highlands Ranch contends, however, that its analysis

using a one-step approach is mandated by the language in Rule

62-345.500(1)(a), providing that each mitigation assessment area

must be assessed under Part II of UMAM under only two

conditions: (1) current condition, or, in the case of

preservation mitigation, without preservation, and (2) with

mitigation or with impact. However, sections (1) and (9) of

Rule 62-345.200 provide further support for the District's two-

step methodology by defining an assessment area as "a mitigation

site" and further defining the term "mitigation site" as

"wetlands and other surface waters . . . or uplands that are

proposed to be created, restored, enhanced or preserved by the

mitigation project." Like the District's ERP rules, UMAM

recognizes the different types of mitigation, and its broad

framework arguably permits an assessment of each form of

mitigation for each area in which that type of mitigation is

proposed. When more than one type of mitigation is proposed in

the same assessment area, it is a reasonable interpretation of

the rule, as suggested by the District, that each type should be

scored under the appropriate conditions set forth in UMAM.

76. Highlands Ranch also argues that the District is

incorrect as a matter of law in treating a conservation easement

as a form of preservation when in fact it is a statutory and

regulatory requirement without which the permit would be denied.

See

on to argue that by treating it as a mitigation proposal, the

District erroneously required every assessment area to be

separately assessed for preservation. However, the legal

requirement that a mitigation bank property be preserved by one

of the means identified in the District's rules before credits

may be released does not provide a basis for the District to

ignore Rule 62-345.500(3)(a) when an assessment area will be

enhanced and preserved. The legal requirement simply means that

before any credits can be released, the property must first be

preserved and that additional forms of mitigation will then be

implemented. A permissible interpretation of UMAM is that the

"current condition" for any enhancement activities is the

condition achieved by preservation of the property, and the

"with mitigation" is the assessment area's condition achieved by

successful implementation of the enhancement activities. See

Fla. Admin. Code R. 62-345.500(1)(b). Within this framework,

the District first evaluated the ecological gain associated with

preservation and then, using the preserved condition as a

starting point for its analysis, evaluated the additional

ecological gain associated with other forms of mitigation. This

was not shown to be inappropriate or unreasonable under the

facts presented here.

77. The District's ore tenus motion to strike certain

opinion testimony offered by Mr. Hamilton is denied. However,

the testimony has been deemed to be unpersuasive.

78. To summarize, while the District's two-step approach

is not identical to the one-step approach described by the DEP

witness (but is essentially the same as the methodology used by

the SWFWMD), its interpretation and application of the

applicable rules and statutes are supported by the evidence, are

reasonable under the circumstances presented here, and have been

accepted.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is

RECOMMENDED that the St. Johns River Water Management

District enter a final order granting Highlands Ranch's Permit

Application No. 4-019-116094-2 authorizing it to construct,

implement, and operate a mitigation bank in Clay County and

awarding the applicant 193.56 potential mitigation banking

credits.

DONE AND ENTERED this 26th day of May, 2010, in

Tallahassee, Leon County, Florida.

S

D. R. ALEXANDER

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399-3060

[phone]

Fax Filing [phone]

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 26th day of May, 2010.

ENDNOTES

1/ All statutory references are to the 2009 version of the

Florida Statutes.

2/ All rule references are to the current version of the Florida

Administrative Code.

3 The reason for reducing the number of credits in the second

Report was due primarily to additional information received by

the District staff after the first Report was issued.

4/ The location and landscape indicator focuses on the

ecological relationship between the assessment area and the

surrounding landscape; the water environment indicator examines

hydrology and water quality; and the community structure

indicator examines the vegetation and structural habitat for

areas with plant cover and the benthic and sessile communities

for areas with a submerged benthic community. Fla. Admin. Code

R. 62-345.500(6)(a), (b), and (c).

5/ As noted in Finding of Fact 35, infra , under the "two-step

approach," the District first evaluated the functional gain of

preserving the wetland assessment area and then scored the

additional functional gain that would result from the enhancement

or restoration activities proposed for that area. Likewise, the

SWFWMD assesses the preservation gain first, and then it

separately assesses the enhancement gain. 574. In contrast,

DEP does not use a "two-step approach," that is, it does not

separately evaluate enhancement assessment areas for

preservation. Highlands Ranch also used a one-step approach in

determining the number of potential mitigation credits. It

should be noted that in response to the applicant's criticisms,

the District also performed a "one-step" assessment, which

resulted in an award of 125.41 credits. This suggests that under

either approach, the outcome can be largely dictated by the

assumptions and judgment used by the assessor.

6/ During his rebuttal testimony, Dr. Dennis contended that the

St. Johns study was "discredited" as far as the buffer rule is

concerned (presumably referring to the 500-foot division for

wetlands), but provided no other evidence to support this

contention.

COPIES FURNISHED:

Kirby B. Green, III, Executive Director

St. Johns River Water Management District

4049 Reid Street

Palatka, Florida 32177-2529

Frank E. Matthews, Esquire

Hopping, Green & Sams, P.A.

119 South Monroe Street

Tallahassee, Florida 32301-1529

Veronika Thiebach, Esquire

St. Johns River Water Management District

4049 Reid Street

Palatka, Florida 32177-2529

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within 15

days of the date of this Recommended Order. Any exceptions to

this Recommended Order should be filed with the agency that will

render a final order in this matter.