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North Carolina's In-Lieu Fee Program Gains National Attention

Friday, March 15, 2019 - 12:15pm

Last week, Division of Mitigation Services Director Tim Baumgartner participated in a panel at the National Press Club in Washington, D.C. where he discussed North Carolina’s nationally renowned in-lieu fee program’s procurement system for stream and wetlands restoration. The conference was hosted by the Environmental Restoration Business Association, and in the hallways of the press club and at a reception on Capitol Hill, North Carolina was a hot topic of discussion.

North Carolina has one of the largest and oldest compensatory mitigation In-Lieu Fee Programs in the country and the performance based contracting system created by DMS known as Full Delivery is being utilized across the country. “I was a little shocked at the interest from conference participants concerning full delivery,” says Baumgartner, a native of Johnston County who came to the Division of Mitigation Services after working as in the private sector.

The Full Delivery performance based system places the risk on the private mitigation market to perform and deliver mitigation credits. “In the past we were using design-bid-build mitigation procurement,” says Baumgartner. “We’d use this model where we’d contract for every piece of the project: the acquisition of a conservation easement, the design of the project, the construction, and the monitoring.”

“All along the way we were on the hook and at risk,” he says. Now full-delivery contracts out the mitigation work to private mitigation providers. “We publish a request for mitigation needed, and private mitigation providers bring a proposal in. We review the proposal and costs but it’s up to them to deliver the credits.” 
“Private mitigation providers have shown they can deliver, on time and on budget,” he says. “It’s something to be proud of, we took something that was very difficult and we ironed it out to where it’s transportable all across the country.”

DMS’s success is due in large part to a historic partnership with the North Carolina Department of Transportation, for mitigation of their infrastructure projects. DOT provides an updated list of projects scheduled over the next seven years, along with each project’s estimated wetland and stream mitigation needs. “This concept of providing mitigation in advance of impacts to natural resources is an innovation not utilized in many parts of the country," says Baumgartner.  “This strong partnership with NCDOT and commitment to advance mitigation is what makes DMS very unique.”

Because of the success of North Carolina’s in-lieu fee program, in the past couple decades, the Division of Mitigation Services been involved in over 600 projects protecting more than four-million feet of stream and 29,000 acres of wetlands. An additional 44 projects were contracted in 2018. And at the conference in Washington, D.C., attended by over a hundred mitigation bankers and ecosystem market investors, Director Baumgartner kept hearing about his own program.

“North Carolina and the mitigation program here was mentioned in several presentations from industry leaders,” he says. “It is great that the successes in our state are being recognized. We’ve got a good story to tell.” And when you ask Baumgartner he will tell you this isn’t work, it’s a calling. “People ask me what I do for a living and I say I get paid to play in a creek,” he says. “Things that I love and do in my spare time I get to do at work.”