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Home My WebLink About20020672 Ver 3_Attachment 39 - 6-4-14 EEP Presentation by Ellison_201411241 NCEEP Budget Update and NCDOT/NCEEP Operational Process Improvement Richard Hancock, NCDOT PDEA Unit Head Michael Ellison, Ecosystem Enhancement Program Director June 4, 2014 Attachment 39 2 Budget Update and Business Process •History of EEP •Current NCDOT/NCEEP Operational Process •Budget Update •Operational Process Improvement Initiative Supports economic development COST CERTAINTY REGULATORY ACCEPTANCE Compensatory Mitigation for stream, wetland, riparian buffer and nutrient offsets Leverages mitigation investments to the benefit of the state’s natural resources PARTNERS Landowners Contractors Investors Engineers Cities & Counties WHAT WE DO UT to Jumping Run – Stream and Wetland Complex •Since June 2003, NCEEP has supported NCDOT in meeting its mission statement by providing the required off-site compensatory mitigation •NCDOT and NCDENR have a joint MOA that defines the business process we work under •Since inception of EEP there have been no projects where the let date has been delayed due to the lack of mitigation 5 NCDOT / NCEEP MOA Operational Process •NCDOT provides NCEEP a list of transportation projects and estimated impacts for each year based on a 7-year STIP Highway program •NCEEP develops Operational Strategic Plan to meet NCDOT’s mitigation needs •NCEEP develops biennial budget and requests NC Board of Transportation approval •NCDOT pays NCEEP based on quarterly invoices = ACTUAL COST SYSTEM 6 Budget Update •Normally present proposed biennial budget as approach end of State fiscal year •Due to ongoing STIP development implementing STI prioritization process, not requesting budget approval for SFY 15-16 •Proposal to proceed with SFY 14 -15 budgeted amount as approved by BOT last year 7 Cash Flow Projection EEP Biennial Budget State Fiscal Years (SFY) 2013/14 and 2014/15 Summary MOA Year 11* (SFY 2013/14) MOA Year 12* (SFY 2014/15) Quarter #1 Quarter #2 Quarter #3 Quarter #4 Quarter #5 Quarter #6 Quarter #7 Quarter #8 Line Item ** 07/13 - 09/13 10/13 - 12/13 01/14 - 03/14 04/14 - 06/14 07/14 - 09/14 10/14 - 12/14 01/15 - 03/15 04/15 - 06/15 Total Administration Salaries $ 908,991 $ 908,991 $ 908,991 $ 908,991 $ 908,991 $ 908,991 $ 908,991 $ 908,991 $ 7,271,928 Operating $ 83,275 $ 83,275 $ 83,275 $ 83,275 $ 83,275 $ 83,275 $ 83,275 $ 83,275 $ 666,200 SPO and legal $ 92,146 $ 92,146 $ 92,146 $ 92,146 $ 92,146 $ 92,146 $ 92,146 $ 92,146 $ 737,168 Restoration $ 8,585,840 $ 10,519,146 $ 6,799,012 $ 8,051,616 $ 13,260,515 $ 9,116,496 $ 8,117,302 $ 3,593,870 $ 68,043,796 Stewardship $ 58,280 $ 58,280 $ 58,280 $ 58,280 $ 65,617 $ 65,617 $ 65,617 $ 65,617 $ 495,584 Planning Framework $ 132,929 $ 96,500 $ 84,000 $ 96,000 $ 89,000 $ 50,000 $ 20,000 $ 15,000 $ 583,429 Total (by Quarter) $ 9,861,460 $ 11,758,337 $ 8,025,703 $ 9,290,307 $ 14,499,544 $ 10,316,525 $ 9,287,331 $ 4,758,899 $ 77,798,105 Total (Annual) $ 38,935,808 $ 38,862,297 $ 77,798,105 * Year of operation as EEP since 2003 ** See individual linetabs for details Summary Administration $ 8,675,296 Restoration $ 68,043,796 Stewardship $ 495,584 Planning Framework $ 583,429 Biennial Total $ 77,798,105 Note: Biennial budget reflects operating requirements of Code of Federal Regulations as agreed with USACE, Wilmington Distric t 11% 87% 1% 1% Distribution Administration Restoration Stewardship Planning Framework Budget Update •Propose to change SFY 14-15 budget line items as follows: Total : $ 38.8 million *New Project Starts (fee based program) - $ 4 million Administration - $ 4 million Ongoing Restoration Projects - $ 24 million Additional Payment for completed projects $ 6 million Planning and Stewardship - $0.8 million 10 Process Improvements In June 2013, NCDOT and NCEEP agreed to develop a new business model that would: •Transition from a “pay as work is done” to a Fee Based Program •Mitigation fees will cover all facets of work from administration, watershed planning, mitigation planning, design, site acquisition, construction, remediation, monitoring, and long-term stewardship. •Payment of fees will relieve all NCDOT liability for the mitigation that is provided by NCEEP. 11 Fee Based Program Proposal •Within program, NCDENR-EEP will provide NCDOT with an annual report of its work for NCDOT •Audits will be conducted by third party on a biennial basis to address the fiscal and environmental/technical components of the program •Annual report and audit will ensure program efficiency 12 Expected Outcomes •Simplifies and streamlines NCDOT and NCEEP’s coordination process •NCDOT has more predictable mitigation costs •Reduces number of NCDOT changes to mitigation orders •Fee is all inclusive; NCDOT relieved of liability after the mitigation fee is paid •NCDOT can provide more focus on improving accuracy of impact projections 13 Fee Based System Implementation •Request approval to begin transition to lump sum fee based payment for mitigation orders in SFY 14-15 ($4 million new starts) •Relatively low mitigation order & is financially doable 14 For Future BOT Approval ( in 6-9 months) •Proposed specific details of fee structure •Proposed operating agreement between NCDOT and NCDENR-EEP to reflect fee based payment system •Additional requests for increased mitigation budget as STI prioritization results are obtained and reviewed 15