Challenges and Opportunities of Using the Puget Sound Watershed Characterization to Identify In-Lieu Fee Mitigation Sites – a Case Study from the Hood Canal ILF Program

The Hood Canal Coordinating Council (HCCC) administers a federally authorized In-lieu Fee (ILF) mitigation program designed to improve compensatory mitigation outcomes and promote recovery of aquatic resources in the Hood Canal watershed. Federal ILF rules require that HCCC select mitigation sites using a watershed approach that considers the landscape-scale characteristics that drive ecological processes and habitat structure and function. This is a shift from the long-standing practice of making mitigation decisions based solely on site-scale considerations. Although there is broad agreement on the need to incorporate landscape-scale assessments into mitigation siting decisions, the practical realities of doing so are not well documented. The Hood Canal watershed encompasses four water resource inventory areas made up of 285 assessment units (AUs). All ILF mitigation projects must be located as close as possible to the impact site, and within the same sub-basin where feasible; thus, HCCC needs to develop a roster of potential mitigation ‘receiving sites’ across thousands of acres of land and water. The HCCC used Ecology’s Puget Sound Watershed Characterization data as a coarse-scale filter to identify areas that are inherently important for water flow processes —delivery, surface storage, groundwater recharge and discharge —and that are also highly degraded. The AUs that met these criteria were further screened to identify areas with the highest relative fish and wildlife habitat value based on landscape-scale indices developed by WDFW. The outputs from this analysis were a list of AUs considered to be high priorities for riparian, floodplain, and aquatic habitat restoration and protection and areas where ILF mitigation could best meet the ecological needs of the watershed. To find potential mitigation receiving sites within the high priority AUs, the HCCC examined watershed plans and other best available science documents for information on mitigation opportunities. Additional data on parcel size, land ownership, water quality, and riparian vegetation was used to zero-in on potential receiving sites within priority AUs. Watershed characterization provides an efficient and objective approach for determining where mitigation is likely to achieve watershed goals, but finding actual mitigation receiving sites that will produce substantial functional lift requires considerable additional on-the-ground information. Pairing landscape-scale assessments with fine-scale data is an important first step in determining where to focus field investigations, landowner outreach and other time-consuming efforts