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Mitigation Calculator Interpretation

Calculator Use and Interpretation

There are a number of different perspectives from which this calculator can be viewed and subsequently used. The three main perspectives are: 1) the developer interested in knowing the amount and cost of mitigation required for one or more future planned development actions, 2) the mitigation provider interested in the amount and monetary value of credit necessary to meet the market demands of their service area, or 3) the regulatory agency interested in establishing a fair and equitable mitigation program for the regulated public while meeting the natural resource protection and recovery goals of one or more natural resource agencies.

Four calculation outcomes are provided when the 'Calculate' button is selected: 1)The total number of credits required to offset the debit, 2) The total dollar cost for those credits required, 3) The total number of credits remaining in the mitigation bank after the credit withdrawl, and 4) The dollar value of those remaining credits in the mitigation bank.

If you are using the calculator to determine the exact mitigation acreage needed to off-set a given development impact, use the following arithmetic:

(Development Multiplier x Mitigation Divider) x Development Acres = Mitigation Acres

This approach will always yield the exact amount of credit needed to satisfy a known debit and subsequently the mitigation credit remaining will always calculate to '0' and the remaining monetary value of the credit will always calculate to '0' when the calculate button is selected. Positive outcomes indicate surplus credit and negative outcomes indicate insufficient credit has been generated to meet the debit. Feel free to try calculations using different inputs that best suit your interests and/or curiosity.

Note: This calculator is intended for use only as a very generic tool to model highly simplified compensatory mitigation actions and should not be considered to reflect the mitigation calculation approach of (or a surrogate for) any Federal or State regulatory agency, planning body, or local government. Its only intended use at this time is for general education purposes.
Effective Ratios

The product derived by multiplying the development multiplier and the mitigation divider is called the "effective ratio." An effective ratio is basically any ratio that is derived using more than one set of principle criteria. The effective ratios available for use in the calculator on this web page can theoretically give regulatory agencies and resource managers choices for optimizing their recovery goals while at the same time providing some flexibility in shifting the financial burden for resource recovery between compensatory mitigation providers and developers. This, of course, only holds true if the compensatory mitigation providers and the developers are separate entities and the mitigation providers are selling credits in a competitive market, which is often not the case. There is much more to be said about effective ratios, but briefly: If the weight on credits needed to satisfy a compensatory mitigation transaction is borne solely on the development side of the calculation (development multiplier > 1 and the mitigation divder is = 1), then this places an increased burden on the developer. If the weight on credits needed to satisfy a compensatory mitigation transaction is borne solely on the mitigation side of the calculation (mitigation divider > 1 and the development multiplier = 1), then this places an increased burden on the mitigation provider. It could be argued that the less burden on the mitigation provider the more likely there will be higher quantity and quality compensatory mitigation outcomes that meet the goals and objectives set by the regulatory and resource agencies with compensatory mitigation oversight responsibilities. But because the cost of these outcomes ultimately are primarily borne by the developers, their role must always be closely considered. Essentially if the costs of compensatory mitigation are not manageable by all parties involved, the program cannot be sustained and, if it cannot be sustained, it cannot survive to serve both its environmental and economic objectives.

Restoration and Creation

When restoration and creation are the methods of compensatory mitigation used, each mitigation transaction constitutes: 1. a loss of acres (ratio < 1), 2. no-net loss of acres (ratio = 1), or 3. net-gain of acres (ratio > 1) proportional to the ratios applied. These calculations do not necessarily reflect functional gains or losses, just acreage.

Preservation and Enhancement

When preservation and enhancement are the methods of compensatory mitigation used, each mitigation transaction constitutes 100% loss of acres, but larger ratios protect more of the remaining acreage of concern for the same amounts of loss (these calculations do not necessarily reflect functional gains or losses, just acreage). The way the arithmetic looks on these kinds of transactions is as follows:

Preservation and Enhancement Mitigation Arithmetic
One-to-One transforms to One-to-Two = 50-Percent Effective Ratio: (1.0/1.0 + 1.0) = 1.0/2.0 = .50 x 100 = 50%
One and One-half-to-One transforms to One and One-half-to-Two and One-half = 60-Percent Effective Ratio: (1.5/1.5 + 1.0) = 1.5/2.5 = .60 x 100 = 60%
Two-to-One transforms to Two-to-Three = 67-Percent Effective Ratio: (2.0/2.0 + 1.0) = 2.0/3.0 = .67 x 100 = 67%
Three-to-One transforms to Three-to-Four = 75-Percent Effective Ratio: (3.0/3.0 + 1.0) = 3.0/4.0 = .75 X 100 = 75%

So if you are planning to develop 10-acres at 1.5:1 ratio and preservation or enhancement is your strategy to replace the losses: The loss of existing habitat is equal to 10-acres (100% loss) and the protection or enhancement is applied to 15-acres of already existing habitat (0% gain). The total transaction involves 25-acres (10-acres loss and 15-acres protected). 15-acres is 60% of 25-acres (the total transaction). For illustration purposes, say while using the above mitigation ratio scenario exclusively, there are 2000 acres of a special type of habitat remaining (e.g. vernal pool wetlands) in a given ecoregion. If we were to lose habitat to development proportional to this amount of protection at each compensatory mitigation transaction, over time and with each successive mitigation action you should eventually be able to protect 1200-acres (60%) of the remaining habitat.

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