Highlands Ranch Mit Bank permit; Has Bersok Kicked the Lid Off?

Thank goodness professional journalists have to be objective and report only facts. Sometimes, however, it’s important to look behind facts and ask what smells.

Craig Pittman who first broke the story about the awful treatment of Connie Bersok by Florida’s Department of Environmental Protection has given us a follow up in yesterday’s (2012.06.06) Tampa Bay Times. Bersok is the state’s chief wetland expert who was suspended by her supervisors at DEP for not giving in to pressure to approve a mitigation bank application near Jacksonville that was against her professional judgment. (See her memo HERE).

Now, it seems, it must have all been a dream. DEP has lifted Bersok’s suspension but makes no mention of the Highlands Ranch Mitigation Bank fiasco in the recently released inspector general’s investigation and report of findings, according to Pittman.

Strange? Yes.

There’s clearly something going on at DEP that the minions don’t want exposed.

Perhaps, it’s the convoluted background to this story:

·       First, Highlands Ranch Mitigation Bank applies for a mitigation bank permit from the SJRWMD. They want some 600 wetland credits which they propose to justify by modifying a former 1500-acre pine tree plantation. 

·       Staff gags at the incredulous nature of the request and instead recommends to the district’s governing board that the applicant be granted less than 200 wetland credits. 

·       Apparently upset at the staff’s recommendation, the applicant files a petition in opposition to its own permit when it is presented to the governing board. 

·       The governing board then forwards the application to an administrative law judge who holds a hearing, finds in favor of the staff’s position and issues a recommended order. When no exceptions were filed by the parties within the prescribed time, the judge issues the permit subject to the permit conditions set forth in the district’s technical staff report.  

·       Meanwhile, newly elected Florida CEO-governor Rick Scott arrives on the scene. A new CEO at DEP, Herschel Vinyard, is appointed (from Jacksonville) who begins replacing the department’s existing supervisors and managers. 

·       Subsequently, the SJRWMD undergoes major organizational and staffing changes brought by the new governor. These changes were, at least indirectly, the result of recommendations pushed by his “transition team” regulatory reform subcommittee chairman, Doug Manson, a Tampa lawyer. 

·       First, the district’s general counsel is fired and governing board member Hans Tanzler (son of a former Jacksonville mayor of the same name) applies for and is appointed to the position by the governing board. Then the executive director is forced out and, again, Tanzler applies for the position and is once more given the position by the governing board which, this time, comes with the approval of the governor. Scott apparently says it’s good. 

·       Sequentially, Tanzler, supported by Scott-appointed, anti-environment, professional consultant, board members like Chuck Drake and others, goes about firing the old permit reviewers at the district and replacing them with new permit reviewers. After this political “cleansing” of dozens of staff members, the rest just hunker down hoping to avoid becoming collateral damage. 

·       Despite the fact that it already has a permit issued by the SJRWMD for the same project, Highlands Ranch Mitigation Bank files for a new permit for the same project, this time to DEP rather than the SJRWMD, and this time they have a new consultant, Breedlove, Dennis and Associates. Breedlove now recommends about 400 wetland credits, down 200 credits from the original 600 requested from SJRWMD. No one seems worried about which permit will be in effect if DEP issues a second permit that is different from the one the administrative hearing judge has already issued for the same project. 

·       A new deputy secretary at DEP, Jeff Littlejohn, who happens to be long time buds with Breedlove (the new consultant for Highlands Ranch) becomes convinced after a conversation with Breedlove that there’s a better way to consider mitigation bank applications, but it will take a policy change to get it done. 

·       Littlejohn quickly admits he is not a wetlands expert. So up steps well known Tallahassee lawyer, Eric Olson, who somehow ends up drafting the new policy for him. Olsen, a former assistant general counsel at SJRWMD, is currently a lawyer with one of the most powerful and connected law firms in Tallahassee, Hopping, Green & Sams. He has published articles on mitigation banking in the Florida Bar Journal. By a not so surprising coincidence, Olson is also the attorney for Highlands Ranch Mitigation Bank. No one notices the odor. 

·       Apparently, no one questions the obvious and gross impropriety of having an applicant’s lawyer draft a policy memo that will not only tremendously benefit his client but could have far reaching implications well beyond the Highlands Ranch Mitigation Bank application. And, everyone apparently ignores the fact that any new regulatory policies which have significant, program-wide ramifications should be thoroughly vetted first and even required to undergo rigorous adoption procedures similar to those mandated for administrative rules before implementation. 

·       So the Olson Policy is handed to Connie Bersok who not only cringes at the new edict but puts into writing her unwillingness to recommend the permit because the project is not consistent with current law and the proposal fails to show how 400 wetlands credits can be justified. 

·       Of course, it is not considered relevant that wetland mitigation credits can be worth anywhere from $75,000 to $100,000 each. At the latter price, if only 200 credits were authorized the revenue would barely cover the cost of the project’s land, engineering and legal costs. (The property was reportedly purchased by the investment group for nearly $15,000,000). Getting the additional 200 credits, on the other hand, could bring Highlands Ranch Mitigation Bank and its investors, including the Carlyle Group, a tidy profit of perhaps $20,000,000. 

·       Also absent in the conversation is the fact that the legislature passed a new law this year (HB 599) that greatly limits the availability of credits DOT can obtain from water management districts. If I read the new statute correctly (and I don’t guarantee that I have because it’s confusing to say the least), on the one hand, water management districts seem to be prohibited from using land they purchased for conservation purposes to create mitigation credits. If so, they’re essentially out of the game. On the other, this limitation may not apply to DOT road transportation projects which means the districts could still be in the game. In any case, DOT will now be able to get the credits it needs for transportation projects from private mitigation bankers. One can only speculate if and how much the price-rise might be now with the private sector guys involved. Previously DOT was required to get its credits exclusively from the water management districts. 

·        According to the House Summary of CS/CS/CS/HB 599 (CS/CS/SB 824), from 2007 to 2011, DOT‘s mitigation expenditures totaled $169,921,562. Of that amount, WMDs received $116,456,080 (68.54%), while other public and private mitigation banks received only $38,107,600 (22.43%) of the total expenditures. 

·       Clearly, if DOT is denied access to WMD credits, the new law will intentionally force DOT to purchase mitigation credits from private mitigation bankers. And, if that is the case, the financial fortunes of private mitigation bankers will become hugely improved. But even if the WMD’s remain in the game, the private guys will still enjoy a tremendously expanded market for their credits created by the sheer volume needed by DOT each year. HB 599 was introduced by Representative Ray Pilon, was joined with SB 824 and others to become a transportation omnibus bill and was signed into law by the governor on April 29, 2012. 

·       In any case, given the evolving situation where public money coming from DOT will by law now be available to the investors and owners of private mitigation banks, here’s a related matter to watch. Remember how CEO Scott stopped all environmental land acquisition efforts by the water management districts and ordered the districts to surplus any lands found to be “unnecessary”? Those so-called surplus lands could become targeted by aggressive corporate mitigation bankers. Conservation lands are purchased, you'll recall, because of their environmental value. Much of that value is based upon a parcel’s relationship to wetlands. Creating new wetlands adjacent to existing wetlands is much more effective and less costly than attempting it elsewhere. How public lands become defined as “unnecessary” will become crucial and extremely political. Hundreds of millions of public dollars are on the table. And, with land prices as low as they are, it’s a buyer’s market. Buy it cheap from the WMDs, ask DEP for wetland credits based upon a plan known only to you and sell the credits to a government agency that must buy tens of millions worth every year. It’s a sweet deal.

So what’s really happening with Connie Bersok? Is the story about her, or is it really about private sector politics and manipulating government programs to finagle the transfer of public tax dollars to private pockets? And, is this just one isolated scenario or is it systemic under Scott's administration?

Connie Bersok’s career with DEP for all practical purposes is probably over. She has crossed a DEP manager's line, it seems. Organizations rarely forgive and forget. But her courageous refusal to kowtow to political pressure has jarred loose some very smelly detritus from Tallahassee that is generating a more refined scrutiny toward the way Rick Scott is running our state government and ruining our natural Florida. Bersok’s legacy will be how she stood up and while under a clear threat to her long, successful and respected career, said what needed to be said, “This isn’t right and I’m not going to do it.”

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Additional Information

From Highlands Ranch website:

“Highlands Ranch Mitigation Bank is a privately-owned wetland mitigation banking firm, headquartered in Jacksonville, Florida. A joint venture of Hassan & Lear Acquisitions Ltd., www.HassanLear.com , and The Carlyle Group, www.Carlyle.com,” 

Source: http://www.hrmb.co/OurMitigationBank.aspx

Wetlands Mitigation
"A wetland enhancement, restoration, creation and/or preservation project that serves to offset unavoidable wetland impacts is known as wetland mitigation or compensatory mitigation. The ecological benefits of a mitigation project should compensate for the functional loss resulting from the permitted wetland impact. Compensatory mitigation activities may include, but are not limited to, onsite mitigation, offsite mitigation, offsite regional mitigation, and the purchase of mitigation credits from permitted mitigation banks."         (Florida Department of Environmental Protection)

Source: http://www.dep.state.fl.us/water/wetlands/mitigation/index.htm