Martin Wachs, Ph.D.
Distinguished Professor Emeritus
University of CA
Former Director of Transportation, Space & Technology
RAND Corporation
Assisted by Jaimee Lederman

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Brief History of RAND Study and Findings
Research on “Advanced Mitigation” and HCPs since then
Summary of Findings – Advance Mitigation Saves Time &
Money
Two Case Studies: San Diego & Orange County
Next Steps Financing Advance Mitigation
The RAND Study identified the need for additional revenue but even more importantly the need for “financing” - the ability to buy land when prices are low and owners more anxious to sell

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Done 2006 to 2008 – out of date in terms of numbers, but
“strategic” findings still relevant
Could not document time & money saved from HCPs so we relied on a survey of 39 agencies: costs in money & time of HCPs significant but ultimately produced savings: reduced lawsuits, economies of scale
Estimated costs to assemble and maintain WRCMSHCP was over
$2 billion(2007 dollars) and could rise to $4 billion in current dollars if land was acquired later.
An important gap in funding compared with then current projections of revenue
Analyzed alternative forms of raising money: property taxes, tolls, vehicle license fees, Mello-Roos taxes, etc.

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˜ $ 450 million expended to date
49,000 acres have been acquired
 Includes land acquired before HCP was permitted
10,000 acres (not counted in the preserve) have been
“conditioned,” in covenants and contracts
42% of time for acquisition has past & 32% of land has been acquired; another 6% has been “conditioned.”

Development fees peak when land prices peak suggested need for “financing” to purchase land when prices dipped – loans against future development fee revenue
Grants
6%
Tipping Fees
8%
Caltrans
2%
TUMF
2%
Measure A
8%
Other
Infrastructure
11%
Development
Fees
63%

And the “Great Recession” demonstrated that the concern was valid – land prices dropped
& development fee revenue dropped

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Academic Studies
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UCLA study funded by UCTC studied largest HCPs across the country
UC Davis study funded by Caltrans on advanced mitigation programs in CA, including HCPs and other advanced mitigations
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Have quantified benefits of advance mitigation
Consensus emerging that HCPs have benefits that exceed their costs
Have shown benefits of partnerships among agencies
Financing them remains the challenge & there is a lively exchange and prospects are improving

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California Habitat Conservation Planning Coalition
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Permitting time reductions save California developers $70 million/year
Permitting compliance cost savings range from $10,000-
$40,000 per acre for medium and large private development projects
Report to the Secretary of the Interior highlights policy shift to landscape-scale mitigation to meet both development and conservation goals

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Saving time to completion of Infrastructure Projects
Saving money from early acquisition of land when prices are lower
Saving money from buying larger parcels
Fewer law suits
Buy in from more parties (e.g. environmentalists supporting highway projects if HCPs are included in the program)
Partnerships among agencies

As of 2011, permits had been issued for 670 HCPs, of which 59 covered more than 10,000 acres

Milestone Name Tasks
Reflected
(indicated by WBS code)
Projects Using
Mitigation Banks
Hours
Estimated at
Completion
(Avg)
Cost
Estimated at
Completion
(Avg)
0.165
4,967 $247,214
Projects Using In-House Parcel
Acquisition
Hours
Estimated at
Completio n (Avg)
6,391
Cost Estimated at
Completion (Avg)
$280,415 BES - DED
DED - PA&ED
PA&ED - RTL
RTL - CCA
0.170, 0.175,
0.180
1.205, 1.230,
1.235, 1.255
3.270, 3.295
Total
2,078 $136,667
15,517 $1,188,634
19,493 $1,775,938
$3,348,453
2,851
22,254
31,538
$158,214
$1,366,567
$2,236,571
$4,041,767
Milestone Names
Begin Environmental Studies Ready to List
Draft Environmental Documents Construction Contract Acceptance
Project Approval & Environmental Documentation

Beach Lake as an Empirical Case
Acquired in 1970s; Declared Surplus; Mitigation Bank for 49 Caltrans Projects in 14 Counties

GDP Chained Price Index
Consumer Price Index
Construction Cost Index
Estimated Land Acquisition Cost
Total Savings
Per Project
Savings
Incremental, as-needed purchases
(1995-2013)
$40,395,104
$41,754,120
$36,437,963
Single advance purchase
(in 1979)
$13,143,614
$16,692,161
$13,652,770
$27,251,491
$25,061,959
$22,785,193
$511,469
$556,153
$465,004

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$53.4 billion in transportation and high speed rail over the next five years (California Department of Finance 2014)
Environmental Mitigation cost estimated to be 4 to 6 billion
Major Savings from Advance Mitigation:
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Land cost saving from early purchases
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Economies of Scale
Reduced costs of litigation

SANDAG included advance mitigation in its renewal of TRANSNET Sales Tax Extension
Measure
Support of Environmental Community
Was Critical to Passage in 2004
Total Revenue Raised by
Measure about $14 billion

SR-76 Middle Widening Project
Melrose Drive to Mission Rd (1207602)
Middle Segment Map Middle Segment Project Schedule

Major Highway &
Transit Projects
Local Road Projects
SR-76 Middle
SR-76 Middle
18.A. Conventional vs. Advance Mitigation Costs of All TransNet Investments
Projected Mitigation Costs (2002$)
Projected Savings
(“Economic Benefit”) of Advance Mitigation
Conventional
Mitigation
Advance Mitigation
(EMP)
Dollar Savings Percent Savings
$600,000,000 $450,000,000 $150,000,000 25%
$250,000,000 $200,000,000 $50,000,000 20%
Conventional
Mitigation
$38,500,000 a
18.B. Conventional vs. Advance Mitigation Costs of SR-76 Middle
Advance Mitigation
(EMP)
$28,875,000 b
Dollar Savings
(2002$)
$9,625,000 c
Percent Savings
25% d
Mitigation
$38,500,000
18.C. Allocation of Estimated Savings (“Economic Benefit”) to SR-76 Middle
Projected Mitigation Costs (2002$)
Conventional a
Advance Mitigation
(EMP)
$28,875,000
TransNet Project-Level Allocation of
Estimated Savings (“Economic Benefit”) of Advance Mitigation
Dollar Allocation of Savings
$8,084,933 e
Percent Allocation of Savings
21%

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Half Cent Sales Tax – Supported by Environmental
Groups
Early Action Plan – to spend up to $55 million on mitigation projects starting even before the measure took effect to benefit from low land costs. Would serve to mitigate environmental impacts of road and transit projects to be funded later under the measure.

Property Name
Saddle Creek South
Hayashi
Ferber Ranch
O’Neill Oaks
Hafen Estates
MacPherson
Date
Purchased
Acreages
4/29/2011
5/18/2011
5/31/2011
5/31/2011
12/5/2011
12/24/2013
TOTALS:
83.649
296
398.768
119.178
47.91
203.635
1149.14
Cost Per Acre
$38,000
$10,000
$32,000
$36,000
$35,589
$12,266
Total Cost
$3,178,662
$2,960,000
$12,760,576
$4,290,408
$1,705,069
$2,497,787
$27,392,502

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State Infrastructure Banks
California’s Federal SIB
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California I-Bank
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Infrastructure State Revolving Fund Program
Cap & Trade
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Federal Financing Options
Transportation Infrastructure Finance and Innovation Act (TIFIA)
Water Infrastructure Finance and Innovation Authority (WIFIA)
GARVEEs, GANs, and Private Activity Bonds
→ sources are promising, but untested for applications supporting advance mitigation

 Sciara, Gian-Claudia, Elizabeth Stryjewski, Jacquelyn Bjorkman, James H. Thorne,
Melanie Schlotterbeck (2015) Task 3 Report: The Business Case for Advance Mitigation in California. Institute of Transportation Studies, University of California, Davis,
Research Report UCD-ITS-RR-15-03 http://www.its.ucdavis.edu/research/publications/publication-detail/?pub_id=2421
 Lederman, Jaimee, Martin Wachs, Melanie Schlotterbeck, Gian-Claudia Sciara (2015)
Task 4 Report: Funding and Financial Mechanisms to Support Advance Mitigation.
Institute of Transportation Studies, University of California, Davis, Research Report
UCD-ITS-RR-15-04 http://www.its.ucdavis.edu/research/publications/publication-detail/?pub_id=2422
 Sciara, Gian-Claudia, Jacquelyn Bjorkman, Jaimee Lederman, James H. Thorne,
Melanie Schlotterbeck, Martin Wachs (2015) Task 2 Report: Setting the Stage for Statewide Advance Mitigation in California. Institute of Transportation
Studies, University of California, Davis, Research Report UCD-ITS-RR-15-02 http://www.its.ucdavis.edu/research/publications/publication-detail/?pub_id=2420

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J. Lederman and M. Wachs. Improving Planning and
Project Delivery While Preserving Endangered
Species , University of California Transportation Center,
Report UCTC-FR-2014-04, April, 2014, 151 pages. http://www.uctc.net/research/papers/UCTC-FR-2014-
04.pdf
J. Lederman and M. Wachs. “Habitat Conservation Plans:
Preserving Endangered Species and Delivering
Transportation Projects,” in Transportation Research
Record: The Journal of the Transportation Research
Board, No. 2403 (2014), pp. 9-16.

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L. Dixon, P. Sorensen, M. Wachs, M. Collins, M. Hanson, A.
Kofner, T. Light, M. Madsen, L. Marsh, A. Overton, H. J. Shatz and B. A. Weatherford, Balancing Environment and
Development: Costs, Revenues, and Benefits of the
Western Riverside County Multiple Species Habitat
Conservation Plan , The RAND Corporation, 2008, 232 pages.
http://www.rand.org/content/dam/rand/pubs/monographs/2
008/RAND_MG816.sum.pdf

Contact Info: mwachs@ucla.edu
Jaimee.Lederman@ucla.edu

1
2
3
4
BES - DED 0.165
DED -
PA&ED
Total
0.170
0.175
0.180
PA&ED -
RTL
Total
1.205
1.230
1.235
1.255
Total
RTL - CCA 3.270
3.295
Total
Total
WBS Code WBS Description
Perform environmental studies and prepare draft environmental document
Permits agreements and route adoptions during PA&ED component
Circulate draft env’tl document and select preferred project alternative identification
Prepare and approve project report and final environmental document
Hours
Est. at
Completion
(Avg)
4,967
Mitigation Banks
Cost
Est. at
Completion
Std.
Dev.
(Avg)
$247,214 $252,830
4,967
136
433
$247,214
$10,077
$24,095
$10,733
$35,433
Permits and agreements during PS&E component
Prepare draft PS&E
Mitigate environmental impacts and clean up hazardous waste
Circulate review and prepare final district
PS&E package
Construction engineering and general contract administration
Accept contract prepare final construction estimate and final report
1,509 $102,495 $167,839
2,078
1,181
9,173
1,323
$136,667
$93,416
$683,875
$107,793
$261,551
$639,822
$203,030
3,839 $303,550 $298,938
15,517 $1,188,634
18,014 $1,675,158 $2,625,868
1,479 $100,780 $143,699
19,493 $1,775,938
$3,348,453
49
46
52
50
52 n
48
In-House Parcel Acquisition
Hours
Est. at
Completion
(Avg)
6,391
Cost
Est. at
Completion
Std.
Dev.
n
(Avg)
$280,415 $486,378 30
13
43
6,391
54
1,299
$280,415
$3,327
$58,600
$1,306 5
$69,360 16
53
53
1,499 $96,287 $124,035 22
2,851
426
16,098
1,612
$158,214
$23,581 $38,029 24
$971,236 $2,091,174 26
$99,888 $119,664 34
4,118 $271,862 $302,916 28
22,254 $1,366,567
29,924 $2,101,125 $2,343,775 30
1,614 $135,447 $90,161 32
31,538 $2,236,571
$4,041,767