Technical Information

Permit Impact Table

FILO Mitigation

Stream Fee Schedule: Effective January 17, 2012

Service Area Credit Method Cost per Credit
Big Sandy EIU $650*
Lower Cumberland AMU $240**
Upper Cumberland EIU $610
Green River AMU $240**
Jackson Purchase AMU $240**
Lower Kentucky AMU $240**
Upper Kentucky EIU $610
Lower Licking AMU $240**
Upper Licking EIU $610
Salt AMU $240**
*Rate Change Effective 3/1/2012 **Rate Change Effective 3/15/2012

Wetland Fee Schedule: Effective January 17, 2012

Service Area Credit Method Cost per Credit
All AMU $30,000

The EIU rate is based on the Eastern Kentucky Stream Assessment Protocol (EKSAP) and applies to the following Service Areas: Big Sandy River, Upper Kentucky River, Upper Licking River and Upper Cumberland River.

The AMU rate is based on the Central Kentucky Assessment Protocol (CKAP) and applies to the following Service Areas: Lower Kentucky River, Lower Licking River, Lower Cumberland River, Green and Tradewater River, Salt River and Jackson Purchase.

Mitigation units for wetlands, regardless of the location within Kentucky, are determined using the CKAP.


Credit Rate Explanation

In-Lieu Fee Mitigation Program

Kentucky Revised Statute 150.255 authorizes the Kentucky Department of Fish & Wildlife Resources to conduct mitigation and to recover costs associated conducting mitigation. No state general fund tax dollars or Department license dollars are used to fund the program.

Federal regulations require that in-lieu fee Sponsors use full cost accounting in setting credit prices in accordance with the “Final Rule” at 33 C.F.R. §332.8(o)(5)(ii). This means that credit rates must be sufficient to fund all costs of an in-lieu fee mitigation program. The Sponsor shall determine the cost of compensatory mitigation credits.

Pursuant to the federal regulation, the Instrument authorized by the U.S. Army Corps of Engineers for the in-lieu fee program officially established the Department as an in-lieu fee Sponsor and the rules for setting credit rates. The Instrument may be viewed here . The Instrument requires the Department to set fees,

“…to reflect the expected costs associated with the mitigation, based on "full cost accounting" and include, as appropriate: land or easement acquisition, project planning and design, construction, plant materials, labor, legal fees, monitoring, remediation or adaptive management activities, administrative costs, contingencies (including construction and real estate expenses), long term management and protection, financial assurances, or other costs. The Sponsor may adjust fees as necessary ...”

The in-lieu fee mitigation credit rate funds activities in three main categories of activities required to implement mitigation:

  • Administrative: 10%-20% (variable)
  • Service Areas: 70%-80% (variable)
  • Reserve: 10%

The credit rate is based on the historic and forecasted costs of implementing mitigation projects including property and conservation easement costs. Administrative and Reserve percentages are added to those costs.

Historically, the in-lieu fee credit rate was set by the Corps of Engineers and was based on the average cost of previous mitigation projects. Under this past practice the rate was adjusted after project costs were incurred. That approach to setting the credit rate created a situation where in-lieu fees could be paid at a rate lower than future actual costs of mitigation projects, which could result in less mitigation.

The 2008 Final Rule on mitigation changed this practice by requiring that in-lieu fee Sponsors set credit rates to fully fund all costs and change to a credit based accounting system for compliance. The in-lieu fee program now sets the rate not only from examining past project costs but also by estimating future project costs to comply with the 2008 Final Rule. This guards against defaulting on mitigation credit replacement since the in-lieu fee program is responsible to replace mitigation credits equal to the amount sold. The in-lieu fee program has identified potential future projects and set the credit rate at an amount needed to fund those projects instead of relying solely on the average rate of completed projects

A general explanation of the in-lieu fee program costs funded by the credit rate is provided below:

  • Administrative Costs:The credit rate includes a percentage that is used to fund administration of the program. That percentage varies between 10-20% and is based on current and projected operational expenses as well as projected sales.

    Administrative functions include tasks completed by Department or other state government staff, or professional services, for identifying, planning, and operation of the program including equipment and materials. Operation of the program may include other aspects necessary to complete mitigation projects such as design, monitoring, management, easement enforcement, legal actions, or other activity.

  • Service Area Costs:This category funds the design, construction, and monitoring of individual mitigation projects: property work, survey, design, construction and monitoring. The percentage of each credit that is devoted to the Service Area is between 70-80%. Monies from credit sales are distributed to the Service Area (a region based on river basins and physiography) from where they originated. There are ten service areas across the state. Funds from a service area are dedicated solely for projects in that same area. The following project related tasks are funded from the Service Area portion of credit sales:
    • Property acquisition or other permanent protection mechanisms: Permanent protection is required for all mitigation projects. This is accomplished by deed restrictions for property purchases or easements on other properties. Property acquisition and permanent protection involves costs associated with legal reviews, title opinions, curative work to correct defective property titles, surveys, and property costs. Some in-lieu fee mitigation sites involve the acquisition of large tracts of land to conduct stream mitigation in headwaters while others are limited to an easement to create a protected buffer of land along the riparian corridor of a stream project.
    • Engineering design: This is the phase of mitigation projects that involves surveying property boundaries for creating the easement, topographic surveys, analyses for the project such as shear stress, hydraulic, and sediment loading calculations, the development of design plans showing plan form, longitudinal profile, cross sections, specifications for structures, standard drawings, preparing permit applications, and development of a construction budget. Engineering services include construction oversight to insure that construction correctly implements the design plans and to verify invoices for construction. Engineering services are normally contracted to private firms.
    • Construction: This phase involves capital construction of individual mitigation projects. Construction contracts are awarded to private companies through a low-bid process. The construction is typically bonded and includes a warranty period on the contract. Normally, construction of mitigation projects is classified as heavy construction. Construction typically requires heavy equipment such as an excavator, dozer, bobcat, and/or other equipment. This phase also includes planting of trees and/or other vegetation.
    • Adaptive management: Each project includes a percentage of the overall project costs that is set aside to cover unexpected costs. The percentage that is set aside for adaptive management varies but is normally 10% of the project budget.
    • Monitoring (minimum of five years post-construction): All projects are monitored after completion as required by the Instrument and the Corps of Engineers and Kentucky Division of Water permits for each project. Each project must meet performance standards during the monitoring period before mitigation credits are validated. Monitoring includes conducting as-built survey(s), hydrogeomorphological measurements and observations, and vegetation surveys. The monitoring period is a minimum of five years but may last longer depending on the permit requirements for a particular project. Monitoring is typically contracted to the engineering firm that completed the design of the project.
  • Reserve:The Reserve has multiple purposes and is 10% of the credit rate. It functions as financial assurance, a funding source for long-term management, easement monitoring and enforcement, legal actions, or for funding additional mitigation projects. The Reserve has a minimum non-wasting limit that functions as an endowment. The non-wasting limit enables the program to maintain enough funding to meet mitigation obligations over the long-term. The Reserve is maintained by credit sales and interest accruing to the program account. The credit price includes a percentage that is dedicated to the Reserve upon receipt of payment for each credit sale. Interest accruing to the in-lieu fee account (except for the Administrative percentage) is included in the Reserve on a monthly basis. Activities funded by the Reserve are subject to the approval of the Corps of Engineers, except for minor actions that do not require permit authorization.

    The following tasks and activities are funded from the Reserve:

    • Long-term management: Long-term management is required of all mitigation projects. Management actions can include maintaining property boundaries, management of vegetation such as periodic burning of fire-dependent communities or suppression of exotic/invasive species, supplemental planting, signage, fencing, maintenance, or other items necessary to maintain mitigation sites.
    • Financial assurances and contingency: The Reserve provides funding to act as a contingency for the program. The in-lieu fee mitigation program is required to have the financial backing to ensure that the credits sold are replaced and fulfilled by successfully implementing mitigation projects. The Reserve provides assurances that funding will be available to create additional mitigation credits in any service area.
    • Legal: Legal actions including litigation may be funded from the reserve. Examples may include enforcement of easement violations.
    • Mitigation projects: The Reserve, except for the non-wasting minimum amount, may also be used to fund mitigation projects. Mitigation projects funded from the Reserve may generate mitigation credits in the service area where they are located.

Program Agreement



BJ Jamison 502-564-9801

Bethany Mulhall 502-564-5237

Andy Mowrey 502-564-5262

Nick Ozburn 502-564-5260

Tom Van Arsdall 502-564-5251

Rob Lewis 502-564-5277

Kristy Nowak 502-782-5839