Estimation and Analysis of Expenses of Design-Bid-Build Projects for Stream Mitigation in North Carolina

As North Carolina’s economy has grown, the need to mitigate negative effects of land disturbance on aquatic ecosystems has also grown. The regulatory authority to require stream mitigation in North Carolina has now been in place for 10 years. When land disturbance adversely impacts streams, the responsible party, typically a developer or North Carolina’s Department of Transportation, can satisfy mitigation requirements through payment of fees to the state’s Ecosystem Enhancement Program (EEP). The EEP then manages a stream mitigation project on behalf of the responsible party. As almost a decade has passed, the needs for the EEP to precisely know the total and per-project expenses of its in-lieu-fee program for stream mitigation and identify ways to reduce costs of the program have grown. The goal of this study was to provide EEP officials with objective information that they could use to improve management of projects for stream mitigation. The first objective was to precisely and thoroughly account for all of the expenses of previous design-bid and design-bid-build projects. The second objective was to rigorously analyze the effects of stream length, location, and other project characteristics on the contractual expense of these projects. EEP has spent or committed to spend $46.34 million for 45 design-build or design-bid-build projects to restore or enhance 191,374 ft. of streams. Expenses per foot are $242.12. As the length of a restored or enhanced stream increases, the expenses per foot decrease. The decrease is more pronounced in undeveloped, rural areas. EEP could reduce contractual costs of mitigation by approving fewer projects with longer reaches of streams. To further reduce costs, EEP could approve projects in undeveloped, rural areas if the stream mitigation units produced would be at least as great as those in urban areas.