SUBJECT: Part 303, Wetland Protection of the Natural Resources and Environmental Protection Act (NREPA), 1994 PA 451, as amended.

Petition John Silander

File No. 97-06-0429
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The above captioned matter was the subject of a contested case hearing resulting in the issuance of a Proposal For Decision dated December 2, 1998. In a letter dated December 2, 1998, the Office of Administrative Hearings gave the Parties until December 30, 1998, to file written Exceptions to the Proposal for Decision. Mr. Robert D. Wire, P.E., filed Exceptions on behalf of John Silander (Petitioner) on December 30, 1998. The Department of Environmental Quality did not file any Exceptions. The matter is now before the Chief Administrative Law Judge of the Office of Administrative Hearings for a final agency decision pursuant to Executive Order 1995-18 and Delegation Letter No. OAH-324.101 et seq.-01.

This Tribunal has considered the Proposal For Decision, the Parties Exceptions, exhibits, pleadings and arguments. Proposed findings and conclusions not addressed in this Final Determination and Order were found to be unsupported by the record or unnecessary in making a final decision in this contested case.

The Petitioner raises six (6) issues in its Exceptions. The Exceptions pertain to the quality and functioning of the subject wetland, whether the feature is a wetland, the Petitioner's plan to mitigate the fill it proposes and the practicality of the alternative allowed in the Proposal for Decision (PFD).

The issues of the whether the feature is a wetland and its quality are of a similar nature. The Petitioner asserts the wetland does not provide a benefit, while its proposed mitigation would. However, Part 303 sets forth the criteria for determining whether a wetland exists. The record supports the finding in the PFD that the property consists of vegetation and soils which indicate the presence of a wetland, and the feature is contiguous to Hamlin Lake. Given these facts, the feature is a regulated wetland under Part 303. Additionally, runoff from the wetland would certainly reach the lake given its proximity. This means the wetland provides the benefits enumerated in the legislative findings. MCL 324.3032.

The proposed mitigation area is some distance from Hamlin Lake and separated by both a ridge and a road, while the proposed fill area is on the shore of the lake. Irrespective of the amount of wetland created, the record does not support the Petitioner's contention that the new wetland would drain into the lake, nor that it would mitigate the loss of the subject wetland.

The Petitioner also argues the finding in the PFD that the construction of the residence on pilings and a boardwalk to provide access to the lake is without precedent. Without addressing that claim directly, it has been found by this Tribunal that such methods constitute a feasible and prudent alternative to placing fill in a wetland. See Petition of Mr. and Mrs. Laurence R. Sidebottom, File No. 96-07-0503, Final Determination and Order; Petition of James Kowall, File No. 97-5-153, Final Determination and Order. Therefore, this argument is without merit.

The Chief Administrative Law Judge of the Office of Administrative Hearings ADOPTS AND INCORPORATES BY REFERENCE the Proposal For Decision including the Findings of Fact and Conclusions of Law.

THEREFORE, IT IS ORDERED:

1. The Proposal For Decision dated December 2, 1998, is adopted by reference and incorporated into this Final Order.

2. The application for a permit, processed under for File No. 97-06-0429, is DENIED.

3. The Petitioner, at his discretion, shall be issued a permit as set forth in Respondent's Exhibit 2 and as revised by Respondent' Exhibit 3 and Respondent's Exhibit 4.

4. The Office of Administrative Hearings does not retain jurisdiction in this matter

Dated: March 18, 1999
Richard G. Lacasse, Chief
Administrative Law Judge, MDEQ
Office of Administrative Hearings

SUBJECT: Natural Resources and Environmental Protection Act (NREPA), 1994 PA 451, as amended; Part 303, Wetland Protection

Petition of John Silander

File No. 97-06-0429

Dated: December 2, 1998
Richard A. Patterson
Administrative Law Judge

This contested case involves the Department of Environmental Quality's denial of an application for a permit filed by Mr. John Silander. The application contemplated the placement of fill in a wetland pursuant to the provisions of Part 303 of Natural Resources and Environmental Protection Act (NREPA). MCL 323.30301 et seq.; MSA 24A.30301, et seq., and the administrative rules.

The hearing in this matter was requested by Mr. Silander under the provisions of Part 303 of the NREPA. MCL 323.30319(2); MSA 24A.30319(2). The hearing was conducted pursuant to the Administrative Procedures Act, MCL 24.201 et seq.; MSA 3.560 (101) et seq.

Pursuant to the Property Rights Preservation Act, 1996 PA 101, MCL 24.421 et seq.; MSA 3.560(421) et seq., in formulating this Proposal for Decision, the undersigned has reviewed the Takings Assessment Guidelines and considered the issue of whether this governmental action equates to a constitutional taking of property.

Mr. John Silander (Petitioner) is a partner in Rednalis, L.P., a limited partnership comprised of family members who own parcels fronting Hamlin Lake and an adjacent undeveloped wooded area comprised of 280 acres. The property is located in Hamlin Township, Mason County, Michigan.

The Petitioner is represented by Mr. Robert Wire, a registered professional engineer and partner of Rednalis. During the hearing the Petitioner presented three (3) witnesses: Mr. John Silander, Petitioner and General Partner of Rednalis, LP; Mr. Robert Wire P.E., Partner and Consulting Engineer; and Mr. Donald Wire, Partner and nephew of Mr. Silander.

The professional staff of the Department of Environmental Quality (Department) is charged with the day-to-day implementation of Part 303. The Department is represented by Mr. Frederick Gottschalk, Contested Case Coordinator, Land and Water Management Division (LWMD). The Department presented three witnesses: Mr. Steven Spencer, LWMD, District Supervisor, Cadillac District Office; Mr. Scott Rasmussen, LWMD, Land and Water Management Analyst, Cadillac District Office; and Mr. Garth Aslakson, Surface Water Quality Division, Surface Water Quality Analyst, Cadillac District Office.

During the contested case hearing on September 16, 1998, the Petitioner introduced twenty six (26) exhibits and the Department introduced ten (10). A list and description of these exhibits is included at the end of this Proposal for Decision.

During the pre-hearing conference on August 3, 1998, the Parties entered into the following stipulations:

1) The Petitioner is the proper applicant for a permit.

2) The processing of the application was procedurally correct.

I find these stipulations are legally correct, and I adopt them as findings. Stipulations entered into by the parties shall be used as evidence at the hearing and are binding. MCL 24.278; MSA 3.560(178); Dana Corporation v Employment Security Commission, 371 Mich 107, 110 (1963).

On September 11, 1997, the Petitioner submitted an application for a permit which proposed the placement of a 12 inch CMP culvert, 50 feet in length, and approximately 925 cubic yards of fill in .33 acres of wetland. The purpose of the proposed activity is to facilitate the construction of residential buildings and a road on a parcel adjacent to Hamlin Lake. On September 24, 1997, the Department sent a correction request for additional information to the Petitioners. The requested information was provided by Nordlund & Associates, Inc., on October 10, 1997. The file was then deemed administratively complete and Public Noticed on October 27, 1997. The Department denied the application by certified letter dated December 22, 1997. Respondent Exhibit 10. In the denial letter it was stated "[T]he Department would give consideration to the placement of the houses on pilings or place (sic) minimal fill as permitted in MDEQ permit # 95-6-310."

The initial application for a permit called for 2,500 cubic yards of fill in 1.02 acres of the same wetland at issue in this case. The purpose of the activity was to facilitate the construction of a road and a residential building site. Permit No. 95-6-310, issued in response to that application, allowed for the placement of 104 cubic yards of clean fill for construction of a 31 foot wide by 40 foot land access road through the wetland. It also allowed the placement of not more than 60 yards of clean fill and a 6 foot wide by 25 foot long open pile supported boardwalk in the wetland to allow for the construction of a single family residence. Respondent's Exhibit R-2. That permit was revised twice by letters from the Department. The first, dated September 27, 1995 (Respondent's Exhibit R-3), increased the fill by 100 cubic yards to allow for a second residence, garage and boardwalk with the garages at the rear with a boardwalk through the wetland between them. The second, dated December 4, 1995 (Respondent's Exhibit R-4), allowed an additional 50 cubic yards to facilitate a second residence, garage and boardwalk but with placement of both buildings at the rear of the property on upland. None of the activity proposed by the Department in response to the initial application was undertaken and at the time of the hearing the permit had expired. For the purposes of this Proposal for Decision, Permit No. 95-6-310, and the subsequent revisions, will be referenced below as the "Modified Permit".

Mr. John Silander testified that the aforementioned Rednalis, L.P. was formed to preserve the property which was initially owned by his grandparents. On average, a new home is built every five years on the property. Mr. Silander's residence was the first and is located at the north end of the lakefront. Subsequently, building has progressed southward and there are currently eight (8) homesites. This proposal involves a potential ninth and tenth site, both of which are intended to be sold. The site is depicted on Petitioner's Exhibit P-1, and is to the immediate south of the area depicted in white which is adjacent to the home site designated "Miller/Reum".

A gradual sale of portions of the property, predominantly back lots adjoining Lincoln Road on the east, had been undertaken in order to underwrite the costs and taxes of the partners. They desire to improve additional lakefront sites because of their potential increased value. Mr. Robert Wire estimated that the each site, if filled and buildable, would have a market value of approximately $125,000. He stated this figure would be many times the value of a non-riparian lot. The fill would be provided, at least in part, by leveling a sand pile on the front of the property that has existed for approximately 40 years. Petitioner's Exhibit P-5.

Mr. Scott Rasmussen went on site and prepared a Project Review Report. Respondent's Exhibit R-6. The document identified the area as a forested wetland of less than one acre which is contiguous to Hamlin Lake. The wetland area to be filled is described in the Application for Permit and Public Notice (Respondent's Exhibit R-5) as consisting of .33 acres. Mr. Steven Spencer, who reviewed the present and past applications and authored the revisions to the previous permit, found the presence of Ash, Aspen, Hemlock, Sensitive Fern and Sedges on the site. Soils are dark organic and water was present at 18 to 20 inches below grade at various points. He noted that alternatives were available such as utilizing less fill, configuring the building to fit the upland at the rear of the parcel or placing the house on pilings. On December 22, 1997 he denied the permit application.

The Petitioner contends the wetland in question is associated with a clay lens and is, therefore, not particularly functional as a wetland because the clay barrier prevents water from entering the substrate or migrating to Hamlin Lake. Mr. Silander described it as a clay depression or vernal pond from which water evaporates and opined that none of the water runs off into the lake. However, contrary to this assertion he testified that after a rainfall of one inch the week previous to the hearing he noticed no accumulation of rainwater in the wetland. In addition, he admitted on cross examination that water could move laterally above and around the clay and thereby reach the lake. The Petitioner argues that there are significant remaining wetlands on the property and they expressed a willingness to mitigate up to four to five times any loss resulting from the proposed activity. This argument will be addressed below.

The proposed activity involves filling in an area the Department has determined to be a regulated wetland. Since Petitioner did not stipulate that the activity was so regulated a finding is necessary. Section 30301 provides the criteria which must be found before the Department may regulate a wetland. MCL 324.30301(d)(i)(ii). As applicable to this site, in order to be regulated the wetland must be:

(i) Contiguous to the Great Lakes of Lake St. Clair, an inland lake of pond or a river or stream.

Administrative Rule 1988 AACS, R 281.921 (1)(b)(iii) defines "contiguous" as:

(b) `contiguous' means any of the following:

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(iii) A wetland is partially or entirely located within 500 of the ordinary high watermark of an inland lake or pond or a river or stream or is within 1,000 feet of the ordinary high water mark of one of the Great Lakes or Lake St. Clair, unless it is determined by the department, pursuant to R 281.924(4), that there is no surface water or groundwater connection to these waters.

The Department contends the affected area is a regulated wetland as determined by Mr. Spencer and Mr. Rasmussen. The Petitioners do not directly dispute that, but argue due to it being located over a clay lens and having observed no run off to the lake, the wetland is not performing the function expressed as valuable under the legislative determinations of Part 303. In particular, it does not, they contend, filter nutrients or provide flood control. However, these arguments address the quality of the wetland rather than disputing its existence.

Based on the testimony of Mr. Spencer and Mr. Rasmussen, I find, as a Matter of Fact, the area proposed to be filled is a wetland which is contiguous to Hamlin Lake and is regulated under Part 303.

Part 303 contains criteria for the review of permit applications and mandates findings be made with regard to each criterion. The pertinent provision, §30311(1), provides:

A permit for an activity listed in section 30304 shall not be approved unless the department determines that the issuance of a permit is in the public interest, that the permit is necessary to realize the benefits derived from the activity, and that the activity is otherwise lawful.

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A determination of whether the project is in the public interest is made by applying criteria discussed in Part 303. I find, as a Matter of Fact, a permit is necessary to engage in the activity requested, placing fill to allow for construction of residences, and said activity is otherwise lawful. As to the public interest, §30311(2) provides:

(2) In determining whether the activity is in the public interest, the benefit which reasonably may be expected to accrue from the proposal shall be balanced against the reasonably foreseeable detriments of the activity. The decision shall reflect the national and state concern for the protection of natural resources from pollution, impairment and destruction. The following general criteria shall be considered:

(a) The relative extent of the public and private need for the proposed activity.

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There is no stated public need for the proposed activity. The private need for the Petitioner is to allow for the development of the subject parcel, thus economically enhancing its value.

(b) The availability of feasible and prudent alternative locations and methods to accomplish the expected benefits from the activity.

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The Department has, in essence, offered a feasible and prudent alternative by the issuance of the aforementioned Modified Permit and the revisions of same per Respondent's Exhibit 3 and 4. These proposals would allow access and essentially straddle the wetland, with the houses on the lakeward side predominantly on upland and the garage on upland to the rear or with the buildings at the rear. A board walk through the wetland would provide ingress and egress to the structures. As previously noted, the Department has also proposed placing the buildings on pilings. Respondent's Exhibit R-10. However, the use of pilings was not addressed during the hearing as to cost and feasibility. Therefore, no finding is possible as to whether that would constitute a feasible and prudent alternative. Assumedly, upon submission of a proper plan, at the Petitioner's discretion, this could be further considered by the Department.

In response to the proposal to build pursuant to the modified permit, Petitioner responded that it would be less desirable than its application request and the proposed mitigation would compensate for the wetland impact. The efficacy of mitigation will be addressed later under the subsection (4)(b) analysis.

I find, therefore, as a Matter of Fact, that the proposal contained in the modified permit and subsequent revisions constitute a feasible and prudent alternative to the activity proposed in the permit application. The basis of this finding is that the Modified Permit essentially accomplishes the Petitioner's stated purpose while at the same time it lessens the wetland impact.

(c) The extent and permanence of the beneficial or detrimental effects which the proposed activity may have on the public and private uses to which the area is suited, including the benefits the wetland provides.

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Mr. Spencer testified that the wetland serves as a flood storage area as well as a nutrient sump to filter surface water before it enters Hamlin Lake. Further, it provides a beneficial habitat and breeding area for reptiles and other wildlife. In that wetlands are essential to control nutrient loading, he described this wetland as a "last line of defense" due to its proximity to the lake.

The activity proposed in the application would result in a permanent effect to the wetland and eliminate almost the entire wetland along with the beneficial effects it now provides. To the contrary, the Modified Permit would preserve the majority of the wetland and, consequently, its functions.

(d) The probable impact of each proposal in relation to the cumulative effect created by other existing and anticipated activities in the watershed.

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Mr. Spencer expressed concern that granting a permit as requested would establish a precedent for further such applications. A letter to the same effect from the Hamlin Township supervisor Kathryn Griffith was entered into the record. Respondent's Exhibit 9. That letter also referred to a management plan which included, among other things, wetlands preservation.

Mr. Spencer testified that Hamlin Lake is on the verge of becoming eutrophic and that loss of wetland resulting from the proposed activity will increase nutrient loading and exacerbate the problem. Mr. Aslakson authored an Interoffice Communication (Respondent's Exhibit 8) and testified to the presence of severe blooms of Blue Green Algae which he attributed to phosphorus enrichment within the water column of the lake.

Due to the near eutrophic state of the lake, I find, as a Matter of Fact, the cumulative impact from the loss of wetland resulting from the proposed activity is significant. Furthermore, the Modified Permit would minimize this concern while allowing the Petitioner to use the parcel.

(e) The probable impact on recognized historic, cultural, scenic, ecological or recreational values and on the public health or fish or wildlife.

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There was no testimony that the activity proposed by the Petitioner would have any impact on recognized historic, cultural scenic values or public health. Recreation could be negatively effected if, as Mr. Spencer indicated, Hamlin Lake became eutrophic, a situation which may be realized if the proposed activity were to be permitted. Mr. Spencer admitted fish would only be indirectly affected by the water quality issue. He also testified the area could be considered a reproduction area for wildlife, but the vast undeveloped remaining area would seem to alleviate that concern.

(f) The size of the wetland being considered.

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The area proposed for filling is approximately 1/3 of an acre. In so doing virtually all of the wetland in this area would be converted to upland. Respondent's Exhibit R-5, Page 4. The Modified Permit would minimize the loss. Respondent's Exhibit R-3, Page 2.

(g) The amount of remaining wetland in the general area.

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The amount of remaining wetland in the area, although not quantified, is, as depicted in Petitioner's Exhibit P-1, considerable.

(h) Proximity to any waterway.

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The wetland is approximately 90 to 100 feet from the shore of Hamlin Lake.

(i) Economic value, both public and private, of the proposed land change to the general area.

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There is no public economic value. The private economic value to Petitioner would be to greatly increase the value of the property.

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(3) In considering a permit application, the department shall give serious consideration to findings of necessity for the proposed activity which have been made by other state agencies.

There have been no findings by other state agencies in connection with the Petitioner's application for a permit.

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(4) A permit shall not be issued unless it is shown that an unacceptable disruption will not result to the aquatic resources. In determining whether a disruption to the aquatic resources is unacceptable, the criteria set forth in section 3 and subsection (2) shall be considered. A permit shall not be issued unless the applicant also shows either of the following:

(a) The proposed activity is primarily dependent upon being located in the wetland.

(b) A feasible and prudent alternative does not exist.

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As previously discussed, the Petitioner is willing to explore mitigation to avoid an unacceptable disruption to the aquatic resources, in the form of the creation of wetland four to five times the loss resulting from the proposed activity. Mr. Wire suggested the mitigation would be done to the north and west, adjacent to the open water and marsh depicted on Exhibit P-1, and to the immediate east of the developed lake front area depicted in white thereon. In so doing, the Petitioner argues the existing wetland, which they argue serves little benefit, would be replaced by a higher quality wetland.

The basis of the Petitioner's argument is that the proposed mitigation, at least four times the size of the exiting wetland, would be contiguous to a large marsh area, thus allowing water to be further filtered before it entered Hamlin Lake. This argument necessarily assumes the water from the filled area would flow toward the proposed mitigation area. However the topography indicates a lowering of elevation across the subject property from the back lakeward of some six (6) feet. It then follows that water flow currently is, and will remain, lakeward, and not toward the proposed mitigation area. A road at the rear of the property which would further impede flow to the east. In rebuttal to the Petitioner's argument, Mr. Spencer described the wetland as the "last line of defense" and testified that wetlands adjacent or close to a water body are always more beneficial.

Mitigation is governed by 1998 AACS, R 281.925. Subsection (3) of the Rule provides "[M]itigation shall not be considered when it is feasible and prudent to avoid impacts". In that a previous finding has been made that a feasible and prudent alternative exists, the Petitioner's proposed mitigation is in contrivance of this Rule. In addition, Subsection (5) states mitigation can be considered "...if the Department determines that it is practical to replace the wetland resource values which will be unavoidably impacted". Emphasis added. Based on the record in this case, the resource values of the wetland on the subject site are different and more critical due to their proximity to Hamlin Lake. The Petitioner's proposal to replace or increase wetlands which are both more distant and of a different character would not replace the values of those lost. Therefore, I find, as a Matter of Fact, the proposed mitigation would not enhance or compensate for the loss of this wetland.

The Petitioner's proposal is primarily dependent on being located in the wetland in that it envisions completely filling the parcels. However, the proposed activity, residential development, could be accomplished without filling the entire wetland under the Modified Permit. That proposal, while utilizing some of the wetland, is not primarily dependent thereon.

I have previously found that a feasible and prudent alternative exists.

1. I conclude, as a Matter of Law, the subject site is comprised of regulated wetland and a permit is required pursuant to Part 303.

2. I conclude, as a Matter of Law, pursuant to the stipulations of the Parties, Mr. John Silander is the proper applicant for a permit and the processing of the application for a permit was procedurally correct.

3. I conclude, as a Matter of Law, both the activity permitted in the Modified Permit and Petitioner's proposal are otherwise lawful.

4. I conclude, as a Matter of Law, that the activity applied for is not in the public interest for the reasons stated in the Findings of Fact.

5. I conclude, as a Matter of Law, the activity permitted in the Modified Permit is in the public interest for the reasons stated in the Findings of Fact.

6. I conclude, as a Matter of Law, the activity permitted in the Modified Permit will not cause an unacceptable disruption to aquatic resources, as opposed to the Petitioners proposed activity which would.

7. I conclude, as a Matter of Law, the Petitioner's proposed activity is primarily dependent on being located in the wetland, while the activity permitted in the Modified Permit is not.

8. I conclude, as a Matter of Law, the activity permitted in the Modified Permit is a feasible and prudent alternative to the activity proposed in the application for a permit.

Based upon the Findings of Fact and Conclusions of Law, it is proposed that Petitioner be issued a permit as described in the Modified Permit entered on this record as Department Exhibit Respondent's Exhibit 2 and as revised by letter dated September 27, 1995, (Respondent Exhibit 3) and December 4, 1995, (Respondent Exhibit 4).

Dated: December 2, 1998

Richard A. Patterson
Administrative Law Judge

Petition of John Silander

File No. 97-06-0429

Respondent's Exhibits

1 Map labeled: Rednalis Lake Estates, Proposed Site Condominiums, Job. No. 515-4, Norlund & Associates, Inc.
2 State of Michigan [SOM], Department of Natural Resources [DNR] Modified Permit No. 95-06-0310. Issued To: Rednalis Ltd Partner on September 7, 1995.
3 Letter to Rednalis Limited Partnership, dated September 27, 1995 from Steven E. Spencer, District Supervisor, DNR, Cadillac District Office.
4 Letter to Rednalis Limited Partnership, dated December 4, 1995 from Steven E. Spencer.
5 SOM, Department of Environmental Quality [DEQ], Land and Water Management Division [LWMD], Cadillac, Public Notice dated October 27, 1997 on File No. 97-06-0429W.
6 DEQ, LWMD, Project Review Report, Field Review by evaluator, Rasmusson.
7 Carbon of Rite-O-Gram dated December 5, 1997 to Scott Rasmusson, LWMD from Tom Rozich, Fish Division.
8 MDEQ, Interoffice Communication dated December 8, 1997 to Scott Rasmusson, LWMD from Garth Aslakson, SWQD.
9 Letter to Scott Rasmusson, LWMD dated July 24, 1998 from Kathryn Griffith, Hamlin Township Supervisor.
10 Certified letter to John Silander dated December 22, 1997 from Scott Rasmusson, LWMD.

Petitioner's Exhibits

1 Color coded Topographic map on coreboard.
2 Map, labeled Wetlands Determination by: Resource Management, December 1993 and drawing by Norlund & Associates, Inc., Job No. 515-4.
3 - 26 Colored Photographs, 4" x 6"