Caltrans Responds to Corps Conditional Suspension of Bypass Permit

willits_childrenOn June 20, just one week after State agencies approved the Willits Bypass Mitigation and Management Proposal,  The U S Army Corps of Engineers notified Caltrans that their permit was conditionally suspended, and that all ground disturbing work within wetlands and stream beds was to halt.  Caltrans staff were disappointed and surprised by the Corps decision to suspend the permit.  Caltrans meet with the Corps on June 24 to discuss their suspension letter to better understand the Corps needs and clarify points in the letter that Caltrans believed to have already been completed.  As a result of that meeting, Caltrans drafted and sent the Corps a reply on June 27.  The entire text of the letter is provided below, and a scanned/signed PDF version is available to download.

Caltrans continues to work with the Corps to resolve these issues and get the suspension lifted as quickly as possible.  Each day the cost to taxpayers goes up due to delays in work, and if there is no resolve soon the project could be delayed a full season which would cost many millions of dollars.

Willits Bypass Suspension Letter from the Corps, June 20, 2014

Caltrans Response to Corps Conditional Suspension Letter, June 27, 2014 [PDF 1.9M]

June 27, 2014

Lieutenant Colonel John K. Baker, P.E.
District Engineer
United States Army Corps of Engineers
1455 Market Street
San Francisco, CA 94130-1398

Dear Lt. Col. Baker:

Thanks to you and your staff for meeting with me and my Caltrans project team on June 24, 2014 to discuss your June 20, 2014, letter and Notice of Permit Suspension of Department of Army Permit 1991-194740N for the MEN-101 Willits Bypass Project. I appreciated the opportunity to have this very cordial and informative meeting with you and your staff, and hope that we can mutually proceed to a quick resolution of this significant setback to our Willits Bypass construction project. As we discussed at our meeting, construction activities within the Corps’ jurisdictional areas were halted immediately upon receipt of your June 20th letter.

Caltrans’ responses to each issue are presented below in the order they were outlined in your June 20th letter.

Issue #1: Special Condition 1


We are committed to environmental mitigation on this project, which is one of the largest mitigation efforts in Caltrans’ history. Caltrans does not dispute that it, “shall mitigate for permanent impacts to 42.76 acres and temporary impacts to 22.91 acres … associated with Phase 1 … through restoration (rehabilitation) of 344.63 acres and establishment of 49.58 acres of wetlands and the rehabilitation of 19.03 acres of other waters of the U.S.” Caltrans acknowledges that implementation of a number of elements of the Willits Bypass Mitigation Project have been delayed for a number of unforeseen reasons, as has the actual construction of the Willits Bypass. Primarily due to the Mitigation Project contract bids coming in excessively over the Engineer’s Estimate, Caltrans needed to reject the bids and repackage the advertised bid package into smaller contracts that should be less costly and more biddable by qualified contractors. While processing the repackaged contracts, Caltrans has itself undertaken items of work that were originally encompassed in the Mitigation Project. This work will accelerate accomplishment of Mitigation Project deliverables, and includes performing some essential mitigation site preparation work under a Bypass Project contract change order (CCO), undertaking required archaeological surveys and testing under a consultant contract with Pacific Legacy, Inc., performing performance monitoring with both consultants and Caltrans staff, and developing four separate service contracts for seed collection and plant propagation.

The details of Caltrans’ progress and anticipated schedule for implementation are set forth in the following sections of this letter. In summary, Caltrans is making good progress on advancing the mitigation work and expects to further accelerate that work as the repackaged Mitigation Project contracts come on line. In short, Caltrans is diligently striving to achieve mitigation success given the financial, logistical and accountability requirements of a public agency. Special Condition 1 of the Permit anticipates that delays in the mitigation implementation schedule may transpire, and that in such cases, Caltrans may be required to provide additional mitigation to compensate for temporal loss, a consequence Caltrans understands and will accept.

Issue #2: Special Condition 3


As discussed at our meeting, your office accepted Caltrans’ last financial assurance letter on July 8, 2013, as Permit-compliant. We sought clarification as to whether, and in what manner, your office deems Caltrans to be out of compliance with this Condition, at this time, and you offered to provide follow-up clarification regarding this issue. Meanwhile, Caltrans additionally responds as follows:

33C.F.R.§332.3(n)(1) allows the USACE to accept a “formal documented commitment from a government agency or public authority” as an alternate mechanism to other enumerated forms of financial assurance. Caltrans has previously provided the USACE correspondence on several occasions which formally confirmed that construction of the Willits Bypass Mitigation Project is fully funded. Specifically, letters sent to your office dated August 13, 2010, May 18, 2012, September 24, 2012, and July 8, 2013, documented financial assurances for the Mitigation Project, per requirements of 33 CFR § 332.3 and in accordance with USACE regulatory requirements.

An October 4, 2012 letter to the USACE noted that Caltrans had purchased in fee title all of the Mitigation Project properties for a total of $14.7 million, and outlined the estimated costs of construction, short-term performance monitoring and maintenance activities, and a long-term mitigation management non-wasting endowment for the Mitigation Project. A February 7, 2013 letter to the USACE confirmed the California Transportation Commission (CTC)’s programming of $47.82 million for the capital construction phase of the Mitigation Project, plus use of $6.25 million of federal demonstration program funds (total of $54.07 million). That letter also noted that the programmed funds are reserved strictly for the Mitigation Project only, and that they would not be used for cost overruns on the Bypass Project or for any other work other than the Mitigation Project.

As explained in our meeting on June 24, 2014, and previously on January 28, 2014, Caltrans rejected the contract bids for construction of the Mitigation Project last fall when the bids came in excessively high (approximately 200% over the Engineer’s Estimate). Caltrans then requested and received approval from the CTC for a 20-month extension of the funding commitment to August 2015 to allow Caltrans time to repackage the Mitigation Project contract into several smaller, more biddable contracts. That effort is proceeding well, with the first Mitigation Project contract expected to be advertised this fall and awarded in February 2015. With a 55-day delayed start to allow the contractor time to secure property for storage yards, approval of the Storm Water Pollution Prevention Plan, etc., work will commence in April 2015. The remaining contracts will be rolled out with staggered start dates shortly afterward.

In the meantime, Caltrans has undertaken a number of steps to expedite the Mitigation Project and ensure that the requisite funding is in place when needed for each component of the Mitigation Project. On September 19, 2013, Caltrans executed a contract change order (CCO) under the Bypass construction project for infrastructure site preparation work on the mitigation properties, including removal of existing cross fencing and debris removal, and new fence installation on 404 lands. By fall of 2013, all remaining grazing leases were cancelled on mitigation lands designated for the USACE. On April 10, 2014, Caltrans initiated a $3.2 million CCO for installation of cattle exclusion fencing on designated mitigation lands and installation of water lines. Caltrans is undertaking the short-term performance monitoring and maintenance activities with internal capital outlay support consultant and staff resources. As part of our process to revise the State Agencies Mitigation & Monitoring Proposal (State MMP), Caltrans staff have worked extensively with the Mendocino County Resource Conservation District (MCRCD) and their mitigation consultant, the California Department of Fish & Wildlife (CDFW) and the North Coast Regional Water Quality Control Board (NCRWQCB) to develop a revised Property Analysis Record (PAR), which is a financial tool used to estimate the endowment needed for the long-term management of a mitigation project. That endowment will be processed and financed with a Program Change Request (PCR) within Caltrans over the next several months, with a target of having a transfer agreement and actual transfer of the funds to the endowment holder, the National Fish & Wildlife Foundation (NFWF) by the end of this calendar year. All of these activities are integral elements of the mitigation implementation schedule and final mitigation plan set forth in the Permit.

Since providing the last financial assurance letter to your office, Caltrans worked with CDFW and the NCRWQCB to revise the State MMP, which includes a chapter (Chapter 13 – enclosed) that addresses financial assurances for the Mitigation Project. The above-referenced letters of financial assurance, similar letters of financial assurance to CDFW and the NCRWQCB, and the recently revised State MMP all confirm Caltrans’ financial ability and commitment to fulfilling its mitigation requirements. As a responsible public agency with decades of experience in successfully funding and developing large and complex public improvement projects, Caltrans remains committed to returning to the CTC to seek a supplemental vote as needed and at the appropriate time, should circumstances ever require.

Issue #3: Special Condition 5: The Permittee shall record a Conservation Easement (CE) in a form approved by the Corps…


As described in this permit condition, Caltrans must prepare and ultimately record CEs as part of the overall mitigation plan. However, the condition prohibits Caltrans from executing and recording any CE, “until it has received written approval from the Corps”. Accordingly, a draft Conservation Easement package was submitted to the USACE for review and input in an email correspondence dated August 27, 2012 (copy enclosed). There has been no response to this submittal from the USACE to-date. We are therefore unclear why this condition has been cited as a basis for a conditional suspension, and respectfully request further clarification on this point.

Caltrans is committed to working diligently and intensively with the Corps on any issues identified during a review of the draft CE and to record them. Caltrans recently demonstrated its commitment and ability to do so by resolving all issues with state regulatory issues regarding CEs for the much larger areas of mitigation lands required by the State MMP.

Following those recent discussions with CDFW, Caltrans is now in agreement with CDFW that recording of the CEs may occur while Caltrans still holds title to the mitigation properties. Therefore, Caltrans intends to record the CEs on the mitigation lands prior to transfer of title to the MCRCD.

Issue #4: Financial Assurances…


Please see response to Issue #2 above.

Issue #5: Updated mitigation implementation schedule…


The Mitigation Project site preparation activities began in September 2013. In an effort to keep the Corps up-to-date on mitigation activities, on July 23, 2013, an updated Mitigation Project implementation schedule was sent via email. In that email, and a second one on July 25, 2013, Caltrans offered to meet, at the Corps’ convenience, to discuss the updated Mitigation Project schedule and factors that have some what impeded Caltrans’ ability to implement the actions listed in Figure 7-1 of the MMP in a timely manner. The Corps did not respond to either request to meet and confer.

In a correspondence dated September 27, 2013, Caltrans re-stated that the implementation scheduleinFigure7-1oftheJanuary2012MMPhad been modified and submitted to the USACE on July 23, 2013. The letter noted how the unprecedented size and comprehensive management requirements of this mitigation project resulted in additional time needed to develop the construction plans, specifications and contract. Caltrans requested a meeting to discuss this revised schedule. Unfortunately, no response was received.

In a January 28, 2014 meeting between USACE and Caltrans held at the Caltrans Construction Office in Willits, CA, Caltrans outlined the reasons for rejecting all mitigation contract bids, the need for schedule changes, and the strategy to restructure Mitigation Project contracts. A May 2, 2014, e-mail from Caltrans transmitted a revised schedule for awarding the repackaged mitigation contracts to the USACE. An additional revised “MMP Figure 7-1 (Mitigation Implementation Schedule)” (copy enclosed) was provided to the USACE in a Willits Bypass field meeting on June 17, 2014.

Baseline studies required by permit Special Condition 10 were designed according to standard nationwide professional practices, which were approved by the USACE before being conducted on the mitigation properties by qualified technical staff; a final report was submitted to the USACE in November 2012. At the USACE’s request,the study methodology was subsequently modified and the baseline study was conducted a second time at considerable cost by Caltrans’ mitigation consultants. Please note that the final report “Baseline Vegetation Monitoring Results for Willits Bypass Project Off-site Wetland Rehabilitation Sites, August 2013” was submitted to the USACE in September 2013, and subsequently accepted by the USACE. Upon the Corps’ review of this final report, minor adjustments were made at two wetland rehabilitation Type locations, which were accepted by the USACE.

Issue #6: Corrective Measure 2 from the August 16, 2013 Non-Compliance Letter


Caltrans acknowledges that completion of site preparation activities did not and could not be completed by October 1, 2013 due to the Mitigation Project contract bids coming in excessively high. The Corps was first aware of specific site preparation tasks not progressing according to schedule (incomplete cattle exclusion fencing, debris and cross fence removal still needed on three of the eight large parcels) during a site compliance inspection on June 25, 2013, and then during a follow up telephone conversation with Caltrans staff on August 2, 2013. During this follow up discussion Caltrans staff informed the Corps alternative means would be used to accelerate the remaining site preparation work. Caltrans has since made every effort practicable to perform the site preparation work as quickly as possible, utilizing a contract change order, in-house and consultant resources to perform monitoring and archaeological testing, initial mitigation seed collection, and temporary stockpiling of wetland topsoil. These activities were outlined at our January 28, 2014 meeting and in other discussions with USACE staff. Site preparation activities were targeted for completion by the end of July 2014, before the conditional suspension of the 404 permit was issued on June 20, 2014.

Issue #7: Corrective Measure 3 from the August 16, 2013 USACE Non-Compliance Letter


As expressed in our January 14, 2014 meeting and again in a March 4, 2014 meeting with USACE staff, Caltrans has been anticipating USACE staff to respond to our requests for updating the Federal MMP. Caltrans welcomes a meeting or series of meetings with USACE staff to discuss revisions and updates to the MMP. As requested in Issue # 11 below, Caltrans will coordinate with the USACE to schedule that meeting and initiate the process prior to July 15, 2014. As noted in our June 24th meeting, Caltrans’ recent successful collaboration with the CDFW and NCRWQCB to prepare a comprehensive revision of the State MMP document took about five months of intensive work by the involved parties. As noted above, Caltrans is certainly willing to go through a similar process with the USACE for the federal MMP, and will initiate this effort promptly.

Issue #8: Additional Corrective Measure 1 – Revised Implementation Schedule


Please see response to Issue #5 above. Caltrans understands that it is already in compliance with this additional corrective measure, but would appreciate clarification from the USACE if otherwise.

Issue #9: “Additional Corrective Measure #2” – Completed and signed native seed collection and propagule collection contract for the mitigation project by July 15, 2014


Initial seed collection efforts were conducted by Caltrans staff during the 2011 and 2012 seasons. Limited quantities of several varieties of native seed were collected and stored for later use by the Mitigation Project contractor. While the Mitigation Project contract is undergoing repackaging, Caltrans has entered into separate service contracts whereby contractors will perform seed collection and plant propagation work so that plants will be propagated and available for planting at the appropriate time needed by the contractors. Even under the original contract award schedule, seed collection and plant propagation could not have occurred any sooner than the scheduled work under the new service contracts.

The first service contract for seed collection has been executed and seed collection began on June 23, 2014. A second seed collecting contract is out for bids and is expected to be awarded by July 1, 2014. Plant propagation contracts are expected to be awarded by July 1st and July 15thand relevant documentation for all the service contracts will be forwarded to your office at that time.

Issue #10: “Additional Corrective Measure #3” – Itemized list of all mitigation project ground disturbing and fill activities for the remainder of  2014, due by July 15, 2014.


Mitigation Project site preparation activities, including removal of existing cross-fencing, installation of cattle exclusion fencing, removal of cattle from mitigation lands,and debris removal began in September 2013. Work has progressed deliberately and as quickly as our Caltrans legal, administrative and contracting processes allow. By October 1, 2013,new mitigation fencing to exclude cattle grazing was completed on at least 53% of USACE-required mitigation lands. To-date, most leases have expired and cattle have been removed from five of the eight large mitigation parcels. Various debris removal from the mitigation properties was completed by October1,2013.

Wetland topsoil to be used for future wetland establishment has been salvaged from the footprint of the bypass project and stockpiled on the MGC Plasma property. In addition, Caltrans continues  to consult with the local Native American tribes and conduct supplemental archaeological testing to ensure any cultural resources are properly protected and addressed during activities conducted on the offsite mitigation parcels pursuant to Section 106 of the National Historic Preservation Act.

As requested in your June 20, 2014 letter, following is a list of Mitigation Project ground-disturbing activities planned for the remainder of the 2014 construction season:

  • Archaeological testing on the mitigation properties prior to installation of cattle exclusion fencing and trenching for water lines. This work has been underway for several months and is being conducted in concert with the CCO sub-contractor performing the site preparation work. These surveys and testing for the presence of any cultural resources are being done to remain in compliance with Section 106 of the National Historic Preservation Act and are essential to successful implementation of the Mitigation Project.
  • Fencing for grazing management and cattle exclusion from wetland creation and riparian area. This work includes 39,221 meters of red brand non-tensile 12.5 gage barbed wire fence, 74 sixteen feet long metal gates, and 82 twelve feet long double gates. Sixty percent of this work has been completed. Additionally, there are 86 signs stating, “WETLAND MANAGEMENT AREA” that will be installed on the fence to demarcate the areas.
  • Water supply line as part of the grazing management. This work included installation of 15,658 meters of 2 inch Schedule-40 plastic pipe, 64 stock tanks with gravel pads, and development of three wells. About 30% of this work has been completed.
  • Four temporary bridges over various creeks are required for access to the mitigation parcels.   One of these bridges has been completed; the other three will be constructed as soon as possible.
  • Other mitigation project-related activities as required.

Note: Caltrans is proceeding with this critical mitigation work, per USACE approval in a personal communication between Chris Collison, Caltrans Senior Resource Biologist, and Sahrye Cohen, USACE Project Manager, on or about 11:30 a.m. on June 26, 2014.

Additionally, approval is requested to complete the construction of all fish passage mitigation work at Haehl and Upp Creeks. The mitigation improvements are designed to improve fish passage, channel stability, water quality, and riparian vegetation along the stream banks, in compliance with the September 11, 2006 Biological Opinion from the National Marine Fisheries Service and the June 29, 2010 Section 1602 Streambed Alteration Agreement with the California Department of Fish and Wildlife. It is necessary to resume the work on these creek improvements immediately, to reduce the potential for additional impacts related to delaying this work into the rainy season and another construction season. Caltrans and the construction contractor have already committed to increase the amount of equipment and manpower necessary to accelerate this work to ensure delivery of these improvements this year. Formal confirmation of your timely approval to resume work immediately is required, so this opportunity will not be lost.

Finally, the clear water diversion has already been initiated at bent #24 of the viaduct (at confluence of Broaddus/Baechtel/Outlet Creeks) to facilitate installation of a cofferdam; for foundation and pier column and falsework construction. Fisheries biologists captured and relocated hundreds of listed salmonids and relocated them outside the work area. This water diversion and supporting aquadams must remain in place and be maintained to prevent ‘take’ of Endangered Species Act listed salmonids. In order to avoid any unnecessary impacts to protected fisheries, your prompt approval to continue the mitigation work at bent #24 is required.

Issue #11: “Additional Corrective Measure #4” – Corps staff will arrange a meeting with Caltrans staff by July 15,2014 to revise and up date the MMP.


Caltrans welcomes a meeting with the USACE staff to discuss revisions and updates to the MMP prior to July 15, 2014. As requested at the March 4, 2014 meeting, Caltrans would especially welcome clarification from the USACE on the performance standards and success criteria in Chapter 9 of the MMP.

Issue #12: “Additional Corrective Measure #5” – Caltrans is required to provide an additional 5.727 acres of wetland establishment, and an additional 9.015 credits of wetland rehabilitation… You must provide a proposal for the additional compensatory mitigation or a proposal for a  reduction in fill in waters of the U.S., including wetlands, by July 15, 2014.


Caltrans acknowledges that elements of the Mitigation Project work are not progressing at a pace commensurate with that of the Bypass Project on a percentage by percentage basis. However, Caltrans is doing everything within its legal, financial and logistical means as a public agency to both implement and accelerate delivery of the Mitigation Project. Successful implementation of biological mitigation requires time, patience, nurturing and reliance on natural growing seasons and conditions, and unfortunately cannot always progress in a linear fashion like road construction activities.

Caltrans also acknowledges the USACE’s requirement for additional compensatory mitigation. To come up with appropriate and suitable additional compensatory mitigation, it will be essential to meet and collaborate with USACE staff on the specifics of such mitigation, conduct follow-up investigations, and identification and preparation of a realistic proposal. Caltrans has concerns about meeting the July 15, 2014 deadline for submission of a concrete proposal, therefore respectfully requests that it meet the USACE to discuss approaches and milestones to prepare a proposal for additional mitigation. Please advise if you are amenable to this request.



Once again, Caltrans appreciates the opportunity to present the progress to-date and status of the Mitigation Project. While not yet progressing on both the Bypass and Mitigation Projects on an equivalent shovel by shovel basis, Caltrans has achieved crucial accomplishments by purchasing and protecting the mitigation properties over the past few years, redirecting significant funding and staff efforts to start the mitigation site preparation work last year and this year, and setting in place the mechanisms to fully deliver the Mitigation Project in the near future. As all parties are aware, there remain many issues and details to address ahead before we reach our goals and I am confident that Caltrans and the USACE can resolve them successfully.

Suspension of the Bypass construction project at this point will only harm Caltrans and the California taxpayers in the amount of potentially tens of millions of dollars in delay costs, notwithstanding the fact that – as evidenced by our agency’s substantial investments in funds, time, labor, and contractual commitments – Caltrans will ultimately meet all its current compensatory mitigation obligations and provide additional mitigation due to the delay. Continued suspension of construction of the Bypass will also soon risk leaving very significant amounts of graded and disturbed areas open for an extra wet season, rather than protected by the anticipated construction and permanent stormwater management features. This imposes a significant and unnecessary risk of unmanaged run-off and discharges during the coming rainy season, and rain events before then. Finally, losing a one year of construction schedule will impose unnecessary inconvenience on the community of Willits. It is my hope that reinstatement of this permit to allow Caltrans to proceed in good faith on both the Bypass and Mitigation Projects will be allowed forthwith.

Additionally, Caltrans respectfully requests that the pending permit modification per our May 1, 2014, application for the contractor’s Mendocino Forest Products borrow site operation be approved at the earliest opportunity. It is our understanding that the NCRWQCB has also contacted the USACE and urged them to allow use of that site, rather than the Oil Well Hill site. That borrow material is needed now for construction, and constructions delays will result in some of the unfortunate results discussed above.

It is apparent that the communication between our respective agencies has broken down somewhat. It is imperative that Caltrans and the USACE institute a way to better collaborate and mutually strive to implement this very complex Mitigation Project, to the benefit of both agencies and our missions and goals. The one common goal that both agencies share is that of successful implementation of this Mitigation Project and compliance with the Department of Army Permit 1991-194740N. I am committing my team to redouble their efforts to work with your staff and get this job done.



District Director

Enclosures [download the PDF above for the enclosures]

(1)         Chapter 13 of the State MMP
(2)         August 8, 2012 email transmitting the draft Conservation Easement
(3)         Figure 7-1of the State MMP, Mitigation Project Implementation Schedule


c:      Congressman Jared Huffman
United States Attorney, San Francisco
Jane Hicks, Chief, Regulatory Branch, USACE San Francisco District
Lt. Col. John Morrow, USACE
Melissia Scianni, U.S. Environmental Protection Agency, Region 9
Joyce Ambrosius, North-Central Coast Office, National Marine Fisheries Service
Tom Dougherty, National Marine Fisheries Service
Vince Mammano, California Division Administrator, Federal Highway Administration
Peter Southworth, Deputy Secretary and General Counsel, CalSTA
Matthias St. John, Executive Director, North Coast Regional Water Quality Control Board
Brendan Thompson, NCRWQCB
Neil Manji, Region 1 Manager, California Department of Fish & Wildlife
Curt Babcock, Environmental Program Manager, CDFW
Phil Dow, Executive Director, Mendocino Council of Governments
Malcolm Dougherty, Caltrans Director