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Home My WebLink About20070747 Ver 1_2019 Credit Sale Audit Results-Non Compliant_20191127Strickland, Bev From: EHI <ehi Ilc@comcast.net> Sent: Wednesday, November 27, 2019 7:22 AM To: Merritt, Katie Cc: Haupt, Mac; Barrett Jenkins Subject: [External] 2019 Credit Sale Audit Results -Non Compliant Attachments: NCDEQ-FSMB-Nov 12 2019 Audit Review Adjustment NOC Ledger.pdf • 1 External email. Do not click links or open attachments unless you verify. Send all suspicious email as an attachment to ELort.spam@nc.gov Hi Katie, Thank you for taking the time to review the Banks Ledgers. In response to you correspondence below. From 2010 to 2016 the banks Ledgers did not reflect sales or credit releases from 2010 to their current date of sales (see 6/30/2016 Ledger). In 2017 NCDENR required all banks to have the same Ledger format which was developed by NCDENR. The new format required banks to record credit releases and credits sales from the 1st release of credits to the current sale. When populating the information into the new Ledger format, that is when our Ledger reflected the two credit releases in 2013 of 76,345.52 and 76,346.20, respectfully show as 2/25/2013 and 3/11/2013 entry in 2017. Attached are two letter of release from NCDENR. In reviewing the two (2) letters, I agree their should have been only one credit release entry. Additionally, when the new Ledgers were sent to the NCDENR for review and completeness, should that double entry not have been recognized by NCDENR and corrected at that time, as that was the first time all of that information was recorded on one Ledger. Attached is the revised November 12, 2019 nutrient Ledger reflecting the February 25, 2019 entry adjustment of 76,345.52 credits for 33.59 acres adjustment as a result of the audit. The GVFS, LLC and the bank credits have been purchased by Restoration Systems, LLC (RS) on November 13, 2019. Although RS is not responsible for compliance of the MBI, they are the owners of the banks credits and by extension the bank site. Bob Robert N. Kessler Managing Member Environmental Heritage Investors, LLC 523 Turnberry Lane St. Augustine, Florida 32080 C: 904.599.6600 -------- Forwarded Message-------- Subject:2019 Credit Sale Audit Results -Non Compliant Date:Tue, 26 Nov 2019 19:33:05 +0000 From:Merritt, Katie <katie.merritt@ncdenr.gov> To:EHI <ehi Ilc@comcast.net> CC:Haupt, Mac <mac.haupt@ncdenr.gov> Hey Bob, I have finalized the Fall 2019 audit for the Flat Swamp Bank for credit sales from July 1, 2018-November 11, 2019. As a result of this audit, DWR has determined that the Nitrogen Credit Ledger is in non-compliance. According to the memo from you (attached to this email) dated November 12, 2019, the Flat Swamp Mitigation Bank is noted to be in the final stages of being purchased; therefore, I chose to do a quick look of all the Flat Swamp Bank's ledgers from 11/30/2009 to 11/11/2019 just to make sure everything appeared in compliance on surface. In doing so, I discovered a major error on your Nitrogen Nutrient ledger submitted with this fall 2019 audit. On February 25, 2013, you back dated a Credit in the amount of 76,345.52 lbs. It appears to have been backdated after the 2017 credit sale audit, which concluded in Then, you credited a second release on 3/11/13 in the amount of 76,346.20 lbs. The credit release letter for 3/11/13 is attached to this email, and clarifies that this letter REPLACES the release letter on 2/25/13. Therefore, there should not have been a credit of 76,345.52 lbs on 2/25/13. I looked back at the 2013, 2014, 2015 & 2016 audits and documented my findings of each audit below: • 2013 Audit — 2013 compliant audit letter and approved ledger is attached. Email correspondence from you dated July 12, 2013 with the ledger approved in the audit is attached to this email. The credit release on 2/25/13 was not shown on the approved 2013 ledger and was deemed compliant. That ledger balance was approved at 666,432.49 lbs • 2014 Audit - January 23, 2014 compliant audit letter and the approved Nitrogen ledger from that audit are attached. The credit release on 2/25/13 was not shown on the approved 2014 ledger and therefore your 2014 credit sale audit was deemed compliant. The ledger balance was approved at 664,557.41 lbs. • 2015 Audit — The Nitrogen ledger approved with the 2015 audit is attached to this email. The credit release on 2/25/13 was not shown on the approved 2015 ledger and therefore your 2015 credit sale audit was deemed compliant. That ledger balance was approved at 737,041.51 lbs. • 2016 Audit — The September 27, 2016 compliant email along with ledgers approved with the 2016 audit is attached to this email. The credit release on 2/25/13 was not shown on the approved 2016 ledger, the balances add up as if the Credit was not part of the balance, and therefore your 2016 credit sale audit was deemed compliant. That ledger balance was approved at 729,029.45 lbs for June 22, 2016. • 2017-2018 Audit (This audit recently concluded in March 2019). The Nitrogen ledger submitted with this audit is attached. The credit release transaction from 2/25/13 was shown on this ledger submitted with the audit. However, the discrepancy did not fall within the 2017 -2018 audit review time period, which is described in the attached document and shown as being ONLY from July 1, 2017-June 30, 2018. Neither was it noted as a discrepancy in the 2013, 2014, 2015 or 2016 audits to be an issue. Therefore, this transaction of 76,345.52 lbs- Nitrogen is confirmed to have been added to the ledger after the 2016 audit was completed, resulting in a credit balance of 76,345.52 pounds of Nitrogen more than it should be. Backdating sales or transactions after an audit has been performed and completed, is unacceptable. RESPONSE REQUIRED: Since it is confirmed that Flat Swamp, LLC backdated a Credit of 76,345.52lbs of Nitrogen Credits on February 25, 2013, after having already concluded 4 credit sale audits where the Credit was not shown, FlatSwamp, LLC is in non-compliance with Item G and 1 of Section V of the Mitigation Banking Instrument. Flat Swamp, LLC must correct the Nitrogen ledger submitted with this audit to comply with the balances and transactions approved in the previous 2013-2016 credit sale audits. It is Flat Swamp, LLC's responsibility to ensure that the final ledger submitted with this audit is compliant with all sales and all credit releases. All sales from the Flat Swamp Mitigation Bank must immediately cease, until DWR confirms that the Nitrogen credit ledger is in full compliance. Thank you, Katie Katie Merritt Nutrient Offset & Buffer Banking Coordinator 401 & Buffer Permitting Unit North Carolina Department of Environmental Quality Office: 919-707-3637 Work Cell: 919-500-0683 Website: http://portal.ncdenr.org/web/wq/401bufferpermitting 512 N. Salisbury Street, Raleigh, NC 27620 1617 Mail Service Center, Raleigh, NC 27699-1617 Email correspondence to and from this address is subject to the North Carolina Public Records Law and may be disclosed to third parties. "Credits shown below are only for mitigation credits approved by the UMBI, BPDP, and As -Built. GreenVest/Flat Swamp, LLC & Flat Swamp Mitigation Bank Middle Neuse River Basin HUC 03020202 Nutrient Credit Ledger Date Last Updated: November 12, 2019 DWR Bank Parcel Project #: 07-0747 Total Credits Released To Date: 839,807.4G Sale/ Release Date Purchaser or % Credit Release Project w/ HUG # Credits Released/Available Credits Debited/Sold Gov't Nutrient Credit Balance to Bank From Sank Requiring Pounds of Nutrients Acres Pounds of Nutrients Acres Pounds of Acres 1130109 50% Nutrients 1111110 324,939.57 142.96 324,939.57 142,96 10% 64,987.91 28.59 389,927.48 171.55 2118110 Sidus Federal LLC Sidus Federal 03020202 4112110 715.21 0.32 389,212.27 171,23 Greenville Ample Storage LLC 03020202 874.8 0.38 388,377.47 170.85 Goldsboro Q6110 AOF LLC Comprehensive Wound Care 03020202 259.8 0.11 388,077.67 170.73 Kinston 102 10 James M. O'Donahue O'Donahue Chiropractic Office 03020202 520.17 0.23 387,557,50 170.5 Greenville U100 Sherif Lskander Sherif Lskander Office 03020202 119.133 0.05 387,438.37 170.45 Goldsboro Al8110 Tim Uppold Brighton Academy 03020202 184.164 0.08 387,254.21 170.37 Goldsboro Q300 Blue Mountain Enterprise Blue Mountain Ent 03020202 129.36 0.06 3 77,124.85 170.31 Kinston i402110 Kennneth D. Keeseeo Respracare 03020202 i101110 Glandon Forest Equity LLC Dollar General 03020202 171 0.07 386,953.85 170.24 Wayne Cty 1 VI) JDL Investments LLC JDL Investments LLC 03020202 76.67 0.03 386,874.18 170.2 Kinston 03111 Foss Enterprises Inc Foss Recycling Inc 03020202 125.76 0.05 386,748.43 170.15 Kinston 103i11 J.L.Gudey Security Mini Storage, Phase 111 03020202 385,51 0.17 386,362.92 169.98 Greenville t03111 Lee Automotive Mgt.,lnc Lee Hyundai of Goldsboro 03020202 20.93 0.01 386,341.99 169.97 Wayne Cty 103k11 Blizzard Storeage Facility Buzzard Storage Facility 03020202 718.8 0,32 385,623.19 169.65 Goldsboro 11 t111 Release 10% 445.2 0.19 385,177.99 169.46 Kinston 128111 Missionary Baptist Church Bear Ck Missionary Baptist Church 03020202 64,987.91 28.59 450,165,90 198.05 21111 Brown & Wood Inc Brown & Wood Parking Lot 03020202 329.208 0.14 449,836.70 197,9 Goldsboro 10111 Mount Olive Pickle Company Mount Pickle Distrubibon CnV 03020202 1,275.18 0.56 448,561.52 1 197,34 Greenville 27111 Pitt County Schools Chicod Elementry School 03020202 833 0,37 447,728.52 196.97 Wayne Cty 23111 AAR Manufactuing, Inc AAR Manufacturing, Inc 03020202 1,137.53 0.5 446,590.99 196.47 Pitt Cty 10111 Wise Development LLC Social Security Admin Bldg 03020202 383.678 0.16 446,207.31 196.31 Goldsboro 10111 Wayne County Public Schools Eastern Wayne Middle School 03020202 650.16 0.29 445,557.15 196.02 Goldsboro i4111 The Wooten Company Abby Gardens 03020202 1,375.23 0.6 444,181.92 195.41 Goldsboro 12/19/2011 Atlantic Medical Gp {Adj) Atlantic Medical Gp. Bldg 03020202 446 0.19 443,735.92 195.22 Kinston 11112 Smithfield Packing Co. Inc Smithfield Packing Co. Inc D3020202 162 0.07 443,573.92 195,15 Kinston 15112 Release 10°1° 4805 2,11 438,768.95 193.04 Kinston 20412 Highlands of Goldsboro Highlands of Goldsboro 03020202 &4,987.91 28.59 21.63 M12 Coastal Transport Inc Malloy Street Apartments 03020202 493.02 0.22 j503ff.011.84 21.41 Goldsboro 16112 Brinkley's Transmission Brinkleys Transmision 03020202 252 0.11 221.3 Goldsboro M12 Tri-City Construction Co. Carquest-Grayson Landing 03020202 170.4 0.07 21.23 Kinston 3112 Mills Automotive Gp LLC Mills Automotive Gp 03020202 287.22 0.13 502,554.22 221.1 Greenville 2112 Bank Modification 628.8 0.28 501,925.42 220.82 Goldsboro M12 Construction Managers inc VA Hospital D3020202 90,860.88 39.97 592,786,30 260.79 1112 EJ Pope & Sons Inc Handy Mart 03020202 384,62 0.17 592.401.68 260.62 Goldsboro 532.73 0.23 591,868.95 260,39 Goldsboro 11106112 State Employee's Credit Union 11106/12 State Employee's Credit Union 11108112 Wayne Montessori School 12U0112 Riverside Animal Hospital 02125113 Release 10% 03111113 Release 10% 03111113 Release Adjustment 05114113 West Star Mini Storage 05121113 Park Hotels LLC 07129113 NC Eastern power Agency 08107113 Buzzard Mini Storage 1Z05113 BRP Properties, LLC 01113114 BRP Properties LLC 09124114 Brooks Mini Kinston LLC 06112114 Wal-mart Neighborhood Mkt 06112114 Wal-mart Stores E, LP 08101414 Smithfield Farmland Corp 08401114 Calaiber Builders LLC 11/04/14 Release 10% 04115115 Greenbrier Landing LP 04129/15 RHA Housing Inc 06118115 Vanguard Ventures LLC 08118115 Lochstone LP 0M26115 Sawyers Prop Mgt GP LLC 02114116 The Three J's Inc OVM16 Colleena Properties LLC 03110116 Colleena Properties LLC 06101116 AMERCO Realestate Co 06122116 Andover Park LP 09101116 Glandon Forest Equity 01116117 Vanguard Ventures LLC 03101117 Lidl U. S. Operations LLC 03106117 Sawyer's Property Mgt GP LLC 5/1/2017 Moen Corporation 61912017 New River Mulch 6125117 Mission Foods 094607 Bill Clark Homes of Greenvifie 09121117 AAA Mini Storage 09125117 Wayne County Public Schools 10127117 Lyndon Steel Company LLC 1211 1\1 7 Komegay Prop & Invest, LLC 12119117 KAE Enterprise LLC 0112408 Pitt County (0001) 3/2212018 Wayne Cty ABC Board 411612018 The Wave of Glory, Inc. 4/20/20 88 Stockton Pointe LP 4/23/2018 Lagecy Firetower, LLC 5/21/2018 Cuyler Springs Assoc (17-7) 6/14/2018 Judson H. Blount III 7/612018 Clark Homes of Greenville 8/4/2018 Wayne County (0008) 912812018 Osboume Holdings LLC (09) State Employee's Credit Union 03020202 State Employee's Credit Union 03020202 Wayne Montessori School 03020202 Riverside Animal Hospital 03020202 West Star Mini Storage 03020202 Hoiiday Inn Express 03020202 NCEMPA Greenvifie PSDG 03020202 Blizzard Mini Storage 03020202 Goldsboro Hotel 03020202 Goldsboro Hotel 03020202 Brooks Mini Kinston Storage 03020202 Walmart 4350 Hwy 70E. 03020202 Walmart 1144 Tommys (toad 03020202 Smithfield Packing Storage Area 03020202 Dxford Plantation 601 Oxford Blvd 03020202 Greenbrier Landing 03020202 Highlands of Goldsboro 03020202 Dollar General 03020202 Lochstone Apartments 03020202 Air U Trampoline Park1ECCATS 03020202 Deacon Jones Automotive GP 03020202 Affortable Storage 03020202 Precision Pfumbing Facility 03020202 Greenville U-Haul 03020202 Andover Park Apartments 03020202 Dollar General 03020202 Dollar General 03020202 LIDL Grocery Store 03020202 Air U Trampoline ParMECCATS 03020202 Moen Corporation 03020202 New River Mulch 03020202 Mission Foods Parking Lot Addition 03020202 Langston Farms Phase II 03020202 AAA Mini Storage 03020202 Meadow Lane Elmentry School 03020202 Kinston Steel Building 03020202 Commercial Bldg 03020202 20120 Vision Center03020202 Pitt County Animal Shelter 03020202 Wayne County ABC Store 03020202 The Wave of Glory, Inc. 03020202 Stockton Pointe Project 03020202 Legecy At Firetower Junction 03020202 Cuyler Springs Housing Associates 03020202 The Drake I Villages-Section7 03020202 ape[ EMS Station 03020202 Inc 03020202 47E 436.1 i 253.E 9( 76,345.52 33,59 76,346.20 33.59 5.36 0.01 148.96 0.21 591,392.95 260.18 Kinston 0.19 590,966.78 269.99 Goldsboro 0,11 590,702.98 259.88 Goldsboro 0.04 590,612.98 259.84 Kinston 383.07 0.17 1863.28 0.82 11.8 0.01 5.57 0.01 588.19 0.26' 207.2 0.01 1,090.68 0.48 857,78 0.38 995 0,44 653.25 0,29 33.59 814 0.36 65.99 0.02 238.38 0.1 1148.4 0.5 504.63 0.01 666,958.50 293.43 743.304.70 327.02 743,299.34 327,01 743,150.38 326.95 Greenville 742,767.31 326.78 Goldsboro 740,904.03 325.96 Greenville 740,892.23 325.95 Kinston 740,892.17 325.94 Goldsboro 740,303,98 325.68 Goldsboro 740,096,78 325.67 Kinston 739,006.10 325.19 Goldsboro 738,148.32 324.81 Goldsboro 737,153.32 324.37 Kinston 736,500.07 324.08 Goldsboro 812,846.27 357.67 812.032,27 357.31 Goldsboro 811,966.28 357.29 Kinston 811,727.90 357.28 Goldsboro 810,579.50 356.78 Goldsboro 810,074.87 356.77 Pitf Cty 3,531.11 1.55 806,543.76 1 355.22 Goldsboro 90.49 0.04 806,453,36 355.18 Goldsboro 476.39 0.21 805,976.97 354.97 Goldsboro 486.25 0.21 805,490.72 354.76 Greenville 8661 0,38 804,624.72 354.38 Kinston 209.92 0,09 804,414.80 354.29 Goldsboro 204.6 0.09 804,210,20 354.2 Grenville 1,012.75 0.45 803,197.45 353.75 Goldsboro 48.76 0.01 803,148.69 353.74 Pitt Cty 1,701 0.74 801,44T69 353 Kinston 132.73 0.06 801,314.96 352.94 Greenville 1,191 0.75 932.25 0.41 200,41 0.09 879.64 1.27 744 0,32 16.77 0.01 157.72 0.07 236.25 0.1 147.42 0.06 40.49 0.02 909 0.4 2.495.17 1.1 515.84 0.23 459.29 0.2 376.46 0.16 49.5 0.02 152.5 0.07 799,523.96 352,15 Goldsboro 798,591.71 351.74 Greenville 798,391.30 351.65 Goldsboro 795,511.66 350.38 Goldsboro 794,767.66 350.06 Kinston 794,750.89 350.05 Wayne Cty 794,593.17 349.98 Greenville 794,356.92 349.88 Greenville 794,209.50 349.821 Goldsboro 794,169.01 349.8 Goldsboro 793,260.01 349.4 Kinston 790,764.84 348.3 Greenville 790,249.00 348.07 Goldsboro 789,789.71 347.87 Greenville 789,413.25 347,85 Greenville 789,363.75 347.83 Wayne Cty 789,211.251 347.21 Greenville 1012512018 The Three J's Inc 2/26/2019 The Wave of Glory - REFUND 2/28/2019 Old Firetower Place, LP 4/8/2019 Oxford Street 5/6/2019 AAA Mini Storage 1011712019 SXCW Properties II, LLC 11/12/2019 NCDEQ Audit adiustmenl Devon Jones KIA 03020202 Full refund per DWR findings in audit 1/1812019 Old Firetower Race 03020202 Stonehenge Place 03020202 4AA Mini Storage 03020202 5am's Xpress Car Wash 03020202 for 2/25/2013 entry 1,332,14 0.59 787,879.11 346.]Goldsborc 0.02 787,919,60 346.Goldsborc 202.93 0.09 787,716.67 346.Greenville 253 0.11 787,463.67 346.44 Greenville 346.33 270.2 76,345,52 0.15 787,117.34 346.291 Goldsboro 0.12 786,847.14 346.17 Greenville 33.59 710,501.62 312.58 Audit