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20180196 Ver 2_Final MBI for PN_20200817AGREEMENT TO ESTABLISH THE CATFISH POND II MITIGATION BANKING INSTRUMENT IN THE UPPER NEUSE RIVER BASIN FOR RIPARIAN BUFFER MITIGATION AND NUTRIENT OFFSET CREDITS PURSUANT TO THE FALLS LAKE WATER SUPPLY NUTRIENT STRATEGY TABLE OF CONTENTS I. PREAMBLE............................................................................................................................2 II. LOCATION AND GEOGRAPHIC SERVICE AREA.......................................................................2 III. AUTHORITIES........................................................................................................................3 IV. ESTABLISHMENT OF BANK PARCEL......................................................................................3 V. BANK PARCEL DEVELOPMENT PACKAGE..............................................................................5 VI. POST CONSTRUCTION DOCUMENTATION............................................................................7 VII. CALCULATION OF MITIGATION CREDITS..............................................................................9 VIII. CREDIT RELEASE SCHEDULE................................................................................................11 IX. PROCEDURE FOR DEBITING AND CREDITING MITIGATION CREDITS..................................12 X. BANK PARCEL CLOSURE......................................................................................................13 XI. GENERAL PROVISIONS........................................................................................................14 ATTACHMENTS & REFERENCES A - Division of Water Resources Authority Document B — Ledger Templates 1. Nutrient Offset Payment Rule: httr)://rer)orts.oa h. state. nc. us/ncac/title%2015a%20-%20environ menta 1%20a ua I itv/chapter%2002%20 %20environmenta1%20management/subchapter%20b/15a%20ncac%2002b%20.0703.pdf 2. Riparian Buffer Mitigation Rule: http://reports.oa h. state. nc. us/ncac/title%2015a%20-%20environ menta 1%20q ua I ity/chapter%2002%20- %20environmental%20management/subchapter%20b/15a%20ncac%2002b%20.0295.pdf 3. NC Session Law 2019- 86 " Nutrient Offset Credits": https://ncleg.gov/EnactedLegislation/Session Laws/HTML/2019-2020/SL2019-86.htmi 4. Buffer Interpretation/ Clarification # 2008- 019 for diffuse flow: https://files. nc.gov/ncdeq/Water%20Quality/Surface%20Water%20Protection/401/Buffer%20CIarification%2 OMemos/Diffuse-Flow-for- Buffer- Mitigation-Sites-Buffer-Clarification-Memo-20080819.pdf 5. Clarified Procedures for Calculating Buffer Mitigation Credits and Nutrient Offset Credits (November 2019): https://files. nc.gov/ncdeq/Water%20QualitV/Surface%20Water%20Protection/401/Mitigation/Issues--- Resolutions-Ver-1.0-buffer-mitigation-nutrient-offset.pdf 6. NCDWR — Methodology and Calculations for Nutrient Reductions on the Bank Parcel: https://files.nc.gov/ncdeq/Water%20Quality/Planning/NPU/Nutrient%20Offset%20Rule/Ag-Buffer-Credit.pdf 1 I. PREAMBLE This Mitigation Banking Instrument ("Instrument") regarding the establishment, use, operation, and maintenance of the Catfish Pond II Nutrient Offset and Buffer Mitigation Bank Parcel ("Bank Parcel") to provide Neuse Riparian Buffer mitigation credits ("Riparian Buffer Credits") and Falls Lake Water Supply Nutrient Strategy nutrient load reduction credit ("Nutrient Offset Credits") is made and entered into by and among Wildlands Holdings V, LLC acting as the Bank Sponsor ("Sponsor") and the North Carolina Department of Environmental Quality — Division of Water Resources ("DWR"). This Instrument is in accordance with 15A NCAC 02B .0703 and the Consolidated Buffer Mitigation Rule 15A NCAC 02B .0295, which became effective on November 1, 2015 (Reference Numbers 1 and 2). The purpose of the Bank is: A. To restore, enhance and preserve riparian vegetation adjacent to mitigated streams and/or agricultural ditches with the intent to improve water quality within the Falls Lake Watershed of the Neuse River Basin (8-digit HUC 03020201). B. To convert agricultural land uses within riparian areas adjacent to streams and/or agricultural ditches into a dense, hardwood vegetated state with the intent to significantly reduce nutrient loadings associated with agricultural practices into streams and ditches. C. To provide mitigation and sell any resulting Riparian Buffer Credits and/or Nutrient Offset Credits to third parties in the Falls Watershed of the Neuse River Basin for development (both existing and proposed), or to offset NPDES-permitted wastewater nutrient sources, requiring such mitigation. II. LOCATION AND GEOGRAPHIC SERVICE AREA A. The Geographic Service Area ("GSA") is the designated area wherein a Bank can reasonably be expected to sell Riparian Buffer Credits and/or Nutrient Offset Credits for impacts due to development activities. B. The Catfish Pond II Bank Parcel is comprised of land in Durham County, NC, lying adjacent to an existing conservation easement for the NC Division of Mitigation Services Full -Delivery Mitigation Site (Catfish Pond Full Delivery Mitigation Site, DMS ID# 100039) and is currently used for cattle pasture, row crops, and forest land. The project is located at 36.16334167 N and 78.91027778 W. The Bank Parcel is located in the Upper Falls Lake Watershed of the Neuse River Basin. C. The GSA for this Bank Parcel is limited to the Falls Lake Watershed of the Neuse River Basin in the State of North Carolina, United States Geological Survey ("USGS") 8-digit Hydrologic Unit Code ("HUC') 03020201. D. Sale or transfer of Riparian Buffer Credits shall be limited to the 8-digit HUC 03020201 of the Neuse River Basin unless otherwise authorized by the DWR or delegated local government in accordance with 15A NCAC 02B .0295. 2 E. Sale or transfer of Nutrient Offset Credits shall be limited to the Falls Lake Watershed, as defined in Rule 15A NCAC 02B .0276 and in accordance with 15A NCAC 02B .0703 unless otherwise authorized by the DWR in accordance with Session Law 2019-86. F. Unnamed tributaries to Catfish Creek are the receiving bodies of water for stormwater runoff from this parcel. The Neuse River is classified by DWR as Nutrient Sensitive Waters (NSW) and Class C Waters. III. AUTHORITIES A. The Bank will be used to provide Riparian Buffer Credit and/or Nutrient Offset Credit in accordance with the requirements in the DWR Authority document referenced herein as "Attachment A" and attached to this Instrument. B. Projects eligible for utilization of the credits are those requiring authorization under the requirements of Attachment A and any new approved North Carolina ("State") statutes and rules for the Neuse Nutrient Sensitive Waters Management Strategy and for the Falls Lake Water Supply Nutrient Strategy. C. The selling of mitigation credits generated from the Bank Parcel approved under this Instrument, shall be consistent with approved State statutes and rules for the Neuse Nutrient Sensitive Waters Management Strategy and for the Falls Lake Water Supply Nutrient Strategy. D. Mitigation activities proposed under this Instrument and corresponding Bank Parcel Development Package (BPDP) to generate Riparian Buffer Credits and Nutrient Offset Credits shall be consistent with State statutes and rules for the Falls Lake Water Supply Nutrient Management Strategy that are in place at the time a complete BPDP is submitted to DWR. IV. ESTABLISHMENT OF BANK PARCEL A. In accordance with 15A NCAC 02B .0295, DWR has provided a "Site Viability Letter" for the Bank Parcel proposed under this Instrument. The Site Viability Letter was written for the proposed DMS Full Delivery Project (Catfish Creek Full Delivery Mitigation Site, DMS ID# 100039) and will be applied, under this instrument, to the Catfish Creek II Bank Parcel with the understanding that the full delivery project will be constructed and a permanent conservation easement will be placed on the mitigation project. The Site Viability Letter is not an approval of the site to generate Riparian Buffer Credits or Nutrient Offset Credits, but is a preliminary review of the Bank Parcel that details and confirms existing land use conditions, defines the riparian sites (Enhancement, Preservation, or Restoration), and identifies features (streams, ditches, ponds, etc.) that meet general criteria to be suitable to generate mitigation credits. Table 1.0 below outlines when a Site Viability Letter was issued by DWR for the mitigation site: 3 Table 1.0 — Site Viability Letter Details Viability LetterExpiration Bank Parcel NC DWR Site Evaluation Viability Letter Received Date February 23, 2018 March 13, 2018 March 13, 2020 Catfish Creek February 18, 2020 (site February 19, 2020 photos provided, no site (extension of initial September 13, 2020 visit) viability letter) B. A valid Site Viability Letter is required prior to submittal of each BPDP. Site Viability Letters will either expire on the dates listed in the table above or upon submittal of an individual As -Built Report to the DWR, whichever comes first. If a Site Viability Letter expires prior to submittal of a complete BPDP as described in Section V to DWR, then the Sponsor must submit a formal request to DWR for a new Site Viability Letter for that Bank Parcel. C. The Bank Parcels proposed for inclusion under this Instrument shall require a Bank Parcel Development Package ("BPDP") be submitted to, and approved, by the DWR prior to use of the individual Bank Parcel for mitigation purposes or the sale or transfer of any associated credits. The contents of each BPDP are provided in Section V. D. The BPDP will be placed on public notice and made available for public commenting for 15 calendar days. E. Riparian Buffer Credits on this Bank Parcel will be generated along restored and enhanced stream channels that are proposed for stream mitigation as well as one agricultural ditch that is directly hydrologically connected to a mitigated stream. All activities conducted within riparian buffers and adjacent riparian areas for purposes of generating Riparian Buffer Credits and Nutrient Offset Credits will be conducted in concurrence with or after the stream mitigation activities proposed in the Catfish Pond Full Delivery Mitigation Plan (DMS# 100039) and not before. Riparian Buffer Credit may be achieved through restoration of DWR riparian buffers as they are defined in 15A NCAC 02B .0714, and other riparian areas as allowed per 15A NCAC 02B .0295 (n) and (o) on the Bank Parcel. Riparian Buffer Credits are only attainable if the width of the riparian restoration site, enhancement site and preservation site is at least 20 feet from top of bank of streams and a minimum of 50' from top of bank along ditches. F. The Bank Parcel is intended to provide Neuse River Basin Buffer Mitigation as follows: 1. Planting hardwood trees and shrubs on a Restoration Site as defined in 15A NCAC 02B .0295 (b) adjacent to mitigated streams. 2. Planting hardwood trees and shrubs on a Restoration Site as defined in 15A NCAC 02B 0295 (b) adjacent to a ditch as allowed in 15 A NCAC 02B .0295 (o). 3. Diffused flow will be maintained onsite to the maximum extent practicable. 4. Enhancing riparian areas adjacent to mitigated streams that are being grazed by cattle as allowed in 15A NCAC 02B .0295 (o)(6), by installing fencing around the perimeter of the mitigation site to permanently remove cattle out of the riparian areas and streams where they currently have access. M G. Nutrient Offset Credit may be achieved on the Bank Parcel through restoration of the riparian areas, where agriculture is the predominant land use. The width of the restoration area begins at the most landward limit of the top of bank or the rooted herbaceous vegetation and extends landward a minimum of 50 feet and a maximum of 200 feet on all sides of the surface waters. H. The Bank Parcel is expected to provide Nutrient Offset Credits in accordance with 15A NCAC 02B .0703 and are expected to provide Nutrient Offset Credit as follows: 1. Converting agricultural land uses within riparian areas to non-agricultural land uses. 2. Planting hardwood trees on a Restoration Site, as defined in 15A NCAC 2B .0295(b) adjacent to mitigated streams and a ditch where agriculture has been determined by DWR to be the predominant land use. 3. Placing a conservation easement around restored riparian areas along streams and a ditch in accordance with 15A NCAC 02B .0703 (g). V. BANK PARCEL DEVELOPMENT PACKAGE A. The BPDP submitted under this Instrument shall be submitted to DWR for review and must be approved by DWR prior to any construction on the Bank Parcel. The BPDP must describe any changes that have occurred to the site between the date of the Site Viability Letter and the date the BPDP is submitted to DWR. The BPDP shall include detailed information consistent with the sections below concerning; 1) site location (8-digit HUC is required); 2) existing conditions with current photos; 3) proposed buffer mitigation and nutrient offset activities including a detailed vegetation plan; 4) monitoring and maintenance plans; 5) financial assurances; 6) associated buffer mitigation/nutrient credit calculations, which shall include credit generation, service area, and accounting as appropriate for each regulatory authority; 7) stream buffer determination letter from DWR; 8) Site Viability Letter from DWR; and 9) service area figure for each mitigation type. B. The Sponsor will obtain all applicable federal, state and local documentation, permits, or authorizations needed to construct and maintain the Bank Parcel. This Instrument does not qualify as, or substitute for, such documentation, permit, or authorization. C. Any restoration and/or enhancement activities or proposed construction within the riparian buffers and other riparian areas on the Bank Parcel to produce Riparian Buffer Credit and/or Nutrient Offset Credit must be approved by DWR in writing prior to implementation. The failure of the Sponsor to comply with this requirement may result in a revised or reduced credit release schedule for that specific Bank Parcels. D. Requests for deviation from the approved BPDP must be submitted to DWR in writing. Written approval from the DWR must be received prior to implementing any deviation from the approved BPDP. Property Disposition & Long -Term Management E. Prior to the release of any credits, the Sponsor shall record permanent conservation easements at the Durham County Register of Deed's office that is sufficient to ensure protection, operation, E and maintenance of restored riparian buffers and other riparian areas for the duration specified in the approved BPDP. F. The form of the conservation easement shall be consistent with the standards employed by the State of North Carolina in the protection of restored riparian buffers and riparian areas and shall be approved by the DWR prior to the release of any credits. G. The conservation easement for the Bank Parcel will be located adjacent to the Catfish Pond Full Delivery Conservation Easement. The Full Delivery's easement will include the mitigated streams and will extend at minimum 50 feet from the top of bank of the project streams. The Bank Parcel's conservation easement will protect the riparian areas adjacent to mitigated streams and one ditch beyond the 50' out to a maximum of 200'. H. The Sponsor shall not grant additional easements, right of ways, or any other property interest in or to the project areas, without prior approval from the DWR. The Sponsor agrees to transfer or assign the conservation easement and its interests in perpetuity to a qualified holder under NC General Statute ("GS") 121-34 et seq. and 170(h) of the Internal Revenue Code prior to the submittal of the Year 4 Monitoring Report. The holder shall be a land trust or stewardship program that will hold and enforce the conservation easement and the interests in perpetuity. The Sponsor shall choose a land trust or stewardship program that is accredited by the Land Trust Accreditation Commission and/or has been approved by DWR prior to the end of the fourth year monitoring period. A land trust must be certified under 501(c)(3) of the Internal Revenue Code. J. In the event the Sponsor is also the owner of the underlying fee interest in the property the conveyance of the conservation easement to a land trust or stewardship fund must be arranged at the outset of the approved BPDP. Financial Assurances K. Following approval of the BPDP for the Bank Parcel, the Sponsor shall provide Performance/Maintenance Bonds from a surety company that is rated no less than an "A-" as rated by A.M. Best, to construct the sites according to the approved BPDP. It is the Sponsor's responsibility to confirm that the surety company is rated no less than an "A-" with each annual bond renewal. L. The amount of each Performance Bond shall be 100% of the estimated cost for implementation of the mitigation activities of the Bank Parcel as described in the approved BPDP. No bond shall be less than $150,000.00 to cover construction costs. M. Alternatively, in lieu of posting a Performance Bond, the Sponsor may elect to construct the project prior to the first credit release. N. Once DWR has released all credits for completion of all the items listed below, then the Bank Sponsor will be released from its performance obligations under the performance bond required in Item K and L of this section: 0 1. Instrument and BPDP Approved by DWR, Conservation Easement Recorded, Financial Assurance Posted; 2. Mitigation Site Earthwork and Planting and Installation of Monitoring Devices Completed; 3. As -Built Report as described in Section VI has been received by DWR; and 4. DWR has submitted a written approval of the As -Built Report O. To comply with this section, DWR must be the Obligee on all performance bonds. VI. POST CONSTRUCTION DOCUMENTATION As -Built Report A. The Sponsor agrees to perform all necessary work, in accordance with the provisions of this Instrument and corresponding BPDP, to establish, maintain, and monitor Neuse River Basin Riparian Buffers or other riparian areas until Items B (1) and (2) of Section X have been satisfied. B. The Sponsor will submit an as -built plan and report for the Bank Parcel separately within 30 calendar days after completing the establishment of the riparian buffer mitigation and nutrient offset areas. Each As -Built report will describe any deviation from the approved BPDP and will document the following: 1. Buffer restoration and enhancement planting details, confirmation of fence installation, invasive species control, monitoring device locations, vegetation plot locations, and photo point locations. 2. Provide confirmation that the construction of all stream mitigation activities associated with the Catfish Pond Full Delivery project have been completed. 3. Boundary Survey of the conservation easement area, signed and sealed by a licensed surveyor, including an inventory of the final mitigation areas for riparian buffer mitigation and nutrient offset credits in both square feet and acres. 4. As -built map of the mitigation areas showing where riparian restoration, enhancement and preservation were performed and any deviations to the Bank Parcel from what was approved in the BPDP. 5. Aerial map of the mitigation that was included in the approved BPDP. Financial Assurance C. After completion of the restoration/construction on the Bank Parcel, a separate Performance/ Maintenance Bond will be secured for 100% of the estimated cost to implement the monitoring and maintenance plan as described in the approved BPDP and As -Built Report. The Bond must be from a surety company that is rated no less than an "A-' as rated by A.M. Best, and it is the Sponsor's responsibility to confirm the surety company is still rated no less than an "A-" with each annual bond renewals. 7 D. A Performance/Maintenance Bond shall be secured each year for a minimum of five years, and until DWR has released all mitigation credits to the Bank Sponsor. Upon DWR approval, the bond may be lowered each year based on the adjusted cost to complete the monitoring. No bond shall be less than $100,000 to cover monitoring and maintenance costs. E. For the Bank Parcel, once DWR has released 100% of all credits for completion of all Bank Parcel milestones described in Table 2 of Section Vill, the Bank Sponsor can be released from its performance obligations under the performance bond required in C and D in this section. F. To comply with this section, DWR must be the Obligee on all performance bonds. Monitoring and Maintenance Reports G. The Sponsor shall monitor the Bank Parcel as described in the BPDP until such time as DWR determines that the performance standards described below have been met. The monitoring period shall be a minimum of five consecutive years H. Performance Standards for Vegetation: Native hardwood trees or native hardwood tree and shrub species should be planted at a density sufficient to provide 260 stems per acre after five years. A minimum of four (4) native hardwood trees or four (4) native hardwood tree and shrub species must be planted. No one species shall be greater than 50% of the planted stems. A list of species for planting will be detailed in the BPDP for approval. Native hardwood tree volunteer species may be included to meet performance standards as determined by the DWR. I. A "stem" means a woody seedling, sapling, shrub or tree, no less than 10 centimeters in height. If the performance standards of the vegetation are not met, supplemental plantings may be required. Supplemental plantings will be utilized until the required densities have been achieved and maintained for five years. Bank Parcel maintenance, such as ensuring diffused flow, managing invasive species, and pest control will be included in the BPDP. K. Monitoring Reports for Riparian Buffer Credit or Nutrient Offset Credit: Reporting criteria of the vegetation shall be based on the Carolina Vegetation Survey (CVS) - EEP Protocol for Recording Vegetation Level 2 Plot Sampling only version 4.0 or any updated versions of this protocol in place at the date of acceptance of the BPDP. The Sponsor shall submit to the DWR an annual monitoring report no later than December 31 of each year for a minimum of five consecutive years after the first full growing season. This report will describe the conditions of the Bank Parcel, including an evaluation of the performance standards of the vegetation contained within the approved BPDP. Reports shall contain the following: 1. A U.S. Geological Survey map showing location of the Bank Parcel; 2. A detailed narrative with supporting photos summarizing the condition of the Bank Parcel along with any maintenance or remediation performed that year; and 3. A map, survey, or other figures showing locations of sampling plots, permanent photo points, and location of transects, Etc.; and 4. Monitoring data, including specific vegetation counts showing that the trees or tree and shrub species planted are meeting performance standards and updated photographs; and 5. A copy of the most recent Bank credit/debit lodgers upon request; and 6. Corresponding verification letters from designated local governments upon request; and 7. Corresponding Mitigation Transfer Certificates upon request; and 8. Proof of performance bond renewal to cover the next monitoring year (when applicable). Contingency Plans/Remedial Actions L. In the event the Bank Parcel fails to achieve the performance criteria described in this Instrument and in the approved BPDP, the Bank Sponsor shall develop necessary contingency plans in coordination with the DWR and implement appropriate remedial actions for the Bank Parcel and the Bank. Depending on the degree of remedial actions required, the DWR may modify the monitoring period and credit release schedule. VII. CALCULATION OF MITIGATION CREDITS Riparian Buffer Credits A. All Riparian Buffer Credits shall be determined based on the ratios and percentages provided in 15A NCAC 02B .0295 (m) and (n) following the guidance provided in the Clarified Procedures for Calculating Buffer Mitigation Credits and Nutrient Offset Credits letter issued by the DWR including the most recent Project Credit Table Template. B. Riparian buffer restoration on the Bank Parcel, as described in 15A NCAC 02B .0295(n) and (o), and defined n 15A NCAC 02B .0295 (b) that is performed on agriculture lands within the Bank Parcel, may be used for either Riparian Buffer Credit or Nutrient Offset Credit, but not both. C. Riparian buffer enhancement on the Bank Parcel, as described in 15A NCAC 02B .0295(o) and defined in 15A NCAC 02B .0295(b) can only be used for Riparian Buffer Credit. D. Riparian Buffer Credit is defined as one (1) buffer credit per one square foot or 43,560 buffer credits per one acre. Nutrient Offset Credits E. The square footage of Nutrient Offset Credits on the Bank Parcel will be determined by applying the applicable ratio as provided in 15A NCAC 02B .0295(m) for a Restoration Site following the guidance provided in the Clarified Procedures for Calculating Buffer Mitigation Credits and Nutrient Offset Credits issued by the DWR including the most recent Project Credit Table Template. All riparian areas proposed for Nutrient Offset Credits must be a minimum of 50 feet from the top of the stream or ditch banks on land noted in a Site Viability Letter as agriculture. F. Nutrient Offset Credits cannot be achieved through enhancement activities performed on this Bank Parcel under 15A NCAC 2B .0295(o)(6). G. Nutrient Abatement of Restored Riparian Area/Buffers on agricultural lands: The Sponsor and DWR agree to the following: 0 1. The pounds of nitrogen offset per acre of restored riparian areas/buffers on agricultural land shall be 2,273.02 pounds per acre or 19.16394 square feet per pound. 2. The pounds of phosphorus offset per acre of restored riparian areas/buffers on agricultural land shall be 146.4 pounds per acre or 297.54099 square feet per pound. H. The Sponsor and DWR agree that the methodology and calculations for determining nitrogen and total phosphorus reductions, associated with restoration of riparian areas on this Bank Parcel as described in Section IV of this Instrument, shall be fixed as part of the approval of this Instrument, with the fixed amount not changing during the Bank Parcel Development or credit release schedule for the Bank Parcel. For further details on the approved method and calculations for determining nutrient reductions associated with the riparian restoration on this Bank Parcel refer to the NCDWR - Methodology & Calculations for Nutrient Reductions document found in reference number 6. This space left blank intentionally, do not add text to this space. 10 Vill. CREDIT RELEASE SCHEDULE A. Upon submittal of all appropriate documentation by the Sponsor, and subsequent approval by DWR, it is agreed that the Riparian Buffer Credits and Nutrient Offset Credits associated with the Bank Parcel will become available for selling to a third party in accordance with the Credit Release Schedule below in Table 2.0. Table 2.0 -Credit Release Schedule for Riparian Buffer and Nutrient Offset Credits Task Project Milestone % Credit Available for Sale Instrument and BPDP Approved by DWR, Full Delivery Mitigation 1 Plan Approved by DWR, Conservation Easements Recorded* and 20 Financial Assurance Posted Mitigation Site Earthwork, Planting and Installation of Monitoring 2 Devices Completed for both the Catfish Pond Full -Delivery site 20 (DMS ID#100039) and the Bank Parcel. Monitoring Financial Assurance Posted and Approval of As -Built 3 10 Report Monitoring Report #1: Approved by the DWR** & financial 4 assurance renewed 10 Monitoring Report #2: Approved by the DWR** & financial 5 assurance renewed 10 Monitoring Report #3: Approved by the DWR** & financial 6 assurance renewed 10 Item B(1) of Section X in this Instrument has been completed and 7 approved by DWR 5 No remaining credits will be released until the conservation easement has been assigned to an approved land trust or stewardship Monitoring Report #4: Approved by the DWR** & financial 8 assurance renewed 5 Monitoring Report #5: Approved by the DWR** and final site visit 9 by DWR has been conducted 10 Total 100 * For specification, please see Section V in this Instrument ** DWR Approval provided upon a determination that the site is meeting success criteria contained within the approved BPDP B. DWR may modify the Credit Release Schedule based on the information submitted or the order in which required information is received. DWR will notify the Sponsor of any modification to the credit release schedule. C. DWR may consider a Credit Release Schedule for a Bank Parcel based on the extent of change between current onsite conditions and proposed post construction conditions. 11 IX. PROCEDURE FOR DEBITING AND CREDITING MITIGATION CREDITS Credit Ledgers A. The Bank Sponsor shall maintain one credit ledger for each mitigation type for the Bank Parcel under this Instrument, unless otherwise instructed by DWR. Credit ledgers shall provide the accounting for Riparian Buffer Credits in square feet and Nutrient Offset Credits in pounds and square feet. B. Each credit ledger shall be submitted on a separate 8 % in. x 11in. spreadsheet with legible font style and font size. All ledgers shall be submitted using the templates provided in Attachment B and E of this Instrument or any updated versions to these templates as provided by DWR. Credit Processing C. Riparian Buffer Credits generated on this Bank Parcel will be used to provide buffer mitigation for authorized riparian buffer impacts within the 03020201 HUC of the Neuse River Basin according to 15A NCAC 02B .0295 (g). D. Nutrient Offset Credits generated on this Bank Parcel can be provided to offset nutrient loadings within the Upper and Lower Falls Lake Watersheds. Impacted areas in the Upper Falls Watershed can only mitigate in the Upper Falls Watershed. Impacted areas in the Lower Falls Watershed can mitigate in any portion of the Falls Watershed per 15A NCAC 02B .0282 Available Riparian Buffer Credits (credits that have been released by DWR but not sold by the Sponsor) that meet criteria for nutrient offset credits as outlined in Section VII of this Instrument, the Site Viability Letter and the corresponding BPDP can be converted and transferred from Riparian Buffer Credits to Nutrient Offset Credits upon written approval from DWR. Once a credit has been converted to another credit type, the transaction is permanent, and the credit cannot be converted again. Available Nutrient Offset Credits (credits that have been released by DWR but not sold by the Sponsor) that are generated within 0-100' from top of banks and meet criteria for riparian buffer credits as outlined in Section VII of this Instrument, the Site Viability Letter, 15A NCAC 02B .0295 and the corresponding BPDP can be converted from Nutrient Offset Credits to Riparian Buffer Credits upon written approval from DWR. Once a credit has been converted to another credit type, the transaction is permanent, and the credit cannot be converted again. G. Riparian Buffer Credits generated under 15A NCAC 02B .0295 (o)(6) on this Bank Parcel are not transferrable to Nutrient Offset Credits. H. Credit conversions must be calculated using the guidance provided in the Clarified Procedures for Calculating Buffer Mitigation Credits and Nutrient Offset Credits letter issued by the DWR. 12 I. The Bank Sponsor shall obtain verification of nutrient offset need from a designated local government in the Falls Lake Watershed, or from DWR through an approved NPDES permit for wastewater nutrient sources, prior to debiting Nutrient Offset Credits from the Bank Parcel. J. The Bank Sponsor shall obtain verification of riparian buffer mitigation required from a delegated/designated local government in the 03020201 Neuse River Basin or DWR prior to debiting Riparian Buffer Credits from the Bank Parcel. K. All credit and debit transactions for the Bank Parcel under this Instrument shall be accurately depicted in the credit ledgers. The Sponsor shall submit accurate and up-to-date credit ledgers for the Bank Parcel by the 10" of each month. At a minimum and only upon request, DWR shall receive a hard copy of updated credit ledgers along with corresponding Mitigation Credit Transfer Certificates and all corresponding letters from the designated local governments or DWR where applicable once a year. Notification of all credit sales shall be provided to DWR until all credits that have been released have been sold. Mitigation Credit Transfer Certificates L. All credit sales will include a Mitigation Credit Transfer Certificate ("Certificate") that is required to be provided to the buyer of Riparian Buffer and/or Nutrient Offset Credits, that will include, at a minimum, the following information; 1. Bank Details: (1) Sponsor Name, (2) Bank Parcel name as it appears in this Instrument and, (3) DWR project number for the BPDP. 2. Credit Details: (1) date of receipt, (2) identify if full or partial payment, and (3- when applicable) amount of nitrogen and/or phosphorus credits purchased in pounds and confirmation from the designated local governments of the amount required, and (4- when applicable) the amount of Riparian Buffer Credits purchased in square feet and the confirmation from DWR or the local government of the amount required. 3. Permitted Project Details: (1) project name as it appears on DWR or local government permits and/or certifications, (2) 8-digit HUC, (3) river basin, (4) nutrient strategy applicable to the permitted project with impacts, (5 — when applicable) designated local government requiring Nutrient Offset Credits, and/or (6) DWR authorization/ID number or delegated local government requiring Riparian Butter Credits for this project. M. If the DWR determines the Bank is operating at a deficit (e.g. the Sponsor is closing on sales and/or transferring credit that is not available), or the Bank is selling credits out of compliance with statutes, rules or this Agreement, the sale/transfer of credits will immediately cease, and the DWR, in consultation with the Sponsor, will determine what remedial actions are necessary. X. BANK PARCEL CLOSURE A. Bank Parcel Closure shall be identified as the event when the Sponsor is relieved of all its responsibilities to the Bank Parcel and there are no Riparian Buffer Credits or Nutrient Offset Credits left to sell. 13 B. Bank Parcel Closure shall commence only after all the following events have occurred; 1. Transfer or assign the conservation easement and all its interests, in perpetuity, to a land trust or stewardship program as described in Section V of this instrument. 2. All five years of monitoring completed and all monitoring reports submitted and approved by DWR. 3. All credits have been released and debited and updated ledgers showing zero credit balances have been submitted and approved by DWR. XI. GENERAL PROVISIONS A. Upon the presentation of proper credentials, and during normal business hours, the Sponsor and the landowner shall grant permission to the Director of DWR, or an authorized representative of the Director of DWR to enter the property containing the Bank Parcel(s). B. Amendments: This Banking Instrument may be amended or modified only with written approval of all signatory parties, including the USACE if it is applicable to the amendment. C. Any transfer of the Sponsor's rights or obligations outlined in this Instrument or any other agreement referenced in this Instrument to a third party must be approved by DWR prior to the transfer. D. Force Majeure: After 100% of all the credits have been released in accordance with the credit release schedule in Section VIII and confirmation has been received by the DWR that the Conservation Easement has been successfully assigned in compliance with Item H of Section V, the Sponsor will not be responsible for Bank failure that is attributed to natural catastrophes including but not limited to flood, drought, disease, regional pest infestation, etc. that are beyond the control of the Sponsor. E. However, if an event occurs before 100% of all the credits have been released in accordance with the credit release schedule in Section VIII, the Sponsor shall take remedial action to restore the property to its condition prior to the event, in a manner sufficient to provide adequate mitigation to cover credits that were sold prior to the occurrence of the event. Such remedial action shall be taken by the Sponsor only to the extent necessary and appropriate, as determined by DWR and the Sponsor. DWR must concur in writing that a force majeure event has occurred for this provision to apply. F. Oversight: Actions taken by DWR may include, but are not limited to, the following: 1. Site visits, 2. Issuance of Site Viability Letters, 3. BPDP review and approval of items listed in Section V of this Instrument, 4. As -Built report review and approval of items listed in Section VI of this Instrument, 5. Monitoring Report review and approval of items listen in Section VI of this Instrument, 6. Credit Ledger review and approval of items listen in Section IX of this Instrument, 14 7. Certificate review of items listed in Section IX of this Instrument and cross analysis to credit ledgers and, 8. Information requests, file reviews and audits. Reports, ledgers, files and other information shall be made available to DWR upon request, unless otherwise specified in this or any other document. G. Validity of this Instrument: This Instrument will become valid on the date of the last party's signature. H. Specific Language of this Instrument Shall Be Controlling: To the extent that specific language in this document changes, modifies, or deletes terms and conditions contained in those documents that are incorporated into the Instrument by reference, and that are not legally binding, the specific language within the Instrument shall be controlling. I. Any disputes over decisions regarding this Instrument, shall be referred to the Director of DWR for a decision. The Director's decision is subject to review as provided in Articles 3 and 4 of G.S. 150 B. J. This Agreement shall be binding upon the parties and is entered into knowingly, intelligently and voluntarily. K. Notices: All Notices and other communication which may be or are required to be given or made by any party to the other shall be in writing and shall be deemed to have been properly given and received on the date delivered in person, received via email with a delivery receipt requested, or deposited in the United States mail, registered or certified, return receipt requested, to the addresses set out below or at such other addresses as specified by written notice delivered in accordance herewith. If to Bank Sponsor: 1430 South Mint Street, Suite 104 Charlotte, NC 28203 Attn: Shawn Wilkerson If to DWR: NC Division of Water Resources — 401 & Buffer Permitting Branch Attn: Nutrient Offset & Buffer Mitigation Banking Coordinator 1617 Mail Service Center Raleigh, NC 27699-1617 15 L. Applicable Law: This Agreement shall be construed under the laws of the State of North Carolina. Wildlands Holdings V, LLC By: Shawn Wilkerson (Print) ot. (Signature) k� President of Wildlands Engineering, Title: Manager of Wildlands Holdings V, LLC Date: 8/14/2020 NORTH CAROLINA DEPARTMENT OF ENVIRONMENTAL QUALITY -DIVISION OF WATER RESOURCES By: Title: Date: 16 (Print) (Signature) Updated August Nutrient Offset Program & Buffer Mitigation Program 12, 2020 Authorities for Falls Lake WS MBI ATTACHMENT A Authorities pertaining to the Catfish Pond II Mitigation Banking Instrument All Basins General Statutes: G.S. § 143-214.11 Ecosystem Enhancement Program G.S. § 143-214.26 Nutrient Offset Credits G.S. § 143-214.20-24 Riparian Buffer Protection Program G.S. § 143-214.7 Stormwater runoff rules and programs G.S. § 143-215.8B Basinwide Water Quality Management Plans Session Laws S.L. 2019-86 (Amendment to G.S. § 143-214.26) S.L. 2016-94 S.L.2015-246 S.L.2015-149 S.L.2014-90 S.L.2014-120 S.L.2013-413 S.L.2013-121 S.L.2013-265 S.L. 2012-200 (Amendment to G.S. §143-214.23 and G.S. §143-215.1) S.L. 2011-343 (Amendment to G.S. §143-214.11) S.L. 2009- 337 (Amendment to G.S. § 143-214.11) Administrative Rules. 15A NCAC 02B .0202 Definitions 15A NCAC 02B .0223 Nutrient Sensitive Waters 15A NCAC 02B .0701 Nutrient Strategies Definitions 15A NCAC 02B .0703 Nutrient Offset Credit Trading 15A NCAC 02B .0295 Mitigation Program Requirements for Protection and Maintenance of Riparian Buffers Neuse River Basin Buffer and Falls Lake Nutrient Strategy General Statutes and Session Laws: G.S. § 143-214.5 Water Supply Watershed Protection S.L.2012-187 S.L. 2011-394 S.L. 2009-486 S.L. 1998-221 (Part I) Administrative Rules. 15A NCAC 02B .0610 Managing Activities within Riparian Buffers: Definitions 15A NCAC 02B .0611 Managing Activities within Riparian Buffers: Authorization Certificates 15A NCAC 02B .0612 Managing Activities within Riparian Buffers: Forest Harvesting Requirements 15A NCAC 02B .0714 Protection and Maintenance of Existing Riparian Buffers 15A NCAC 02B .0715 Delegation of Authority for the Protection and Maintenance of Existing Riparian Buffers 15A NCAC 02B .0275 Purpose and Scope 15A NCAC 02B .0276 Definitions 15A NCAC 02B .0277 Stormwater Management for New Development 15A NCAC 02B .0278 Stormwater Management for Existing Development 15A NCAC 02B .0279 Wastewater Discharge Requirements 15A NCAC 02B .0280 Agriculture 15A NCAC 02B .0281 Stormwater Requirements for State and Federal Entities 15A NCAC 02B .0282 Options for Offsetting Nutrient Loads Aft-k ao c a w m m � y > O Q V z V w f6 � a m v V y O O O W W C O z ao © Y f6 m w O a LL O \ v W O � z O ++ VI V 7 O a c v E w w c •� a bn m \ Y > C � N f6 v p N O O z j cn v io N + "a 7 z a° V y t y O 0 N O W ESL v v � � 0 Z p fu z QCL E V m D z C �c � O y V 7 z ON W Q O - m a O O V c V O O D LL = O LL L 06 N V N '6 O K 71 f6 w 71 � E � ++ i f0 w O V � i O N 71 O O y� N s V 7 a Y � w m w w � m m � O 71 O F 71 ATTACHMENT B Aft-k ao c a w m m � ++ > O p V z V w (6 � a m v C o O w v s c a J� � 0 o 0 Z a a © Y f6 m w O a LL O Ln v 2 y N O p C O. v O ° O � y aa V c � N � W w � GO m Q Y > w � co � 3 co N O O O = _ W N O N C Q m Z a 0 O 0 N GO U/ l0 to m -O i 0 a a N p V o Y Y a, 0 N Q O V J O in O Z m t a 0 LL O_ f0 O Q L Q E 7 Q V co c-I V O V � O O W Z N O Q = m a — m 6 O V c V c O D a- = C 06 N V � O N � 71 (6 71 � 71 � ++ i N w O V � i O N 71 O O yf (6 s V 7 a Y � w m � p � w w � m m O O � 71 F 71 ATTACHMENT B ao 3 0 z c 3 O' W K O H aQ m �LL J 1.4 m s m o 0 i � d d c d u` d � d 3 c d d a" a � s d d d z LL d v Y C V 3 C OD m C � C � l0 � m U1 C � O N OD zw O O U1 -O v a0+ �' w U Q W m N 'p a` v 3 m � m v o � N N O Z � - m -O O CJ C O � 2 = L _ N C U W J Q C � W � C N W u O � O N W m t o. � N N w o v C O U F W N Ol W W O W W K N N O F ATTACHMENT B ao 3 0 z c 3 O' W K O H aQ m �LL J 1.4 m s m o 0 i � d d c d u` d � d 3 c d d a" a � s d d d z LL d v Y C V 3 C OD m C � C � l0 � CO U1 C � ` O N N OD U1 v > U O N 0 � W w L U -O 7 v Cit v N V �O LL C N � Q w 0 � � J m ri m N O � N N O Z � - m -O O C O D 2 = L _ N C U W J Q C � W � C N W u O � O N W m t d N N w o v C O U F W N Ol W W O W W K N N O F ATTACHMENT B