20201149 Ver 2_UMBI FINAL 2021_20210927

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20201149
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Version* 2
Katie Merritt
Initial Review Completed Date 09/27/2021
Mitigation Project Submittal - 9/27/2021
Is this a Prospectus, Technical Proposal or a New Site?* r Yes r No
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r Stream r Wetlands rJ Buffer rJ Nutrient Offset
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Jamey McEachran
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20201149
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Project Type: r DMS C•' Mitigation Bank
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jmceachran©res.us
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*2
Project Name: Wolf King Riparian Buffer and Nutrient Offset
Mitigation Project
County:
Wayne
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Mitigation Bank Instrument
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RES Neuse 2021 UMBI FINAL Wolf King_Shady
466.04KB
Grove.pdf
Rease upload only one R}F of the complete file that needs to be submitted...
Jamey McEachran
povi lle[ 4 t

AGREEMENT TO ESTABLISH THE RES 2021 NEUSE UMBRELLA NHTIGATION
BANKING INSTRUMENT IN THE NEUSE RIVER BASIN FOR RIPARIAN BUFFER
AND NUTRIENT OFFSET MITIGATION CREDITS PURSUANT TO THE NEUSE
NUTRIENT MANAGEMENT STRATEGY
TABLE OF CONTENTS
I.
PREAMBLE.......................................................................................................................
2
II.
LOCATION AND GEOGRAPHIC SERVICE AREA ......................................................
2
III.
AUTHORITIES..................................................................................................................
3
IV.
ESTABLISHMENT OF BANK PARCELS.......................................................................
3
V.
PRE -CONSTRUCTION DOCUMENTATION.................................................................
5
VI.
POST CONSTRUCTION DOCUMENTATION FOR EACH BANK PARCEL .............
7
VII.
CALCULATION OF CREDITS......................................................................................
10
VIII.
CREDIT RELEASE SCHEDULE....................................................................................
12
IX.
PROCEDURE FOR DEBITING AND CREDITING MITIGATION CREDITS ...........
13
X.
BANK PARCEL CLOSURE............................................................................................
15
XI.
GENERAL PROVISIONS FOR EACH BANK PARCEL ..............................................
15
ATTACHMENTS
A - Division of Water Resources Authority Document
B - Ledger Templates
C — Project Credit Table (example)
References
1. Nutrient Offset Credit Trading Rule:
hLp://reports.oah. state.nc.us/ncac/title%2015a%20%20environmental%20qualily/chapter%2002%20-
%20environmental%20management/subchapter%20b/ 15 a%20ncac%2002b%20.0703.pdf
2. Riparian Buffer Mitigation Rule:
http://reports.oah. state.nc.us/ncac/title%2015a%20%20environmental%20qualily/chapter%2002%20-
%20environmental%20management/subchapter%20b/ 15 a%20ncac%2002b%20.0295.pdf
3. NC Session Law 2019-86 "Nutrient Offset Credits":
https://www.ncleiz.lzov/Sessions/2019/Bills/House/PDF/H812v3.pd
4. Buffer Interpretation/ Clarification # 2008- 019 for diffuse flow:
https://files.nc.gov/ncdeq/Water%200ualiiy/Surface%2OWater%2OProtection/401 Buffer%2OClarification
%20Memo s/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%200uality/Surface%2OWater%2OProtection/401 /Mitigation/Issues---
Re solutions-Ver-1.0-buffer-mitigation-nutrient-offset.pdf
6. NCDWR — Methodology and Calculations for Nutrient Reduction on the Bank Parcel:
hI tps://files.nc.gov/ncdeq/Water%200uality/Planning/NPU/Nutrient%200ffset%2ORule/Ag-Buffer-
Credit.pdf
1

I. PREAMBLE
This RES 2021 Neuse Umbrella Mitigation Banking Instrument ("Instrument") regarding the
establishment, use, operation, and maintenance of the Wolf King Bank Parcel and Shady Grove
Bank Parcel (Bank Parcels), identified in Section II, to provide Neuse Riparian Buffer
mitigation credits ("Riparian Buffer Credits") and Neuse Nutrient Strategy nutrient load
reduction credit ("Nutrient Offset Credits") is made and entered into by and among
Environmental Banc and Exchange, 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
Mitigation Rule 15A NCAC 02B .0295, which became effective on April 1, 2020 and
November 1, 2015 (References 1 and 2) respectively. This instrument is for two individual
bank sites, Wolf King and Shady Grove.
The purpose of the Bank Parcels are:
A. To restore and preserve riparian vegetation adjacent to streams and/or agricultural ditches
with the intent to improve water quality, reduce nutrient loads, enhance flood attenuation,
and restore wildlife habitat within the Neuse River Basin (8-digit HC 03020201), excluding
the Falls Lake Watershed.
B. To convert agricultural land uses within riparian areas adjacent to streams and/or
agricultural ditches into a dense and diverse, hardwood vegetated state with the intent to
significantly reduce nutrient loadings associated with agricultural practices into streams
and ditches.
C. To provide buffer mitigation and nutrient offsets and sell any resulting Riparian Buffer
Credits and/or Nutrient Offset Credits to third parties in the Neuse River Basin, for
development (both existing and proposed) or to offset NPDES- permitted wastewater
nutrient sources requiring such mitigation or offset.
IL 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 GSA for the Bank Parcels under this instrument is limited to the United States
Geological Survey ("USGS") 8-digit Hydrologic Unit Code ("HUC") 03020201 of the
Neuse River Basin, excluding the Falls Lake Watershed in the State of North Carolina.
C. Sale or transfer of Riparian Buffer Credits shall be limited to the 8-digit HUC 03020201 in
the Neuse River Basin, excluding the Falls Lake Watershed, unless otherwise authorized
by the DWR or delegated local government in accordance with 15A NCAC 02B .0295.
PA

D. Sale or transfer of Nutrient Offset Credits shall be limited to 8-digit HUC 03020201 in the
Neuse River Basin, excluding the Falls Lake Watershed, in accordance with 15A NCAC
02B .0703, unless otherwise authorized by the DWR in accordance with Session Law (S.
L.) 2019-86.
E. The following table provides site -specific details of each of the two Bank Parcels proposed
under this Instrument, all are within the Neuse River Basin (8-digit HUC 03020201);
Table 1.0 Project Information
Bank
8-Digit
Named
Parcel
County
USGS
DWR
Project
Receiving
Primary Land
Name
Hydrologic
Project #
Location
Stream
Use/s
Unit Code
Wolf King
Wayne
03020201
2020-1149
35.307000,
Horse Creek
Agricultural
vl
-78.167000
Fields
Shady
2020-1091
19357,
Thunder
Agricultural
Grove
Wayne
03020201
vl
- 78.
78.111898
Swamp
fields, mature
natural forest
IILAUTHORITIES
A. The Banks will be used to provide Riparian Buffer Credit and 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.
C. The selling of credits generated from the Bank Parcels approved under this Instrument,
shall be consistent with approved State statutes and rules for the Neuse Nutrient Sensitive
Waters Management Strategy.
D. Buffer Mitigation and nutrient offset activities proposed under this Instrument and
corresponding Bank Parcel Development Packages (BPDP) to generate Riparian Buffer
Credits and Nutrient Offset Credits shall be consistent with North Carolina ("State")
statutes and rules for the Neuse Nutrient Sensitive Waters Management Strategy that are
in place at the time a complete BPDP is submitted to DWR.
IV. ESTABLISHMENT OF BANK PARCELS
A. In accordance with 15A NCAC 02B .0295 and 15A NCAC 02B .0703, DWR has provided
a "Site Viability Letter" for each of the Bank Parcels proposed under this Instrument. The
site viability letter is not an approval of the site to generate Riparian Buffer Credits and
Nutrient Offset Credits, but is a preliminary review of the Bank Parcel that details and
confirms existing land -use conditions, defines the riparian zone sites (Enhancement,

Preservation, or Restoration), and identifies features (streams, ditches, ponds, etc.) that
meet general criteria to be suitable to generate Riparian Buffer Credits and Nutrient Offset
Credits. Table 2.0 below outlines when a Site Viability Letter was issued by DWR for the
mitigation sites proposed under this Instrument:
Table 2.0 — Site Viability Letter Details
Bank Parcel/DWR
Project #
NC DWR Site
Visit
Viability Letter Received
Viability Letter
Expiration Date
Wolf King
September 23, 2020
February 22, 2021
February 22, 2023
Shady Grove
September 23, 2020
March 3rd, 2021
March 3, 2023
B. A valid Site Viability Letter is required prior to submittal of each BPDP. Site Viability
Letters will either expire upon the submittal of a BPDP to the DWR or on the dates listed
in the table above, 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 each require a BPDP
be submitted to, and approved by, the DWR prior to use of the individual Bank Parcel for
buffer mitigation and nutrient offset purposes or for any sale or transfer of any associated
credits. The contents of the BPDP are provided in Section V.
D. Each BPDP submitted under this instrument will be placed on public notice and made
available for public commenting for 15 calendar days.
E. In general Riparian Buffer Credit on these Bank Parcels may be achieved through
restoration and preservation of DWR riparian buffers as they are defined in 15A NCAC
02B .0233, and other riparian areas allowed per 15A NCAC 02B .0295 (n) and (o) where
applicable. Riparian Buffer Credits are only attainable if the width of the riparian areas are
at least 20 feet from tops of banks along streams and 30 feet from tops of banks along
viable ditches when measuring perpendicular and landward from features. Riparian buffer
credits are attainable to a maximum of 200 feet from tops of banks of streams and a
maximum of 50 feet from the tops of banks of viable ditches. The viability of features to
generate riparian buffer credits is provided in the Site Viability Letters for the Bank Parcels
and referenced in Table 2.0 of this instrument.
F. The Bank Parcels are intended to provide Neuse Riparian Buffer Mitigation Credits as
follows:
1. Planting hardwood trees on a Restoration Site as defined in 15A NCAC 02B
.0295(b) adjacent to viable streams and viable ditches.
2. Maintaining a Preservation Site as defined in 15A NCAC 02B .0295(b) by placing
a conservation easement around riparian areas along viable streams as allowed per
15A NCAC 02B .0295 (o).
E

3. Diffused flow will be maintained onsite to the maximum extent practicable. The
Buffer Interpretation/Clarification Memo 92008-019 may be applied where
maintenance of diffuse flow onsite is unattainable.
G. Nutrient Offset Credit may be achieved on these Bank Parcels through restoration of the
riparian areas adjacent to viable streams and viable ditches, where agriculture was
determined by DWR to be the predominant land use. The width of the riparian restoration
area will begin at the most landward limit of the top of bank or the rooted herbaceous
vegetation of streams and ditches and extend landward a minimum of 50 feet and a
maximum of 200 feet on all sides of the features. A conservation easement will be secured
to include the tops of all channel and ditch banks and will extend out a maximum of 200
feet from the streams and viable ditches. The viability of features to generate nutrient offset
credit is provided in the Site Viability Letters for the Bank Parcels and referenced in Table
2.0 of this Instrument.
H. The Bank Parcels are expected to provide Nutrient Offset Credits as follows:
1. Converting agricultural land uses within riparian areas to non-agricultural land uses
by placing a perpetual conservation easement around riparian areas along viable
streams and viable ditches.
2. Planting hardwood trees and shrubs on a Restoration Site as defined in 15A NCAC
02B .0295 (b) adjacent to viable streams and viable ditches where agriculture has
been determined by DWR to be the predominant land -use.
F. Both of the Bank Parcels submitted for review under this Instrument are anticipated to
begin construction of buffer activities in Spring 2022. The total area of riparian restoration
activities on the Wolf King Bank Parcel is expected to be 8.75 acres and 19.43 acres on the
Shady Grove Bank Parcel.
V. PRE -CONSTRUCTION DOCUMENTATION
Bank Parcel Development Package
A. All BPDPs 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) A Project Credit Table (see Attachment C)
showing 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, and 8) Site Viability Letter from DWR; 9)
service area figure for each mitigation type proposed under this instrument; and all
pertinent information including but not limited to permitting, bank stabilization, culvert
5

removal, installation of any utilities indirectly or directly affecting the Bank Parcel,
endangered or threatened species, presence of historical sites and an Environmental Data
Resources (EDR) report to evaluate environmental risk associated with the land proposed
for the Bank.
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 stream
channels, the riparian buffers and other riparian areas on the Bank Parcels to produce
Riparian Buffer Credit 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 mitigation site.
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 Wayne County Register of Deed's office that is sufficient to ensure
protection, operation 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 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.
H. The Sponsor agrees to 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.
L 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.
no

Financial Assurances for Bank Parcel Development
Following approval of the BPDP for each 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 BPDPs. It is the
Sponsor's responsibility to confirm that the surety company is rated no less than an "A-"
with each annual bond renewal.
K. The amount of each Performance Bond shall be 100% of the estimated cost for
implementation of the riparian restoration, enhancement, preservation and other related
activities for the construction of the Bank Parcels as described in the approved BPDPs. No
bond shall be less than $150,000.00 to cover construction costs.
L. Alternatively, in lieu of posting Performance Bonds, the Sponsor may elect to construct
the Bank Parcel prior to the first credit releases.
M. For each Bank Parcel, once DWR has released all credits for completion of all items listed
below, then the Bank Sponsor will be released from its performance obligations under the
performance bond required in Item J and K of this section:
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
N. To comply with this section, DWR must be the Obligee on all performance bonds.
VI. POST CONSTRUCTION DOCUMENTATION FOR EACH BANK PARCEL
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
Riparian Buffers or other riparian areas until Item B (1) and (2) of Section X have been
satisfied.
B. Within 30 calendar days after completing the establishment of the buffer mitigation and
nutrient offset areas, the Sponsor will submit written notification to DWR documenting
that all buffer mitigation and nutrient offset activities have been completed. Failure to
submit written notification within 30 days may result in a modified credit release schedule
or a delay in the issuance of credit releases. Notification shall include all the following:
1. Short summary of activities completed as required per the approved BPDP;
7

2. Figures representing all riparian restoration, riparian enhancement and riparian
preservation activities where applicable;
3. Figures representing location of all monitoring plots installed;
4. Detailed planting plan- including type of species planted, density of species planted,
and any modifications to the planting plan from what was approved in the BPDP;
5. Description of how the conservation easement boundaries were marked; and
6. Any major changes to the conservation easement boundary or to the amount of
Riparian Buffer Credits and/or Nutrient Offset Credits from what was proposed in
the approved BPDP
C. The Sponsor will submit an as -built plan and report for the Bank Parcel after completing
the establishment of the buffer and nutrient offset mitigation areas. The as -built report will
describe any deviation from the approved BPDP and will document the following:
Riparian restoration and enhancement planting details and other construction
activities that were required in the BPDP, confirmation that all boundary markers
are installed, invasive species control, monitoring device locations, vegetation plot
locations, and photo point locations.
2. 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 Credits and/or Nutrient Offset Credits in both square feet and acres.
3. As -built map of the buffer mitigation and nutrient offset areas showing where
riparian restoration, enhancement and preservation was performed and any
deviations to the Bank Parcel from what was approved in the BPDP.
4. Aerial map of the buffer mitigation and nutrient areas that was included in the
approved BPDP.
Financial Assurance for Monitoring and Maintenance
D. After completion of the riparian restoration and mitigation activities construction on each
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 applicable for each site. 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 that the surety company is rated no less than an "A-"
with annual bond renewals.
E. A Performance/Maintenance Bond shall be secured each year for a minimum of five years,
and until DWR has released all Riparian Buffer Credits and Nutrient Offset Credits to the
Bank Sponsor. Upon receiving a credit release letter from DWR approving a monitoring
report with no contingencies, the bond may be lowered for that next year's monitoring
based on the adjusted cost to complete the monitoring. No bond shall be less than $100,000
initially, to cover monitoring and maintenance costs.

F. For each Bank Parcel, once DWR has released 100% of all credits for completion of all
Bank Parcel milestones described in Table 3 of Section VIII and in the corresponding
BPDP, the Bank Sponsor will be released from its performance obligations under the
performance bond required in "C-D" of this Section.
G. To comply with this section, DWR must be the Obligee on all performance bonds.
Monitoring and Maintenance Reports
H. 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 for each Bank Parcel.
L 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.
A "stem" means a woody seedling, sapling, shrub or tree, no less than 10 centimeters in
height and shall apply, on the Bank Parcels, to the minimum height that a planted tree or
shrub shall be at initial planting. Volunteer stems that are less than 10 centimeters shall
not be quantified and included in the annual vegetation data included with the monitoring
reports.
K. 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 diffuse
flow, managing invasive species, and pest control will be included in the BPDP.
L. Monitoring Reports for Riparian Buffer Credit and 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 on 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 for each
Bank Parcel under this instrument. Vegetation data shall not be collected prior to late
August of each year. This report will describe the conditions of each 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;
6

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 figure showing locations of sampling plots, permanent
photo points, location of transects, etc.; and
4. Monitoring data, including specific vegetative 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 ledgers; 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 (if
applicable)
Contingency Plans/Remedial Actions
M. In the event the Bank Parcel fails to achieve the performance criteria described in this
Instrument and 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.
VIL CALCULATION OF 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, see reference 95, including the most recent Project Credit Table
Template provided online (see Appendix Q.
B. Riparian buffer restoration on each of the Bank Parcels, as described in 15A NCAC 02B
.0295 (n), and defined in 15A NCAC 02B .0295 (b) that is performed on agriculture lands
within the Bank Parcels, may be used for either Riparian Buffer Credit or Nutrient Offset
Credit, but not both.
C. Riparian buffer preservation 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
10

E. The square footage of Nutrient Offset Credits on both of the Bank Parcels submitted under
this Instrument will be determined by applying the applicable ratio as provided in 15A
NCAC O2B .0295 (m) for a Restoration Site and Enhancement 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 provided online by DWR, see reference 9 5 and Attachment C. 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.
E. Nutrient Offset Credits cannot be achieved through the preservation activities performed
on this Bank Parcel.
F. Nutrient Abatement of Restored Riparian Area/Buffers on agricultural land: The Sponsor
and DWR agree to the following:
1. The pounds of nitrogen offset per acre of restored riparian areas/buffers shall be
2,273.02 pounds per acre or 19.16394 square feet per pound.
G. The Sponsor and DWR agree the methodology and calculations for determining nitrogen
reduction, associated with restoration and enhancement of riparian areas on these Bank
Parcels 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 each Bank Parcel unless the viability letter for
that Bank Parcel has expired. 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 96.
This space left blank intentionally, do not add text to this space.
11

VIIL 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 each individual Bank Parcel will become available for sale to a third party
in accordance with Credit Release Schedule in Table 3.0 below.
Table 3.0 - Credit Release Schedule for Riparian Buffer and Nutrient Offset Credits
% Credit
Available for
Task
Project Milestone
Sale
Instrument and BPDP Approved by DWR, Conservation Easement
1
Recorded* and Financial Assurance Posted
20
All Riparian Earthwork & Mitigation Activities, Planting and Installation
of Monitoring Devices completed, easement boundaries adequately
2
marked, all applicable permits obtained, site visit performed by DWR
20
3
Mo nitoring Financial Assurance Posted and Approval of As -Built Report
10
Monitoring Report #1: Approved by the DWR** & Financial Assurance
4
Posted
10
Monitoring Report #2: Approved by the DWR** & Financial Assurance
5
Posted
10
Monitoring Report #3: Approved by the DWR** & Financial Assurance
6
Posted
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 Assurance
8
Posted
5
Monitoring Report #5: Approved by the DWR** and final site visit by
9
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 credit release schedules 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.
Any major deviations to the Bank Parcel that were not authorized in writing by DWR
prior to implementation may affect the amount of riparian buffer credits and nutrient
offset credits that will be generated by the Bank Parcels
12

IX. PROCEDURE FOR DEBITING AND CREDITING MITIGATION CREDITS
Credit Ledters
A. The Bank Sponsor shall maintain a credit ledger for each mitigation type for each Bank
Parcel under this Instrument: Credit ledgers shall provide the accounting for Riparian
Buffer Credits in square feet and acres, and Nutrient Offset Credits in pounds and square
feet.
B. Each credit ledger shall be submitted on a separate 8'/2 in. x 11 in. spreadsheet with legible
font style and font size. All ledgers shall be submitted using the templates provided in
Attachments B of this Instrument or any updated versions to these templates as provided
by DWR.
Credit Processing
C. Credits must be calculated for the Bank Parcel using the most recent Project Credit Table
template (see attachment C) which is referenced in the guidance provided in the Clarified
Procedures for Calculating buffer Mitigation Credits and Nutrient Offset Credits letter
issued by the DWR, see reference 95.
D. Riparian Buffer Credits generated on these Bank Parcels will be used to provide mitigation
for authorized buffer impacts within the 03020201 HUC of the Neuse River Basin
according to 15A NCAC 02B .0295 (f) and (g), excluding the Falls Lake Watershed.
E. Nutrient Offset Credits generated on these Bank Parcels will be used to offset nitrogen
nutrient loads within the 03020201 HUC of the Neuse River Basin, excluding Falls Lake
Watershed, in accordance with 15A NCAC 02B .0703.
F. Available Riparian Buffer Credits (credits that have been released by DWR but not sold by
the Sponsor) that are generated from riparian restoration on agriculture land and 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 from Riparian Buffer
Credits into 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.
G. Available Nutrient Offset Credits (credits that have been released by DWR but not sold by
the Sponsor) that are generated from riparian restoration within 0- 100' from tops of stream
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.
13

H. Riparian Buffer Preservation credits generated on these Bank Parcels are not transferrable
into nutrient offset credits.
I. Any 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, see reference 95.
The Bank Sponsor shall obtain written verification of nutrient offset need from a designated
local government in the 03020201 HUC of the Neuse River Basin outside of the Falls
Watershed, or from DWR through an approved NPDES permit for wastewater nutrient
sources prior to debiting Nutrient Offset Credits from the Bank Parcel.
K. The Bank Sponsor shall obtain verification of buffer mitigation required from the delegated
local government in the 03020201 HUC of the Neuse River Basin outside of the Falls
Watershed or DWR prior to debiting Riparian Buffer Credits from the individual Bank
Parcel.
L. All credit and debit transactions for each Bank Parcel under this Instrument shall be
accurately depicted in the credit ledgers. The Bank Sponsor shall provide DWR up-to-date
credit ledgers for each Bank Parcel by the tenth (loth) of each month. At a minimum and
upon request DWR shall receive a hard copy of updated credit ledgers along with the
corresponding Mitigation Credit Transfer Certificates ("Certificate") 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
M. 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:
Bank Details: (1) sponsor, (2) bank parcel as it appears in this Instrument, (3) DWR
project number for the BPDP as it appears in Table 1.0.
2. Credit Details: (1) date of receipt, (2) identify if full or partial payment, (3 — when
applicable) amount of Nutrient Offset Credits purchased in pounds and
confirmation from the designated local government of the amount required, and (4
— when applicable) 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 project, (5 — when applicable) designated local
government requiring Nutrient Offset Credits, and/or (6) DWR authorization
14

number or delegated local government requiring Riparian Buffer Credits for this
proj ect.
C. If the DWR determines that 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 for each Bank Parcel under this Instrument shall be identified as the
event when the Sponsor is relieved of all of its responsibilities to the Bank Parcel and there
are no Riparian Buffer Credits or Nutrient Offset Credits left to sell.
B. Bank Parcel Closure shall commence only after all following events have occurred:
1. Transfer or assign the conservation easement and all of 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 FOR EACH BANK PARCEL
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.
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 of the credits have been released according to the credit
release schedule in the BPDP 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.
15

E. However, if an event occurs before 100% of all of the credits have been released according to
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 listed in Section VI of this
Instrument,
6. Credit Ledger review and approval of items listed in Section IX of this Instrument,
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 the Banking Instrument: This Instrument will become valid on the date of the
last party's signature.
H. Specific Language of Banking 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.
L 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. 150B.
J. This Agreement shall be binding upon the parties and is entered into knowingly,
intelligently, and voluntarily.
16

K. Notices: All notices and other communications 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 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: Environmental Banc and Exchange, LLC
Attention: Mr. Daniel Ramsay
3600 Glenwood Avenue, Suite 100
Raleigh, North Carolina 27612
[e-mail]
If to DWR: NC Division of Water Resources — 401 & Buffer Permitting Branch
Attn: Nutrient Offset and Buffer Banking Coordinator
1617 Mail Service Center
Raleigh, NC 27699-1617
L. Applicable Law: This Agreement shall be construed under the laws of the State of North
Carolina.
Environmental Banc and Exchange, LLC
By: (Print)
(Signature)
Title:
Date:
NORTH CAROLINA DEPARTMENT OF ENVIRONMENTAL QUALITY -
DIVISION OF WATER RESOURCES
By: (Print)
(Signature)
Title:
Date:
17

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