The URL can be used to link to this page

Home My WebLink About20201664 Ver 2_Signed NOBI_20211129DocuSign Envelope ID: CD2D023C-C6AE-451E-A591-72F6213B8E52 ROY COOPERtv GovernorELIZABETH S. BISERSecretary S. DANIEL SMITH NORTH CAROLINA Director Environmental Quality November 16, 2021 TO: Danny Smith Director FROM: Katie Merritt Nutrient Offset & uffer Banking Coordinator THROUGH: Paul Wojoski Supervisor - 401 & Buffer Permitting Branch SUBJECT: Division Approval of the Roseneath Umbrella Nutrient Offset Banking Instrument for Nutrient Offset Credits pursuant to the Tar -Pamlico Nutrient Management Strategy for Restoration Systems, LLC. The attached final Umbrella Nutrient Offset Banking Instrument (NOBI) between Restoration Systems, LLC and the Division of Water Resources was placed on public notice and made available for public comments on October 28, 2021. The public comment period ended on November 12, 2021 and no comments were received on the draft NOBI. DEQ Legal counsel assisted with and agrees with the final template for which all our NOBI documents are drafted from. I have reviewed the attached NOBI and it is ready for your approval. Please sign on page 14 and return the document to me for final execution. D E Q�� North Carolina Department of Environmental Quality I Division of Water Resources 512 North Salisbury Street 1 1617 Mail Service Center I Raleigh, North Carolina 27699-1617 NORTH CAROHNA oena�entatEWro—lOusu\ r 919.707.9000 DocuSign Envelope ID: CD2D023C-C6AE-451E-A591-72F6213B8E52 AGREEMENT TO ESTABLISH THE RESTORATION SYSTEMS' ROSENEATH UMBRELLA NUTRIENT OFFSET BANKING INSTRUMENT IN THE TAR-PAMLICO RIVER BASIN FOR NUTRIENT OFFSET CREDITS PURSUANT TO THE TAR- PAMLICO NUTRIENT MANAGEMENT STRATEGY TABLE OF CONTENTS I. PREAMBLE.......................................................................................................................................I II. LOCATION AND GEOGRAPHIC SERVICE AREA...................................................................... l III. AUTHORITIES..................................................................................................................................2 IV. ESTABLISHMENT OF EACH BANK PARCEL............................................................................ 2 V. PRE -CONSTRUCTION DOCUMENTATION FOR EACH BANK PARCEL ............................... 3 VI. POST CONSTRUCTION DOCUMENTATION FOR EACH BANK PARCEL ............................. 5 VII. CALCULATION OF CREDITS........................................................................................................ 7 VIII. CREDIT RELEASE SCHEDULE FOR EACH BANK PARCEL .................................................... 9 IX. PROCEDURE FOR DEBITING AND CREDITING FOR EACH BANK PARCEL .................... 10 X. BANK PARCEL CLOSURE........................................................................................................... 1 1 XI. GENERAL PROVISIONS FOR EACH BANK PARCEL............................................................. 11 DocuSign Envelope ID: CD2D023C-C6AE-451E-A591-72F6213B8E52 ATTACHMENTS A — Division of Water Resources Authority Document B — Ledger Templates REFERENCES 1. Nutrient Offset Payment Rule 15A NCAC 02B .0703: http://reports.oah.state.nc.us/ncac/title%2015a%20%20enviromnental%20qualit /hgpter%2002%20- %20environmental%20management/subchapter%20b/ 15 a%20ncac%2002b%20.0703 .pdf 2. Riparian Buffer Mitigation Rule 15A NCAC 02B .0295: http:Hreports.oah.state.nc.us/ncac/title%2015a%20%20environmental%20qualit /hgpter%2002%20- %20environmental%20management/subchapter%20b/ 15 a%20ncac%2002b%20.0295 .pdf 3. NC Session Law 2019-86 "Nutrient Offset Credits": https://ncleg. gov/EnactedLegislation/SessionLaws/HTML/2019-2020/SL2019-86.html 4. Buffer Interpretation/Clarification #2008-019 for diffuse flow: https://files.nc. gov/ncdeq/Water%20Quality/Surface%20Water%20Protection/401 /Buffer%20CIarification%20M emos/Diffuse-Flow-for-Buffer-Mitigation-Sites-Buffer-Clarification-Memo-20080819.pdf 5. Clarified Procedures for Calculating Buffer Mitigation Credits and Nutrient Offset Credits (Nov 2019): https://files.nc. gov/ncdeq/Water%20Quality/Surface%20Water%20Protection/401 /Mitigation/Issues--- Resolutions-Ver-1.0-buffer-mitigation-nutrient-offset.pdf 6. Project Credit Table: https:Hdeq.nc. gov/about/divisions/water-resources/water-qualiiy_pennitting/401-buffer- authorization/nutrient-offset 7. NCDWR — Methodology and Calculations for Nutrient Reductions on the Bank Parcel: https:Hfiles.nc. gov/ncdeq/Water%20Quality/Planning/NPU/Nutrient%20Offset%20Rule/Ag-Buffer- Credit.pdf DocuSign Envelope ID: CD2D023C-C6AE-451E-A591-72F6213B8E52 I. PREAMBLE This Nutrient Offset Banking Instrument ("Instrument") regarding the establishment, use, operation, and maintenance of the Bells Bridge and White Farm Nutrient Offset Bank Parcels (`Bank Parcels"), further identified in Section II, is to provide Tar -Pamlico Nutrient Strategy nutrient load reduction credits ("Nutrient Offset Credits"), is made and entered into by and among Restoration Systems, LLC (RS) 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 15A NCAC 02B .0295, see references. The purpose of each Bank Parcel is: A. To establish, restore and preserve riparian vegetation adjacent to streams and agricultural ditches with the intent to improve water quality along unnamed tributaries to the Tar -Pamlico River within the Tar -Pamlico River Basin. B. To convert agricultural land uses within riparian areas adjacent to streams and 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 nutrient offset and sell any resulting Nutrient Offset Credits to third parties in the Tar - Pamlico River Basin, for development (both existing and proposed), or to offset NPDES permitted wastewater nutrient sources requiring such mitigation or offset. 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 Nutrient Offset Credits for impacts requiring such mitigation or offset. B. The GSA for the Bank Parcels under this instrument is limited to the Tar -Pamlico River Basin in the State of North Carolina, United States Geological Survey ("USGS") 8-digit Hydrologic Unit Code ("HUC") 03020102. C. Sale or transfer of Nutrient Offset Credits shall be limited to the 8-digit HUC 03020102 in the Tar - Pamlico River Basin, in accordance with 15A NCAC 02B .0703, unless otherwise authorized by the DWR in accordance with Session Law 2019-86. D. Table 1 provides site -specific details of the Bank Parcels proposed under this Instrument. Table 1.0 —Bank Parcel Details Bank Parcel 8-Digit USGS Project Named Primary Name/DWR County Hydrologic Unit Code Location Receiving Land Use Project # Stream Bells Bridge Halifax 03020102 Scotland Deep Creek Agricultural 2020-16642 Neck, NC Crops White Farm Halifax 03020102 Hobgood, Deep Creek Agricultural 2020-1665v2 NC Crops DocuSign Envelope ID: CD2D023C-C6AE-451E-A591-72F6213B8E52 III. AUTHORITIES A. The Bank will be used to provide 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 General Statutes (NCGS) and rules for the Tar -Pamlico Nutrient Management Strategy. C. The selling of credits generated from the Bank Parcels approved under this Instrument, shall be consistent with approved North Carolina ("State") statutes and rules for the Tar -Pamlico Nutrient Management Strategy. D. Nutrient Offset activities proposed under this Instrument and corresponding Bank Parcel Development Packages (BPDPs) to generate Nutrient Offset Credits shall be consistent with North Carolina ("State") statutes and rules for the Tar -Pamlico Nutrient Management Strategy that are in place at the time a complete BPDP is submitted to DWR. IV. ESTABLISHMENT OF EACH BANK PARCEL A. In accordance with 15A NCAC 02B .0295 and 15A NCAC 02B .0703, DWR has provided a "Site Viability Letter" for each Bank Parcel 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 sites (Enhancement, Preservation, or Restoration), and identifies features (streams, ditches, ponds, etc.) that meet general criteria to be suitable to generate Riparian Buffer andNutrient Offset Credits. Table 2.0 below outlines when the Site Viability Letters were issued by NCDWR for each Bank Parcel proposed under this instrument: Table 2.0 — Site Viability Letter Details Bank Parcel NC DWR Site Visit Viability Letter Viability Letter Received Expiration Date Bells Bridge December 3, 2020 February 16, 2021 February 16, 2023 White Farm December 3, 2020 February 9, 2021 February 9, 2023 B. A valid Site Viability Letter is required prior to submittal of each related BPDP. Site Viability Letters will either expire on the dates listed above or upon the 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. Each Bank Parcel proposed for inclusion under this Instrument shall require a BPDP be submitted to, and approved by, the DWR prior to use of the Bank Parcel for nutrient offset purposes or sale or transfer of any associated credits. The contents of the BPDPs are provided in Section V. D. The BPDPs submitted under this instrument will be placed on public notice and made available for public commenting for 15 calendar days. DocuSign Envelope ID: CD2D023C-C6AE-451E-A591-72F6213B8E52 E. In general, the Sponsor expects all Nutrient Offset Credits to be generated through riparian restoration. F. Nutrient Offset Credit on these two (2) Bank Parcels may be achieved through restoration of the riparian areas adjacent to viable streams and viable ditches where agriculture is the predominant land use as determined by DWR. Nutrient Offset Credits are only attainable if the width of the restored riparian areas are at least fifty (50) feet as measured perpendicular from tops of banks along viable streams and viable ditches. The width of the restoration area should begin at the most landward limit of the top of bank or the rooted herbaceous vegetation (if present along streams) and extends landward a minimum of 50 feet and a maximum of 200 feet on all sides of the surface waters. A conservation easement will be secured to include the tops of all stream channel and ditch banks and will extend out a maximum of 200 feet. The viability of features to generate nutrient offset credits is provided in the Site Viability Letters for the Bank Parcels and referenced in Table 2.0 of this Instrument. G. 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 or 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 to be the predominant land -use. 3. Diffused flow will be maintained onsite. The Buffer Interpretation/Clarification Memo #2008-019 may be applied where maintenance of diffuse flow onsite is unattainable, see reference 4. H. The total area of riparian restoration activities on the Bank Parcels is expected to be 125 acres (Bells Bridge +/- 35 acres and White Farm +/- 90 acres). V. PRE -CONSTRUCTION DOCUMENTATION FOR EACH BANK PARCEL A. Each BPDP submitted under this Instrument shall be submitted to DWR for review and must be approved by DWR prior to any construction on the corresponding Bank Parcel(s). Each BPDP will describe specifics related to any phasing of 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. Each 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 nutrient offset activities including a detailed vegetation plan; 4) monitoring and maintenance plans; 5) financial assurances; 6) a Project Credit Table (see reference 6) associated buffer/nutrient credit calculations, which shall include credit generation, service area, and accounting as appropriate for each regulatory authority; 7) stream determination letter from DWR; 8) Site Viability Letter from DWR, 9) service area figure for each mitigation type proposed under this Instrument; and 10) all pertinent information including but not limited to permitting, bank stabilization, culvert 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 Parcel. DocuSign Envelope ID: CD2D023C-C6AE-451E-A591-72F6213B8E52 B. The Sponsor will obtain all applicable federal, state, and local documentation, permits, or authorizations needed to construct and maintain the Bank Parcels. This Instrument does not qualify as, or substitute for, such documentation, permit, or authorization. C. Any restoration activities or proposed construction within stream channels, riparian buffers and other riparian areas on the Bank Parcels to produce 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 each Bank Parcel. D. Requests for deviation from the approved BPDPs must be submitted to DWR in writing. Written approval from the DWR must be received prior to implementing any deviation from the approved BPDPs. Property Disposition & Long -Term Management for each Bank Parcel E. Prior to the release of any credits, the Sponsor shall record permanent conservation easements at the Halifax County Register of Deed's office that is sufficient to ensure protection, operation and maintenance of restored riparian buffers and other riparian areas in perpetuity. 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 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. A land trust must be certified under 501(c)(3) of the Internal Revenue Code. I. 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 for Bank Parcel Development J. Following approval of each Bank Parcels's BPDP, the Sponsor shall provide a Performance/Maintenance Bond from a surety company that is rated no less than an "A-" as rated by A.M. Best, to construct each Bank Parcel, in its entirety, 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. K. The amount of the Performance Bond/s shall be 100% of the estimated cost for implementation of the riparian restoration activities and other related activities for the construction of the Bank Parcel as described in the approved BPDP. No bond shall be less than $150,000.00 to cover construction costs. Each Bank Parcel will be bonded individually. 4 DocuSign Envelope ID: CD2D023C-C6AE-451E-A591-72F6213B8E52 L. Alternatively, in lieu of posting Performance Bonds, the Sponsor may elect to construct each Bank Parcel, in its entirety, prior to the first credit release. M. For each Bank Parcel, once DWR has released all credits for completion of all items listed below, then the 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. All Riparian Earthwork, Planting, and Installation of Monitoring Devices Completed, easement boundaries adequately marked, all applicable permits obtained, site visit performed by DWR; 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 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 nutrient offset areas, the Sponsor will submit written notification to DWR documenting that all 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; 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; 6. Any major changes to the conservation easement boundary or to the amount of Nutrient Offset Credits from what was proposed in the approved BPDP. C. The Sponsor will submit an as -built plan and report for each Bank Parcel separately after completing the establishment of the nutrient offset areas. Each As -built Report will be submitted to DWR and describe any deviation from the approved BPDP and will document all the following: 1. Riparian restoration and planting details, invasive species control, confirmation of fence installation if applicable, cattle exclusions if applicable, confirmation that all easement boundary markers are installed, monitoring device locations, vegetation plot locations, and DocuSign Envelope ID: CD2D023C-C6AE-451E-A591-72F6213B8E52 photo point locations, as appropriate, and confirmation that all boundary markers are installed. 2. Boundary Survey of the conservation easement area, signed and sealed by a licensed surveyor, including an inventory of the final nutrient offset areas in both square feet and acres. 3. As -built map of the nutrient offset areas showing where riparian restoration was performed and any deviations to the Bank Parcel from what was approved in the BPDP. 4. Aerial map of the riparian restoration activities approved in the BPDP. Financial Assurance for Bank Parcel Monitoring and Maintenance D. After completion of the riparian restoration activities and construction on each Bank Parcel, in its entirety, a separate Performance/Maintenance Bond will be secured for 100% of the estimated cost to implement the monitoring and maintenance plan as described in each approved BPDP and As - Built Report 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 each annual bond renewal. E. Each Performance/Maintenance Bond shall be secured each year for a minimum of five years, and until DWR has released all Nutrient Offset Credits to the 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 initially. F. 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 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 each Bank Parcel, in its entirety 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. I. 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 each BPDP for approval. Some native hardwood tree volunteer species may be included to meet performance standards as determined by the DWR. J. A "stem" means a woody seedling, sapling, shrub or tree, no less than 10 centimeters in height and shall apply, on these Bank Parcels, as 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 for an individual Bank Parcel, supplemental plantings may be required. Supplemental plantings will be utilized until the required 6 DocuSign Envelope ID: CD2D023C-C6AE-451E-A591-72F6213B8E52 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 BPDPs. L. Monitoring Reports for 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 each BPDP. The Sponsor shall submit an annual monitoring report for each Bank Parcel 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 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 figure showing locations of sampling plots, permanent photo points, location of transects, etc.; and 4. Monitoring data, including specific vegetative counts and height data 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 (when applicable). Contingency Plans/Remedial Actions M. In the event a Bank Parcel fails to achieve the performance criteria described in this Instrument and the approved BPDP, the 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. VII. CALCULATION OF CREDITS Nutrient Offset Credits A. The square footage of Nutrient Offset Credits on both Bank Parcels proposed under this Instrument is 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 (see references 5 and 6 respectively). All riparian areas proposed for Nutrient Offset Credits must be a minimum of fifty (50) feet from the top of banks along viable streams and viable ditches on land noted in a Site Viability Letter as agriculture. DocuSign Envelope ID: CD2D023C-C6AE-451E-A591-72F6213B8E52 B. Nutrient Abatement of Restored Riparian Area/Buffers on Agricultural lands: The Sponsor and DWR agree to the following: a. 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. b. The pounds of phosphorus offset per acre of restored riparian areas/buffers shall be 146.40 pounds per acre or 297.54099 square feet per pound. C. The Sponsor and DWR agree that the methodology and calculations for determining nitrogen and phosphorus reduction, associated with restoration of riparian areas on these two (2) Bank Parcels shall be fixed as part of the approval of this Instrument, with the fixed amount not changing during the Bank Parcels Development or credit release schedule for the Bank Parcels. For further details on the approved method and calculations for determining nutrient reductions with the riparian restoration on these Bank Parcels, refer to the NCDWR — Methodology & Calculations for Nutrient Reductions on the Bank Parcel document found in reference 7. (Remainder of page intentionally left blank) DocuSign Envelope ID: CD2D023C-C6AE-451E-A591-72F6213B8E52 VIII. CREDIT RELEASE SCHEDULE FOR EACH BANK PARCEL A. Upon submittal of all appropriate documentation by the Sponsor, and subsequent approval by DWR, it is agreed that Nutrient Offset Credits associated with the Bells Bridge and White Farm Bank Parcels will become available to sell to a third parry in accordance with the Credit Release Schedule in Table 3.0. Table 3.0 - Credit Release Schedule for Nutrient Offset Credits % Credit Task Project Milestone Available for Sale 1 Instrument and BPDP Approved by DWR, Conservation Easement 20 Recorded*, Financial Assurance Posted All Riparian Earthwork, Planting and Installation of Monitoring Devices 2 Completed, Easement Boundaries are adequately marked, and all applicable 20 permits obtained. A site visit by DWR is required for this task. 3 Monitoring Financial Assurance Posted and Approval of As -Built Report 10 4 Monitoring Report #1: Approved by the DWR** & financial assurance 10 renewed 5 Monitoring Report #2: Approved by the DWR** & financial assurance 10 renewed 6 Monitoring Report #3: Approved by the DWR** & financial assurance 10 renewed 7 Item B (1) of Section X in this Instrument has been completed and approved 5 by DWR. No remaining credits will be released until the conservation easement has been assigned to an approved land trust or stewardship 8 Monitoring Report #4: Approved by the DWR** & financial assurance 5 renewed 9 Monitoring Report #5: Approved by the DWR** and final site visit by DWR 10 has been conducted 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. Any major deviations to the Bank Parcels that were not authorized in writing by DWR prior to implementation may affect the amount of nutrient offset credits that will be generated by the Bank Parcels. DocuSign Envelope ID: CD2D023C-C6AE-451E-A591-72F6213B8E52 IX. PROCEDURE FOR DEBITING AND CREDITING FOR EACH BANK PARCEL Credit Ledgers A. The Sponsor shall maintain one credit ledger for each mitigation type for each Bank Parcel proposed under this Instrument unless otherwise instructed by DWR in the approved BPDP. Each Bank Parcel will have a separate credit ledger. Credit ledgers shall provide the accounting for 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 Attachment B of this Instrument or any updated versions to these templates as provided by DWR. Credit Processing C. Nutrient Offset Credits generated on these Bank Parcels will be used to offset nitrogen and phosphorus nutrient loads within the 8-digit HUC 03020102 of the Tar -Pamlico River Basin in accordance with 15A NCAC 02B .0703. D. Credits must be calculated for each Bank Parcel using the most recent Project Credit Table template, see reference 6, 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 5. E. The Sponsor shall obtain written verification of nutrient offset need from a designated local government within the 03020102 RUC of the Tar -Pamlico River Basin, or from DWR through an approved NPDES permit for wastewater nutrient sources, prior to debiting Nutrient Offset Credits from the Bank Parcels. F. All credit and debit transactions for the Bank Parcels under this Instrument shall be accurately depicted in the credit ledgers. The Sponsor shall provide DWR up-to-date credit ledgers for each Bank Parcel by the tenth (101}i) 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 G. 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 Table 1.0, (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 nitrogen Nutrient Offset Credits purchased in pounds and confirmation from the designated local government or DWR of the amount required, and (4-when applicable) 10 DocuSign Envelope ID: CD2D023C-C6AE-451E-A591-72F6213B8E52 amount of phosphorus Nutrient Offset Credits purchased in pounds and confirmation from the designated local government or DWR 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 with impacts, (5 — when applicable) designated local government or DWR requiring Nutrient Offset Credits, and (6) credit type and amount required for the project. H. If the DWR determines that the Bank is operating at a deficit (e.g., the Sponsor is selling, leasing and/or transferring credits that are not available), or the Bank is selling or transferring credits out of compliance with statutes, rules or this Agreement, the sale/transfer 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 its responsibilities to the Bank Parcel and there are no Nutrient Offset Credits left to sell. B. Each 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 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, and/or an authorized representative of the Director of DWR, to enter the property containing each Bank Parcel. 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 the credits have been released according to 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. 11 DocuSign Envelope ID: CD2D023C-C6AE-451E-A591-72F6213B8E52 E. However, if an event occurs before 100% of all 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 offset and 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. 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. 150B. J. This Agreement shall be binding upon the parties and is entered into knowingly, intelligently, and voluntarily. 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, received via electronic mail, 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. 12 DocuSign Envelope ID: CD2D023C-C6AE-451E-A591-72F6213B8E52 If to Sponsor: Restoration Systems, LLC Attn: Barrett Jenkins 1101 Haynes Street, Suite 211 Raleigh, NC 27605 bjenkins@restorationsystems.com If to DWR: NC Division of Water Resources — 401 & Buffer Permitting Branch Attn: Nutrient Offset Banking Coordinator 1617 Mail Service Center Raleigh, NC 27699-1617 (Remainder ofpage intentionally left blank) 13 DocuSign Envelope ID: CD2D023C-C6AE-451E-A591-72F6213B8E52 L. Applicable Law: This Agreement shall be construed under the laws of the State of North Carolina. RESTORATION SYSTEMS, LLC By: George Howard (Print) �j�•-�� (Signature) Title: CEO - Restoration Systems, LLC Date: 10/28/2021 NORTH CAROLINA DEPARTMENT OF ENVIRONMENTAL QUALITY -DIVISION OF WATER RESOURCES Danny Smith By: DoGwSig.ned_by: (Print) V= SK4L (Signature) �8F7A�7ff5UCA325... Title: Director, Division of Water Resources Date: 11/29/2021 14 DocuSign Envelope ID: CD2D023C-C6AE-451E-A591-72F6213B8E52 ATTACHMENT A — Division of Water Resources Authority Document DocuSign Envelope ID: CD2D023C-C6AE-451E-A591-72F6213B8E52 Updated Nutrient Offset Program & Buffer Mitigation Program 10/28/2019 Authorities for MBI ATTACHMENT A Authorities pertaining to the Roseneath Umbrella 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 Tar -Pamlico River Basin Buffer and Tar -Pamlico Nutrient Strategy Session Laws S.L. 2019-86 (Amendment to G.S. § 143-214.26) S.L. 2011-394 S.L. 1999-329 (part of G.S. §143B-282) 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 .0715 Delegation of Authority for the Protection and Maintenance of Existing Riparian Buffers 15A NCAC 02B .0730 Tar -Pamlico Nutrient Strategy Purpose & Scope 15A NCAC 02B .0731 Tar -Pamlico Nutrient Strategy Stormwater 15A NCAC 02B .0732 Tar -Pamlico Nutrient Strategy Agriculture 15A NCAC 02B .0733 New and Expanding Wastewater Discharge Requirements 15A NCAC 02B .0734 Protection and Maintenance of Existing Riparian Buffers DocuSign Envelope ID: CD2D023C-C6AE-451E-A591-72F6213B8E52 ATTACHMENT B — Ledger Templates DocuSign Envelope ID: CMD023C-C6AE-451E-A591-72F6213B8E52 Restoration Systems, LLC - Roseneath Umbrella Nutrient Offset Banking Instrument (UBI) White Farm Bank Parcel / Tar -Pamlico 03020102 Nitrogen Offset Credit Ledger Date Last Updated: 00/00/0000 DWR # 2020-1665v2 Total Credits Released to Date: Credits Released/Available to Credits Debited/Sold from Nutrient Credit Balance Date Paid Purchaser or UMBI Task Completed Project w/HUC # Bank Bank Local Gov't Pounds of Pounds of Pounds of ,,,,__ __ _ Square Feet __ _ Square Feet -,.__ Square Feet DocuSign Envelope ID: CMD023C-C6AE-451E-A591-72F6213B8E52 Restoration Systems, LLC - Roseneath Umbrella Nutrient Offset Banking Instrument (UBI) White Farm Bank Parcel / Tar -Pamlico 03020102 Phosphorus Offset Credit Ledger Date Last Updated: 00/00/0000 DWR # 2020-1665v2 Total Credits Released to Date: Credits Released/Available to Credits Debited/Sold from Bank Nutrient Credit Balance Date Paid Purchaser or UMBI Task Completed Project w/HUC # Bank Local Gov't Pounds of Pounds of Pounds of Phosphorus Square Feet phosphorus Square Feet phosphorus Square Feet 00/00/0000 0.00 0.00 0.00 DocuSign Envelope ID: CMD023C-C6AE-451E-A591-72F6213B8E52 Restoration Systems, LLC - Roseneath Umbrella Nutrient Offset Banking Instrument (UBI) Bells Bridge Bank Parcel / Tar -Pamlico 03020102 Nitrogen Offset Credit Ledger Date Last Updated: 00/00/0000 DWR # 2020-1664v2 Total Credits Released to Date: Credits Released/Available to Credits Debited/Sold from Nutrient Credit Balance Date Paid Purchaser or UMBI Task Completed Project w/HUC # Bank Bank Local Gov't Pounds of Pounds of Pounds of ____ Square Feet ____ Square Feet I Square Feet DocuSign Envelope ID: CMD023C-C6AE-451E-A591-721`6213HE52 Restoration Systems, LLC - Roseneath Umbrella Nutrient Offset Banking Instrument (UBI) Bells Bridge Bank Parcel / Tar -Pamlico 03020102 Phosphorus Offset Credit Ledger Date Last Updated: 00/00/0000 DWR # 2020-1664v2 Total Credits Released to Date: Credits Released/Available to Credits Debited/Sold from Bank Nutrient Credit Balance Date Paid Purchaser or UMBI Task Completed Project w/HUC # Bank Local Gov't Pounds of Pounds of Pounds of Phosphorus Square Feet Phosphorus Square Feet Phosphorus Square Feet 00/00/0000 1 0.00 0.00 1 0.00