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Home My WebLink About20210306 Ver 2_UMBI for PN_20220329ID#* 20210306 Select Reviewer: Katie Merritt Initial Review Completed Date 03/29/2022 Mitigation Project Submittal - 3/29/2022 Version* 2 Is this a Prospectus, Technical Proposal or a New Site?* Type of Mitigation Project:* Stream Wetlands Buffer Nutrient Offset (Select all that apply) Project Contact Information Contact Name:* Jamey McEachran Project Information ID#:* 20210306 Existing ID# Project Type: DMS Mitigation Bank Project Name: RES Phase II UMBI County: Wayne Document Information O Yes O No Email Address-* jmceachran@res.us Version:* 2 Existing Version Mitigation Document Type:* Mitigation Bank Instrument Mod File Upload: UMBI FINAL_ RES_2022Phasell.pdf 600.26KB Please upload only one PDF of the complete file that needs to be submitted... Signature Print Name:* Jamey McEachran Signature: * AGREEMENT TO ESTABLISH THE RES 2022 PHASE II UMBRELLA MITIGATION BANKINGINSTRUMENTIN THE NEUSERIVER BASINFOR NUTRIENTOFFSET AND BUFFER 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 PARCEL......................................................................... 4 V.PRE-CONSTRUCTION DOCUMENTATION................................................................. 6 VI. POST CONSTRUCTION DOCUMENTATION ............................................................... 9 VII.CALCULATION OF CREDITS ...................................................................................... 12 VIII. CREDIT RELEASE SCHEDULE .................................................................................... 14 IX. PROCEDURE FOR DEBITING AND CREDITING MITIGATION CREDITS ........... 15 X. BANK PARCEL CLOSURE ............................................................................................ 17 XI. GENERAL PROVISIONS FOR THE BANK PARCEL ................................................. 17 ATTACHMENTS A - Division of Water Resources Authority Document B - Ledger Templates C – Project Credit Table (example) References 1. Nutrient Offset Credit Trading Rule: http://reports.oah.state.nc.us/ncac/title%2015a%20-%20environmental%20quality/chapter%2002%20- %20environmental%20management/subchapter%20b/15a%20ncac%2002b%20.0703.pdf 2. Riparian Buffer Mitigation Rule: http://reports.oah.state.nc.us/ncac/title%2015a%20-%20environmental%20quality/chapter%2002%20- %20environmental%20management/subchapter%20b/15a%20ncac%2002b%20.0295.pdf 3. NC Session Law 2019-86 “Nutrient Offset Credits”: https://www.ncleg.gov/Sessions/2019/Bills/House/PDF/H812v3.pdf 4. Buffer Interpretation/ Clarification # 2008- 019 for diffuse flow: https://files.nc.gov/ncdeq/Water%20Quality/Surface%20Water%20Protection/401/Buffer%20Clarification %20Memos/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%20Quality/Surface%20Water%20Protection/401/Mitigation/Issues--- Resolutions-Ver-1.0-buffer-mitigation-nutrient-offset.pdf 6. NCDWR – Methodology and Calculations for Nutrient Reduction on the Bank Parcel: https://files.nc.gov/ncdeq/Water%20Quality/Planning/NPU/Nutrient%20Offset%20Rule/Ag-Buffer- Credit.pdf 1 I.PREAMBLE This RES 2022 Phase II Umbrella Mitigation Banking Instrument (“Instrument”) regarding the establishment, use, operation, and maintenance of the Thunder Swamp Phase II Bank Parcel, Carraway Bluff Phase II Bank Parcel, and Sassafras Phase II Bank Parcel (“Bank Parcels”), further 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 three individual bank sites, Thunder Swamp Phase II, Carraway Bluff Phase II, and Sassafras Phase II. The purpose of each BankParcelis: A. To restore, enhance, and preserve riparian vegetation adjacent to streams with the intent to improve water quality, reduce nutrient loads, enhance flood attenuation,andrestore 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 agricultural ditches into a dense and diverse, hardwood vegetated state with the intent to significantly reduce nutrient loadings associated with agricultural practices into streams. 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. 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 requiring such mitigation or offset. B.The GSA for the Bank Parcelsunder 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. 2 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 Thunder Swamp Phase II Bank Parcel will be lying adjacent to the proposed NC Division of Mitigation Services (DMS) Full-Delivery Mitigation Site referred to as the Thunder Swamp Project with DMS ID#100181and DWR ID#2021-0306v2. F. The Carraway Bluff Phase II Bank Parcel will be lying adjacent to the proposed NC Division of Mitigation Services Full-Delivery Mitigation Site referred to as the Carraway Bluff Project with DMS ID#100186and DWR ID#unassigned. G. The Sassafras Phase II Bank Parcel will be lying adjacent to the proposed NC Division of Mitigation Services Full-Delivery Mitigation Site referred to as the Sassafras Project with DMS ID#100178 and DWR ID#2021-0754v2. H. Table 1.0 provides site-specific details of each of the three Bank Parcels proposed under this Instrument, which is within the Neuse River Basin (8-digit HUC 03020201). Table 1.0 –Bank Parcel Details 8-Digit USGS Named Bank Parcel Project Primary Land DWR ID# County Hydrologic Receiving Name Location Use/s Unit Code Stream Agricultural Thunder Swamp 35.205260, Thunder fields, mature 2021-0306v2 Wayne 03020201 Phase II -78.094640 Swamp natural forest Carraway Agricultural Carraway Bluff Creek and 35.326291, Unassigned Wayne 03020201 fields, mature Phase II -78.011360 Neuse natural forest River 35.400670, Charles Agricultural Sassafras Phase II 2021-0754v3 Wayne 03020201 -78.072782 Branch fields III.AUTHORITIES A. These Banks 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 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. 3 D.Buffer mitigation and/ornutrient load reduction activities proposed under this Instrument andeachcorresponding Bank Parcel Development Package (BPDP) to generate Riparian Buffer Credits and Nutrient Offset Credits shall be consistent with State statutes and rules for the Neuse Nutrient Management Strategythat 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 Letters apply to land and features proposed on the DMS Full Delivery Projects referenced in Items E, F and G in Section II of this Instrument as well as for the Bank Parcels proposed under this Instrument. The Site Viability Letters are not valid if the DMS Full Delivery Projects referenced in Items E, F, and G of Section II do not get approved by DWR and are not implemented according to the applicable mitigation plan for each project. A permanent conservation easement must be in place for both the DMS Full Delivery Projects as well as for the Bank Parcels. 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 site proposed under this Instrument: Table 2.0 –Site Viability Letter Details Viability Letter Viability Letter Bank Parcel NC DWR Site Visit Received Expiration Date thth th Thunder Swamp Phase IIMay 27, 2021July 13,2021July 13,2023 thndnd Carraway Bluff Phase II July 29, 2021 October 22, 2021October 22, 2023 ththth Sassafras Phase IIJuly 29, 2021August 26, 2021August 26, 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 three (3) Bank Parcels proposed for inclusion under this Instrument shall require a BPDPbe submitted to,and approved by,the DWRprior 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 BPDPsubmitted under this instrument will be placed on public notice and made available for public commenting for 15 calendar days. 4 E.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 riparian restoration activities proposed in the Full Delivery Mitigation Plans for the projects referenced in Items E, F and G of Section II F. In general, Riparian Buffer Credit on these three (3) Bank Parcels may be achieved through restoration, enhancement, and preservation of DWR riparian buffers as they are defined in 15A NCAC 02B .0714, 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 stream tops of banks along streams and at least 30 feet from top 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 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. G. The Bank Parcels are intended to provide Neuse Riparian Buffer Mitigation Credits as follows: 1. Plantinghardwood trees on a Restoration Site and Enhancement Site as defined in 15A NCAC 02B .0295(b) adjacent to viable streams and viable ditches, unless otherwise approved in the project specific Bank Parcel Development Package. 2. Performing minor bank stabilization and grading where bank stability is compromised and where erosional rills, sink holes and gullies are observed. 3. Maintaining a Preservation Site as defined in 15A NCAC 02B .0295(b) by placing a conservation easement around riparian areasalongviable streams as allowed per 15A NCAC 02B .0295 (o). 4. Diffused flow will be maintained onsite to the maximum extent practicable.The Buffer Interpretation/Clarification Memo # 2008-019 may be applied where maintenance of diffuse flow onsite is unattainable. H. Nutrient Offset Credit may be achieved on these three (3) 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.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 riparian restoration area is measured from the most landward limit of the top of bank or the rooted herbaceous vegetation of streams and ditches and extends landward a minimum of 50 feet and a maximum of 200 feet on all sides of viable features. A conservation easement will be secured to include the tops of all stream channels and ditch banks and will extend out a maximum of 200 feet. The viability of features to generate riparian buffer credits is provided in the Site Viability Letter for the Bank Parcel and referenced in Table 2.0 of this instrument. 5 I.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 in accordance with 15A NCAC 02B .0703 (g) 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. 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. I. The Bank Parcels submitted for review under this Instrument is anticipated to begin construction of riparian activities in Spring 2022 and 2023. The total area of riparian buffer and/or nutrient offset activities is expected to be 30.4 acres for Thunder Swamp Phase II, 38.5 acres for Carraway Phase II, and 13.17 acres for Sassafras Phase II. V. PRE-CONSTRUCTION DOCUMENTATION Bank Parcel Development Package 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 Bank Parcel. EachBPDP 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; 8) Site Viability Letter from DWR; 9) service area figure for each mitigation type proposed under this instrument; 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; and 11) mitigation plan approval letter for DMS Full Delivery Projects referenced in Items E, F and G of Section II of this Instrument. 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. 6 C.Anyrestoration 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 conservation easement for the Thunder Swamp Phase II will be located adjacent to the Thunder Swamp Full Delivery conservation easement which will include the tops of banks of each stream and ditch proposed for riparian restoration and will extend a minimum 50 feet perpendicular from streams and a minimum of 30 feetfrom ditches. This Bank Parcel conservation easement will include protections of restored riparian areas beyond the DMS conservation easement out to a maximum of 200 feet. H. The conservation easement for the Carraway Bluff Phase II Bank Parcel will be located adjacent to the Carraway Bluff Full Delivery conservation easement which will include the tops of banks of each stream and ditch proposed for riparian restoration and will extend a minimum 50 feet perpendicular from streams and a minimum of 30 feet from ditches. This Bank Parcel conservation easement will include protections of restored riparian areas beyond the DMS conservation easement out to a maximum of 200 feet. I. The conservation easement for the Sassafras Phase II will be located adjacent to the Sassafras Full Delivery conservation easement which will include the tops of banks of each stream and ditch proposed for riparian restoration and will extend a minimum 50 feet perpendicular from streams and a minimum of 30 feet from ditches. This Bank Parcel conservation easement will include protections of restored riparian areas beyond the DMS conservation easement out to a maximum of 200 feet. J. 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. 7 K. In general, 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 unless otherwise specified in Item L of this Section. 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. 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 DWR approved stewardship fund must be arranged at the outset of the approved BPDP. For Bank Parcels proposed under this Instrument only, in the event a land trust or preferred stewardship program is not available at the outset of the approved BPDP, but is actively undergoing the DWR approval process, then an appropriate qualified holder under NC General Statute (“GS”) 121-34 et seq. may be proposed to DWR for approval to be a temporary steward of the conservation easement for that Bank Parcel. A temporary steward of a conservation easement is only allowed to hold the conservation easement until December 31 of the second year of monitoring for that Bank Parcel in accordance with the approved BPDP. Failure by the Sponsor to assign the conservation easement in accordance with item K of this Section at that time, will result in the immediate suspension ofall credit releases for Tasks 5-9. Financial Assurances for Bank Parcel Development M.Following approval of each BPDPfor the Bank Parcels, 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. N. 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 Parcel as described in the approved BPDP. No bond shall be less than $150,000.00 to cover construction costs. O. Alternatively, in lieu of posting Performance Bonds, the Sponsor may elect to construct the Bank Parcels prior to the first credit releases. P. For the Bank Parcels, 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 J and K of this section: 1. Instrument and BPDP Approved by DWR, Full Delivery DMS Mitigation Plan approved by DWR, Conservation Easement Recorded, Financial Assurance Posted; 8 2. All riparian Earthwork and Planting and Installation of Monitoring Devices Completedforboth the Bank Parcel and the DMS Full Delivery Site, easement boundaries adequately marked, and all applicable permits obtained ; and a 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 Q. 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 BPDPs, 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; 2. Documentation that all riparian activities and nutrient load reduction activities have been completed for the DMS Full Delivery Site; 3. Figures representing all riparian restoration, riparian enhancement, and riparian preservation activities where applicable; 4. Figures representing location of all monitoring plots installed; 5. 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; 6. Documentation that the conservation easement boundaries associated with the applicable DMS Full Delivery Site have been adequately marked; 7. Description of how the conservation easement boundaries were marked for the Bank Parcel; and 8. 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 Parcels after completing the establishment of the buffer mitigationand nutrientoffset areas. The as-built report will describe any deviation from the approved BPDPs andwill document the following: 9 1. 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, confirmation of fence installation if applicable, 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. Documentation confirming that the applicable DMS Full Delivery Site has been completed. 4. As-built map of the buffer mitigationand nutrient offsetareas showing where riparian restoration, enhancement, and preservation was performed and any deviations to the Bank Parcel from what was approved in the BPDP. 5. Aerial map of the buffer mitigation and nutrient offset areas that was included in the approved BPDP. Financial Assurance for Bank Parcel 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 BPDPs and As-Built Reports 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. For each Bank Parcel, 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. 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 “D-E” of this Section. G. To comply with this section, DWR must be the Obligee on all performance bonds. Monitoring and Maintenance Reports 10 H. The Sponsor shall monitor eachBank Parcel as described in each BPDP until such time as DWRdetermines that the performance standardsdescribed 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 the BPDP for approval. 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 the Bank Parcel, 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 BPDPs. L. Monitoring Reports for Riparian Buffer Credit and Nutrient Offset Credit: Reporting criteria of the vegetationshall 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 BPDPs. 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 vegetationcontained within the approved BPDPs. Reports shall contain the following: 1. A U.S. Geological Survey map showing location of the Bank Parcel; 2. A detailed narrative with supporting photossummarizing 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 governmentsupon request; and 7.Corresponding Mitigation Transfer Certificates upon request; and 11 8. Proof of performance bond renewal to cover the next monitoring year (if applicable) Contingency Plans/Remedial Actions M.In the event a BankParcel fails to achieve the performance criteria described in this Instrument and the approved BPDPs, 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. VII. 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 #5, including the most recent Project Credit Table Template provided online (see Appendix C). B.Riparian buffer restoration or enhancement 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 Parcel, may be used for either Riparian Buffer Credit or Nutrient Offset Credit, but not both. C. Riparian buffer enhancement and preservation on each of the Bank Parcels, 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 footageof Nutrient Offset Credits on eachBank Parcel submitted under this Instrument will be determined by applying the applicable ratio as provided in 15A NCAC O2B .0295 (m) for a Restoration Siteand 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 # 5, reference #6and Attachment C. All riparian areas proposed for Nutrient Offset Credits must be a minimum of 50 feet from the top of the banks along viable streams and viable ditcheson land noted in a Site Viability Letter as agriculture. 12 F. Nutrient Offset Credits cannot be achieved through the preservation activities performed on aBank Parcel. G. Nutrient Offset Credits cannot be achieved through enhancement activities under 15A NCAC 02B .0295 (o) performed on this Bank Parcel. H. 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. I. The Sponsor and DWR agree the methodology and calculations for determining nitrogen reduction, associated with restoration 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. 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 #6. This space left blank intentionally, do not add text to this space. 13 VIII.CREDIT RELEASE SCHEDULE A. In general, uponsubmittal of all appropriate documentation by the Sponsor, and subsequent approval by DWR, it is agreed that the Riparian Buffer Credits and/orNutrient Offset Credits associated with the Thunder Swamp Phase II, Sassafras Phase II and Caraway Bluff Phase II Bank Parcels will become available for sale to a third party in accordance with a Credit Release Schedule similar to that provided in Table 3.0 below. B. A Credit Release Schedule specific to each Bank Parcel proposed under this Instrument shall be provided in each BPDP and shall outline project milestones required to be completed for each Task. Credit releases will follow the Credit Release Schedule approved in each BPDP. Table 3.0 - Credit Release Schedulefor Riparian Buffer and Nutrient Offset Credits %Credit Available for Task Project Milestone Sale Instrument and BPDP Approved by DWR, applicable DMS Full Delivery Mitigation Plan approved by DWR, Conservation Easement Recorded* and 1Financial Assurance Posted 15 - 20 All Riparian Earthwork & Mitigation Activities, Planting and Installation of Monitoring Devices completed for both the Full Delivery site and the Bank Parcel, easement boundaries adequately marked, all applicable 2permits obtained. A site visit performed by DWR is required for this task20 3Monitoring Financial Assurance Posted and Approval of As-Built Report 10 Monitoring Report #1: Approved by the DWR** & Financial Assurance 4Posted5-10 If Item L of Section V applies, then no remaining credits will be released until Item B (1) of Section X in this Instrument has been completed and 5approved by DWR 0-10 Monitoring Report #2: Approved by the DWR** & Financial Assurance 5 or 6Posted5-10 Monitoring Report #3: Approved by the DWR** & Financial Assurance 6Posted10 Item B (1)of Section Xin this Instrumenthas been completed and 7approved by DWR.0-5 Unless Item L of Section V applies, then 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 8Posted5-10 Monitoring Report #5: Approved by the DWR** and final site visit by 9DWR has been conducted10 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 C.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 Parcels 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. 14 IX. PROCEDURE FOR DEBITING AND CREDITING MITIGATION CREDITS Credit Ledgers A. The Bank Sponsor shall maintain one credit ledger for each mitigation type for each Bank Parcel 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 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 ½ 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 # 5 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. Riparian Buffer Enhancement and Preservation credits approved under 15A NCAC 02B .0295 (o) generated on the Bank Parcels are neither convertible nor transferrable into nutrient offset credits. F. 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. G. 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. Credit conversions can only be requested after completion of Task 3 per Table 3.0 in this Instrument. Once a credit has been converted to another credit type, the transaction is permanent, and the credit cannot be converted again. H. 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 15 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. Credit conversions can only be requested after completion of Task 3 per Table 3.0 in this Instrument. Once a credit has been converted to another credit type, the transaction is permanent, and the credit cannot be converted again. 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 #5. J.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 each 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 th credit ledgers for each Bank Parcel by the tenth (10) 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: 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 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 onDWR or local government permits and/or certifications, (2) 8-digit HUC, (3) river basin, (4) 16 nutrient strategy applicable to the project with impacts, (5 – when applicable) designated local government requiring Nutrient Offset Credits, and/or (6) DWR authorization number or delegated local government requiring Riparian Buffer Credits for this project, and (6) credit type and amount required for the project J. 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 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. 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 K 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. 17 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 occurredfor 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 VIof this Instrument, 6. Credit Ledger review and approval of items listed in Section IXof 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. Validityof 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 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. 18 If to Bank Sponsor: Environmental Banc and Exchange, LLC Attention: Mr. Bradley Breslow 3600 Glenwood Avenue, Suite 100 Raleigh, North Carolina 27612 bbreslow@res.us 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 19 L. Applicable Law: This Agreement shall be construed under the laws of the State of North Carolina. Environmental Banc and Exchange, LLC By:Brad Breslow(Print) (Signature) RegulatoryManager Title: 03/30/2022 Date: NORTH CAROLINA DEPARTMENT OF ENVIRONMENTAL QUALITY- DIVISION OF WATER RESOURCES By: (Print) (Signature) Title: Date: 20 Nutrient Offset Program & Buffer Mitigation Program Authorities for Neuse Strategy MBI ATTACHMENT A Authorities pertaining to the RES 2022 Phase II Neuse 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) Updated August 11, 2020 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 Neuse Nutrient Strategy Session Laws S.L. 2011-394 S.L. 1998-221 (Part I) S.L. 1995-572 Administrative Rules: 15A NCAC 02B .0610 15A NCAC 02B .0611 15A NCAC 02B .0612 15A NCAC 02B .0710 15A NCAC 02B .0711 15A NCAC 02B .0712 15A NCAC 02B .0713 15A NCAC 02B .0714 15A NCAC 02B .0715 Managing Activities within Riparian Buffers: Definitions Managing Activities within Riparian Buffers: Authorization Certificates Managing Activities within Riparian Buffers: Forest Harvesting Requirements Neuse Nutrient Strategy: Purpose and Scope Neuse Nutrient Strategy: Stormwater Neuse Nutrient Strategy: Agriculture Neuse Nutrient Strategy: Wastewater Discharge Requirements Protection and Maintenance of Existing Riparian Buffers Delegation of Authority for the Protection and Maintenance of Existing Riparian Buffers Gov'tRequiring Acres Balance Credit Feet Square Buffer Bank Debited/Sold FeetAcres From Credits Ledger to #: Built.Name) Date: Credit As To and Bank Project Credits Buffer FeetAcresSquare Updated: Instrument #) BPDP, & Released Parcel Released/Available Last Square HUC UMBI, w/ Date Credits the # DWRBank by Name Total HUC (SponsorName w/ (Parcel approved Project credits mitigation Credit for % or only Release are Purchaser below shown Date Sale/ Release *Credits Gov'tRequiring Balance Credit of Nitrogen Nutrient Pounds From Bank of Debited/Sold Ledger Nitrogen Pounds Credits name) #: Credit Date: To Built. Project As Nitrogen Updated: Instrument Bank #) and & Released to Parcel of Released/Available Last HUC BPDP, name Nitrogen Date Credits w/ Pounds Credits DWRBank UMBI, Total Name the (Sponsor # by HUC (Parcel w/ approved Project credits mitigation Credit for % or only Release are Purchaser below shown Date Sale/ Release *Credits Table 1. [INSERT PROJECT NAME], [INSERT PROJECT NUMBER], Project Credits Project Area N Credit Conversion Ratio (ftWound) P Credit Conversion Ratio (ftWound) Delivered Nutrient Offset: p (Ibsj' \ƒ}}}}}}}}}}}}}}}}}}}{ ] \\ c & {ƒ it 0.000 \/( it \ $ \\ !£% \{ ƒ g ° z ƒ / ___ \ { Total Buffer (ft2): Total Nutrient Offset (ft2): Min Max Buffer Width (ft) { g z z \ ! Subject? (enter NO if ephemeral or ditch j 3 ■ a \ § To 4 \/ LL § < - W \23 To 0 - Riparian Buffer Credits � it CO 4.1 \ $ \\ \\ ;; 1 \{} ƒ{k \ Min Max Buffer Width (ft) .48 !0 TOTAL AREA OF BUFFER MITIGATION (TABM) \) 0.000 0.000 Total .Riparian Buffer: I 0 I 0.000 TOTAL NUTRIENT OFFSET MITIGATION \)) i IACr Square Feet 0 ./ gte 2 f$ ( ƒ // Mitigation Totals Nitrogen: Nutrient Offset: Phosphorus: 1. The Randleman Lake buffer rules allow some ditches to be classified as subject according to 15A NCAC 02B .0250 (5)(a). last updated 08/03/2020