20211669 Ver 1_Draft Instrument and Mitigation Plan IRT Comments

CAUTION: External email. Do not click links or open attachments unless verified. Report suspicious emails with the Report Message button located on your Outlook menu bar on the Home
tab.

Kevin,

I sent out our Intent to Approve notification to the IRT this morning, which you should have received by now. Once we are through the dispute resolution process, I will arrange for
it to be signed and we will prepare an approval letter. The instrument may also be signed by other IRT members, but it will be considered approved for our purposes once we have signed
the instrument. In the meantime, you may need to upload a copy of the instrument and mitigation plan to the DWR Laserfiche system – I’ve copied Maria for her awareness.

Thank you for your patience with this process and please let me know if you have any questions.

Todd Tugwell

Chief, Mitigation Branch

Regulatory Division

Wilmington District, USACE

[phone]

From: Kevin Yates <[e-mail]>
Sent: Thursday, September 28, 2023 7:30 AM
To: Tugwell, Todd J CIV USARMY CESAW (USA) <[e-mail]>
Cc: Haywood, Casey M CIV USARMY CESAW (USA) <[e-mail]>
Subject: Re: [URL Verdict: Neutral][Non-DoD Source] Re: SAW-2015-01815 / Clearwater Mitigation Solutions / Neuse 01 UMB / Lowlands Mitigation Site / Draft Instrument and Mitigation Plan
IRT Comments

Morning Todd,

Thanks for presenting to the NCERA last week and working around the fire alarm. Know y’all have a lot on the plate, checking to see if you’ve had a chance to review revisions and comment
responses for the Lowlands Site?

Thanks,

Kevin

On Thu, Sep 7, 2023 at 1:11 PM Kevin Yates <[e-mail] <mailto:[e-mail]> > wrote:

Hey Todd,

Hope you had a great Labor Day weekend. I've included a response to comments letter per your Aug 1st email and made appropriate revisions to the Lowlands Mit Plan per the Aug 1st comments
and uploaded these items to RIBITS. Also uploaded to RIBITS is a signed version of the UMBI which includes the Appendix A Service Area Map, and is located under the Clearwater Neuse
01 UMB directory.

Thanks for your help and direction on this. Let me know if you have any questions.

Thanks,
Kevin

Kevin Yates

Clearwater Mitigation Solutions

919-624-6901

On Fri, Sep 1, 2023 at 2:30 PM Tugwell, Todd J CIV USARMY CESAW (USA) <[e-mail] <mailto:[e-mail]> > wrote:

Kevin,

Thank you for the additional information you provided in your 8/21/23 email. I appreciate your getting verification that the NCWHF has agreed to be the 3rd party designee. My FA concerns
were also with the wording in the latest version of the Mitigation Plan (July 2023 version on RIBITS) where Clearwater is identified as the entity that would receive payment. Just
wanted to verify that you’ll change this in the final final version. Once you’ve addressed this and the other issues from my 8/1/23, please upload the mitigation plan and UMBI to RIBITS
and we can move forward with approving the bank.

Let me know if you have other questions or want to talk over the other comments from my Aug 1 email.

Thanks and have a great Labor Day.

Todd

From: Kevin Yates <[e-mail] <mailto:[e-mail]> >
Sent: Wednesday, August 30, 2023 7:11 PM
To: Tugwell, Todd J CIV USARMY CESAW (USA) <[e-mail] <mailto:[e-mail]> >
Subject: Re: [URL Verdict: Neutral][Non-DoD Source] Re: SAW-2015-01815 / Clearwater Mitigation Solutions / Neuse 01 UMB / Lowlands Mitigation Site / Draft Instrument and Mitigation
Plan IRT Comments

Thanks Todd. That will work, know your busy.

On Wed, Aug 30, 2023 at 4:42 PM Tugwell, Todd J CIV USARMY CESAW (USA) <[e-mail] <mailto:[e-mail]> > wrote:

Kevin,

My apologies for not getting to this sooner. I also got your phone message related to this, but was out of town last week, but should be able to review this new info and get you
a response before the end of this week.

Thanks,

Todd

From: Kevin Yates <[e-mail] <mailto:[e-mail]> >
Sent: Monday, August 21, 2023 5:18 PM
To: Tugwell, Todd J CIV USARMY CESAW (USA) <[e-mail] <mailto:[e-mail]> >
Cc: Haywood, Casey M CIV USARMY CESAW (USA) <[e-mail] <mailto:[e-mail]> >
Subject: Re: [URL Verdict: Neutral][Non-DoD Source] Re: SAW-2015-01815 / Clearwater Mitigation Solutions / Neuse 01 UMB / Lowlands Mitigation Site / Draft Instrument and Mitigation
Plan IRT Comments

Hey Todd,

This is an update on the finanical assurance designee for the Lowlands Site. I went over the terms and obligations with the long-term steward, NCWHF, and the NCWHF has agreed to
be the third-party designee for the finanical assurance per correspondence and email below. They have in the past been the obligee and/or thrid party designee for the financial assurances
on other approved mit plans with other providers, and experience working with a number of other mitigaiton providers in NC.

Additionally, I discussed your concerns regarding the finanical assurance with Bob Spoth (EcoSystems Insurance) who has been my Financial Assurance Advisor / Broker. Bob has helped
me with other mitigation projects in the past, and very knowledgeable in this space.Bob was stating that although Clearwater would be the "named insured" on the policy, the policy would
not payout to Clearwater, it pays the third party designee as required by the Corps, per the excerpt below.

Excerpt from Bob Spoth at EcoSystems Insurance:

1. "The insurance policy is set up that way. No problem there. It is payable to a third party or standby trust. Note: most Corps districts do not allow a standby trust because
that may invoke the Miscellaneous Receipts Act (Constructive Receipt). That's up to the Corps attorneys though - we will follow whatever they want.

a. Technical point - you are the "named insured". The still policy does not pay you. It pays the 3rd party designee as required by the Corps. You have to be the Named Insured
because you are the permit holder. It relates to a bond in that sense. The "Principal" on the bond is you but the bond pays the "Obligee" the Corps - different semantics but same
result. I think it has to be that way because you are the permitee."

Let me know if you'd like to discuss further or need some more information on the third party designee and/or insurance policy. I can loop Bob Spoth and Beau Bethea in on a seperate
email.

Thanks,
Kevin

---------- Forwarded message ---------
From: Theodore Bethea <[e-mail] <mailto:[e-mail]> >
Date: Mon, Aug 21, 2023 at 3:34 PM
Subject: Re: Good Copy and Update to Follow Re: UPDATE Re: SEPT 26, 2022 LOWLANDS CE FINANCIAL WORKSHEET
To: Kevin Yates <[e-mail] <mailto:[e-mail]> >
Cc: Harrison Stewart <[e-mail] <mailto:[e-mail]> >, Gregory Erwin <[e-mail] <mailto:[e-mail]> >, Robert Spoth <[e-mail]
<mailto:[e-mail]> >

Kevin,

The NCWHF agrees to be the third party Designee as requested for the Financial Assurance for the Lowlands Mitigation Site.

We look forward to working with you.

Sincerely,

Beau

NCWHF Operations Director

Kevin Yates

Clearwater Mitigation Solutions

919-624-6901

On Thu, Aug 17, 2023 at 4:44 PM Kevin Yates <[e-mail] <mailto:[e-mail]> > wrote:

Hey Beau,

Great talking to you today and Big Thank You to the NCWHF for their support and agreeing to be the third-party designee for the financial assurance requirements for the Lowlands
Site. As stated previously we know that NCWHF would not be responsible for any actual repair work and/or monitoring, but NCWHF is willing to be the third-party designee if financial
assurances were called upon and willing to be in charge of overseeing, handing it off, and making payment to another experienced mitigation provider to carry out repairs/monitoring
work for the Lowlands Site.

Just some highlights, the Lowlands Site was originally constructed as a PRM Site in 2018, and demonstrating success, it is being administratively converted into a traditional mitigation
bank site and we have 4 years of monitoring through 2026. The financial assurance will consist of an annual maintenance and monitoring policy which will be renewed each year. Attached
is a worksheet with the basis for the annual monitoring and maintenance cost which is approximately $42,000 for the current year of monitoring and decreases by 10% through 2026, which
is the last year of monitoring. Also attached is the Draft Insurance Policy (Financial Assurance) for the first year. Per the excerpt below, Bob Spoth (EcoSystems Insurance) is my
Financial Assurance Advisor / Broker and has provided some very helpful context to the Draft Policy Language. I have also copied Bob on this email, Bob has helped me with other mitigation
projects in the past, and is very knowledgeable in this space.

Excerpt from Bob Spoth at EcoSystems Insurance:

1. "The insurance policy is set up that way. No problem there. It is payable to a third party or standby trust. Note: most Corps districts do not allow a standby trust because
that may invoke the Miscellaneous Receipts Act (Constructive Receipt). That's up to the Corps attorneys though - we will follow whatever they want.

a. Technical point - you are the "named insured". The still policy does not pay you. It pays the 3rd party designee as required by the Corps. You have to be the Named Insured
because you are the permit holder. It relates to a bond in that sense. The "Principal" on the bond is you but the bond pays the "Obligee" the Corps - different semantics but same
result. I think it has to be that way because you are the permitee."

As I'm writing this Todd wanted to see some verification that the Long-Term Steward (NCWHF) would be able/willing to take on this role, whether its an email confirmation or in letter
form. Let me know if you have any questions or would like any more information.

Again, appreciate the support of the NCWHF and your quick response to this original request. Big help in expediting this process.

Kevin

Kevin Yates

Clearwater Mitigation Solutions

919-624-6901

Kevin Yates

Clearwater Mitigation Solutions

919-624-6901

On Mon, Aug 7, 2023 at 10:28 AM Tugwell, Todd J CIV USARMY CESAW (USA) <[e-mail] <mailto:[e-mail]> > wrote:

Kevin,

I would check with other sponsors. If the intent is to have your designated long-term steward oversee activities that may be required if the FA were called upon (monitoring, repair,
etc.), we would want to see some verification that that organization would be able/willing to take on that role. Regardless, the sponsor cannot be the recipient of the FA. If the
long-term steward cannot fill that role, then another organization would have to be identified that could.

Thanks,

Todd

From: Kevin Yates <[e-mail] <mailto:[e-mail]> >
Sent: Friday, August 4, 2023 2:22 PM
To: Tugwell, Todd J CIV USARMY CESAW (USA) <[e-mail] <mailto:[e-mail]> >
Cc: Haywood, Casey M CIV USARMY CESAW (USA) <[e-mail] <mailto:[e-mail]> >
Subject: Re: [URL Verdict: Neutral][Non-DoD Source] Re: SAW-2015-01815 / Clearwater Mitigation Solutions / Neuse 01 UMB / Lowlands Mitigation Site / Draft Instrument and Mitigation
Plan IRT Comments

Hey Todd,

Been off the grid for a few days. Thanks for the quick turn around on the Lowlands review. I did send the updated UMBI with requested changes in a separate email to you and Casey
on 07/24, but can submit final UMBI as requested.

We’ll get these comments turned around pretty quick, but regarding comment #5, I’ll reach out to some other providers on this but didn’t know if you had any contacts or ideas on
a third party designee for the financial assurances?

Thanks!

Kevin

On Tue, Aug 1, 2023 at 11:15 AM Tugwell, Todd J CIV USARMY CESAW (USA) <[e-mail] <mailto:[e-mail]> > wrote:

Kevin,

I wanted to let you know that I was able to download the Final Mit Plan from RIBITS. As I mentioned in my earlier emails, I expected that we may have some other recommended final
changes before we reach the Final version. Below are some comments regarding the most recent version that need to be fixed before we accept the final version and move on to approval.
Also I did not see the updated UMBI – were you waiting to upload that document until we had finalized the Mit Plan? We did have a couple comments on the UMBI, but assuming you make
the changes we noted, I would recommend you submit the final UMBI with your signature once we have a Final Mit Plan in hand.

Once you’ve had a chance to make further updates, please upload the newest version to RIBITS. Once we can get it and UMBI finalized, we can send out to the IRT with our intent to
approve notification. Let me know if you have any questions.

Thanks,

Todd

Comments on Draft Final Mit Plan:

1. Table of Contents – Sec. 9.3 should be Nuisance and Invasive Species Management
2. Pg 13, Table 4 – Is the title of this table supposed to reference Enhancement Area 2 rather than 1?
3. Pg 19, Sec 6.3.6 states “The overall supplemental planting within Enhancement Area 2 was less than 50%, however, an additional year of vegetative monitoring can be added to Enhancement
Area 2, if it is the desire of the IRT.” Additionally, your response to comments states that “there is an additional year of monitoring proposed for the entire site”. I’m not sure
whether you are proposing an additional year of monitoring or not, or for the whole site or just Enhancement Area 2. At this point, I don’t necessarily think we need to have another
year (beyond Year 8/2026). Can you just explain this more clearly? Also, something to keep in mind for this year’s monitoring in Enhancement Area 2 is that we normally do not allow
supplementally planted vegetation to count toward success until it has been in the ground for 2 growing seasons, otherwise supplemental planting could be used to skew the monitoring
results.
4. Page 25, Table 11 shows that vegetation was monitored in Year 4, but the report states in several other places (Sec 5.4 and Sec 8.4) and that vegetation was not monitored in
Year 4. Is Table 11 incorrect?
5. Pg 27, Sec 11.2 – This section states that the financial assurances (FA) will be paid to the bank sponsor (Clearwater Mitigation Solutions, LLC). FA cannot be paid to eh sponsor,
as this would defeat the purpose of the FA. Per the UMBI “all financial assurances shall be made payable to a standby trust or to a third-party designee, acceptable to the Corps, who
agrees to complete the project or provide alternative mitigation”. I believe this is also how the insurance policy is set up, which defines a third party to receive payment from Underwriters.
We just need to identify who the appropriate third part is.
6. The LTM plan has been updated to show the endowment ($50,000) to be fully funded upon transfer of the Conservation Easement to NCWHF (LTM Steward). Does the CE transfer upon
bank approval, or would this not occur until project closeout? The endowment must be fully funded in order for the first release of credits (%65), and Table 8 should be updated to
include this as a task.

From: Kevin Yates <[e-mail] <mailto:[e-mail]> >
Sent: Tuesday, July 25, 2023 6:34 AM
To: Haywood, Casey M CIV USARMY CESAW (USA) <[e-mail] <mailto:[e-mail]> >
Cc: Tugwell, Todd J CIV USARMY CESAW (USA) <[e-mail] <mailto:[e-mail]> >
Subject: Re: [URL Verdict: Neutral][Non-DoD Source] Re: SAW-2015-01815 / Clearwater Mitigation Solutions / Neuse 01 UMB / Lowlands Mitigation Site / Draft Instrument and Mitigation
Plan IRT Comments

Hey Todd/Casey,

Thanks again for setting up the folders, the Lowlands Final Mit Plan is uploaded to RIBITS along with response to comments letter (had to reduce file size). Apologize it took so
long to get back to you. We took some time to review our plan and procedures and make our plan more in line with current guidance.

Feel free to call with any questions or clarifications.

Thanks,
Kevin

Kevin Yates

Clearwater Mitigation Solutions

919-624-6901

On Mon, Jul 24, 2023 at 1:24 PM Kevin Yates <[e-mail] <mailto:[e-mail]> > wrote:

Hey Todd/Casey,

I've tried uploading the Lowlands Final Mit Plan doc several times and getting a "client error" message. I've emailed the RIBITS help desk and waiting to hear back from them. I'll
let you know when it has been uploaded.

I've attached to this email the Draft UMBI with requested revisions for your review, along with the IRT comment letter.

Thanks,
Kevin

Kevin Yates

Clearwater Mitigation Solutions

919-624-6901

On Sun, Jul 23, 2023 at 3:10 PM Haywood, Casey M CIV USARMY CESAW (USA) <[e-mail] <mailto:[e-mail]> > wrote:

Hi Kevin,

I don’t need a hardcopy of the plan.

Thank you,

Casey

From: Kevin Yates <[e-mail] <mailto:[e-mail]> >
Sent: Monday, July 17, 2023 2:52 PM
To: Tugwell, Todd J CIV USARMY CESAW (USA) <[e-mail] <mailto:[e-mail]> >
Cc: Haywood, Casey M CIV USARMY CESAW (USA) <[e-mail] <mailto:[e-mail]> >
Subject: Re: [URL Verdict: Neutral][Non-DoD Source] Re: SAW-2015-01815 / Clearwater Mitigation Solutions / Neuse 01 UMB / Lowlands Mitigation Site / Draft Instrument and Mitigation
Plan IRT Comments

Ok appreciate it. Will do.

Thanks!

Kevin

On Mon, Jul 17, 2023 at 12:19 PM Tugwell, Todd J CIV USARMY CESAW (USA) <[e-mail] <mailto:[e-mail]> > wrote:

Kevin,

No need to provide me with a hard copy. I’ll let Casey answer as well, in case she would like to receive one.

I’ve created a folder in RIBITS for the Final Mit Plan. Once you have uploaded the document, please let me and Casey know.

Thanks,

Todd Tugwell

Chief, Mitigation Branch

Regulatory Division

Wilmington District, USACE

[phone]

From: Kevin Yates <[e-mail] <mailto:[e-mail]> >
Sent: Thursday, July 13, 2023 10:03 AM
To: Tugwell, Todd J CIV USARMY CESAW (USA) <[e-mail] <mailto:[e-mail]> >
Cc: Haywood, Casey M CIV USARMY CESAW (USA) <[e-mail] <mailto:[e-mail]> >
Subject: Re: [URL Verdict: Neutral][Non-DoD Source] Re: SAW-2015-01815 / Clearwater Mitigation Solutions / Neuse 01 UMB / Lowlands Mitigation Site / Draft Instrument and Mitigation
Plan IRT Comments

Hey Todd,

We are getting the (draft) Final Mitigation Plan back to you with response to comments for this Lowlands Site. We will upload to RIBITS, but just want to see if you would like a
hard copy as well?

Thanks,
Kevin

Kevin Yates

Clearwater Mitigation Solutions

919-624-6901

On Fri, Mar 3, 2023 at 6:06 PM Tugwell, Todd J CIV USARMY CESAW (USA) <[e-mail] <mailto:[e-mail]> > wrote:

Kevin, I have some time on Tuesday if that would work. Regarding your questions, I provided some responses below:

Comment 6, credit release – that was my error in reading the plan, so please keep this at 65%.

Comment 18, this was just to let you know that we may have additional comments on the CE and financial assurances depending on the resolution to some of our other comments about
the long term steward. Otherwise I don’t expect any comments about the CE or property documents. Sorry if this was confusing.

Thanks,

Todd

From: Kevin Yates <[e-mail] <mailto:[e-mail]> >
Sent: Friday, March 3, 2023 2:13 PM
To: Haywood, Casey M CIV USARMY CESAW (USA) <[e-mail] <mailto:[e-mail]> >; Tugwell, Todd J CIV USARMY CESAW (USA) <[e-mail]
<mailto:[e-mail]> >
Cc: Jennifer Burdette <[e-mail] <mailto:[e-mail]> >; Rebecca Stubbs Cell <[e-mail] <mailto:[e-mail]> >
Subject: [URL Verdict: Neutral][Non-DoD Source] Re: SAW-2015-01815 / Clearwater Mitigation Solutions / Neuse 01 UMB / Lowlands Mitigation Site / Draft Instrument and Mitigation
Plan IRT Comments

Hey Todd and Casey,

Would you have a few minutes next week for a call to discuss a few comments from the Lowlands comment letter? Maybe 10-15 minutes.

Thanks,

Kevin

On Fri, Feb 24, 2023 at 11:36 AM Kevin Yates <[e-mail] <mailto:[e-mail]> > wrote:

Hey Todd,

We are in the process of collaborating responses for the Lowlands Site per the February 10th comment letter, but need a couple clarifications:

Comment 6 (Page 2): I realize our credit release schedule is confusing, but in previous correspondence you and IRT indicated the Lowlands Site could receive a release of 65%, which
is what we have proposed in table 8 and within mit plan document. Should we revise for 50% or keep at 65% credit release?

Comment 18 (Page 4): Carl provided legal doc/property comments on 12/1/22 and you confirmed via email our responses looked good on 12/9/22. Should we expect additional comments?

Let me know your thoughts when you get a chance. We also met last week and we’ll clean up some of the confusing portions, particularly on the veg data.

Thanks,

Kevin

On Fri, Feb 10, 2023 at 3:51 PM Tugwell, Todd J CIV USARMY CESAW (USA) <[e-mail] <mailto:[e-mail]> > wrote:

Good afternoon Kevin,

Attached are the Clearwater Mitigation Solutions – Neuse 01 UMB, Lowlands, Draft Instrument and Mitigation Plan (dated July 2021) IRT comments. You may proceed with developing the
final mitigation plan for the above referenced mitigation site provided you adequately address all comments/concerns in the enclosed memo.

As you will see, there were a variety of questions/comments on the draft plan. Some of the questions will likely require additional review of language or information on our part,
so while you are preparing the Final Instrument and Mitigation Plan, please feel free to contact me with questions regarding the comments. This is normally a bank-and-forth process
to get to the final final plan. When the Final Mitigation Plan is complete, please upload an electronic copy of the complete document to RIBITS for distribution to the IRT – I have
created a folder for it. I’ve also attached a couple documents – I reference the AMP guidance in my comments, and the Bank Prospectus procedures document has updated document delivery
preferences and contact info.

Lastly, please note that if you make other changes to the Draft Mitigation Plan or fail to adequately address any of the issues identified in the attached comments, we will not
be able to approve a Final Mitigation Plan, and may have to revise our initial determination that the site has the potential to provide compensatory mitigation for impacts to Waters
of the U.S. authorized by permits issued by the District.

Please let me know if you have any questions about the process or attached comments.

Thank you,

Todd Tugwell

Mitigation Project Manager

Wilmington District, US Army Corps of Engineers

3331 Heritage Trade Drive, Suite 105

Wake Forest, North Carolina 27587

[phone]

We would appreciate your feedback on how we are performing our duties. Our automated Customer Service Survey is located at: https://regulatory.ops.usace.army.mil/customer-service-survey/
Thank you for taking the time to visit this site and complete the survey.

--

Kevin Yates

Clearwater Mitigation Solutions

919-624-6901

--

Kevin Yates

Clearwater Mitigation Solutions

919-624-6901

--

Kevin Yates

Clearwater Mitigation Solutions

919-624-6901

--

Kevin Yates

Clearwater Mitigation Solutions

919-624-6901

e
Hope you had a great Labor Day weekend. I've included a response to comments letter per your Aug 1st email and
made appropriate revisions to the Lowlands Mit Plan per the Aug 1st comments and uploaded these items to
RIBITS. Also uploaded to RIBITS is a signed version of the UMBI which includes the Appendix A Service Area Map, and is
located under the Clearwater Neuse 01 UMB directory.

Thanks for your help and direction on this. Let me know if you have any questions.

Thanks,
Kevin

Kevin Yates

Clearwater Mitigation Solutions
919-624-6901

On Fri, Sep 1, 2023 at 2:30 PM Tugwell, Todd J CIV USARMY CESAW (USA) <[e-mail]> wrote:
Kevin,
Thank you for the additional information you provided in your 8/21/23 email. I appreciate your getting verification
rd
that the NCWHF has agreed to be the 3 party designee. My FA concerns were also with the wording in the latest
version of the Mitigation Plan (July 2023 version on RIBITS) where Clearwater is identified as the entity that would
receive payment. Just wanted to verify that you’ll change this in the final final version. Once you’ve addressed this
and the other issues from my 8/1/23, please upload the mitigation plan and UMBI to RIBITS and we can move forward
with approving the bank.

Let me know if you have other questions or want to talk over the other comments from my Aug 1 email.

Thanks and have a great Labor Day.

Todd

From: Kevin Yates <[e-mail]>
Sent: Wednesday, August 30, 2023 7:11 PM
To: Tugwell, Todd J CIV USARMY CESAW (USA) <[e-mail]>
Subject: Re: \[URL Verdict: Neutral\]\[Non-DoD Source\] Re: SAW-2015-01815 / Clearwater Mitigation Solutions / Neuse
01 UMB / Lowlands Mitigation Site / Draft Instrument and Mitigation Plan IRT Comments

Thanks Todd. That will work, know your busy.
2

On Wed, Aug 30, 2023 at 4:42 PM Tugwell, Todd J CIV USARMY CESAW (USA) <[e-mail]>
wrote:
Kevin,
My apologies for not getting to this sooner. I also got your phone message related to this, but was out of town last
week, but should be able to review this new info and get you a response before the end of this week.

Thanks,
Todd

From: Kevin Yates <[e-mail]>
Sent: Monday, August 21, 2023 5:18 PM
To: Tugwell, Todd J CIV USARMY CESAW (USA) <[e-mail]>
Cc: Haywood, Casey M CIV USARMY CESAW (USA) <[e-mail]>
Subject: Re: \[URL Verdict: Neutral\]\[Non-DoD Source\] Re: SAW-2015-01815 / Clearwater Mitigation Solutions / Neuse
01 UMB / Lowlands Mitigation Site / Draft Instrument and Mitigation Plan IRT Comments

Hey Todd,

This is an update on the finanical assurance designee for the Lowlands Site. I went over the terms and obligations
with the long-term steward, NCWHF, and the NCWHF has agreed to be the third-party designee for the finanical
assurance per correspondence and email below. They have in the past been the obligee and/or thrid party designee
for the financial assurances on other approved mit plans with other providers, and experience working with a
number of other mitigaiton providers in NC.

Additionally, I discussed your concerns regarding the finanical assurance with Bob Spoth (EcoSystems Insurance) who
has been my Financial Assurance Advisor / Broker. Bob has helped me with other mitigation projects in the past, and
very knowledgeable in this space.Bob was stating that although Clearwater would be the "named insured" on the
policy, the policy would not payout to Clearwater, it pays the third party designee as required by the Corps, per the
excerpt below.

Excerpt from Bob Spoth at EcoSystems Insurance:
3

1. "The insurance policy is set up that way. No problem there. It is payable to a third party or
standby trust. Note: most Corps districts do not allow a standby trust because that may invoke
the Miscellaneous Receipts Act (Constructive Receipt). That's up to the Corps attorneys though -
we will follow whatever they want.

a. Technical point - you are the "named insured". The still policy does not pay you. It
rd
pays the 3 party designee as required by the Corps. You have to be the Named Insured
because you are the permit holder. It relates to a bond in that sense. The "Principal" on
the bond is you but the bond pays the "Obligee" the Corps - different semantics but same
result. I think it has to be that way because you are the permitee."
Let me know if you'd like to discuss further or need some more information on the third party designee and/or
insurance policy. I can loop Bob Spoth and Beau Bethea in on a seperate email.

Thanks,
Kevin

---------- Forwarded message ---------
From: Theodore Bethea <[e-mail]>
Date: Mon, Aug 21, 2023 at 3:34 PM
Subject: Re: Good Copy and Update to Follow Re: UPDATE Re: SEPT 26, 2022 LOWLANDS CE FINANCIAL WORKSHEET
To: Kevin Yates <[e-mail]>
Cc: Harrison Stewart <[e-mail]>, Gregory Erwin <[e-mail]>, Robert Spoth
<[e-mail]>

Kevin,

The NCWHF agrees to be the third party Designee as requested for the Financial Assurance for the Lowlands
Mitigation Site.

We look forward to working with you.

Sincerely,

Beau
4

NCWHF Operations Director

Kevin Yates

Clearwater Mitigation Solutions
919-624-6901

On Thu, Aug 17, 2023 at 4:44 PM Kevin Yates <[e-mail]> wrote:
Hey Beau,

Great talking to you today and Big Thank You to the NCWHF for their support and agreeing to be the third-party
designee for the financial assurance requirements for the Lowlands Site. As stated previously we know that NCWHF
would not be responsible for any actual repair work and/or monitoring, but NCWHF is willing to be the third-party
designee if financial assurances were called upon and willing to be in charge of overseeing, handing it off, and
making payment to another experienced mitigation provider to carry out repairs/monitoring work for the Lowlands
Site.

Just some highlights, the Lowlands Site was originally constructed as a PRM Site in 2018, and demonstrating success,
it is being administratively converted into a traditional mitigation bank site and we have 4 years of monitoring
through 2026. The financial assurance will consist of an annual maintenance and monitoring policy which will be
renewed each year. Attached is a worksheet with the basis for the annual monitoring and maintenance cost which is
approximately $42,000 for the current year of monitoring and decreases by 10% through 2026, which is the last year
of monitoring. Also attached is the Draft Insurance Policy (Financial Assurance) for the first year. Per the excerpt
below, Bob Spoth (EcoSystems Insurance) is my Financial Assurance Advisor / Broker and has provided some very
helpful context to the Draft Policy Language. I have also copied Bob on this email, Bob has helped me with other
mitigation projects in the past, and is very knowledgeable in this space.

Excerpt from Bob Spoth at EcoSystems Insurance:
1. "The insurance policy is set up that way. No problem there. It is payable to a third party or
standby trust. Note: most Corps districts do not allow a standby trust because that may invoke
5

the Miscellaneous Receipts Act (Constructive Receipt). That's up to the Corps attorneys though -
we will follow whatever they want.

a. Technical point - you are the "named insured". The still policy does not pay you. It
rd
pays the 3 party designee as required by the Corps. You have to be the Named Insured
because you are the permit holder. It relates to a bond in that sense. The "Principal" on
the bond is you but the bond pays the "Obligee" the Corps - different semantics but same
result. I think it has to be that way because you are the permitee."
As I'm writing this Todd wanted to see some verification that the Long-Term Steward (NCWHF) would be
able/willing to take on this role, whether its an email confirmation or in letter form. Let me know if you have any
questions or would like any more information.

Again, appreciate the support of the NCWHF and your quick response to this original request. Big help in expediting
this process.
Kevin

Kevin Yates

Clearwater Mitigation Solutions
919-624-6901
Kevin Yates

Clearwater Mitigation Solutions
919-624-6901

On Mon, Aug 7, 2023 at 10:28 AM Tugwell, Todd J CIV USARMY CESAW (USA) <[e-mail]>
wrote:
Kevin,
6

I would check with other sponsors. If the intent is to have your designated long-term steward oversee activities that
may be required if the FA were called upon (monitoring, repair, etc.), we would want to see some verification that
that organization would be able/willing to take on that role. Regardless, the sponsor cannot be the recipient of the
FA. If the long-term steward cannot fill that role, then another organization would have to be identified that could.

Thanks,
Todd

From: Kevin Yates <[e-mail]>
Sent: Friday, August 4, 2023 2:22 PM
To: Tugwell, Todd J CIV USARMY CESAW (USA) <[e-mail]>
Cc: Haywood, Casey M CIV USARMY CESAW (USA) <[e-mail]>
Subject: Re: \[URL Verdict: Neutral\]\[Non-DoD Source\] Re: SAW-2015-01815 / Clearwater Mitigation Solutions /
Neuse 01 UMB / Lowlands Mitigation Site / Draft Instrument and Mitigation Plan IRT Comments

Hey Todd,

Been off the grid for a few days. Thanks for the quick turn around on the Lowlands review. I did send the updated
UMBI with requested changes in a separate email to you and Casey on 07/24, but can submit final UMBI as
requested.

We’ll get these comments turned around pretty quick, but regarding comment #5, I’ll reach out to some other
providers on this but didn’t know if you had any contacts or ideas on a third party designee for the financial
assurances?

Thanks!
Kevin

On Tue, Aug 1, 2023 at 11:15 AM Tugwell, Todd J CIV USARMY CESAW (USA) <[e-mail]>
wrote:
Kevin,
I wanted to let you know that I was able to download the Final Mit Plan from RIBITS. As I mentioned in my earlier
emails, I expected that we may have some other recommended final changes before we reach the Final
7

version. Below are some comments regarding the most recent version that need to be fixed before we accept the
final version and move on to approval. Also I did not see the updated UMBI – were you waiting to upload that
document until we had finalized the Mit Plan? We did have a couple comments on the UMBI, but assuming you
make the changes we noted, I would recommend you submit the final UMBI with your signature once we have a
Final Mit Plan in hand.

Once you’ve had a chance to make further updates, please upload the newest version to RIBITS. Once we can get it
and UMBI finalized, we can send out to the IRT with our intent to approve notification. Let me know if you have
any questions.

Thanks,
Todd

Comments on Draft Final Mit Plan:
1. Table of Contents – Sec. 9.3 should be Nuisance and Invasive Species Management
2. Pg 13, Table 4 – Is the title of this table supposed to reference Enhancement Area 2 rather than 1?
3. Pg 19, Sec 6.3.6 states “The overall supplemental planting within Enhancement Area 2 was less than 50%,
however, an additional year of vegetative monitoring can be added to Enhancement Area 2, if it is the
desire of the IRT.” Additionally, your response to comments states that “there is an additional year of
monitoring proposed for the entire site”. I’m not sure whether you are proposing an additional year of
monitoring or not, or for the whole site or just Enhancement Area 2. At this point, I don’t necessarily think
we need to have another year (beyond Year 8/2026). Can you just explain this more clearly? Also,
something to keep in mind for this year’s monitoring in Enhancement Area 2 is that we normally do not
allow supplementally planted vegetation to count toward success until it has been in the ground for 2
growing seasons, otherwise supplemental planting could be used to skew the monitoring results.
4. Page 25, Table 11 shows that vegetation was monitored in Year 4, but the report states in several other
places (Sec 5.4 and Sec 8.4) and that vegetation was not monitored in Year 4. Is Table 11 incorrect?
5. Pg 27, Sec 11.2 – This section states that the financial assurances (FA) will be paid to the bank sponsor
(Clearwater Mitigation Solutions, LLC). FA cannot be paid to eh sponsor, as this would defeat the purpose
of the FA. Per the UMBI “all financial assurances shall be made payable to a standby trust or to a third-
party designee, acceptable to the Corps, who agrees to complete the project or provide alternative
mitigation”. I believe this is also how the insurance policy is set up, which defines a third party to receive
payment from Underwriters. We just need to identify who the appropriate third part is.
6. The LTM plan has been updated to show the endowment ($50,000) to be fully funded upon transfer of the
Conservation Easement to NCWHF (LTM Steward). Does the CE transfer upon bank approval, or would
this not occur until project closeout? The endowment must be fully funded in order for the first release of
credits (%65), and Table 8 should be updated to include this as a task.

8

From: Kevin Yates <[e-mail]>
Sent: Tuesday, July 25, 2023 6:34 AM
To: Haywood, Casey M CIV USARMY CESAW (USA) <[e-mail]>
Cc: Tugwell, Todd J CIV USARMY CESAW (USA) <[e-mail]>
Subject: Re: \[URL Verdict: Neutral\]\[Non-DoD Source\] Re: SAW-2015-01815 / Clearwater Mitigation Solutions /
Neuse 01 UMB / Lowlands Mitigation Site / Draft Instrument and Mitigation Plan IRT Comments

Hey Todd/Casey,

Thanks again for setting up the folders, the Lowlands Final Mit Plan is uploaded to RIBITS along with response to
comments letter (had to reduce file size). Apologize it took so long to get back to you. We took some time to
review our plan and procedures and make our plan more in line with current guidance.

Feel free to call with any questions or clarifications.

Thanks,
Kevin

Kevin Yates

Clearwater Mitigation Solutions
919-624-6901

On Mon, Jul 24, 2023 at 1:24 PM Kevin Yates <[e-mail]> wrote:
Hey Todd/Casey,

I've tried uploading the Lowlands Final Mit Plan doc several times and getting a "client error" message. I've
emailed the RIBITS help desk and waiting to hear back from them. I'll let you know when it has been uploaded.

9

I've attached to this email the Draft UMBI with requested revisions for your review, along with the IRT comment
letter.

Thanks,
Kevin

Kevin Yates

Clearwater Mitigation Solutions
919-624-6901

On Sun, Jul 23, 2023 at 3:10 PM Haywood, Casey M CIV USARMY CESAW (USA)
<[e-mail]> wrote:
Hi Kevin,

I don’t need a hardcopy of the plan.

Thank you,
Casey

From: Kevin Yates <[e-mail]>
Sent: Monday, July 17, 2023 2:52 PM
To: Tugwell, Todd J CIV USARMY CESAW (USA) <[e-mail]>
Cc: Haywood, Casey M CIV USARMY CESAW (USA) <[e-mail]>
Subject: Re: \[URL Verdict: Neutral\]\[Non-DoD Source\] Re: SAW-2015-01815 / Clearwater Mitigation Solutions /
Neuse 01 UMB / Lowlands Mitigation Site / Draft Instrument and Mitigation Plan IRT Comments

Ok appreciate it. Will do.
10

Thanks!
Kevin

On Mon, Jul 17, 2023 at 12:19 PM Tugwell, Todd J CIV USARMY CESAW (USA) <[e-mail]>
wrote:
Kevin,
No need to provide me with a hard copy. I’ll let Casey answer as well, in case she would like to receive one.

I’ve created a folder in RIBITS for the Final Mit Plan. Once you have uploaded the document, please let me and
Casey know.

Thanks,

Todd Tugwell
Chief, Mitigation Branch
Regulatory Division
Wilmington District, USACE
[phone]

From: Kevin Yates <[e-mail]>
Sent: Thursday, July 13, 2023 10:03 AM
To: Tugwell, Todd J CIV USARMY CESAW (USA) <[e-mail]>
Cc: Haywood, Casey M CIV USARMY CESAW (USA) <[e-mail]>
Subject: Re: \[URL Verdict: Neutral\]\[Non-DoD Source\] Re: SAW-2015-01815 / Clearwater Mitigation Solutions /
Neuse 01 UMB / Lowlands Mitigation Site / Draft Instrument and Mitigation Plan IRT Comments

11

Hey Todd,

We are getting the (draft) Final Mitigation Plan back to you with response to comments for this Lowlands Site.
We will upload to RIBITS, but just want to see if you would like a hard copy as well?

Thanks,
Kevin

Kevin Yates

Clearwater Mitigation Solutions
919-624-6901

On Fri, Mar 3, 2023 at 6:06 PM Tugwell, Todd J CIV USARMY CESAW (USA) <[e-mail]>
wrote:
Kevin, I have some time on Tuesday if that would work. Regarding your questions, I provided some responses
below:

Comment 6, credit release – that was my error in reading the plan, so please keep this at 65%.

Comment 18, this was just to let you know that we may have additional comments on the CE and financial
assurances depending on the resolution to some of our other comments about the long term
steward. Otherwise I don’t expect any comments about the CE or property documents. Sorry if this was
confusing.

Thanks,
Todd

12

From: Kevin Yates <[e-mail]>
Sent: Friday, March 3, 2023 2:13 PM
To: Haywood, Casey M CIV USARMY CESAW (USA) <[e-mail]>; Tugwell, Todd J CIV
USARMY CESAW (USA) <[e-mail]>
Cc: Jennifer Burdette <[e-mail]>; Rebecca Stubbs Cell <[e-mail]>
Subject: \[URL Verdict: Neutral\]\[Non-DoD Source\] Re: SAW-2015-01815 / Clearwater Mitigation Solutions /
Neuse 01 UMB / Lowlands Mitigation Site / Draft Instrument and Mitigation Plan IRT Comments

Hey Todd and Casey,

Would you have a few minutes next week for a call to discuss a few comments from the Lowlands comment
letter? Maybe 10-15 minutes.

Thanks,
Kevin

On Fri, Feb 24, 2023 at 11:36 AM Kevin Yates <[e-mail]> wrote:
Hey Todd,

We are in the process of collaborating responses for the Lowlands Site per the February 10th comment letter,
but need a couple clarifications:

Comment 6 (Page 2): I realize our credit release schedule is confusing, but in previous correspondence you
and IRT indicated the Lowlands Site could receive a release of 65%, which is what we have proposed in table 8
and within mit plan document. Should we revise for 50% or keep at 65% credit release?

Comment 18 (Page 4): Carl provided legal doc/property comments on 12/1/22 and you confirmed via email
our responses looked good on 12/9/22. Should we expect additional comments?

Let me know your thoughts when you get a chance. We also met last week and we’ll clean up some of the
confusing portions, particularly on the veg data.

13

Thanks,
Kevin

On Fri, Feb 10, 2023 at 3:51 PM Tugwell, Todd J CIV USARMY CESAW (USA) <[e-mail]>
wrote:
Good afternoon Kevin,

Attached are the Clearwater Mitigation Solutions – Neuse 01 UMB, Lowlands, Draft Instrument and
Mitigation Plan (dated July 2021) IRT comments. You may proceed with developing the final mitigation plan
for the above referenced mitigation site provided you adequately address all comments/concerns in the
enclosed memo.

As you will see, there were a variety of questions/comments on the draft plan. Some of the questions will
likely require additional review of language or information on our part, so while you are preparing the Final
Instrument and Mitigation Plan, please feel free to contact me with questions regarding the comments. This
is normally a bank-and-forth process to get to the final final plan. When the Final Mitigation Plan is
complete, please upload an electronic copy of the complete document to RIBITS for distribution to the IRT –
I have created a folder for it. I’ve also attached a couple documents – I reference the AMP guidance in my
comments, and the Bank Prospectus procedures document has updated document delivery preferences and
contact info.

Lastly, please note that if you make other changes to the Draft Mitigation Plan or fail to adequately address
any of the issues identified in the attached comments, we will not be able to approve a Final Mitigation Plan,
and may have to revise our initial determination that the site has the potential to provide compensatory
mitigation for impacts to Waters of the U.S. authorized by permits issued by the District.

Please let me know if you have any questions about the process or attached comments.

Thank you,

Todd Tugwell
Mitigation Project Manager
Wilmington District, US Army Corps of Engineers
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3331 Heritage Trade Drive, Suite 105
Wake Forest, North Carolina 27587
[phone]

We would appreciate your feedback on how we are performing our duties. Our automated Customer Service
Survey is located at: https://regulatory.ops.usace.army.mil/customer-service-survey/ Thank you for taking
the time to visit this site and complete the survey.
--
Kevin Yates

Clearwater Mitigation Solutions
919-624-6901
--
Kevin Yates

Clearwater Mitigation Solutions
919-624-6901
--
Kevin Yates

Clearwater Mitigation Solutions
919-624-6901
--
Kevin Yates

Clearwater Mitigation Solutions
919-624-6901
15