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HomeMy WebLinkAbout20230135 Ver 1_2023-12-06 EcoTerraNeuse01UBI_20231206 1 AGREEMENT TO ESTABLISH THE ECO TERRA NEUSE 01 UMBRELLA BANKING INSTRUMENT IN THE NEUSE RIVER BASIN FOR NUTRIENT OFFSET AND RIPARIN BUFFER MITIGATION CREDITS PURSUANT TO THE NEUSE NUTRIENT STRATEGY Table of Contents: I. Preamble 2 II. Location and Geographic Service Area 2 III. Authorities 3 IV. Establishment of Bank Parcel 3 V. Pre-Construction Documentation 5 VI. Post-Construction Documentation for Bank Parcel 7 VII. Calculation of Credits 9 VIII. Credit Release Schedule 11 IX. Procedure for Debiting and Crediting for Each Bank Parcel 12 X. Bank Parcel Closure 13 XI. General Provisions for the Bank Parcel 14 Attachments: A – Division of Water Resources Authority Document B – Bank Parcel Ledger (template) C – Bank Parcel Credit Table (template) References: 1. Nutrient Offset Payment 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://ncleg.gov/Enactedlegislation/Sessionlaws/HTML/2019-2020/SL2019-86.html 4. Buffer Interpretation/ Clarification# 2008- 019 for diffuse flow: https://deq.nc.gov/media/4742/download 5. Clarified Procedures for Calculating Buffer Mitigation Credits and Nutrient Offset Credits (November 2019): https://deq.nc.gov/media/15043/download 6. NCDWR - Methodology and Calculations for Nutrient Reductions on the Bank Parcel: https://files.nc.gov/ncdeq/Water%20Quality/Planning/NPU/Nutrient%20Offset%20Rule/Ag- Buffer-Credit.pdf 2 I. PREAMBLE This Umbrella Banking Instrument (“Instrument”) regarding the establishment, use, operation, and maintenance of Nutrient Offset and Buffer Mitigation Bank Parcels (“Bank Parcels”) is to provide Neuse Riparian Buffer mitigation credit (“Riparian Buffer Credits”) and Neuse Nutrient Strategy nutrient load reduction credit (“Nutrient Offset Credits”) is made and entered into by and among Eco Terra, 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 15A NCAC 02B .0295, see refences. The purpose of each Bank Parcel is: A. To establish, restore, enhance, and preserve riparian vegetation adjacent to streams and/or agricultural ditches with the intent to improve water quality, reduce nutrient loads, enhance flood attenuation and restore wildlife habitat along unnamed tributaries and ditches within the Neuse River Basin. B. To convert agricultural land uses within riparian areas adjacent to streams and/or agricultural ditches into a dense and diverse hardwood vegetated state with the intent to significantly reduce nutrient loadings associated with agricultural practices into streams and ditches. C. To provide buffer mitigation and nutrient offset and sell any resulting Riparian Buffer Credits and/or Nutrient Offset Credits to third parties in specific areas within 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 Parcels under this Instrument is limited to the Neuse River Basin in the State of North Carolina, United States Geological Survey (“USGS”) 8-digit Hydrologic Unit Code (“HUC”) 03020201, excluding the Falls Lake Watershed. C. Sale or transfer of Riparian Buffer Credits from the Bank Parcels shall be limited to the 8-digit HUC 03020201, excluding the Falls Lake Watershed in the Neuse River Basin, in accordance with 15A NCAC 02B .0295, unless otherwise authorized by the DWR or delegated local government. D. Sale or transfer of Nutrient Offset Credits from the Bank Parcels shall be limited to the 8-digit HUC 03020201, excluding the Falls Lake Watershed in the Neuse River Basin, in accordance with 15A NCAC 02B .0703, unless otherwise authorized by the DWR in accordance with Session Law 2019-86. 3 III. AUTHORITIES A. The Bank Parcels will be used to provide Riparian Buffer Credit and Nutrient Offset Credit in accordance with the requirements in the DWR Authority document referenced herein as “Attachment A” and attached to this Instrument. B. Projects eligible for utilization of the credits are those requiring authorization under the requirements of Attachment A and any new approved North Carolina General Statutes (NCGS) 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 North Carolina ("State") statutes and rules for the Neuse Nutrient Management Strategy. D. Nutrient Offset and Buffer Mitigation activities proposed under this Instrument and corresponding Nutrient Offset and Buffer Mitigation Plans (NOBMPs) to generate Riparian Buffer and Nutrient Offset Credits shall be consistent with State statutes and rules for the Neuse Nutrient Management Strategy that are in place at the time complete NOBMP is submitted to DWR. IV. ESTABLISHMENT OF EACH BANK PARCEL A. In accordance with 15A NCAC 02B .0295 and 15A NCAC 02B .0703, DWR has provided a "Site Viability Letter" for each of the Bank Parcels proposed under this Instrument. The site viability letter is not an approval of the site to generate Riparian Buffer Credits and Nutrient Offset Credits but is a preliminary review of the Bank Parcel that details and confirms existing land-use conditions, defines the riparian 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. B. A valid Site Viability Letter is required prior to submittal of each NOBMP. Site Viability Letters will either expire on the dates listed in the letter or upon the submittal of an individual As-Built Report to the DWR, whichever comes first. If a Site Viability Letter expires prior to submittal of a complete NOBMP as described in Section V to DWR, then the Sponsor must submit a formal request to DWR for a new Site Viability Letter for that Bank Parcel. C. Each parcel proposed for inclusion under this Instrument shall require a NOBMP be submitted to, and approved by, the DWR prior to use of the Bank Parcel for buffer mitigation or nutrient offset purposes or sale or transfer of any associated credits. D. Each NOBMP submitted under this instrument will be placed on public notice and made available for public commenting for 15 calendar days. E. Nutrient Offset Credit on the Bank Parcels may be achieved through restoration or enhancement of the riparian areas adjacent to viable streams and viable ditches where agriculture is the predominant land use as determined by DWR. Nutrient Offset Credits are only attainable if the width of the restored riparian areas are at least fifty (50) feet as measured perpendicular from tops of banks along viable streams and viable ditches. The width of the 4 restoration area should begin at the most landward limit of the top of bank or the rooted herbaceous vegetation if present along streams) and extends landward a minimum of 50 feet and a maximum of 200 feet on all sides of the viable features. A conservation easement will be secured to include the tops of all stream channel and ditch banks and will extend out a maximum of 200 feet. The viability of features to generate nutrient offset credits is provided in the Site Viability Letters for the Bank Parcels. F. The Bank Parcel(s) are expected to provide Nutrient Offset Credits as follows: a. 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). b. Planting hardwood trees or trees and shrubs on a Restoration Site as defined in 15A NCAC 02B .0295 (b) adjacent to viable streams and viable ditches where agriculture has been determined by DWR to be the predominant land use. G. In general, Riparian Buffer Credit on the Bank Parcels may be achieved through restoration, enhancement, or preservation of DWR riparian buffers as they are defined in 15A NCAC 02B .0714, and other riparian areas as allowed per 15A NCAC 02B .0295 (n) and (o) where applicable. Riparian Buffer Credits are only attainable if the width of the riparian areas are at least 20 feet from tops of banks along streams and at least 30 feet from top of banks along viable ditches when measuring perpendicular and landward from features. Riparian Buffer Credits are attainable up to 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 Credit is provided in the Site Viability Letters for the Bank Parcels. H. The Bank Parcel(s) are expected to provide Riparian Buffer Credits as follows: a. Planting hardwood trees or trees and shrubs on a Restoration Site as defined in 15A NCAC 02B .0295 (b) adjacent to viable streams and viable ditches. b. Planting hardwood trees or trees and shrubs on a Restoration Site as defined in 15A NCAC 02B .0295 (b) adjacent to ephemeral streams as allowed in 15A NCAC 02B .0295 (o). c. Planting hardwood trees or trees and shrubs on an Enhancement Site as defined in 15A NCAC 02B .0295 (b). d. Maintaining a Preservation Site as defined in 15A NCAC 02B .0295 (b) along streams as allowed in 15A NCAC 02B .0295 (o) by placing a conservation easement around riparian areas. e. 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. Bank Parcel(s) may be added to the Bank at any time upon approval of a NOBMP by the DWR. 5 V. PRE-CONSTRUCTION DOCUMENTATION FOR EACH BANK PARCEL Nutrient Offset and Buffer Mitigation Plan A. Each NOBMP submitted under this Instrument shall be submitted to DWR for review and must be approved by DWR prior to any construction on the corresponding Bank Parcel. Each NOBMP will describe any changes that have occurred to the site between the date of the Site Viability Letter and the date the NOBMP is submitted to DWR. Each NOBMP shall include detailed information consistent with the sections below concerning: 1) site location (8-digit HUC is required); 2) existing conditions with current photos; 3) proposed nutrient offset and buffer mitigation activities including 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; and 7) stream determination letter from DWR; 8) Site Viability Letter from DWR, 9) service area figure for each mitigation type proposed under this Instrument; and 10) all pertinent information including but not limited to permitting, bank stabilization, culvert removal, installation of any utilities indirectly or directly affecting the Bank Parcel, endangered or threatened species, presence of historical sites and an Environmental Data Resources (EDR) report to evaluate environmental risk associated with the land proposed for the Bank Parcel. B. The Sponsor will obtain all applicable federal, state, and local documentation, permits, or authorizations needed to construct and maintain each Bank Parcel. This Instrument does not qualify as, or substitute for, such documentation, permit, or authorization. C. Any restoration activities or proposed construction within stream channels, riparian buffers and other riparian areas on the Bank Parcels to produce 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 will result in a revised or reduced credit release schedule for the Bank Parcel or a denial of the Bank Parcel to generate riparian buffer or nutrient offset credits. D. Requests for deviation from the approved NOBMP must be submitted to DWR in writing. Written approval from the DWR must be received prior to implementing any deviation from the approved NOBMP. Property Disposition & Long Term Management for the Bank Parcel E. Prior to the release of any credits, the Sponsor shall record permanent conservation easements at the appropriate county Register of Deed' s office that is sufficient to ensure protection, operation and maintenance of restored riparian and other riparian areas in perpetuity. F. The form of the conservation easement shall be consistent with the standards employed by the State of North Carolina in the protection of restored riparian buffers and riparian areas and shall be approved by the DWR prior to the release of any credits. G. The Sponsor shall not grant additional easements, right of ways, or any other property interest in or to the project areas, without prior approval from the DWR. 6 H. The Sponsor agrees to transfer or assign the conservation easement and its interests in perpetuity to a qualified holder under NC General Statute ("GS") 121- 34 et seq. and 170(h) of the Internal Revenue Code prior to the submittal of the Year 4 Monitoring Report. The holder shall be a land trust or stewardship program that will hold and enforce the conservation easement and the interests in perpetuity. The Sponsor shall choose a land trust or stewardship program that is accredited by the Land Trust Accreditation Commission and/ or has been approved by DWR. A land trust must be certified under 501(c)(3) of the Internal Revenue Code. I. In the event the Sponsor is also the owner of the underlying fee interest in the property, the conveyance of the conservation easement to a land trust or stewardship fund must be arranged at the outset of the approved NOBMP. Financial Assurances for Bank Parcel Development J. Following approval of each Bank Parcels' NOBMP, the Sponsor shall provide a Performance/ Maintenance Bond from a surety company that is rated no less than an "A-" as rated by A.M. Best, to construct the Bank Parcel, in its entirety, according to the approved NOBMP. It is the Sponsor' s responsibility to confirm that the surety company is rated no less than an "A-" with each annual bond renewal. K. The amount of the Performance Bond/s shall be 100% of the estimated cost for implementation of the riparian restoration activities and other related activities for the construction of the Bank Parcel as described in the approved NOBMP. No bond shall be less than $150,000.00 to cover construction costs. Each Bank Parcel will be bonded individually. L. Alternatively, in lieu of posting Performance Bonds, the Sponsor may elect to construct the Bank Parcel, in its entirety, prior to the first credit release. M. For each Bank Parcel, once DWR has released all credits for completion of all listed below, then the Sponsor will be released from its performance obligations under the applicable performance bond required in Item J and K of this section: a. Instrument and NOBMP Approved by DWR, Conservation Easement Recorded, Financial Assurance Posted; b. All Riparian Earthwork, Planting, and Installation of Monitoring Devices Completed, easement boundaries adequately marked, all applicable permits obtained, site visit performed by DWR; c. As-Built Report as described in Section VI has been received by DWR; and d. DWR has submitted a written approval of the As-Built Report N. To comply with this section, DWR must be the Obligee on all performance bonds. 7 VI. POST-CONSTRUCTION DOCUMENTATION FOR EACH BANK PARCEL As-Built Report A. The Sponsor agrees to perform all necessary work, in accordance with the provisions of this Instrument and corresponding NOBMP, 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 nutrient offset and buffer mitigation areas, the Sponsor will submit written notification to DWR documenting that all nutrient offset and buffer mitigation 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: a. Short summary of activities completed as required per the approved NOBMP; b. Figures representing all riparian restoration, riparian enhancement and riparian preservation activities where applicable; c. Figures representing location of all monitoring plots installed; d. 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 NOBMP; e. Description of how the conservation easement boundaries were marked; f. Any major changes to the conservation easement boundary or to the amount of Riparian Buffer or Nutrient Offset Credits from what was proposed in the approved NOBMP. C. The Sponsor will submit an as-built plan and report for each Bank Parcel separately, after completing the establishment of the nutrient offset areas. Each As-built Report will be submitted to DWR and describe any deviation from the approved NOBMP and will document all the following: a. Riparian restoration and planting details, invasive species control, confirmation of fence installation if applicable, cattle exclusions if applicable, confirmation that all easement boundary markers are installed, monitoring device locations, vegetation plot locations and photo point locations as appropriate, and confirmation that all boundary markers are installed. b. Boundary Survey of the conservation easement area, signed and sealed by a licensed surveyor, including an inventory of the final riparian buffer mitigation and nutrient offset areas in both square feet and acres. c. As-built map of the riparian buffer and nutrient offset areas showing where riparian restoration was performed and any deviations to the Bank Parcel from what was approved in the NOBMP. d. Aerial map of the riparian restoration activities approved in the NOBMP. 8 Financial Assurance for Bank Parcel Monitoring D. After completion of the riparian restoration activities and construction on each Bank Parcel, in its entirety, a separate Performance/Maintenance Bond will be secured for 100% of the estimated cost to implement the monitoring and maintenance plan as described in the approved NOBMP and As-Built Report for the site. The Bond must be from a surety company that is rated no less than an “A-“ as rated by A.M. Best, and it is the Sponsor's responsibility to confirm that the surety company is rated no less than an "A-" with each annual bond renewal. E. Each Performance/Maintenance Bond shall be secured each year for a minimum of five years, and until DWR has released all Riparian Buffer and/or Nutrient Offset Credits to the Sponsor. Upon DWR approval, the bond may be lowered each year based on the adjusted cost to complete the monitoring. No bond shall be less than $100,000 to cover monitoring and maintenance costs initially. F. Once DWR has released 100% of all credits for completion of all Bank Parcel milestones described in Table 3 of Section VIII and in the corresponding NOBMP, the Sponsor will be released from its performance obligations under the performance bond required in “C-D” of this Section. G. To comply with this section, DWR must be the Obligee on all performance bonds. Monitoring and Maintenance Reports H. The Sponsor shall monitor each Bank Parcel, in its entirety, as described in the NOBMP until such time as DWR determines that the performance standards described below have been met. The monitoring period shall be a minimum of five consecutive years for each Bank Parcel. I. Performance Standards for Vegetation: Native hardwood trees or native hardwood trees and shrub species should be planted at a density sufficient to provide 260 stems per acre after five years. A minimum of four (4) native hardwood trees or four (4) native hardwood tree and shrub species must be planted. No one species shall be greater than 50% of the planted stems. A list of species for planting will be detailed in each NOBMP for approval. Some native hardwood tree volunteer species may be included to meet performance standards as determined by the DWR. J. A "stem" means a woody seedling, sapling, shrub, or tree, no less than 10 centimeters in height and shall apply, on this Bank Parcel, as the minimum height that a planted tree or shrub shall be at initial planting. Volunteer stems that are less than 10 centimeters shall not be quantified and included in the annual vegetation data included with the monitoring reports. K. If the performance standards of the vegetation are not met for an individual Bank Parcel, supplemental plantings may be required. Supplemental plantings will be utilized until the required 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 monitoring report. L. Monitoring Reports for Nutrient Offset Credit: Reporting criteria of the vegetation shall be based on the Carolina Vegetation Survey (CVS) — EEP Protocol for Recording Vegetation Level 1 Plot Sampling only version 4.0 or any updated versions of this protocol in place at the date of acceptance of each NOBMP. The Sponsor shall submit an annual monitoring report for each 9 Bank Parcel no later than December 31st of each year for a minimum of five consecutive years after the first full growing season for each Bank Parcel under this Instrument. Vegetation data shall not be collected prior to late August of each year. This report will describe the conditions of the Bank Parcel, including an evaluation of the performance standards of the vegetation contained within the approved NOBMP. Reports shall contain the following: a. A U.S. Geological Survey map showing location of the Bank Parcel; b. A detailed narrative with supporting photos summarizing the condition of the Bank Parcel along with any maintenance or remediation performed that year; and c. A map, survey, or other figure showing location of sampling plots, permanent photo points, location of transects, etc.; and d. Monitoring data, including specific vegetative counts and height data showing that the trees or tree and shrub species planted are meeting performance standards and updated photographs; and e. A copy of the most recent Bank credit/debit ledgers; and f. Corresponding verification letters from designated local governments upon request; and g. Corresponding Mitigation Transfer Certificates upon request; and h. Proof of performance bond renewal to cover the next monitoring year (when applicable). Contingency Plans/Remedial Actions M. In the event the Bank Parcel fails to achieve the success criteria described in this Instrument and the approved NOBMP, 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 BCAC 02B .0295 (m)(n) following guidance provided in the Clarified Procedures for Calculating Buffer Mitigation Credits and Nutrient Offset Credits letter issued by DWR (see references) including the most recent Project Credit Table template provided online (Appendix C). B. Riparian buffer restoration on the Bank Parcel, as described in 15A NCAC 02B .0295 (n) and defined in 15A NCAC 02B .0295 (b) that is performed on agricultural lands within the Bank Parcel, may be used for either Riparian Buffer Credit or Nutrient Offset Credit, but not both. C. Riparian buffer enhancement on the Bank Parcel covered under this Instrument, as described in 15A NCAC 02B .0295 (n) and (o), can be used for either Riparian Buffer Credit or Nutrient Offset Credit, but not both. D. Riparian buffer preservation on the Bank Parcel covered under this Instrument, as described in 15A NCAC 02B .0295 (o) and defined in 15A NCAC 02B .0295 (b) can be used for Riparian Buffer Credit. 10 E. Riparian Buffer Credit is defined as one (1) buffer credit per square foot or 43,560 buffer credits per one (1) acre. Nutrient Offset Credits F. The square footage of Nutrient Offset Credits on Bank Parcels proposed under this Instrument is determined by applying the applicable ratio as provided in 15A NCAC 02B .0295(m) for a Restoration Site following the guidance provided in the Clarified Procedures for Calculating Buffer Mitigation Credits and Nutrient Offset Credits issued by the DWR, including the most recent Project Credit Table Template (see references 5 and Attachment C respectively). All riparian areas proposed for Nutrient Offset Credits must be a minimum of fifty (50) feet from the top of the banks along viable streams and viable ditches on land noted in a Site Viability Letter as agriculture. G. Nutrient Abatement of Restored Riparian Area/ Buffers on Agricultural lands: The Sponsor and DWR agree to the following: a. The pounds of nitrogen offset per acre of restored riparian areas/ buffers shall be 2,273.02 pounds per acre or 19.16394 square feet per pound. H. The Sponsor and DWR agree that the methodology and calculations for determining nitrogen reduction associated with restoration of riparian areas on the Bank Parcels 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 with the riparian restoration on this Bank Parcel, refer to the NCDWR – Methodology & Calculations for Nutrient Reductions on the Bank Parcel documents found in reference 6. This space left blank intentionally; do not add text to this space. 11 VIII. CREDIT RELEASE SCHEDULE A. Upon submittal of all appropriate documentation by the Sponsor, and subsequent approval by DWR, it is agreed that Riparian Buffer and Nutrient Offset Credits associated with the Bank Parcels under this Instrument will become available to sell to a third party in accordance with the Credit Release Schedule in Table 3.0. Table 3.0 – Credit Release Schedule for Riparian Buffer and Nutrient Offset Credits Task Project Milestone % Credit Available for Sale 1 Instrument and NOBMP Approved by DWR, Conservation Easement Recorded*, Financial Assurance Posted 20 2 Mitigation Site Earthwork, Planting and Installation of Monitoring Devices Completed, Easement Boundaries adequately marked, and all applicable permits obtained. A site visit by DWR is required for this task. 20 3 Monitoring Financial Assurance Posted and Approval of As-Built Report 10 4 Monitoring Report #1: Approved by the DWR** & financial assurance renewed 10 5 Monitoring Report #2: Approved by the DWR** & financial assurance renewed 10 6 Monitoring Report #3: Approved by the DWR** & financial assurance renewed 10 7 Item B (1) of Section X in this Instrument has been completed and approved by DWR. 5 No remaining credits will be released until the conservation easement has been assigned to an approved land trust or stewardship 8 Monitoring Report #4: Approved by the DWR** & financial assurance renewed 5 9 Monitoring Report #5: Approved by the DWR** and final site visit by DWR has been conducted 10 Total 100% *For specification, please see Section V in this Instrument **DWR Approval provided upon a determination that the site is meeting success criteria contained within the approved NOBMP B. DWR may modify the credit release schedule based on the information submitted or the order in which required information is received. DWR will notify the Sponsor of any modification to the credit release schedule. C. Any major deviations to the Bank Parcel that were not authorized in writing by DWR prior to implementation may affect the amount of nutrient offset credits will be generated by the Bank Parcel. 12 IX. PROCEDURE FOR DEBITING AND CREDITING FOR EACH BANK PARCEL Credit Ledgers A. The Sponsor shall maintain one credit ledger for each mitigation type for each Bank Parcel proposed under this Instrument, unless otherwise instructed by DWR in the approved NOBMP, 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 8.5in X 11in spreadsheet with legible font style and font size. All ledgers shall be submitted using the templates provided in Attachment B of this Instrument or any updated versions to these templates as provided by DWR. Credit Processing C. Credits must be calculated for each 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 each Bank Parcel will be used to provide mitigation for authorized buffer impacts within the 8-digit HUC 03020201, excluding the Falls Lake Watershed of the Neuse River Basin in accordance with 15A NCA 02B .0295 (f) and (g). E. Nutrient Offset Credits generated on each Bank Parcel will be used to offset nitrogen loads within the 8-digit HUC 03020201, excluding the Falls Lake Watershed of the Neuse River Basin in accordance with 15A NCA 02B .0703. F. Available Riparian Buffer Credits (credits that have been released by DWR but not sold by the Sponsor) that are generated from riparian restoration on agricultural land and meet criteria for nutrient offset credits as outlined in Section VII of this Instrument, the Site Viability Letter and the corresponding NOBMP can be converted from Riparian Buffer Credits into Nutrient Offset Credits upon written approval from DWR. Once a credit has been converted to another credit type, the transaction is permanent, and the credit cannot be converted again. G. Available Nutrient Offset Credits (credits that have been released by DWR but not sold by the Sponsor) that are generated from riparian restoration within 0-100' from tops of stream banks and meet criteria for riparian buffer credits as outlined in Section VIIError! Reference source not found. of this Instrument, the Site Viability Letter, 15A NCAC 02B .0295 and the corresponding NOBMP can be converted from Nutrient Offset Credits to Riparian Buffer Credits upon written approval from DWR. Once a credit has been converted to another credit type, the transaction is permanent, and the credit cannot be converted again. H. 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. I. The Sponsor shall obtain written verification of nutrient offset need from a designated local government within HUC 03020201, excluding the Falls Lake Watershed of the Neuse River Basin, 13 or from DWR through an approved NPDES permit for wastewater nutrient sources, prior to debiting Nutrient Offset Credits from the Bank Parcels. J. The Sponsor shall obtain written verification of buffer mitigation required from a designated local government within HUC 03020201, excluding the Falls Lake Watershed of the Neuse River Basin, or from DWR prior to debiting Riparian Buffer Credits from the Bank Parcels. K. All credit and debit transactions for each Bank Parcel under this Instrument shall be accurately depicted in the credit ledgers. The Sponsor shall submit accurate and up-to-date credit ledgers for the Bank Parcel by the tenth (10th) of each month. At a minimum and only 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 L. All credit sales will include a Mitigation Credit Transfer Certificate (“Certificate”) that is required to be provided to the buyer of Riparian Buffer and/or Nutrient Offset credits, that will include, at a minimum, the following information: a. Bank Details: (1) Sponsor Name, (2) Bank Parcel name, (3) DWR project number for the NOBMP. b. Credit Details: (1) date of receipt, (2) identify if full or partial payment, (3) amount of buffer credits in (sf) and/or nitrogen Nutrient Offset Credits purchased in pounds (lb) or pounds per year (lb/yr) and confirmation from the designated local government or DWR of the amount required. c. Permitted Project Details: (1) project name as it appears on DWR or local government permits and/or certifications, (2) 8-digit HUC, (3) river basin, (4) nutrient strategy applicable to the project with impacts, (5 – when applicable) designated local government or DWR requiring Riparian Buffer or Nutrient Offset Credits, and (6) credit type and amount required for the project M. If the DWR determines that the Bank is operating at a deficit (e.g. the Sponsor is closing on sales and/or transferring credit that is not available), or the Bank is selling credits out of compliance with statutes, rules or this Agreement, the sale/transfer of credits will immediately cease, and the DWR, in consultation with the Sponsor, will determine what remedial actions are necessary. X. BANK PARCEL CLOSURE A. Bank Parcel Closure for each Bank Parcel under this Instrument shall be identified as the event when the Sponsor is relieved of all of its responsibilities to the Bank Parcel and there are no mitigation credits left to sell. B. Bank Parcel Closure shall commence only after all of the following events have occurred: a. Transfer or assign the conservation easement and all of its interests, in perpetuity, to a land trust or stewardship program as described in Item B of Section V of this instrument. b. All five years of monitoring completed, and all monitoring reports submitted and approved by DWR. 14 c. All credits have been released and debited and updated ledgers showing a zero-credit balance have been submitted and approved by DWR. XI. GENERAL PROVISIONS FOR EACH BANK PARCEL A. Upon the presentation of proper credentials, and during normal business hours, the Sponsor and the landowner shall grant permission to the Director of DWR, and/or an authorized representative of the Director of DWR, to enter the property containing the Bank Parcel(s). B. Amendments: This Banking Instrument may be amended or modified only with written approval of all signatory parties. C. Any transfer of the Sponsor’s rights or obligations outlined in this Instrument or any other agreement referenced in this Instrument to a third party must be approved by DWR prior to the transfer. D. Force Majeure: After 100% of all the credits have been released according to the credit release schedule in Section VIII and confirmation has been received by the DWR that the Conservation Easement has been successfully assigned in compliance with Item H of Section V, the Sponsor will not be responsible for Bank failure that is attributed to natural catastrophes including but not limited to flood, drought, disease, regional pest infestation, etc. that are beyond the control of the Sponsor. E. However, if an event occurs before 100% of all the credits have been released according to the credit release schedule in Section VIII, the Sponsor shall take remedial action to restore the property to its condition prior to the event, in a manner sufficient to provide adequate offset and mitigation to cover credits that were sold prior to the occurrence of the event. Such remedial action shall be taken by the Sponsor only to the extent necessary and appropriate, as determined by DWR and the Sponsor. DWR must concur in writing that a force majeure event has occurred for this provision to apply. F. Oversight: Actions taken by DWR may include, but are not limited to, the following: a. Site visits, b. Issuance of Site Viability Letter, c. NOBMP review and approval of items listed Section V of this Instrument, d. As-Built Report review and approval of items listed in Section VI of this Instrument, e. Monitoring Report review and approval of items listed in Section VI of this Instrument, f. Credit Ledger review and approval of items listed in Section IX of this Instrument, g. Certificate review of items listed in Section IX of this instrument and cross analysis to credit ledgers and, h. Information requests, file reviews and audits. Reports, ledgers, files, and other information shall be made available to DWR upon request, unless otherwise specified in this or any other document. G. Validity of the Banking Instrument: This Instrument will become valid on the date of the last party’s signature. 15 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. If to Sponsor: Eco Terra, LLC Attn: Michael Beinenson 117 Centrewest Court Cary, NC 27513 mitigation@ecoterra.com If to DWR: NC Division of Water Resources – 401 & Buffer Permitting Branch Attn: Nutrient Offset and Buffer Mitigation Banking Coordinator 1617 Mail Service Center Raleigh, NC 27699-1617 16 L. Applicable Law: This Agreement shall be construed under the laws of the State of North Carolina. ECO TERRA, LLC By: (Print) (Signature) Title: Date: NORTH CAROLINA DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES DIVISION OF WATER RESOURCES By: (Print) (Signature) Title: Date: Nutrient Offset Program & Buffer Mitigation Program Authorities for UMBI/MBI Updated 03/26/2013 Attachment A All Basins General Statutes: G.S. §143-214.1 Water; water quality standards and classifications; duties of Commission 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. §143-215.3(a)(1) General powers of Commission and Department; auxiliary powers G.S. §143-215.6A Enforcement Procedures: Civil Penalties G.S. §143-215.6B Enforcement Procedures: Criminal Penalties G.S. §143-215.6C Enforcement Procedures: Injunctive Relief G.S. §143-215.8B Basinwide Water Quality Management Plans G.S. §143B-282 Environmental Management Commission – creation; powers and duties Session Laws S.L. 2012-200 (Amendment to G.S. §143-214.23 and G.S. §143-215.1) S.L. 2011-343 (Amendment to G.S. §143-214.11) S.L. 2009- 337 (Amendment to G.S. §143-214.11) Administrative Rules: 15A NCAC 02B .0202 Definitions 15A NCAC 02B .0223 Nutrient Sensitive Waters 15A NCAC 02B .0237 Best Management Practice Cost-Effectiveness Rate 15A NCAC 02B .0240 Nutrient Offset Payments 15A NCAC 02B .0269 Riparian Buffer Mitigation Fees to the NC Ecosystem Enhancement Program 15A NCAC 02B .0274 Nutrient Offset Payment Rates for the NC Ecosystem Enhancement Program 15A NCAC 02B .0301 Stream Classifications 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 .0232 Basin Nutrient Reduction Goal 15A NCAC 02B .0233 Protection and Maintenance of Existing Riparian Buffers 15A NCAC 02B .0234 NPDES Wastewater Discharge Requirements 15A NCAC 02B .0235 Basinwide Stormwater Requirements 15A NCAC 02B .0236 Agricultural Nitrogen Loading Reduction 15A NCAC 02B .0238 Agricultural Nitrogen Reduction Strategy 15A NCAC 02B .0239 Nutrient Management 15A NCAC 02B .0241 Delegation of Authority for the Protection and Maintenance of Existing Riparian Buffers 15A NCAC 02B .0242 Mitigation Program for Protection and Maintenance of Riparian Buffers Neuse River Basin Buffer and Falls Lake Nutrient Strategy General Statutes and Session Laws: G.S. §143-214.5 Water Supply Watershed Protection S.L. 2012-187 S.L. 2011-394 S.L. 2009-486 S.L. 1998-221 (Part I) Administrative Rules: 15A NCAC 02B .0233 Protection and Maintenance of Existing Riparian Buffers 15A NCAC 02B .0241 Delegation of Authority for the Protection and Maintenance of Existing Riparian Buffers 15A NCAC 02B .0242 Mitigation Program for Protection and Maintenance of Riparian Buffers 15A NCAC 02B .0275 Purpose and Scope 15A NCAC 02B .0276 Definitions 15A NCAC 02B .0277 Stormwater Management for New Development 15A NCAC 02B .0278 Stormwater Management for Existing Development 15A NCAC 02B .0279 Wastewater Discharge Requirements 15A NCAC 02B .0280 Agriculture 15A NCAC 02B .0281 Stormwater Requirements for State and Federal Entities 15A NCAC 02B .0282 Options for Offsetting Nutrient Loads Jordan Buffer and Jordan Water Supply Nutrient Strategy General Statutes and Session Laws: G.S. §143-214.5 Water Supply Watershed Protection) S.L. 2012-201 S.L. 2012-187 S.L. 2009-216 S.L. 2009-484 S.L. 2006-259 (Section 31(a)) S.L. 2005-190 S.L. 1999-329 (part of G.S. 143B-282) Administrative Rules: 15A NCAC 2B .0262 Purpose and Scope 15A NCAC 2B .0263 Definitions 15A NCAC 2B .0264 Agriculture 15A NCAC 2B .0265 Stormwater Management for New Development 15A NCAC 2B .0267 Jordan Water Supply Nutrient Strategy 15A NCAC 2B .0268 Mitigation for Riparian Buffers 15A NCAC 2B .0270 Wastewater Discharge Requirements 15A NCAC 2B .0271 Stormwater Requirements for State and Federal Entities 15A NCAC 2B .0272 Fertilizer Management 15A NCAC 2B .0273 Options for Offsetting Nutrient Loads Nutrient Offset Program & Buffer Mitigation Program Authorities for UMBI/MBI Updated 03/26/2013 Tar-Pamlico River Basin Buffer and Tar-Pamlico Nutrient Strategy Session Laws: S.L. 2011-394 S.L. 1999-329 (part of G.S. 143B-282) Administrative Rules: 15A NCAC 2B .0229 Nutrient Offset Payments for Non-Tar-Pamlico Basin Association Members 15A NCAC 2B .0255 Agricultural Nutrient Loading Goals 15A NCAC 2B .0256 Agricultural Nutrient Control Strategy 15A NCAC 2B .0257 Nutrient Management 15A NCAC 2B .0258 Basinwide Stormwater Requirements 15A NCAC 2B .0259 Protection and Maintenance of Existing Riparian Buffers 15A NCAC 2B .0260 Mitigation Program for Protection and Maintenance of Existing Riparian Buffers 15A NCAC 2B .0261 Delegation of Authority for the Protection and Maintenance of Existing Riparian Buffers *Credits shown below are only for mitigation credits approved by the MBI, BPDP, and As-Built. Sale/ Release Date Purchaser or % Credit Release Project w/ HUC #Gov't Requiring Square Feet Acres Square Feet Acres Square Feet Acres Credits Released/Available to Bank Credits Debited/Sold From Bank Buffer Credit Balance Eco Terra, LLC Neuse 01 UBI Little Timber HUC 03020201, excluding Falls Watershed, Buffer Credit Ledger Date Last Updated: DWR Bank Parcel Project #: 2023-0137 V1 Total Credits Released To Date: *Credits shown below are only for mitigation credits approved by the MBI, BPDP, and As-Built. Sale/ Release Date Purchaser or % Credit Release Project w/ HUC #Gov't Requiring Pounds of Nitrogen Acres Pounds of Nitrogen Acres Pounds of Nitrogen Acres Credits Released/Available to Bank Credits Debited/Sold From Bank Nutrient Credit Balance Eco Terra, LLC Neuse 01 UBI Little Timber HUC 03020201, excluding Falls Watershed, Nitrogen Credit Ledger Date Last Updated: DWR Bank Parcel Project #: 2023-0137 V1 Total Credits Released To Date: Table 1. Little Timber, DWR# 2023-0135, Project Credits Project Area N Credit Conversion Ratio (ft2/pound) P Credit Conversion Ratio (ft2/pound) Credit Type Location Subject? (enter NO if ephemeral or ditch 1) Feature Type Mitigation Activity Min-Max Buffer Width (ft)Feature Name Total Area (ft2) Total (Creditable) Area of Buffer Mitigation (ft2) Initial Credit Ratio (x:1)% Full Credit Final Credit Ratio (x:1) Convertible to Riparian Buffer? Riparian Buffer Credits Convertible to Nutrient Offset? Delivered Nutrient Offset: N (lbs) Delivered Nutrient Offset: P (lbs) — — — Yes — Yes — — Yes — Yes — — No —Yes — — No — Yes — — No — Yes — — No — Yes — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — — Totals (ft2):0 0 0.000 0.000 0.000 Total Buffer (ft2):0 0 Total Nutrient Offset (ft2):0 N/A Total Ephemeral Area (ft2) for Credit:0 0 Total Eligible Ephemeral Area (ft2):0 0.0%Ephemeral Reaches as % TABM Enter Preservation Credits Below Total Eligible for Preservation (ft2):0 0.0%Preservation as % TABM Credit Type Location Subject? Feature Type Mitigation Activity Min-Max Buffer Width (ft)Feature Name Total Area (sf) Total (Creditable) Area for Buffer Mitigation (ft2) Initial Credit Ratio (x:1)% Full Credit Final Credit Ratio (x:1) Riparian Buffer Credits Buffer — — — — — Preservation Area Subtotals (ft2):0 0 Square Feet Credits 0 0.000 0 0.000 0 0.000 0 0.000 Square Feet Credits Nitrogen:0.000 Phosphorus:0.000 Neuse 03020201 - Outside Falls Lake 19.16394 N/A Restoration: Enhancement: Mitigation Totals 0 TOTAL AREA OF BUFFER MITIGATION (TABM) TOTAL NUTRIENT OFFSET MITIGATION Mitigation Totals Nutrient Offset: Preservation: Total Riparian Buffer: 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