EBX_SelmaMill_AuditReview

Good Afternoon,

DWR has finalized the audit for Nutrient Offset and Buffer Credit Sales for the Selma Mill (DWR ID 2014-0705v2) mitigation bank from 1/1/2021 to 12/31/2022 based on the most recent ledger
submitted to DWR which is attached and dated 7/3/2024. The audit results are provided below and require further action from EBX-Neuse 1, LLC:

Nitrogen Nutrient Offset Credit Letter

1. Compliance Issue: The following transactions were a Partial sale as indicated by the MCTC but is not shown as a Partial credit sale on the credit ledger:

* 7/2/2021 – Thanksgiving Elementary
* 3/10/2022 – Towerview Court

* Action Required

* Add “partial” along with the project name.

2. Compliance Issue: Credit Release for Task 8 has incorrect date of release.

* Action Required:

* Change Task 8 credit release transaction date to 12/22/2021 as stated on the credit release letter.

3. Compliance Issue: The Garner buydown letter for the 2/7/2022 Lofts at Aversboro provided to DWR is not an official buydown letter as it was an email sent by a consultant.

* Action Required:

* Request an official buydown letter from Garner that has an appropriate letterhead and authorizing signature.

* If a buydown letter is not received within 15 calendar days from receipt of this email, EBX will be required to issue a FULL REFUND for the Lofts at Aversboro. The process to issue
a FULL Refund is outlined below:

1. Add a line item to the Nitrogen nutrient offset ledger dated 7/22/2024. Add the purchaser Name. For Project Name, enter: Lofts at Aversboro FULL REFUND for non-compliant credit
sale dated 2/7/22. Under the “CREDITS RELEASED/AVAILABLE” column, enter 6.54 lbs and update the credit balances accordingly.
2. Create a new Mitigation Credit Transfer Certificate w/ “REFUND” under the heading, dated 7/22/2024 to the permittee, documenting the FULL REFUND of phosphorus nutrient offset credits
due to not having an approved stormwater management plan approval letter. Indicate on the MCTC, that the 6.54 lbs of Nitrogen nutrient offset credits can be purchased upon receipt
of an approved stormwater management plan approval letter (aka Buydown letter)

* Once you have finalized the new MCTC notifying the refund, send it to the permittee, their consultant (if applicable), the DWR contact and to me along with the corrected Credit Ledger.

Buffer Credit Ledger

1. Compliance Issue: The follow transactions were a Partial sale as indicated by the MCTC but is not shown as a Partial credit sale on the credit ledger:

* 10/4/2021– Georgia’s Landing Subdivision
* Action Required

* Add “partial” along with the project name.

2. Compliance Issue: The following transactions need to include the DWR# related to the buffer authorization:

* 12/22021 – 1113 Brucemont Drive
* 4/14/2022 – Comet Raleigh Apartments
* Action Required:

* Add DWR# along with project name

3. Compliance Issue: Credit Release for Task 8 has incorrect date of release.

* Action Required:

* Change Task 8 credit release transaction date to 12/22/2021 as stated on the credit release letter.

4. Compliance Issue: According to Buffer Authorization for Eastfield Crossing/Providence Boulevard (DWR#20201750), there is no mitigation required, therefore no buffer credits needed
to be purchased. This transaction is non-compliant with the MBI and will need to be refunded.

* Action Required:

* Add a line item to the buffer restoration ledger dated 7/22/2024. Add the purchaser Name. For Project Name, enter: Eastfield Crossing/Providence Boulevard (DWR#20201750) – FULL
REFUND for non-compliant credit sale dated 3/28/22. Under the “CREDITS RELEASED/AVAILABLE” column, enter 7,950 ft2 and update the credit balances accordingly.
* Create a new Mitigation Credit Transfer Certificate w/ “REFUND” under the heading, dated 7/22/2024 to the permittee, documenting the FULL REFUND of buffer credits due to not needing
mitigation for buffer impacts since impacts were under mitigation thresholds.

Once you have finalized the new MCTC notifying the refund, send it to the permittee, their consultant, the DWR contact (Rob Ridings) and to me along with the corrected Credit Ledger.

Once all action items are completed and a summary of all responses to the comments and actions required are provided to DWR, we can finalize the audit for this Bank.

Let me know if you have any questions.

Thank you,

Blake Hartshorn (he/him)

Mitigation Specialist, Division of Water Resources

North Carolina Department of Environmental Quality

Office: [phone]

Cell: [phone]

[e-mail] <mailto:[e-mail]>