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20180181 Ver 3_Signed MBI- Scarborough Buffer_20191118AGREEMENT TO ESTABLISH THE SCARBOROUGH MITIGATION BANKING INSTRUMENT IN THE NEUSE RIVER BASIN FOR NUTRIENT OFFSET AND RIPARIAN BUFFER MITIGATION CREDITS PURSUANT TO THE NEUSE NUTRIENT MANAGEMENT STRATEGY TABLE OF CONTENTS I. PREAMBLE.........................................................................................................................2 11. LOCATION AND GEOGRAPHIC SERVICE AREA ....................................................... 2 III. AUTHORITIES................................................................................................................... 3 IV. ESTABLISHMENT OF BANK PARCEL.......................................................................... 3 V. BUFFER MITIGATION & NUTRIENT OFFSET PLAN ................................................. 5 VI. POST CONSTRUCTION DOCUMENTATION FOR THE BANK PARCEL ................. 7 VIL CALCULATION OF MITIGATION CREDITS FOR THE BANK PARCEL ................ 10 VIII. CREDIT RELEASE SCHEDULE.................................................................................... 11 IX. PROCEDURE FOR DEBITING AND CREDITING MITIGATION CREDITS ............ 12 X. BANK PARCEL CLOSURE............................................................................................. 13 XI. GENERAL PROVISIONS FOR THE BANK PARCEL .................................................. 14 ATTACHMENTS A — Division of Water Resources Authority Document B — Rule Text 15A NCAC 02B .0240 C — Rule Text 15A NCAC 02B .0295 (Effective November 1, 2015) D — Buffer Ledger Template E — Nutrient Offset Ledger Template 1 I. PREAMBLE This Mitigation Banking Instrument ("Instrument") regarding the establishment, use, operation, and maintenance of the Scarborough Nutrient Offset and Buffer Mitigation Bank Parcel ("Bank Parcel") to provide Neuse Riparian Buffer mitigation credits ("Riparian Buffer Credits") and Neuse Nutrient Strategy nutrient load reduction credit ("Nutrient Offset Credits") is made and entered into by and among Water & Land Solutions, 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 .0240 and the Consolidated Mitigation Rule 15A NCAC 02B .0295, which became effective on November 1, 2015 (Attachments B and C). The purpose of the Bank is: A. To restore riparian vegetation adjacent to streams with the intent to improve water quality within the Neuse River Basin (8-digit HC 03020202). B. To convert agricultural land uses within riparian areas adjacent to streams into a dense, hardwood vegetated state with the intent to significantly reduce nutrient loadings associated with agricultural practices into streams and ditches. C. To provide mitigation and sell any resulting Riparian Buffer Credits and/or Nutrient Offset Credits to third parties in the Neuse River Basin, for development (both existing and proposed), or to offset NPDES-permitted wastewater nutrient sources, requiring such mitigation or offset. II. LOCATION AND GEOGRAPHIC SERVICE AREA A. The Geographic Service Area ("GSA") is the designated area wherein a Bank can reasonably be expected to sell Riparian Buffer Credits and/or Nutrient Offset Credits for impacts due to development activities. B. The GSA for 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") 03020202. C. Sale or transfer of Riparian Buffer Credits shall be limited to the Neuse River Basin (8- digit HUC 03020202), unless otherwise authorized by the DWR or delegated local government in accordance with 15A NCAC 02B .0295. D. Sale or transfer of Nutrient Offset Credits shall be limited to Neuse River Basin (8-digit HUC 03020202) in accordance with 15A NCAC 02B .0240, unless otherwise authorized by the DWR in accordance with Session Law 2019-86. E. The project is comprised of two parcels of land in Wayne County, NC and is currently used for corn and soybean production. The land use is a combination of forested and non- 2 forested cropland and is accessed from Casey Mill Road in Goldsboro, NC. The project is located at 35.3211000 N and 77.98972222 W. F. Unnamed tributaries to the Neuse River are the receiving bodies of water for stormwater runoff from this parcel. The Neuse River is classified by DWR as Nutrient Sensitive Waters (NSW) and Class C Waters. III. AUTHORITIES A. The Bank 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 ("State") statutes and rules for the Neuse Nutrient Sensitive Waters Management Strategy. C. The selling of mitigation credits shall be consistent with approved North Carolina ("State") statutes and rules for the Neuse Nutrient Sensitive Waters Management Strategy. D. Mitigation activities proposed under this Instrument and the corresponding Buffer Mitigation & Nutrient Offset Plan ("Plan") to generate Riparian Buffer Credits and Nutrient Offset Credits shall be consistent with State statutes and rules for the Neuse Nutrient Sensitive Waters Management Strategy that are in place at the time a complete Plan is submitted to DWR. IV. ESTABLISHMENT OF BANK PARCEL A. In accordance with 15A NCAC 02B .0295 and 15A NCAC 02B .0240, DWR has provided a "Site Viability Letter" for the Bank Parcel proposed under this Instrument. The Site Viability Letter is not an approval of the site to generate mitigation 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 mitigation credits. A Site Viability Letter that applies to this Bank Parcel was issued by DWR on March 29, 2019 and a letter for Scarborough Phase 2 (the second parcel) was issued on July 10, 2019. This is not a second phase of the Bank; however, this parcel was assessed after the initial viability letter was issued. The buffer mitigation and nutrient offset viability will be based on proposed site conditions. B. The Bank Parcel proposed for inclusion under this Instrument shall require a Buffer Mitigation & Nutrient Offset Plan ("Plan") be submitted to, and approved by, the DWR prior to use of the Bank Parcel for mitigation purposes or for any sale or transfer of any associated credits. The contents of the Plan are provided in Section V. 3 C. This Bank Parcel is also part ofthe WLS Neuse 02 Umbrella Mitigation Bank, Scarborough Mitigation Site, USACE Action ID #SAW-2017-02527 for stream and wetland mitigation. This mitigation plan has been submitted to the Interagency Review Team (IRT) for review and approval, and the Plan is an appendix in this mitigation plan. D. The Plan will be placed on public notice and made available for public commenting for 15 calendar days. E. All of the Riparian Buffer Credits on this Bank Parcel will be generated along restored stream channels that are proposed for stream mitigation and will be a minimum of 50 feet. Stream Mitigation Plans will be submitted to the IRT under the WLS Neuse 02 Umbrella Mitigation Bank, Scarborough Mitigation Site referenced in "C" in this section. Additionally, all activities conducted within riparian buffers and adjacent riparian areas for purposes of generating Riparian Buffer Credits and Nutrient Offset Credits will be conducted in concurrence with stream mitigation activities. Riparian Buffer Credit may be achieved through restoration of DWR riparian buffers as they are defined in 15A NCAC 02B .0233, and other riparian areas as allowed per 15A NCAC 02B .0295 (n) and (o) on the Bank Parcel. Riparian Buffer Credits are only attainable if the width of the restoration site, enhancement site, and preservation site is at least 20 feet from top of bank. F. The Bank Parcel is intended to provide Neuse Riparian Buffer mitigation as follows: 1. Planting hardwood trees on a Restoration Site as defined in 15A NCAC 02B .0295(b) adjacent to mitigated streams. 2. Planting hardwood trees on a Restoration Site as defined in 15A NCAC 02B .0295(o) adjacent to mitigated coastal headwater streams. 3. Diffuse flow will be maintained onsite to the maximum extent practicable. The Buffer Interpretation/Clarification Memo #2008-019 may be applied where maintenance of diffuse flow onsite is unattainable. G. Nutrient Offset Credit may be achieved through restoration of the riparian areas adjacent to streams on the Bank Parcel where agriculture is the predominant land use. The streams onsite drain directly to the Neuse River. The width of the restoration area begins at the most landward limit of the top of bank or the rooted herbaceous vegetation and extends landward a minimum of 50 feet and a maximum of 200 feet on all sides of the surface waters. H. The Bank Parcel is intended to provide Nutrient Offset Credits as follows: 1. Converting agricultural land uses within riparian areas to non-agricultural land uses by placing a conservation easement around riparian areas along streams. 2. Planting hardwood trees and shrubs on a Restoration Site as defined in 15A NCAC 02B .0295 (b) adjacent to mitigated streams where agriculture has been determined to be the predominant land -use. I. The total area of riparian buffer and/or nutrient offset mitigation on the Bank Parcel is expected to be 32.01 acres. V. BUFFER MITIGATION & NUTRIENT OFFSET PLAN A. The Scarborough Buffer Mitigation & Nutrient Offset Plan ("Plan") submitted under this Instrument shall be submitted to DWR for review and must be approved by DWR prior to any construction on the Bank Parcel. The Plan must describe any changes that have occurred to the site between the date of the Site Viability Letter and the date the Plan is submitted to DWR. The Plan shall include detailed information consistent with the sections below concerning; 1) site location (8-digit HUC is required); 2) existing conditions with current photos; 3) proposed buffer mitigation and nutrient offset activities including a detailed vegetation plan; 4) monitoring and maintenance plans; 5) financial assurances; 6) associated buffer mitigation/nutrient credit calculations, which shall include credit generation, service area, and accounting as appropriate for each regulatory authority; 7) stream buffer determination letter from DWR, and 8) Site Viability Letter from DWR; 9) a figure depicting the proposed stream and wetland mitigation areas; and 10) service area figure for each mitigation type proposed under this Instrument. B. The Sponsor will obtain all applicable federal, state, and local documentation, permits, or authorizations needed to construct and maintain the Bank Parcel. This Instrument does not qualify as, or substitute for, such documentation, permit, or authorization. C. Any restoration activities or proposed construction within the riparian buffers and other riparian areas on the Bank Parcel to produce Riparian Buffer Credit or Nutrient Offset Credit must be approved by DWR by way of a written approval of the Plan prior to implementation. The failure of the Sponsor to comply with this requirement may result in a revised or reduced credit release schedule for that specific mitigation site. All restoration and enhancement activities must be performed in concurrence with any stream or wetland mitigation activities and not before. D. Requests for deviation from the approved Plan must be submitted to DWR in writing. Written approval from the DWR must be received prior to implementing any deviation from the approved Plan. Property Disposition & Long -Term Management for Each Bank Parcel E. Prior to the release of any credits, the Sponsor shall acquire a permanent conservation easement at the Wayne County Register of Deed's office that is sufficient to ensure protection, operation and maintenance of restored riparian buffers and other riparian areas for the duration specified in the approved Plan. 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 and United States Army Corps of Engineers (USAGE) 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 and the USACE. 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 prior to the end of the fourth -year monitoring period. A land trust must be certified under 501(c)(3) of the Internal Revenue Code. 1. 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 Plan. Financial Assurances for the Bank Parcel J. Following approval of the Plan, the Sponsor shall provide Performance/Maintenance Bonds from a surety company that is rated no less than an "A-" as rated by A.M. Best, to construct the site according to the approved Plan. 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 each Performance Bond shall be 100% of the estimated cost for implementation of the mitigation activities of the Bank Parcel as described in the approved Plan. No bond shall be less than $150,000.00 to cover construction costs. L. Alternatively, in lieu of posting a Performance Bond, the Sponsor may elect to construct the project prior to the first credit release. M. Once DWR has released all credits for completion of all the items listed below, then the Bank Sponsor will be released from its performance obligations under the performance bond required in Item J and K of this section: 1. Instrument and Plan Approved by DWR, Conservation Easement Recorded, Financial Assurance Posted; 2. Mitigation Site Earthwork and Planting and Installation of Monitoring Devices Completed; 3. As -Built Report as described in Section VI has been received by DWR; and 4. DWR has submitted a written approval of the As -Built Report N. To comply with this section, DWR must be the Obligee on all performance bonds. Co VI. POST CONSTRUCTION DOCUMENTATION FOR THE BANK PARCEL As -Built Report A. The Sponsor agrees to perform all necessary work, in accordance with the provisions of this Instrument and corresponding Plan, 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. When all stream and wetland mitigation activities have commenced, the Sponsor will submit an as -built plan and report for the Bank Parcel within 30 calendar days after completing the establishment of the riparian buffer mitigation and nutrient offset areas. The as -built report will describe any deviation from the approved Plan and will document all the following: 1. Buffer restoration and planting details, invasive species control, monitoring device locations, vegetation plot locations, photo point locations, surface and groundwater elevations, as appropriate. 2. Provide confirmation that the construction of all stream and wetland mitigation activities have been completed and all applicable permits have been obtained by the Sponsor. Boundary Survey of the conservation easement area, signed and sealed by a licensed surveyor, including an enumeration of the final mitigation areas for riparian buffer and/or nutrient offset mitigation credits in both square feet and acres. 4. As -built map of the mitigation area showing where riparian restoration was performed and any deviations to the Bank Parcel from what was approved in the Plan. 5. As -Built map of the stream and/or wetland mitigation areas. 6. Aerial map of the mitigation area that was included in the approved Plan. Financial Assurance for the Bank Parcel C. After completion of the restoration/construction 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 Plan and As -Built Report applicable 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. D. A Performance/Maintenance Bond shall be secured each year for a minimum of seven years, and until DWR has released all mitigation credits to the Bank Sponsor. Upon written approval by DWR, the bond may be lowered after year five based on the adjusted cost to complete the monitoring. No bond shall be less than $100,000 initially, to cover monitoring and maintenance costs. E. Once DWR has released all credits for completion of Tasks 1-10 according to the credit release schedule in Section VIII, the Bank Sponsor can be released from its performance obligations under the performance bond required in "C-D" of this Section F. To comply with this section, DWR must be the Obligee on all perfonnance bonds. Monitoring and Maintenance Reports G. The Sponsor shall monitor the Bank Parcel as described in the Plan 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 the nutrient offset areas and a minimum of seven consecutive years for the coastal headwater buffer restoration areas. H. Performance Standards for Vegetation: Native hardwood trees or native hardwood tree and shrub species should be planted at a density sufficient to provide 260 stems per acre at the end of five years. A minimum of four (4) native hardwood trees or four (4) native hardwood tree and shrub species must be planted. No one species shall be greater than 50% of the planted stems. A list of species for planting will be detailed in the Plan for approval. Native hardwood tree volunteer species may be included to meet performance standards as determined by the DWR. I. Performance Standards for Vegetation along Coastal HW Streams: The performance standards for riparian restoration areas adjacent to coastal headwater stream restoration will be 260 stems per acre at the end of five years and 210 hardwood trees per acre at the end of seven years. A minimum of four (4) native hardwood trees or four (4) native hardwood tree and shrub species must be planted. No one species shall be greater than 50% of the planted stems. A list of species for planting will be detailed in the Plan for approval. Native hardwood tree volunteer species may be included to meet performance standards as determined by the DWR. J. Performance Standards for Coastal HW Streams: The performance standards for the coastal headwater streams will be detailed in the Stream Mitigation Plan that is referenced in Item C of Section IV of this Instrument. Performance standards must be met each monitoring year for a minimum of seven years to comply with 15A NCAC 02B .0295 (o)(2) for buffer mitigation. Confirmation from the USACE that performance standards have been met will need to be provided to DWR by the Bank Sponsor prior to issuance of credit releases for riparian buffer credit along the coastal headwater streams. K. A "stem" means a woody seedling, sapling, shrub or tree, no less than 10 centimeters in height. L. If the performance standards of the vegetation are not met, supplemental plantings may be required. Supplemental plantings will be utilized until the required densities have been achieved and maintained for five years on the nutrient offset areas and seven years on the coastal headwater buffer restoration areas. Bank Parcel maintenance, such as ensuring diffuse flow, managing invasive species, and pest control will be included in the Plan. M. If the performance standards of the coastal headwater streams detailed in the Stream Mitigation Plan are not met, DWR may withhold riparian buffer credit releases until the USACE confirms that performance has been achieved. N. Monitoring Reports for Riparian Buffer Credit or Nutrient Offset Credit: Reporting criteria of the vegetation shall be based on the Carolina Vegetation Survey (CVS) — EEP Protocol for Recording Vegetation Level 2 Plot Sampling only version 4.0 or any updated versions of this protocol in place on the date of acceptance of the Plan. In addition, pertinent reporting criteria necessary to exhibit performance standards for coastal headwater streams shall be included where necessary. The Sponsor shall submit to the DWR an annual monitoring report no later than December 31 of each year for a minimum of seven consecutive years after the first full growing season. This report will describe the conditions of each Bank Parcel, including an evaluation of the performance standards of the vegetation contained within the approved Plan. Reports shall contain the following: 1. A U.S. Geological Survey map showing location of the Bank Parcel; 2. A detailed narrative with supporting photos summarizing the condition of the Bank Parcel along with any maintenance or remediation performed that year; A map, survey, or other figure showing locations of sampling plots, permanent photo points, location of transects, etc.; 4. Monitoring data, including specific vegetative counts showing that the trees or tree and shrub species planted are meeting performance standards and updated photographs; 5. Detailed summary regarding the status of the performance standards for coastal headwater streams onsite where riparian buffer credit is being generated; 6. A copy of the most recent Bank credit/debit ledgers; 7. Corresponding verification letters from designated local governments upon request; 8. Corresponding Mitigation Transfer Certificates upon request; and 9. Proof of performance bond renewal to cover the next monitoring year (if applicable). Z Contingency Plans/Remedial Actions 0. In the event the Bank Parcel fails to achieve the performance criteria described in this Instrument, the approved Plan, and the Final Mitigation Plan, 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 or credit release schedule. VII. CALCULATION OF MITIGATION CREDITS FOR THE BANK PARCEL Riparian Buffer Credits A. All Riparian Buffer Credits shall be determined based on the ratios and percentages provided in 15A NCAC 02B .0295 (m) and (n). B. Riparian buffer restoration on this Bank Parcel, as described in 15A NCAC 02B .0295 (n) and (o) and defined in 15A NCAC 02B .0295 (b) that is performed on agriculture lands within the Bank Parcel, may be used for either Riparian Buffer Credit or Nutrient Offset Credit, but not both. C. Riparian buffer restoration on this Bank Parcel, as described in 15A NCAC 02B .0295 (o) (2) may only be used for Riparian Buffer Credit. D. Riparian Buffer Credit is defined as one (1) buffer credit per one square foot or 43,560 buffer credits per one acre. E. Pursuant to 15A NCAC 02B .0295 (1)(6)(B), "Buffer mitigation credit shall not be generated within wetlands that provide mitigation credit required by 15A NCAC 02H .0506". Nutrient Offset Credits F. All Nutrient Offset Credits will be determined by applying the applicable ratio as provided in 15A NCAC O2B .0295 (m) for a Restoration Site. All riparian areas proposed for Nutrient Offset Credits must be a minimum of fifty (50) feet from the top of the stream banks on land noted in a Site Viability Letter as agriculture. G. Nutrient Abatement of Restored Riparian Area/Buffers on agricultural land: The Sponsor and DWR agree to the following: 1. The pounds of nitrogen offset per acre of restored riparian areas/buffers shall be 2,273.02 pounds per acre. H. The Sponsor and DWR agree the methodology and calculations for determining nitrogen reduction, associated with restoration of riparian areas as described in Section IV of this 10 Instrument, shall be fixed as part of the approval of this Instrument, with the fixed amount not changing during the Bank Parcel Development or credit release schedule for each Bank Parcel unless the viability letter for that Bank Parcel has expired. VIII. CREDIT RELEASE SCHEDULE A. Upon submittal of all appropriate documentation by the Sponsor, and subsequent approval by DWR, it is agreed that the mitigation credits associated with the Bank Parcel will become available for sale to a third party in accordance with the Credit Release Schedule below. Table I - Credit Release Schedule for Riparian Buffer and Nutrient Offset Credits % Riparian Buffer Credit Release within % Nutrient Coastal Offset Credit Headwater Task Project Milestone Release Areas Instrument and Plan Approved by DWR, Conservation Easement 1 Recorded and Assigned*, Financial Assurance Posted, and Draft 25 None Stream & Wetland Mitigation Plan Approved by IRT 2 Mitigation Site Earthwork, Planting and Installation of Monitoring Devices Completed and all Applicable Permits Obtained 20 None 3 Monitoring Financial Assurance Posted and Approval of As -Built Report 10 30 4 Monitoring Report #1 Approved by the DWR** & financial assurance renewed 10 10 Monitoring Report #2 Approved by the DWR** & financial 5 assurance renewed 10 10 6 Monitoring Report #3 Approved by the DWR** & financial - assurance renewed 10 7 Monitoring Report #4 Approved by the DWR** & financial - assurance renewed 5 Monitoring Report #5 Approved by the DWR**, financial 8 assurance renewed for coastal headwater buffer areas, and final site 10 20 visit by DWR has been conducted for nutrient offset areas 9 Monitoring Report #6 Approved by the DWR** and financial assurance renewed for coastal headwater buffer areas N/A 10 10 Monitoring Report #7 Approved by the DWR** and final site visit b DWR has been conducted for coastal headwater buffer areas N/A 10 Total 1 100% 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 Plan and corresponding Stream & Wetland Mitigation Plan where applicable B. DWR may modify 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. 11 IX. PROCEDURE FOR DEBITING AND CREDITING MITIGATION CREDITS Credit Ledgers A. The Bank Sponsor shall maintain a credit ledger for each mitigation type for the Bank Parcel under this Instrument (Riparian Buffer Restoration Credits, Coastal Headwater Restoration Riparian Buffer Credits, and Nitrogen Nutrient Offset Credits). Credit ledgers shall provide the accounting for buffer mitigation credits in square feet and acres, and Nutrient Offset Credits in pounds and acres. B. Each credit ledger shall be submitted on a separate 8 '/2 in X 11 in spreadsheet with legible font style and font size. All ledgers shall be submitted using the templates provided in Attachments D and E of this Instrument or any updated versions to these templates as provided by DWR. Credit Processing C. Riparian Buffer Credits generated on this Bank Parcel will be used to provide mitigation for authorized riparian buffer impacts within the 03020202 HUC of the Neuse River Basin according to 15A NCAC 02B .0295 (g). D. Nutrient Offset Credits generated on the Bank Parcel will be used to offset nitrogen nutrient loads within the 03020202 HUC of the Neuse River Basin, in accordance with 15A NCAC 02B .0240. E. 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 top of stream bank, as defined in 15A NCAC 02B .0295 (b) and described in 15A NCAC 02B .0295 (n) and 15A NCAC 02B .0295 (o) can be converted and transferred 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. F. Riparian Restoration credits generated along outer Coastal Plain Headwater stream mitigation on this Bank Parcel are not transferrable into nutrient offset credits. G. The Bank Sponsor shall obtain verification of nutrient offset need from a designated local government in the 03020202 HUC of the Neuse River Basin or from DWR through an approved NPDES permit for wastewater nutrient sources, prior to debiting Nutrient Offset Credits from the Bank Parcel. H. The Bank Sponsor shall obtain verification of riparian buffer mitigation required from a delegated local government in the 03020202 HUC of the Neuse River Basin or DWR prior to debiting Riparian Buffer Credits from the Bank Parcel. 12 I. All credit and debit transactions under this Instrument shall be accurately depicted in the credit ledgers. The Bank Sponsor shall provide DWR up-to-date credit ledgers electronically for each Bank Parcel by the tenth (I01h) of each month. At a minimum and only upon request, DWR shall receive a hard copy of up-to-date 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 J. All credit sales will include a Mitigation Credit Transfer Certificate ("Certificate") that is required to be provided to the buyer of Riparian Buffer and/or Nutrient Offset credits, that will include, at a minimum, the following information: 1. Bank Details: (1) sponsor, (2) bank parcel name as it appears in this Instrument, (3) DWR project number for the Plan. 2. Credit Details: (1) date of receipt, (2) identify if full or partial payment, (3 — when applicable) amount of nitrogen credits purchased in pounds and confirmation from the designated local government of the amount required, and (4 — when applicable) amount of Riparian Buffer Credits purchased in square feet and the confirmation from DWR or the local government of the amount required. 3. Permitted Project Details: (1) project name as it appears on DWR or local government permits and/or certifications, (2) 8-digit F UC, (3) river basin, (4) nutrient strategy applicable to the project, (5 — when applicable) designated local government requiring Nutrient Offset Credits, and/or (6) DWR project authorization/ ID number or delegated local government requiring Riparian Buffer Credits for this project. K. 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 shall be identified as the event when DWR relieves the Sponsor of all of its responsibilities to the Bank Parcel and there are no mitigation credits left to sell. DWR must acknowledge Bank Parcel Closure in writing directly to the Sponsor. B. Bank Parcel Closure shall commence only after all of the following events have occurred: 13 1. Transfer or assign the conservation easement and all of its interests, in perpetuity, to a land trust or stewardship program as described in Section V of this Instrument. 2. All seven years of monitoring completed, and all monitoring reports submitted and approved by DWR. 3. All credits have been released and debited and updated ledgers showing zero credit balances have been submitted and approved by DWR. XI. GENERAL PROVISIONS FOR THE BANK PARCEL A. Upon the presentation of proper credentials, and during normal business hours, the Sponsor and the landowner shall grant permission to the Director of DWR, or an authorized representative of the Director of DWR, to enter the property containing the Bank Parcel. B. Amendments: This Banking Instrument may be amended or modified only with written approval of all signatory parties, including the USACE if it is applicable to the amendment. C. Any transfer of the Sponsor's rights or obligations outlined in this Instrument or any other agreement referenced in this Instrument to a third party must be approved by DWR prior to the transfer. D. Force Majeure: After 100% of all of the credits have been released according to the credit release schedule in 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 mitigation to cover credits that were sold prior to the occurrence of the event. Such remedial action shall be taken by the Sponsor only to the extent necessary and appropriate, as determined by DWR and the Sponsor. DWR must concur in writing that a force majeure event has occurred for this provision to apply. F. Oversight: Actions taken by DWR may include, but are not limited to, the following: 1. Site visits, 2. Issuance of Site Viability Letters, 3. Plan review and approval of items listed in Section V of this Instrument, 4. As -Built Report review and approval of items listed in Section VI of this Instrument, 5. Monitoring Report review and approval of items listed in Section VI of this Instrument, 6. Credit Ledger review and approval of items listed in Section IX of this Instrument, 14 7. Certificate review of items listed in Section IX of this Instrument and cross analysis to credit ledgers and, 8. Information requests, file reviews and audits Reports, ledgers, files and other information shall be made available to DWR upon request, unless otherwise specified in this or any other document. G. Validity of the Banking Instrument: This Instrument will become valid on the date of the last party's signature. H. Specific Language of Banking Instrument Shall Be Controlling: To the extent that specific language in this document changes, modifies, or deletes terms and conditions contained in those documents that are incorporated into the Instrument by reference, and that are not legally binding, the specific language within the Instrument shall be controlling. I. Any disputes over decisions regarding this Instrument, shall be referred to the Director of DWR for a decision. The Director's decision is subject to review as provided in Articles 3 and 4 of G.S. 150B. J. This Agreement shall be binding upon the parties and is entered into knowingly, intelligently, and voluntarily. K. Notices: All notices and other communications which may be or are required to be given or made by any party to the other shall be in writing and shall be deemed to have been properly given and received on the date delivered in person 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 Bank Sponsor: Water & Land Solutions, LLC Attention: Mr. Adam McIntyre 7721 Six Forks Road, Suite 130 Raleigh, North Carolina 27615 If to DWR: NC Division of Water Resources — 401 & Buffer Permitting Branch Attn: Nutrient Offset Banking Coordinator 1617 Mail Service Center Raleigh, NC 27699-1617 L. Applicable Law: This Agreement shall be construed under the laws of the State of North Carolina. 15 WATER & LAND SOLUTIONS, LLC By: Adam McIntyre (Print) (Signature) Title: (f 1C C) Date: A) v - / 4j NORTH CAROLINA DEPARTMENT OF ENVIRONMENTAL QUALITY -DIVISION OF WATER RESOURCES By: L i vaA r 9r cr (Print) d� V (Signature) Title: a i Date: 11 / I rr/m 16 Updated Nutrient Offset Program & Buffer Mitigation Program 10/28/2019 Authorities for MBI ATTACHMENT A Authorities pertaining to the Scarborough Mitigation Banking Instrument All Basins General Statutes: G.S. §143-214.11 Ecosystem Enhancement Program G.S. § 143-214.26 Nutrient Offset Credits G.S. §143-214.20-24 Riparian Buffer Protection Program G.S. § 143-214.7 Stormwater runoff rules and programs G.S. §143-215.8B Basinwide Water Quality Management Plans Session Laws S.L. 2015-246 S.L.2015-149 S.L. 2014-90 S.L. 2014-120 S.L.2013-413 S.L.2013-121 S.L. 2013-265 S.L. 2012-200 (Amendment to G.S. §143-214.23 and G.S. §143-215.1) S.L. 2011-343 (Amendment to G.S. §143-214.11) S.L. 2009- 337 (Amendment to G.S. §143-214.11) Administrative Rules: 15A NCAC 02B .0202 Definitions 15A NCAC 02B .0223 Nutrient Sensitive Waters 15A NCAC 02B .0237 Best Management Practice Cost -Effectiveness Rate 15A NCAC 02B .0240 Nutrient Offset Payments 15A NCAC 02B .0295 Mitigation Program Requirements for Protection and Maintenance of Riparian Buffers Neuse River Basin Buffer and Neuse Nutrient Strate2v Session Laws S.L. 2019-86 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 .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