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20191261 Ver 2_signed Kittrell MBI_20200326 1 AGREEMENT TO ESTABLISH THE KITTRELL HILL MITIGATION BANKING INSTRUMENT IN THE NEUSE RIVER BASIN FOR RIPARIAN BUFFER AND NUTRIENT OFFSET MITIGATION CREDITS PURSUANT TO THE NEUSE RIVER BASIN NUTRIENT MANAGEMENT STRATEGY TABLE OF CONTENTS I. PREAMBLE ...................................................................................................................... 2.. II. LOCATION AND GEOGRAPHIC SERVICE AREA .................................................... 2 III. AUTHORITIES ................................................................................................................. 3 IV. ESTABLISHMENT OF BANK PARCEL ........................................................................ 3 V. BANK PARCEL DEVELOPMENT PACKAGE .............................................................. 5 VI. POST CONSTRUCTION DOCUMENTATION .............................................................. 7 VII. CALCULATION OF MITIGATION CREDITS ............................................................... 9 VIII. CREDIT RELEASE SCHEDULE ................................................................................... 11 IX. PROCEDURE FOR DEBITING AND CREDITING ..................................................... 12 X. BANK PARCEL CLOSURE ........................................................................................... 14 XI. GENERAL PROVISIONS ............................................................................................... 14 ATTACHMENTS & REFERENCES A - Division of Water Resources Authority Document B– NCDWR – Methodology & Calculations for Nutrient Reductions on the Bank Parcel C- Ledger Templates 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%20.0240.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://files.nc.gov/ncdeq/Water%20Quality/Surface%20Water%20Protection/401/Buffer%20Clarification %20Memos/Diffuse-Flow-for-Buffer-Mitigation-Sites-Buffer-Clarification-Memo-20080819.pdf 2 2 I. PREAMBLE This Mitigation Banking Instrument ("Instrument") regarding the establishment, use, operation, and maintenance of the Kittrell Hill Nutrient Offset and Buffer Mitigation Bank Parcel ("Bank Parcel") 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 EcoTerra Partners, 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 Buffer Mitigation Rule 15A NCAC 02B .0295, which became effective on November 1, 2015, see references. The purpose of the Bank is: A. To improve water quality, reduce nutrient loads, enhance flood attenuation and restore wildlife habitat along tributaries to Oldwoman Branch and nutrient sensitive waters of Little Contentnea Creek, through the restoration of riparian buffers and adjacent riparian areas. B. To convert agricultural land uses with riparian areas associated with streams and/or agricultural ditches into a fully stocked forested community with the intent to substantially reduce nutrient loadings into surface waters associated with agricultural land uses. 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 both existing and proposed development, 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 United States Geological Survey (“USGS”) 8- digit Hydrologic Unit Code ("HUC'') 03020203 of the Neuse River Basin. C. The project is comprised of one parcel of land in Pitt County, NC, accessed from Kittrell Hill Road, northeast of Farmville, NC. Land use within the Bank parcel is currently row crop agriculture with unnamed tributaries draining to Oldwoman Branch. The project is located at approximately 35.611142 N and -77.545014 W. D. Sale or transfer of Riparian Buffer Credits shall be limited to the 8-digit HUC 03020203 in the Neuse River Basin, unless otherwise authorized by the DWR or delegated local 3 government in accordance with 15A NCAC 02B .0295. E. Sale or transfer of Nutrient Offset Credits shall be limited to the 8-digit HUC 03020203 in the Neuse River Basin in accordance with 15A NCAC 02B .0240, unless otherwise authorized by the DWR in accordance with Session Law (S.L.) 2019-86. 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 credits generated from the Bank Parcel approved under this Instrument, shall be consistent with approved State statutes and rules for the Neuse Nutrient Sensitive Waters Management Strategy. D. Mitigation activities proposed under this Instrument and corresponding Bank Parcel Development Package (BPDP) to generate Riparian Buffer Credits and Nutrient Offset Credits shall be consistent with State statutes and rules for the Neuse Nutrient Sensitive Waters Management Strategy that are in place at the time a complete BPDP is submitted to DWR. IV. ESTABLISHMENT OF KITTRELL HILL 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 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 and Nutrient Offset credits. Table 1.0 Bank Parcel Name/DWR Project # NCDWR Site Visit Site Viability Letter Viability Letter Expiration Kittrell Hill/2019-1261v2 November 19 & 21, 2019 December 17, 2019 December 17, 2021 4 B. A valid Site Viability Letter is required prior to submittal of each BPDP. Site Viability Letters will either expire on the dates listed in the table above or upon 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 BPDP as described in Section V to DWR, then the Sponsor must submit a formal request to DWR for a new Site Viability Letter for that Bank Parcel. C. The Bank Parcel proposed for inclusion under this Instrument shall require a BPDP be submitted to, and approved by, the DWR prior to use of the Bank Parcel for mitigation purposes or sale or transfer of any associated credits. The contents of the BPDP are provided in Section V. D. The BPDP will be placed on public notice and made available for public commenting for 15 calendar days. E. 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). Riparian buffer credits are only attainable if the width of the restoration site is within at least 20 feet from tops of banks along streams and 30 feet from tops of banks along viable ditches. Riparian buffer credits are attainable to a maximum of 200 feet from tops of banks of streams and 50 feet from the tops of banks of viable ditches. F. The Bank Parcel is intended to provide Riparian Buffer Credits as follows: 1. Planting hardwood trees on a Restoration Site, as defined in 15A NCAC 02B .0295(b) adjacent to two intermittent streams. 2. Planting hardwood trees on a Restoration Site, as defined in 15A NCAC 02B .0295(b) adjacent to ditches 3. Diffused flow will be maintained onsite. The Buffer Interpretation/Clarification Memo #2008-019 may be applied where maintenance of diffuse flow onsite is unattainable. G. Nutrient Offset Credit on this Bank Parcel may be achieved through restoration of the riparian areas adjacent to the intermittent streams and ditches where agriculture is the predominant land use. The viable ditches onsite flow directly into intermittent streams that drain offsite to the Oldwoman Branch that flows into Little Contentnea Creek. The width of the restoration area must begin 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 expected 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 on a Restoration Site, as defined in 15A NCAC 2B .0295(b) adjacent to intermittent streams and ditches where agriculture has been 5 determined by DWR to be the predominant landuse. I. The total area of riparian restoration activities on the Bank Parcel is expected to be less than 20 acres. V. BANK PARCEL DEVELOPMENT PACKAGE A. The Kittrell Hill BPDP submitted under this Instrument shall be submitted to DWR for review and must be approved by DWR prior to any construction on the Bank Parcel. The BPDP must describe any changes that have occurred to the site between the date of the Site Viability Letter and the date the BPDP is submitted to DWR. The BPDP shall include detailed information consistent with the sections below concerning; 1) site location (8-digit HUC is required); 2) existing conditions with current photos; 3) proposed buffer mitigation and nutrient offset activities including a detailed vegetation plan; 4) monitoring and maintenance plans; 5) financial assurances; 6) associated buffer /nutrient credit calculations, which shall include credit generation, service area, and accounting as appropriate for each regulatory authority; 7) stream buffer determination letter from DWR; 8) Site Viability Letter from DWR; 9) service area figure for each mitigation type proposed under this Instrument. 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 construction within the stream, riparian buffers and other riparian areas on the Bank Parcel to produce Riparian Buffer Credit or Nutrient Offset Credit must be approved by DWR in writing prior to implementation. The failure of the Sponsor to comply with this requirement may result in a revised or reduced credit release schedule. D. Requests for deviation from the approved BPDP must be submitted to DWR in writing. Written approval from the DWR must be received prior to implementing any deviation from the approved BPDP. Property Disposition & Long-Term Management E. Prior to the release of any credits, the Sponsor shall record a permanent conservation easement at the Pitt County Register of Deed's office that is sufficient to ensure protection, operation and maintenance of restored riparian buffers and other riparian areas for the duration specified in the approved BPDP. F. The form of the conservation easement shall be consistent with the standards employed by the State of North Carolina in the protection of restored riparian buffers and riparian areas and shall be approved by the DWR prior to the release of any 6 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. 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. I. In the event that 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 BPDP. Financial Assurances J. Following approval of the BPDP, 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 site according to the approved BPDP. It is the Sponsor's responsibility to confirm that the surety company is rated at least "A-" with each annual bond renewal. K. The Performance Bond amount shall be 100% of the estimated cost for implementation of the riparian restoration and other activities of the Bank Parcel as described in the approved BPDP. No bond shall be less than $150,000.00 to cover construction costs. L. Alternatively, in lieu of posting the 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 BPDP 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. 7 VI. POST CONSTRUCTION DOCUMENTATION As-Built Report A. The Sponsor agrees to perform all necessary work, in accordance with the provisions of this Instrument, 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. The Sponsor will submit an as-built plan and report to DWR for the Bank Parcel within 30 calendar days after completing the riparian buffer mitigation and nutrient offset areas. The as- built report will describe any deviation from the approved BPDP and will document all the following: 1. Buffer restoration: planting details and other construction activities that were required in the BPDP, invasive species control, monitoring device locations, vegetation plot locations, photo point locations, surface and groundwater elevations, as appropriate. 2. .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 credits and nutrient offset credits (in both square feet and acres). 3. 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 BPDP. 4. Aerial map of the mitigation area that was included in the approved BPDP. Financial Assurance C. After completion of the riparian restoration and mitigation activities , 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 BPDP. 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 still 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 five years, and until DWR has released all Riparian Buffer Credits and Nutrient Offset Credits to the Bank 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. E. Once DWR has released all credits for completion of Tasks 1-9 in accordance with the credit release schedule in Section VIII, the Bank Sponsor can be released from its 8 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 performance bonds. Monitoring and Maintenance Reports G. The Sponsor shall monitor the Bank Parcel as described in the BPDP 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. 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 after five years. A minimum of four (4) native hardwood tree or four (4) native hardwood tree and shrub species must be planted. No one species shall be greater than 50% of the planted sterns. A list of species for planting will be detailed in the BPDP for approval. Native hardwood tree volunteer species may be included to meet performance standards as determined by the DWR. I. A "stem" means a woody seedling, sapling, shrub or tree, no less than 10 centimeters in height. J. If the performance standards of the vegetation are not met, supplemental plantings may be required. Supplemental plantings will be utilized until the required densities have been achieved and maintained for five years. Bank Parcel maintenance; such as ensuring diffuse flow, managing invasive species, and pest control will be included in the BPDP. K. Monitoring Reports for Riparian Buffer Credit or Nutrient Offset Credit: Reporting criteria of the riparian restoration areas 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 at the date of acceptance of the BPDP. The Sponsor shall submit to the DWR an annual monitoring report no later than December 31 of each year for a minimum of five consecutive years after the first full growing season. This report will describe the conditions of each Bank Parcel, including an evaluation of the performance standards of the vegetation contained within the approved BPDP. Reports shall contain the following: 1. A U.S. Geological Survey map showing location of the Bank Parcel; 2. A detailed narrative summarizing the condition of the Bank Parcel along with any maintenance or remediation performed that year; and 3. A map, survey, or other figure showing locations of sampling plots, permanent photo points, location of transects, etc.; and 4. Monitoring data, including specific vegetative counts showing that the trees or tree and shrub species planted are meeting performance standards and updated photographs; and 9 5. A copy of the most recent Bank credit/debit ledgers; and 6. Corresponding verification letters from designated local governments upon request; and 7. Corresponding Mitigation Transfer Certificates upon request 8. Proof of performance bond renewal to cover the next monitoring year (if applicable). Contingency Plans/Remedial Actions L. In the event the Bank Parcel fails to achieve the success criteria described in this Instrument and the approved BPDP, 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 MITIGATION CREDITS Riparian Buffer Credits A. All Riparian Buffer Credits shall be determined based on the ratios and percentages provided in 15A NCAC 02B .0295 (m) and (n). B. Riparian buffer restoration on the Bank Parcel, as described in 15A NCAC 02B .0295 (n) and (o), defined in 15A NCAC 02B .0295 (b) and 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 Credit is defined as one (1) buffer credit per one square foot or 43,560 buffer credits per one acre. Nutrient Offset Credits D. The square footage of Nutrient Offset Credits on the Bank Parcel will be determined by applying the applicable ratio as provided in 15A NCAC 02B .0295(m) for a Restoration Site. All riparian areas proposed for Nutrient Offset Credit must be a minimum of 50 feet from the top of stream and ditch banks with adjacent agricultural land uses as noted in a Site Viability Letter. E. 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. 10 F. The Sponsor and DWR agree that the methodology and calculations for determining nitrogen reduction, associated with restoration of riparian areas on this Bank Parcel, 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 the Bank Parcel. The approved method and calculations for determining nutrient reductions associated with the riparian restoration on this Bank Parcel is provided in further detail in Attachment B. 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 the Riparian Buffer Credits and Nutrient Offset Credits associated with the Bank Parcel will become available for sale to a third party in accordance with the Credit Release Schedule in Table 2 below: Table 2.0 - Credit Release Schedule for Riparian Buffer and Nutrient Offset Credits Task Project Milestone % Credit Available for Sale I MBI and BPDP Approved by DWR, Conservation Easement Recorded* and Financial Assurance posted 20 2 Site Earthwork, Planting and Installation of Monitoring Devices Completed, all applicable permits obtained 20 3 Monitoring Financial Assurance Posted and Approval of As-Built Report 10 4 Monitoring Report #1: App roved 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 (I) of Section X in this Instrument has been completed and approved by DWR. 5 No remaining credits will be released until Task 7 has been satisfied, assigning the conservation easement to an approved land trust or long-term steward. 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 performance standards contained within the approved BPDP 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. DWR may consider a Credit Release Schedule for a Bank Parcel based on the extent of change between current onsite conditions and proposed post construction conditions. 12 IX. PROCEDURE FOR DEBITING AND CREDITING Credit Ledgers A. The Bank Sponsor shall maintain a credit ledger for each mitigation type for the Bank Parcel under this Instrument: one accounting for Riparian Buffer Restoration Credits in square feet and acres, and one accounting for Nutrient Offset Credits in pounds and acres. B. Each credit ledger shall be submitted on a separate 8 ½ in X 11in spreadsheet with legible font style and font size. All ledgers shall be submitted using the templates provided in Attachment C 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 buffer impacts within the Neuse River Basin in accordance with 15A NCAC 02B .0295 (f) and (g). D. Nutrient Offset Credits generated on this Bank Parcel will be used to offset nitrogen nutrient loadings within the 03020203 HUC of the Neuse River basin in accordance with 15A NCAC 02B .0240. E. Available Riparian Buffer credits (credits that have been released by DWR, but not sold by the Sponsor) that are generated from riparian restoration and meet criteria for nutrient offset credits as outlined in Section VII of this Instrument, the Site Viability Letter, and the corresponding BPDP can be converted from Riparian Buffer Credits to 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. F. 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 banks and meet criteria for riparian buffer credits as outlined in Section VII of this Instrument, the Site Viability Letter, 15A NCAC 02B .0295 and the corresponding BPDP, can be converted from Nutrient Offset Credits to Riparian Buffer Credits upon written approval from DWR. Once a credit has been converted to another credit type, the transaction is permanent and the credit cannot be converted again. G. The Bank Sponsor shall obtain written verification of nutrient offset need from a designated local government in HUC 03020203 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. 13 H. The Bank Sponsor shall obtain verification of buffer mitigation required from the delegated local government in HUC 03020203 of the Neuse River Basin or DWR prior to debiting Riparian Buffer Credits from the Bank Parcel. I. 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 each 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 corresponding Mitigation Credit Transfer Certificates 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 Name, (2) Bank Parcel name as it appears in this Instrument, (3) DWR project number for the BPDP as it appears in Table 1.0. 2. Credit Details: (1) date of receipt, (2) identify if full or partial payment, (3 - when applicable) amount of nitrogen Nutrient Offset Credits purchased in pounds and confirmation from the designated local government or DWR 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 HUC, (3) river basin, (4) nutrient strategy applicable to the project, (5 - when applicable) designated local government or DWR requiring Nutrient Offset Credits, and/or (6) DWR authorization 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 selling and/or transferring credit that is not available), or the Bank is selling or transferring 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. 14 X. BANK PARCEL CLOSURE A. Bank Parcel Closure shall be identified as the event when the Sponsor is relieved of all of its responsibilities to the Bank Parcel and there are no Riparian Buffer Credits or Nutrient Offset Credits left to sell. B. Bank Parcel Closure shall commence only after all the following events have occurred: 1.Transfer or assign the conservation easement and all its interests, in perpetuity, to a land trust or stewardship program as described in Section V of this instrument. 2. All five years of monitoring completed and all monitoring reports submitted and approved by DWR 3. All credits have been released and debited and updated ledgers showing zero credit balances have been submitted and approved by DWR. XI. GENERAL PROVISIONS 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, 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 I 00% 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 15 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. Mitigation determinations /mitigation viability assessments. 4. BPDP review and approval of items listed in Section V of this instrument. 5. As-Built Report review and approval of items listed in Section VI of this instrument. 6. Monitoring Report review and approval of items listed in Section VI of this instrument. 7. Credit Ledger review and approval of items listed in Section IX of this instrument. 8. Certificate review of items listed in Section IX of this instrument and cross analysis to credit ledgers. 9. 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, received via electronic mail 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. 16 If to Bank Sponsor: Eco Terra Partners, LLC 1117 Peachtree Walk, NE STE 126 Atlanta, GA 30309 mitigation@ecoterra.com If to DWR: NC Division of Water Resources – 401 & Buffer Permitting Branch Attn: Nutrient Offset and Buffer Banking Coordinator 1617 Mail Service Center Raleigh, NC 27699-1617 M.Applicable Law: This Agreement shall be construed under the laws of the State of North Carolina. ECO TERRA PARTNERS, LLC By: _________________________ (Print) ________________________ (Signature) Title: ________________________ Date: ________________________ NORTH CAROLINA DEPARTMENT OF ENVIRONMENTAL QUALITY- DIVISION OF WATER RESOURCES By: (Print) _________________________ ________________________ (Signature) Title: ________________________ Date: ________________________ Luther T. (Ted) Griffith Jr 3/09/2020 Vice-President S. Danny Smith Director March 26, 2020 Nutrient Offset Program & Buffer Mitigation Program Authorities for MBI Updated 10/28/2019 ATTACHMENT A Authorities pertaining to the Kittrell Hill 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 Strategy 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 ATTACHMENT B NCDWR – Methodology & Calculations for Nutrient Reductions on the Bank Parcel NC Division of Water Quality - Methodology and Calculations for determining Nutrient Reductions associated with Riparian Buffer EstablishmentNitrogen Water Quality Benefits for Riparian Buffer Restoration1). Benefit of Land Use Change2). Benefit of Nutrient Removal from Nonpoint Source Runoff3). Benefit of Nutrient Removal from Periodic Overbank FloodNitrogen General Assumptions:1. Life expectancy of Riparian Buffer is assumed to be 30 years. (Life expectancy for stormwater detention pond is 20 - 30 yrs)2. Restored Riparian Buffer is assumed to be natural.Effectiveness of Riparian BufferAnnual Effectiveness (kg/ha/yr)Annual Effectiveness (lb/ac/yr)Effectiveness in 30 yrs (lb/ac)Benefit (1) 11.08 9.89 296.6Benefit (2) 70.09 62.54 1876.1Benefit (3) 3.75 3.35 100.4Total 84.92 75.77 2273.0Nitrogen Benefit Descriptions and Assumptions:1) Benefit is due to change land use. Assume existing land use export coefficient is a composite export coefficient with a value of 12.98 kg/ha (agriculture and urban). Wetland export coefficient is 1.9 kg/ha.Th l t i t t t i d d b 11 08 k /h ll b l d h i The annual nutrient output is decreased by 11.08 kg/ha annually by land use changing.2) Benefit is due to nitrogen removal from nonpoint source runoff. Nutrient contribution/buffer treatment area ratio is approximately 10.8 (based on studies examined by Gannon 1997). In flow loading is calculated by nutrient contribution area x composite export coefficient. In flow loading is 10.8 ha x 12.98 kg/ha = 140 kg/ha/yr. Nutrient removal due to this benefit is calculated by in flow loading x removal efficiency *Gannon, Richard. 1997. Effectiveness of Wetland Riparian Areas for Treatment of Agricultural Pollution Sources: A Literature Review. (Draft) The nitrogen removal efficiency is 50% based on various literature. * Kadlec, Robert H. and Robert L. Knight. 1996. Treatment Wetland * Moshiri, Gerald A.1993. Constructed Wetlands for Water Quality Improvement. Lewis Publi. * Mitsch, William J. 1994. Global Wetlands: Old world and New. Elsevier3) Benefit is due to nitrogen removal from overbank flooding Nitrogen concentration is assumed to be 2.5 mg/L. Assume overboard is 1 ft. Flood frequency is assumed to be once every year. Nutrient removal due to this benefit is estimated by in flow concentration x area (1 ha) x overboard height x removal efficiency.Formula for Calculating Nitrogen Offset Reductions on Riparian Buffer Restoration Sites:Size (Acres) * 75.77(lbs/Acre/Year) * 30 Years = Total Pounds of Nitorgen Removed from Riparian Buffer Project1 Phosphorus Water Quality Benefits for Riparian Buffer Restoration1). Benefit of Land Use Change2). Benefit of Nutrient Removal from Nonpoint Source RunoffPhosphorus General Assumptions:1. Life expectancy of Riparian Buffer is assumed to be 30 years. Effectiveness of Riparian BufferAnnual Effectiveness (lb/ac/yr)Effectiveness in 30 yrs (lb/ac)Benefit (1) 1.73 51.90Benefit (2) 3.15 94.50Total 4.88 146.40Phosphorus Benefit Descriptions and Assumptions:1) Benefit is due to change land use1, 2 Export coefficient for agricultural land is 2.15 (lb/ac/yr). Export coefficient for riparian buffer is 0.42 (lb/ac/yr). The annual total phosphorus (TP) output is decreased by 1.73 lb/ac annually by land use changing.2) Benefit is due to TP removal from nonpoint source runoff 3, 4 Mass load for TP reductions for buffer is estimated to be 3.15 lb/ac/yr.Page 2Assumptions: Riparian buffer restorations only occur on agricultural lands. Width of restored riparian buffer is 50 feet, and with mixture of grass and forest.References:1 NC Division of Water Quality memo 'Export Coefficients Revisited' (1996)2 Comparison of Selected TP Loading Coefficients (Jim Blose, 2001)4 A Review of the Scientific Literature on Riparian Buffer Width, Extent and Vegetation. (Seth Wenger, 1999) Formula for Calculating Phosphorus Offset Reductions on Riparian Buffer Restoration Sites:Size (Acres) * 4.88(lbs/Acre/Year) * 30 Years = Total Pounds of Total Phosphorus Removed from Riparian Buffer Project3 Cost-Effectiveness Study of Selected Agricultural Best Management Practices in the Neuse and Tar-Pamlico River Basins (Todd Kennedy, 2001) Page 2 16 ATTACHMENT C Credit Ledger Templates *Credits shown below are as approved by the MBI, BPDP, and As-Built. Sale/ Release Date Purchaser or % Credit Release Project w/ HUC #Gov't Requiring Square Feet Ft2 Square Feet Ft2 Square Feet Ft2 Credits Released/Available to Bank Credits Debited/Sold From Bank Buffer Credit Balance Eco Terra Partners, LLC Kittrell Hill MBI (Kittrell Hill Nutrient Offset and Riparian Buffer Mitigation Bank) HUC 03020101 Buffer Credit Ledger Date Last Updated: DWR Bank Parcel Project #: 2019-1261v2 Total Credits Released To Date: *Credits shown below are as approved by the MBI, BPDP, and As-Built. Sale/ Release Date Purchaser or % Credit Release Project w/ HUC #Gov't Requiring Pounds of Nitrogen Ft2 Pounds of Nitrogen Ft2 Pounds of Nitrogen Ft2 Credits Released/Available to Bank Credits Debited/Sold From Bank Nutrient Credit Balance (Sponsor name & Instrument name) (Parcel Name w/ HUC #) Nitrogen Credit Ledger Date Last Updated: DWR Bank Parcel Project #: Total Credits Released To Date: Eco Terra Partners, LLC Kittrell Hill MBI (Kittrell Hill Nutrient Offset and Riparian Buffer Mitigation Bank) HUC 03020101 Nitrogen Credit Ledger Date Last Updated: DWR Bank Parcel Project #: 2019-1261v2 Total Credits Released To Date: