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20210112 Ver 3_Signed MBI_20220422ROY COOPER Governor ELIZABETH S. BISER Secretary RICHAM E. ROGEM, JR. Director TO FROM THROUGH NORTH CAROLINA Environmental Quality April 22, 2022 Richard Rogers Director Katie Merritt Nutrient Offset & Buffer Banking Coordinator Paul Wojoski Supervisor - 401 & Buffer Permitting Branch SUBJECT: Division Approval of the Little River Ford II Nutrient Offset Banking Instrument for Nutrient Offset Credits pursuant to the Neuse River Basin Nutrient Management Strategy for Wildlands Holdings III, LLC. The attached final Nutrient Offset Banking Instrument (NOBI) between Wildlands Holdings III, LLC and the Division of Water Resources was placed on public notice and made available for public comments on April 5, 2022. The public comment period ended on April 20, 2022 and no comments were received on the draft NOBI. DEQ Legal counsel assisted with and agrees with the final template for which all our MBI documents are drafted from. I have reviewed the attached NOBI and it is ready for your approval. Please sign on page 16 and return the document to me for final execution. North Carolina Department of Environmental Quality I Division of Water Resources D E Q 512 North Salisbury Street 1 1611 Mail Service Center I Raleigh, North Carolina 27699-1611 NORTH C of Envi A a 919.707.9000 Deparlmem of Envlronmenml Duali� AGREEMENT TO ESTABLISH THE LITTLE RIVER FORD II NUTRIENT OFFSET BANKING INSTRUMENT IN THE NEUSE RIVER BASIN FOR NUTRIENT OFFSET CREDITS PURSUANT TO THE NEUSE RIVER BASIN NUTRIENT MANAGEMENT STRATEGY TABLE OF CONTENTS I. PREAMBLE....................................................... II. LOCATION AND GEOGRAPHIC SERVICE AREA...... III. AUTHORITIES................................................... IV. ESTABLISHMENT OF BANK PARCEL .................... V. PRE -CONSTRUCTION DOCUMENTATION ............ VI. POST CONSTRUCTION DOCUMENTATION .......... VII. CALCULATION OF MITIGATION CREDITS ............. Vill. CREDIT RELEASE SCHEDULE ............................... IX. PROCEDURE FOR DEBITING AND CREDITING ...... X. BANK PARCEL CLOSURE .................................... XI. GENERAL PROVISIONS ...................................... .................................................................... 2 .................................................................... 2 .................................................................... 3 .................................................................... 3 .................................................................... 4 .................................................................... 7 .................................................................... 9 .................................................................. 11 .................................................................. 12 .................................................................. 13 .................................................................. 13 ATTACHMENTS A - Division of Water Resources Authority Document B —Ledger Templates C — Project Credit Table (template) 1. Nutrient Offset Credit Trading Rule: httD://reDorts.oah.state.nc.us/ncac/title%2015a%20-%20environmental%20auaIity/chapter%2002%20 %20environmentaI%20manage ment/subchapter%20b/15a%20ncac%2002b%20.0703.pdf 2. NC Session Law 2019- 86 " Nutrient Offset Credits": https://ncleg.gov/Enacted Legislation/Session Laws/HTM L/2019-2020/S L2019-86. html 3. Buffer Interpretation/ Clarification # 2008- 019 for diffuse flow: https://files.nc.gov/ncdeq/Water%20Quality/Surface%20Water%20Protection/401/Buffer%20CIarification%2 OMemos/Diffuse-Flow-for- Buff er-Mitigation-Sites-Buffer-Clarification-Memo-20080819.pdf 4. Clarified Procedures for Calculating Buffer Mitigation Credits and Nutrient Offset Credits (November 2019): https://files.nc.gov/ncdeq/Water%20Quality/Surface%20Water%20Protection/401/Mitigation/Issues--- Resolutions-Ver-1.0-buffer-mitigation-nutrient-offset.pdf 5. NCDWR — Methodology and Calculations for Nutrient Reductions on the Bank Parcel: https://files.nc.gov/ncdeq/Water%20QuaIity/Planning/NPU/Nutrient%20Offset%20Rule/Ag-Buffer-Credit.pdf 6. Riparian Buffer Mitigation Rule: http://reports.oah.state.nc.us/ncac/title%2015a%20-%20environmental%20quaIitV/chapter%2002%20- %20environmental%20management/subchapter%20b/15a%20ncac%2002b%20.0295.pdf 1 I. PREAMBLE This Nutrient Offset Banking Instrument ("Instrument") regarding the establishment, use, operation, and maintenance of the Little River Ford II Nutrient Offset Bank Parcel ("Bank Parcel") to provide Neuse Nutrient Strategy nutrient load reduction credit ("Nutrient Offset Credits") is made and entered into by and among Wildlands Holdings III, 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 (Reference Numbers 1 and 6). The purpose of the Bank is: A. To 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 nutrient offset and sell any resulting 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 Nutrient Offset Credits for impacts due to development activities. B. The GSA for this Bank Parcel is limited to the United States Geological Survey ("USGS") 8-digit Hydrologic Unit Code ("HUC") 03020201 of the Neuse River Basin, excluding the Falls Lake Watershed. C. Sale or transfer of Nutrient Offset Credits shall be limited to the 8-digit HUC 03020201 in the Neuse River Basin, excluding the Falls Lake Watershed in accordance with 15A NCAC 02B .0703, unless otherwise authorized by the DWR in accordance with Session Law (S.L.) 2019-86. D. The Little River Ford II Bank Parcel is comprised of land lying adjacent to an existing conservation easement for the NC Division of Mitigation Services Full -Delivery Mitigation Site (Little River Ford Mitigation Site, DMS No. 100182, DWR ID# 2021-0112v2) and is currently used for row crops. Table 1.0 provides site -specific details of the Bank Parcel proposed under this Instrument. 2 Table 1.0- Bank Parcel Details 8-Digit Bank Parcel Named Name/DWR County USGS Project Receiving Primary Hydrologic Location Land Use Project # Stream Unit Code Little River Ford II/ Johnston 03020201 35.5922, Little River Agricultural -78.1781 Crops 2021-0112v3 III. AUTHORITIES A. The Bank will be used to provide 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. Nutrient reduction activities proposed under this Instrument and corresponding Bank Parcel Development Package (BPDP) to generate 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 BANK PARCEL A. In accordance with 15A NCAC 02B .0295 and 15A NCAC 02B .0703, 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 Credits and Nutrient Offset Credits. Table 2.0 below outlines when a Site Viability Letter was issued by DWR for the mitigation site proposed under this Instrument: Table 2.0 — Site Viability Letter Details Bank Parcel NC DWR Site Viability Letter Viability Letter Evaluation Received Expiration Date Little River Ford June 8, 2021 July 27, 2021 July 27, 2023 3 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 individual Bank Parcel for mitigation purposes or the sale or transfer of any associated credits. The contents of the BPDP are provided in Section V. D. The BPDP submitted under this instrument will be placed on public notice and made available for public commenting for 15 calendar days. E. Nutrient Offset Credit may be achieved on the Bank Parcel through restoration of the riparian areas adjacent to viable streams and viable ditches where agriculture was determined by DWR to be the predominant land use. On this Bank Parcel, the width of the riparian restoration area will begin at 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. All activities conducted within riparian buffers and adjacent riparian areas for purposes of generating Nutrient Offset Credits will be conducted in concurrence with or after the buffer mitigation activities proposed in the Little River Ford Full Delivery Mitigation Plan (DMS No. 100182) and not before. The conservation easement for the Bank Parcel will be contiguous with the conservation easement for the Little River Ford Full Delivery site which includes all top of banks of streams and ditches. The Bank Parcel easement will extend from the Little Ford Full Delivery conservation easement out a maximum of 200 feet from viable streams and viable ditches. The viability of features to generate nutrient offset credit is provided in the Site Viability Letter for the Bank Parcel and referenced in Table 2.0 of this Instrument F. 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 perpetual conservation easement around riparian areas along viable streams and viable ditches in accordance with 15A NCAC 02B .0703 (g). 2. Planting hardwood trees 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. I. The total area of riparian restoration activities on the Little River Ford II Bank Parcel is expected to be 10.2 acres. V. PRE -CONSTRUCTION DOCUMENTATION BANK PARCEL DEVELOPMENT PACKAGE A. The Little River Ford II 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 will describe any changes that have occurred to the site between the date of the Site Viability 4 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 nutrient offset activities including a detailed vegetation plan; 4) monitoring and maintenance plans; 5) financial assurances; 6) a Project Credit Table (see Attachment C) showing associated 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; 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 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 streams, riparian buffers and other riparian areas on the Bank Parcel to produce 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 permanent conservation easements at the Johnston 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 credits. G. The conservation easement for the Bank Parcel will be located adjacent to the conservation easement for the DMS Little River Ford Mitigation Site, which will include the tops of banks of each stream and ditch proposed for riparian restoration and will extend a minimum 100 feet perpendicular from streams and a minimum of 30' from ditches. The Bank Parcel's conservation easement will include protections of restored riparian areas beyond the DMS conservation easement out to a maximum of 200' feet. H. 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. 61 The Sponsor agrees to 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. J. 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 BPDP Financial Assurances for Bank Parcel Develoament K. Following approval of the BPDP, 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 sites according to the approved BPDP. It is the Sponsor's responsibility to confirm that the surety company is rated no less than an "A-" with each annual bond renewal. L. The amount of the Performance Bond shall be 100% of the estimated cost for implementation of the riparian restoration and other related activities for the construction of the Bank Parcel as described in the approved BPDP. No bond shall be less than $150,000.00 to cover construction costs. M. Alternatively, in lieu of posting a Performance Bond, the Sponsor may elect to construct the Bank Parcel prior to the first credit release. N. Once DWR has released all credits for completion of all items listed below, then the 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, Little River Ford Full Delivery DMS Mitigation Plan approved by DWR, Conservation Easement Recorded, Financial Assurance Posted; 2. All Riparian Site Earthwork, Planting, and Installation of Monitoring Devices Completed for both the Little River Ford Full Delivery Site and the Bank Parcel, easement boundaries adequately marked, all applicable permits obtained, site visit performed by DWR; 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 O. To comply with this section, DWR must be the Obligee on all performance bonds. 6 VI. POST CONSTRUCTION DOCUMENTATION As -Built Report A. The Sponsor agrees to perform all necessary work, in accordance with the provisions of this Instrument and corresponding BPDP, to establish, maintain, and monitor Neuse Riparian Buffers or other riparian areas until Items B (1) and (2) of Section X have been satisfied. B. Within 30 calendar days after completing the establishment of the nutrient offset areas, the Sponsor will submit written notification to DWR documenting that all nutrient offset 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: 1. Short summary of activities completed as required per the approved BPDP; 2. Figures representing all riparian restoration, riparian enhancement and riparian preservation activities where applicable; 3. Figures representing location of all monitoring plots installed; 4. 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 BPDP; 5. Description of how the conservation easement boundaries were marked; 6. Any major changes to the conservation easement boundary or to the amount of Nutrient Offset Credits from what was proposed in the approved in the BPDP. C. The Sponsor will submit an as -built plan and report to the DWR for the Bank Parcel after completing the establishment of the nutrient offset areas. Each As -Built report will describe any deviation from the approved BPDP and will document all the following: 1. Riparian restoration planting details and other construction activities that were required in the BPDP, confirmation that all boundary markers are installed, invasive species control, monitoring device locations, vegetation plot locations, and photo point locations. 2. Boundary Survey of the conservation easement area, signed and sealed by a licensed surveyor, including an inventory 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 nutrient offset areas showing where riparian activities including restoration, enhancement and/or preservation were performed and any deviations to the Bank Parcel from what was approved in the BPDP. 4. Aerial map of the riparian restoration proposal for buffer mitigation and nutrient offset that was included in the approved BPDP. Financial Assurance for Bank Parcel Monitorine & Maintenance D. After completion of the riparian restoration activities on the Bank Parcel, 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 and As -Built Report. The Bond must be 7 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 the surety company is still rated no less than an "A-" with each annual bond renewals. E. A Performance/Maintenance Bond shall be secured each year for a minimum of five years, and until DWR has released all 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 3.0 of Section VIII, the Sponsor will be released from its performance obligations under the performance bond required in D and E in this section. G. To comply with this section, DWR must be the Obligee on all performance bonds. Monitorine and Maintenance Resorts H. 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. 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 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 BPDP for approval. Native hardwood tree volunteer species may be included to meet performance standards as determined by the DWR. A "stem" means a woody seedling, sapling, shrub or tree, no less than 10 centimeters in height and shall apply, on the Bank Parcels, to 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, 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 diffused flow, managing invasive species, and pest control will be included in the BPDP. 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 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. 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 BPDP. Reports shall contain the following: 8 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; and 3. A map, survey, or other figures showing locations of sampling plots, permanent photo points, and location of transects, Etc.; and 4. Monitoring data, including specific vegetation counts and height data showing that the trees or tree and shrub species planted are meeting performance standards and updated photographs; and 5. A copy of the most recent Bank credit/debit lodgers; and 6. Corresponding verification letters from designated local governments upon request; and 7. Corresponding Mitigation Transfer Certificates upon request; and 8. Proof of performance bond renewal to cover the next monitoring year (when applicable). Contingency Plans/Remedial Actions M. In the event a Bank Parcel fails to achieve the performance criteria described in this Instrument and in the approved BPDP, the Sponsor shall develop necessary contingency plans in coordination with the DWR and implement appropriate remedial actions for the Bank Parcels and the Bank. Depending on the degree of remedial actions required, the DWR may modify the monitoring period. VII. CALCULATION OF CREDITS Nutrient Offset Credits A. 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 following the guidance provided in the Clarified Procedures for Calculating Buffer Mitigation Credits and Nutrient Offset Credits issued by the DWR see reference #4, including the most recent Project Credit Table Template (see Appendix C) provided online. All riparian areas proposed for Nutrient Offset Credits must be a minimum of 50 feet from the top of the banks along viable streams or viable ditch banks on land noted in a Site Viability Letter as agriculture B. Nutrient Abatement of Restored Riparian Area/Buffers on agricultural land: The Sponsor and DWR agree: 1. The pounds of nitrogen offset per acre of restored riparian areas/buffers on agricultural land shall be 2,273.02 pounds per acre or 19.16394 square feet per pound. C. The Sponsor and DWR agree that the methodology and calculations for determining nitrogen reductions, associated with restoration of riparian areas on this Bank Parcel as described in Section IV of this 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 the Bank Parcel. For further details on the approved method and calculations for determining nutrient reductions associated with the riparian restoration on this Bank Parcel refer to the NCDWR - Methodology & Calculations for Nutrient Reductions document found in reference number 5. 0 This space left blank intentionally, do not add text to this space. 10 VIII. CREDIT RELEASE SCHEDULE A. Upon submittal of all appropriate documentation by the Sponsor, and subsequent approval by DWR, it is agreed that the 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 3.0 below: Table 3.0 - Credit Release Schedule for Nutrient Offset Credits Credit Available for Task Project Milestone Sale Instrument and BPDP Approved by DWR, Little River Ford Full 1 Delivery DMS Mitigation Plan approved by DWR, Conservation 20 Easement Recorded*, and Financial Assurance Posted All Riparian Site Earthwork, Planting and Installation of Monitoring Devices Completed for both the Little River Ford Full Delivery Site 2 and the Bank Parcel, Easement Boundaries adequately marked, and 20 all applicable permits obtained. A site visit by DWR is required for this task. Monitoring Financial Assurance Posted and Approval of As -Built 3 Report 10 Monitoring Report #1: Approved by the DWR** & financial 4 assurance renewed 10 Monitoring Report #2: Approved by the DWR** & financial 5 assurance renewed 10 Monitoring Report #3: Approved by the DWR** & financial 6 assurance renewed 10 Item B (1) of Section X in this Instrument has been completed and 7 approved by DWR 5 No remaining credits will be released until Task 7 has been satisfied, assigning the conversation easement to an approved land trust or long-term steward. Monitoring Report #4: Approved by the DWR** & financial 8 assurance renewed 5 Monitoring Report #5: Approved by the DWR** and final site visit 9 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 Credit Release Schedules 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 that will be generated by the Bank Parcel. 11 IX. PROCEDURE FOR DEBITING AND CREDITING Credit Ledgers A. The Sponsor shall maintain one credit ledger for each mitigation type for the Bank Parcel under this Instrument, unless otherwise instructed by DWR in the approved BPDP: Credit ledgers shall provide the accounting for Nutrient Offset Credits in pounds and square feet. B. Each credit ledger shall be submitted on a separate 8 % in. 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 the 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 #4. D. Nutrient Offset Credits generated on this Bank Parcel will be used to offset nitrogen nutrient loads within the 03020201 HUC of the Neuse River Basin, excluding the Falls Lake Watershed, in accordance with 15A NCAC 02B .0703 and are neither convertible nor transferrable to Riparian Buffer Credits. E. The Sponsor shall obtain written verification of nutrient offset need from a designated local government in the 03020201 HUC of the Neuse River Basin outside of the Falls Lake Watershed, or from DWR through an approved NPDES permit for wastewater nutrient sources prior to debiting Nutrient Offset Credits from the Bank Parcel. F. 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 101" 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 G. All credit sales will include a Mitigation Credit Transfer Certificate ("Certificate") that is required to be provided to the buyer of Nutrient Offset Credits, that will include, at a minimum, the following information; 12 1. Bank Details: (1) Sponsor Name, (2) Bank Parcel name as it appears in this Instrument in Table 1.0 and, (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, and (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) the amount of Riparian Buffer Credits purchased in square feet and the confirmation from DWR or the local government of the amount required. 2. Permitted Project Details: (1) project name and project number 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 requiring Nutrient Offset Credits, and/or (6) DWR or delegated local government requiring Riparian Butter Credits for this project and (6) credit type and amount required for project. H. If the DWR determines the Bank is operating at a deficit (e.g. the Sponsor is utilizing, 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. X. BANK PARCEL CLOSURE A. Bank Parcel Closure shall be identified as the event when the Sponsor is relieved of all its responsibilities to the Bank Parcel and there are no Nutrient Offset Credits left to sell. B. Bank Parcel Closure shall commence only after all 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, or an authorized representative of the Director of DWR to enter the property containing the Bank Parcel(s). B. Amendments: This Banking Instrument maybe amended or modified only with written approval of all signatory parties. 13 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 in accordance with 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 in accordance with 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. BPDP 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 listen in Section VI of this Instrument, 6. Credit Ledger review and approval of items listen in Section IX of this Instrument, 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 this Instrument: This Instrument will become valid on the date of the last party's signature. H. Specific Language of this 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. 14 K. Notices: All Notices and other communication 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 email with a delivery receipt requested, 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: 1430 South Mint Street, Suite 104 Charlotte, NC 28203 Attn: John Hutton jhutton@wildlandseng.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 15 I. Applicable Law: This Agreement shall be construed under the laws of the State of North Carolina. Wildlands Holdings III, LLC By: John Hutton (Print) (Signature) 4 Vice President of Wildlands Engineering, Title: Member of Wildlands Holdings ID, LLC 3171Zz Date: NORTH CAROLINA DEPARTMENT OF ENVIRONMENTAL QUALITY -DIVISION OF WATER RESOURCES By: Richard E. Rogers, Jr. (Print) Title: &hard E Rogers, Jr. Director, Division of Water Resources Date: 4-22-2022 16 (Signature) Nutrient Offset Program & Buffer Mitigation Program Updated Authorities for Neuse Strategy MBI I August 11, 2020 ATTACHMENT A Authorities pertaining to the Little River Ford II Nutrient Offset 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. 2019-86 (Amendment to G.S. §143-214.26) S.L. 2016-94 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 .0701 Nutrient Strategies Definitions 15A NCAC 02B .0703 Nutrient Offset Credit Trading 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. 2011-394 S.L. 1998-221 (Part I) S.L. 1995-572 Administrative Rules: 15A NCAC 02B .0610 Managing Activities within Riparian Buffers: Definitions 15A NCAC 02B .0611 Managing Activities within Riparian Buffers: Authorization Certificates 15A NCAC 02B .0612 Managing Activities within Riparian Buffers: Forest Harvesting Requirements 15A NCAC 02B .0710 Neuse Nutrient Strategy: Purpose and Scope 15A NCAC 02B .0711 Neuse Nutrient Strategy: Stormwater 15A NCAC 02B .0712 Neuse Nutrient Strategy: Agriculture 15A NCAC 02B .0713 Neuse Nutrient Strategy: Wastewater Discharge Requirements 15A NCAC 02B .0714 Protection and Maintenance of Existing Riparian Buffers 15A NCAC 02B .0715 Delegation of Authority for the Protection and Maintenance of Existing Riparian Buffers WW G cn Co - CT �� \ 0z � \co � % j ) ( f oZ \ co d oZ a § o o )o z co}\\§ ID lu lu / ID ID ID Attachment Attachment c /}/�������������������\ \/ ) \\m /!! 4-1 � \{/ ` \ 10 00 )) \\\ \ !y2 3 o #§ ; J) \) \ \( \\ ;a \. _ §\% 2;¥`\ ` /)! y f30000 ) q %| A q� §\____)\_ (« )..«.§§(!o § ;f � � \)§�(Mo £ `� k �% Al