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HomeMy WebLinkAbout20160847 Ver 3_Signed MBI_20190531AGREEMENT TO ESTABLISH THE RES CLOUD AND BANNER MITIGATION BANKING INSTRUMENT IN THE HAW RIVER SUBWATERSHED FOR NUTRIENT OFFSET AND RIPARIAN BUFFER MITIGATION CREDITS PURSUANT TO THE JORDAN LAKE NUTRIENT MANAGEMENT STRATEGY TABLE OF CONTENTS I. PREAMBLE......................................................................................................... II. LOCATION AND GEOGRAPHIC SERVICE AREA ......................................... III. AUTHORITIES.................................................................................... ................ IV. ESTABLISHMENT OF BANK PARCELS.......................................................... V. BANK PARCEL DEVELOPMENT PACKAGE ................................................. VI. POST CONSTRUCTION DOCUMENTATION FOR THE BANK PARCEL... VII. CALCULATION OF MITIGATION CREDITS FOR THE BANK PARCEL.... VIII. CREDIT RELEASE SCHEDULE------------------------------------------------------------------------- IX. PROCEDURE FOR DEBITING AND CREDITING MITIGATION CREDITS X. BANK PARCEL CLOSURE................................................................................. XI. GENERAL PROVISIONS FOR THE BANK PARCEL ...................................... ATTACHMENTS A — Division of Water Resources Authority Document B — Delivered Credit Yield Table for Jordan Subwatersheds dated December 20, 2012 C — Rule Text 15A NCAC 02B .0240 D — Rule Text 15A NCAC 02B .0295 (Effective November 1, 2015) E — Jordan Lake Buffer Ledger Template F — Jordan Lake Nutrient Offset Ledger Template 1 I. PREAMBLE This RES Cloud and Banner Mitigation Banking Instrument ("Instrument") regarding the establishment, use, operation, and maintenance of one (1) Nutrient Offset and Buffer Mitigation Bank Parcel ("Bank Parcel"), identified in Section II, is to provide Jordan Lake Riparian Buffer mitigation credits ("Riparian Buffer Credits") and Jordan Lake Nutrient Strategy nutrient load reduction credit ("Nutrient Offset Credits") is made and entered into by and among Environmental Banc and Exchange ("EBX, 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 C and D). This instrument is for the bank site known as Cloud and Banner. The purpose of this Bank is: A. To restore and preserve riparian vegetation adjacent to streams and/or agricultural ditches with the intent to improve water quality within the Haw River Subwatershed of the Jordan Lake Watershed. B. To convert agricultural land uses within riparian areas adjacent to streams and/or agricultural ditches 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 Haw River Subwatershed of the Jordan Lake Watershed, for development (both existing and proposed) requiring such mitigation. 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 Haw River Subwatershed of Jordan Lake watershed as defined in rule 15A NCAC 02B .0262. C. Sale or transfer of Riparian Buffer Credits shall be limited to Haw River Subwatershed of the Jordan Lake watershed, as defined in rule 15A NCAC 02B .0262, unless otherwise authorized by the DWR or delegated local government in accordance with 15A NCAC 02B .0295. D. Sale or transfer of delivered Nutrient Offset Credits shall also be limited to Haw River Subwatershed of the Jordan Lake watershed, as defined in rule 15A NCAC 02B .0262 and in accordance with 15A NCAC 02B .0240. 2 E. The following table provides site-specific details of the Bank Parcel proposed under this Instrument, which is within the Haw River Subwatershed of the Jordan Lake watershed (8 - digit RUC 03030002); Tablc 1.0 — Site-specific Details Bank Parcel County 14 -Digit USGS DWR Project Project Named Primary Land Name HUC Location Strcamg Use/s Hayfield Cloud and Alamance 03030002030070 2016- 36.143777, Back Creek (agriculture), Banner 08470 -79.271535 mature bottoniland forest 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 Jordan Lake Nutrient Sensitive Waters Management Strategy. C. The sale of mitigation credits generated from the Bank Parcel approved under this Instrument, shall be consistent with approved North Carolina statutes and rules for the Jordan Lake Nutrient Sensitive Waters Management Strategy. D. Mitigation activities proposed under this Instrument and corresponding Bank Parcel Development Packages (BPDP) to generate Riparian Buffer Credits and Nutrient Offset Credits shall be consistent with North Carolina statutes and rules for the Jordan Lake Nutrient Sensitive Waters Management Strategy that are in place at the time a complete BPDP is submitted to DWR. IV. ESTABLISHMENT OF BANK PARCELS A. In accordance with 15A NCAC 02B.0295 and 15A NCAC 0213 .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 (Restoration or Preservation), and identifies features (streams, ditches, ponds, etc.) that meet general criteria to be suitable to generate mitigation 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 Visit Viability Letter Received Viability Letter Expiration Date Cloud and Banner June 21, 2016 August 17, 2016 None noted B. A valid Site Viability Letter is required prior to submittal of the BPDP. Site Viability Letters will either expire on the dates listed in the table above or upon the submittal of an individual As -Built Report to the DWR, whichever comes first. If the 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 Bank Parcel Development Package ("BPDP") be submitted to, and approved by, the DWR prior to use of the individual Bank Parcel for mitigation purposes or for any sale or transfer of any associated credits. The contents of the BPDP are provided in Section V. D. This Bank Parcel is slated to be developed in conjunction with the RES Cape Fear 02 Umbrella Mitigation Bank, Cloud and Banner United States Army Corps of Engineers (USACE) Action ID #SAW -2016-02451 for stream and wetland mitigation. The mitigation plan associated with this Bank Parcel has been submitted to the Interagency Review Team (IRT) for review and approval. E. The BPDP submitted under this instrument will be placed on public notice and made available for public commenting for 15 calendar days. F. Most of the Riparian Buffer Credits on this Bank Parcel will be generated along stream channels that are proposed for stream mitigation. Stream Mitigation Plans will be submitted under the RES Cape Fear 02 Umbrella Mitigation Bank referenced in "D" in this section. Additionally, all activities conducted within riparian buffers and adjacent riparian areas for purposes of generating Riparian Buffer Credits or Nutrient Offset Credits will be conducted in concurrence with stream and wetland mitigation activities. Riparian Buffer Credit may be achieved through restoration and preservation of DWR riparian buffers as they are defined in 15A NCAC 02B _0267, and other riparian areas allowed per 15A NCAC 02B .0295 (n) and (o) on the Bank Parcel. Riparian Buffer Credits are only attainable if the width of the mitigated area is at least 20 feet as measured perpendicularly from top of bank. G. The Bank Parcel is intended to provide Jordan Lake Riparian Buffer Credit as follows: 1. Planting hardwood trees and shrubs on a Restoration Site as defined in 15A NCAC 02B .0295(b) adjacent to mitigated streams. 2. Maintaining a Preservation Site as defined in 15A NCAC 02B .0295(b) by placing a conservation easement around riparian areas. 3. Diffused flow will be maintained onsitc to the maximum extent practicable. 4 H. Nutrient Offset Credit may be achieved on this Bank Parcel through restoration of the riparian areas, where agriculture is the predominant land use. 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. I. The Bank Parcel is expected to provide Nutrient Offset Credits in accordance with 15A NCAC 02B .0240 and is expected to provide Nutrient Offset Credit as follows: 1. Converting agricultural land uses within riparian areas to non-agricultural land uses. 2. Planting hardwood trees and shrubs on a Restoration Site as defined in 15A NCAC 02B .0295(b) adjacent to streams where agriculture has been determined to be the predominant land -use. J. The Bank Parcel submitted for review under this Instrument is anticipated to begin stream and wetland mitigation construction in Fall 2019. V. BANK PARCEL DEVELOPMENT PACKAGE A. The Bank Parcel Development Package (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 (14 -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. 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 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 for the Bank Parcel. All restoration activities must be performed in concurrence with any stream and wetland mitigation activities and not before. 5 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 for the Bank Parcel E. Prior to the release of any credits, the Sponsor shall record permanent conservation easements at the County Register of Deeds' office in the county in which the Bank Parcel is located 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 and USACE 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. 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 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 the Bank Parcel J. Following approval of the BPDP for the Bank Parcel, 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 BPDPs. 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 BPDP. No bond shall be less than $150,000.00 to cover construction costs. L. Alternatively, in lieu of posting Performance Bonds, the Sponsor may elect to construct the projects prior to the first credit releases. 0 M. For the Bank Parcel, 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. 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 BPDP, to establish, maintain, and monitor Jordan Lake Riparian Buffers or other riparian areas until Item B(l) 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 buffer and nutrient offset mitigation areas. The as -built report will describe any deviation from the approved BPDP and will document the following: 1. Buffer restoration and planting details, invasive species control, confirmation of fence installation (if applicable), 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 has been completed. 3. 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 and/or nutrient offset mitigation credits in both square feet and acres. 4. As -built map of the mitigation area showing where riparian restoration, enhancement and preservation was performed and any deviations to the Bank Parcel from what was approved in the BPDP. 5. As -Built map of the stream and wetland mitigation areas. 6. Aerial map of the mitigation area that was included in the approved BPDP. 7 Financial Assurance for the Bank Parcel C. After completion of the restoration/construction 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 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 annual bond renewals. D. A Performance/Maintenance Bond shall be secured each year for a minimum of five years, and until DWR has released all mitigation 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 initially, to cover monitoring and maintenance costs. E. For the Bank Parcel, once DWR has released 100% of all credits for completion of all Bank Parcel milestones described in Table 5.0 of Section VIII and in the corresponding BPDP, the Bank Sponsor will be released from its performance obligations under the performance bond required in C and 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 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. 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 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 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 the 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 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 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 arc meeting performance standards and updated photographs; and 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; and 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 performance 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 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 the Bank Parcel, as described in 15A NCAC 02B .0295(n), 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 preservation on the Bank Parcel, as described in 15A NCAC 02B.0295 (o) and defined in 15A NCAC 02B .0295 (b), can only be used for Riparian Buffer Credit. W 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_ The acreage of Nutrient Offset Credits on the Bank Parcel submitted under this Instrument is 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 Credits must be a minimum of fifty (50) feet from the top of the stream or ditch banks on land noted in a Site Viability Letter as agriculture. G. Nutrient Offset Credits cannot be achieved through the preservation activities performed on this Bank Parcel. H. Nutrient Abatement of Restored Riparian Area/Buffers on Agricultural Lands: The Sponsor and DWR agree to the following: Pursuant to the Jordan Trading Rule Item 15A NCAC 02B .0273(2)(a), load reductions eligible for credit are only those that exceed reduction needs calculated by applying the strategy subwatershed percentage reduction goals as provided in 15A NCAC 02B .0262(5). For the Haw River Subwatershed, this requirement results in a reduction of credits yielded per acre for restored riparian buffers when compared with the credit given in other river basins. Table 3.0 below lists the generated credit per acre of restored riparian buffer for the Haw River Subwatershed. Table 3.0. Generated credit yields for forest buffer restoration in Haw River Subwatershed Credit Generated (lbs/30yrs/ac) Jordan Subwatershed Nitrogen Phosphorus Haw River 2,249.36 143.81 I. As required under Jordan Trading Item 15A NCAC 02B .0273(2)(d)(i), the party seeking to sell credit must account for differences in instream nutrient losses between the location of the reduction need and excess loading reduction being delivered to the affected area of Jordan Lake. Attachment B produced the delivered Jordan Lake Total Nitrogen (TN) and Jorden Lake Total Phosphorus (TP) credit yields per acre of buffer restoration by each Jordan Lake 14 -digit HUC subwatershed. 1. Delivered credits are calculated by applying the delivery factors in Table 4.0 below and the acreage of riparian restoration to the generated credit yields from Table 3.0 above. The delivery factors for the Bank Parcel under this Instrument for Total 10 Nitrogen (TN) and Total Phosphorus (TP) are provided in Table 4.0 below using Attachment B for reference. The amount of delivered credits for each Bank Parcel will be detailed in the BPDP for the Bank Parcel. Table 4.0 — Delivery Factors Delivery Factors Bank Parcel TN TP Cloud and Banner 36% 18% 2. The Bank Sponsor shall report the pounds of nitrogen and phosphorus credit per acre of restored riparian buffer in the Bank Parcel's BPDP for both credits generated at the site of the nutrient reduction activity and the credit delivered to Jordan Lake. The Sponsor and DWR agree the methodology and calculations for determining nitrogen and phosphorus reduction, associated with restoration and enhancement of riparian areas as described in Section N 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 unless the viability letter for that Bank Parcel has expired. 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 mitigation credits associated with the Bank Parcel will become available for sale to a third party in accordance with the Credit Release Schedule below in Table 5.0. Table 5.0 - Credit Release Schedule for Riparian Buffer and Nutrient Offset Credits Task Project Milestone % Credit Available for Sale 1 Instrument and BPDP Approved by DWR, Conservation Easement Recorded* and Financial Assurancc Posted 20 2 Mitigation Site Earthwork, Planting and Installation of Monitoring Devices Completed and all Applicable Permits Obtained 20 3 Monitoring Financial Assurance Posted and Approval of As -Built Report 10 4 Monitoring Report #1: Approved by the DWR** & financial assurance renewed 10 5 Monitoring Report #2: Approved by the DWR** & financial assurance renewed 10 6 Monitoring Report #3: Approved by the DWR** & financial assurance renewed 10 7 Item B (1) of Section X in this Instrument has been completed and approved by DWR. 1 5 No remaining credits will be released until the conservation easement has been assigned to an approved land trust or stewardship 8 Monitoring Report #4: A roved by the DWR** & financial assurance renewed 5 9 Monitoring Report #5: Approved by the DWR** and final site visit by DWR has been conducted 10 Total 100% * For specification, please see Section V in this Instrument * * DWR Approval provided upon a determination that the site is meeting success criteria contained within the approved BPDP B. DWR may modify the 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. 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_ D. The Sponsor must initiate implementation of the approved BPDP for the site under this Instrument in concurrence with all stream mitigation activities proposed in the approved Mitigation Plans referenced in Item D of Section IV of this Instrument. 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: Credit ledgers shall provide the accounting for Riparian Buffer Credit in square feet and acres, and Nutrient Offset Credits in pounds and acres. B. Each credit ledger shall be submitted on a separate 8 1/2 inch by 11 -inch spreadsheet with legible font style and font size. All ledgers shall be submitted using the templates provided in Attachments E and F 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 Haw River Subwatershed of the Jordan Lake Watershed according to 15A NCAC 02B .0295(g). D. Nutrient Offset Credits generated on this Bank Parcel will be used to offset nitrogen and phosphorus nutrient loads within the Haw River Subwatershed of the Jordan Lake, in accordance with 15A NCAC 02B .0240. E. Available credits (credits that have been released by DWR but not sold by the Sponsor) that are generated from riparian restoration, as defined in 15A NCAC 02B .0295(b) and described in 15A NCAC 02B .0295(n), on agriculture land can be converted and transferred from Riparian Buffer Credits to Nutrient Offset Credits and from Nutrient Offset Credits back to Riparian Buffer Credits upon written approval from DWR. F. Riparian Buffer Preservation credits generated on this Bank Parcel is not transferrable into nutrient offset credits. G. The Bank Sponsor shall obtain written verification of buffer mitigation required from the delegated local government in the Haw River Subwatershed of the Jordan Lake Watershed or DWR prior to debiting Riparian Buffer Credits from the individual Bank Parcel. H. The Bank Sponsor shall obtain verification of nutrient offset need from a designated local government in the Haw River Subwatershed of the Jordan Lake Watershed, prior to debiting Nutrient Offset Credits from the Bank Parcel. L All credit and debit transactions for the bank parcel under this Instrument shall be accurately depicted in the credit ledgers. The Bank Sponsor shall provide DWR up-to-date credit ledgers for the Bank by the tenth (101h) of each month. At a minimum and upon request, DWR shall receive a hard copy of updated credit ledgers along with the corresponding Mitigation Credit Transfer Certificates and all corresponding letters from the designated or delegated local governments or DWR where applicable once a year. 13 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: Bank Details: (1) Bank Sponsor Name, (2) Bank Parcel as it appears in this Instrument, (3) DWR project number for the BPDP. 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 phosphorus credits purchased in pounds and confirmation from the designated local government of the amount required, and (5 — when applicable) amount of Riparian Buffer Credits purchased in square feet and the confirmation from DWR or the local government of the amount required. Project Details: (1) project name as it appears on DWR or local government permits and/or certifications, (2) 14 -digit HUC, (3) the subwatershed within the Jordan Lake watershed, (4) nutrient strategy applicable to the project, (5 — when applicable) designated local government 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 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 the Sponsor is relieved of all of its responsibilities to the Bank Parcel and there are no mitigation credits left to sell. B. Bank Parcel Closure shall commence only after all of the following events have occurred: 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 five years of monitoring completed, and all monitoring reports submitted and approved by DWR. 14 3. All credits have been released and debited and updated ledgers showing zero credit balances have been submitted and approved by DWR. Xl. 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 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 of 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. 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 listed in Section VI of this Instrument, 6. Credit Ledger review and approval of items listed 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. 15 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. 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. 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, electronic mail, 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: Environmental Banc & Exchange, LLC Attention: Mr. Brad Breslow 302 Jefferson Street Suite 110 Raleigh, North Carolina 27605 Brad Breslow BBreslow@res.us 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 16 L. Applicable Law: This Agreement shall be construed under the laws of the State of North Carolina. ENVIRONMENTAL BANC & EXCHANGE, LLC By: VOUA DY-.-(StOLA) (Print) (Signature) Title: P--'Cn c �c Y4 OIVVW4�r- Date: i NORTH CAROLINA DEPARTMENT OF ENVIRONMENTAL QUALITY -DIVISION OF WATER RESOURCES By: (Print) ( (Signature) Title: '-I vin- . t ) i" �- . ✓` Date: . -h 0111 17 Updated Nutrient Offset Program & Buffer Mitigation Program 09/15/2015 MBI Authorities for Environmental Banc & Exchange, LLC effective 04/18/2019 ATTACHMENT A Authorities pertaining to the Cloud and Banner 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 Jordan Buffer and Jordan Water Suouly Nutrient Strate General Statutes and Session Laws: G.S. § 143-214.5 Water Supply Watershed Protection) S.L. 2013-395 S.L. 2012-201 S.L. 2012-200S.L.2012-187 S.L. 2009-216 S.L. 2009-484 S.L. 2006-259 (Section 31(a)) S.L. 2005-190 S.L. 1999-329 (part of G.S. 143B-282) Administrative Rules: 15A NCAC 2B.0262 Purpose and Scope 15A NCAC 2B.0263 Definitions 15A NCAC 2B .0264 Agriculture 15A NCAC 2B .0265 Stormwater Management for New Development 15A NCAC 2B .0267 Jordan Water Supply Nutrient Strategy: Protection of Existing Riparian Buffers 15A NCAC 2B .0270 Wastewater Discharge Requirements 15A NCAC 2B .0271 Stormwater Requirements for State and Federal Entities 15A NCAC 2B .0272 Fertilizer Management 15A NCAC 2B .0273 Options for Offsetting Nutrient Loads Jordan Water Supply Nutrient StrategyI Updated Delivered Credit Yield Table for Jordan Sub Watersheds 12/20/2012 Attachment B Delivered credit yields for buffer acres in Jordan small watersheds. Watershed ID Jordan Subwatershed Delivery Factors TN TP TN Credit (lbs/30yrs) TP Credit (lbs/30yrs) 03030002010010 Haw 25% 10% 562.34 14.38 03030002010020 Haw 37% 36% 832.26 51.77 03030002010030 Haw 44% 40% 989.72 57.52 03030002010040 Haw 49% 44% 1102.19 63.27 03030002010050 Haw 55% 48% 1237.15 69.03 03030002020010 Haw 15% 4% 337.40 5.75 03030002020020 Haw 22% 12% 494.86 17.26 03030002020030 Haw 48% 43% 1079.69 61.84 03030002020040 Haw 32% 33% 719.80 47.46 03030002020050 Haw 32% 32% 719.80 46.02 03030002020060 Haw 47% 42% 1057.20 60.40 03030002020070 Haw 54% 47% 1214.66 67.59 03030002030010 Haw 60% 56% 1349.62 80.53 03030002030020 Haw 44% 31% 989.72 44.58 03030002030030 Haw 25% 8% 562.34 11.50 03030002030040 Haw 42% 30% 944.73 43.14 03030002030050 Haw 64% 62% 1439.59 89.16 03030002030060 Haw 39% 19% 877.25 27.32 03030002030070 Haw 36% 18% 809.77 25.88 03030002030080 Haw 73% 64% 1642.04 92.04 03030002040010 Haw 30% 14% 674.81 20.13 03030002040020 Haw 28% 14% 629.82 20.13 03030002040030 Haw 71% 63% 1597.05 90.60 03030002040040 Haw 32% 15% 719.80 21.57 03030002040050 Haw 52% 50% 1169.67 71.90 03030002040060 Haw 54% 51% 1214.66 73.34 03030002040070 Haw 67% 60% 1507.07 86.28 03030002040080 Haw 53% 51% 1192.16 73.34 03030002040090 Haw 54% 51% 1214.66 73.34 03030002040100 Haw 75% 65% 1687.02 93.47 03030002040110 Haw 66% 60% 1484.58 86.28 03030002050010 Haw 74% 68% 1664.53 97.79 03030002050020 Haw 81% 74% 1821.98 106.42 03030002050030 Haw 42% 17% 944.73 24.45 03030002050040 Haw 80% 73% 1799.49 104.98 Page 1 of 2 Jordan Water Supply Nutrient StrategyI Updated Delivered Credit Yield Table for Jordan Sub Watersheds 12/20/2012 *Watershed is located in both the Upper New Hope (UNH) and Lower New Hope (LNH) Subwatersheds. Page 2 of 2 Jordan Delivery Factors TN Credit TP Credit Watershed ID Subwatershed TN TP (lbs/30yrs) (lbs/30yrs) 03030002050050 Haw 71`Yo 67% 1597.05 96.35 03030002050060 Haw 79% 73% 1777.00 104.98 03030002050070 Haw 78% 72% 1754.50 103.54 03030002050080 Haw 80% 73% 1799.49 104.98 03030002050090 Haw 79% 73% 1777.00 104.98 03030002050100 Haw 81% 75% 1821.98 107.85 03030002060010 Haw 81% 74% 1821.98 106.42 03030002060020 Haw 95% 97% 2136.90 139.49 03030002060030 Haw 88% 91% 1979.44 130.86 03030002060040 Haw 97% 98% 2181.88 140.93 03030002060050 Haw 92% 95% 2069.41 136.61 03030002060062 Haw 98% 99% 2204.38 142.37 03030002060070 UNH 40% 19% 867.70 27.32 03030002060080 UNH 59% 45% 1279.86 64.71 03030002060100 UNH 69% 63% 1496.79 90.60 03030002060110 UNH 61% 58% 1323.25 83.41 03030002060120 UNH 69% 63% 1496.79 90.60 03030002060140 UNH 85% 89% 1843.87 127.99 03030002060130 UNH 69% 63% 1496.79 90.60 03030002060160 LNH 85% 90% 1932.07 131.76 03030002060090* UNH 92% 94% 1995.71 135.18 03030002060090* LNH 92% 94% 2091.18 137.62 03030002060060* UNH 94% 96% 2039.10 138.05 03030002060060* LNH 94% 96% 1 2136.64 140.54 03030002060150* UNH 88% 91% 1908.94 130.86 03030002060150* LNH 88% 91% 2000.26 133.22 *Watershed is located in both the Upper New Hope (UNH) and Lower New Hope (LNH) Subwatersheds. 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