HomeMy WebLinkAbout2007-07-24; City Council; 19110; Wetland mitigation credits17
CITY OF CARLSBAD - AGENDA BILL
AB# 19,110
MTG- 7/24/07
DEPT.ENG
APPROVAL OF AGREEMENTS FOR THE
PURCHASE OF WETLAND MITIGATION CREDITS IN
THE NORTH COUNTY HABITAT BANK
DEPT. HEAD
CITY ATTY.
CITY MGR.
RECOMMENDED ACTION:
Adopt Resolution No. 2007-200 approving two agreements with Westmark Development
Corporation for the purchase of wetland mitigation credits from the North County Habitat Bank and
appropriating funds from the Planned Local Drainage Area fee accounts and the General Fund.
ITEM EXPLANATION:
The Westmark Development Corporation (Westmark) recently obtained agency approval for the
establishment of a wetlands mitigation bank along Encinas Creek south of Palomar Airport Road and
east of Paseo Del Norte. The bank site, known as the North County Habitat Bank (NCHB), is located
on an 18-acre site immediately east of CostCo. Westmark is currently marketing the available wetland
mitigation credits within the NCHB to interested parties in need of wetland mitigation acreage.
For the past year, staff has been working with the resource agencies to develop a mitigation plan to
compensate for habitat losses resulting from the Emergency Agua Hedionda Channel Dredge project
(Emergency Dredge project). The Emergency Dredge project resulted in the need for 4.5 acres in
wetland mitigation (0.96 acres of new wetland creation and 3.54 acres of wetland enhancement
mitigation).
Last summer, staff submitted a mitigation plan to the resource agencies detailing how nearly all of the
wetland requirements (creation and enhancement) for the Emergency Dredge project could be
accommodated within City owned property surrounding Lake Calavera. After numerous consultations
with the resource agency staff, it was determined that the Lake Calavera mitigation site is not suitable
for type of wetland creation desired by the agencies and that only a fraction (approximately 0.63
acres) of the wetland enhancement mitigation needs can be accommodated at the site. As an
alternative to the Lake Calavera site, staff investigated the potential of purchasing mitigation credits
from the newly created NCHB.
The asking price for mitigation credits in the NCHB is the same for wetland creation or wetland
enhancement credits ($250,000 per acre with a 10% reduction when purchasing more than 4 acres of
credits). The City's estimated cost for creating an acre of wetland on its own property is over
$300,000. The City's cost to enhance an acre of wetland is between $60,000 and $150,000
depending upon the type of enhancements required. Staff is recommending that the city move forward
with the purchase of 0.96 acres of wetland creation credits from the NCHB to meet the wetland
creation needs of the Emergency Dredge project. Staff will continue to work with the resource
agencies on the selection of acceptable alternative site locations or other means to meet the wetland
enhancement mitigation needs of the dredge project for the balance of enhancement mitigation that
can not be accommodated at the Lake Calavera site.
FOR CITY CLERKS USE ONLY
COUNCIL ACTION: APPROVED
DENIED
CONTINUED
WITHDRAWN
AMENDED
ri
D
D
D
D
CONTINUED TO DATE SPECIFIC
CONTINUED TO DATE UNKNOWN
RETURNED TO STAFF
OTHER -SEE MINUTES
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The establishment of the NCHB offers the City a rare opportunity to purchase banked wetland
creation mitigation credits for use with future City projects and/or maintenance activities. The bank
currently has around 10 acres of available wetland creation credits available for purchase.The supply
of available wetland mitigation sites located in the City is steadily being depleted and the cost for the
remaining sites is rapidly escalating. This is especially true for mitigation sites located within the
Coastal Zone. Current coastal zone policies require that wetland habitat impacts for projects located
in the coastal zone be mitigated to the maximum extent feasible within the coastal zone. The NCHB is
located within the coastal zone so any purchased credits can be used to mitigate for coastal wetland
impacts.
Staff anticipates that approximately 14 acres in wetland mitigation credits will be needed to mitigate
for future project and maintenance activity impacts over the next five years. The staff memorandum
attached as Exhibit 5, provides additional details regarding the anticipated wetland mitigation needs
together with more background on the formation of the NCHB and type of mitigation credits available.
Approximately half of the City's projected five-year wetland mitigation needs will be for project impacts
in the coastal zone. Some sites will have the ability to accomplish all or a portion of their mitigation on
site negating the need to acquire offsite credits. For this reason, staff is recommending purchase of a
minimum of 5 acres of additional wetland creation credits from the NCHB for use on future City
projects. As an alternative, Council may authorize the purchase of additional credits up to the amount
remaining within the NCHB.
Staff is proposing that the City enter into two purchase agreements with Westmark for the purchase of
available wetland mitigation credits in the NCHB. The first agreement would be for the purchase of the
0.96 acres of wetland creation credits for impacts related to the Emergency Dredge project. These
credits would immediately be credited to the Emergency Dredge project and all appropriate
documentation with the resource agencies would be completed to ratify the use of the credits against
the Emergency Dredge project mitigation needs.
The second purchase agreement would be for an additional 5.00 acres of wetland mitigation credits.
These credits would be owned by the City but held in the bank by Westmark pending their need by
the City. Upon City request to withdraw the credits, individual credit acknowledgement agreements
containing the appropriate ratification of the credit usage by the resource agencies would be
processed.
The purchase of mitigation credits for use on future projects carries some risk to the City. Westmark
is selling the mitigation credits on an "AS IS, WHERE IS, WITH ALL FAULTS" basis. The potential risk
for the City is that the resource agencies will not accept credits for use on a future projects due to a
catastrophic loss of the banked habitat resulting from natural or human caused disasters or, a change
in agency regulations and/or policies. Staff believes the risk level is negligible. To establish the bank,
Westmark entered into a Banking Establishment Instrument (BEI attached as Exhibit 6) with the
resource agencies. One purposes of the BEI is to clarify terms and conditions for the bank in order to
provide a level of certainty to the bank owner(s) that the credits they create will retain their value and
be accepted by the agencies for use as mitigation on future projects.
Under the terms of the BEI, project proponents, like the City, must first receive approval from the
resource agencies to use banked credits on specific projects. Westmark is required by the BEI to
immediately notify the agencies of the sale of banked mitigation credits and to account for the sale on
a Bank Credit Sales Ledger (for more information on the sales and credit ledger see email from
Westmark attached as Exhibit 7). The type of credits proposed for purchase by the City are of the
highest mitigation value having full acceptance from the Army Corps of Engineers and California
-2-
PageS
Department of Fish and Game for riparian wetland habitat creation or enhancement. In the event the
agencies deny the use of the bank credits on a specific project, the City still has the ability to sell the
credits or use them on another City project.
The risk of losing or having the value of the credits devalued due to a natural disaster or manmade
disaster is minimal. The BEI requires that Westmark post cash securities for general construction
contingencies and for establishment of a long term endowment fund. A major flood or fire would have
little likelihood of causing catastrophic damage exceeding the restorative financial capacity of the
contingency fund or long term endowment. Human caused disasters such as a plane or vehicle crash
are just as unlikely to result in catastrophic damage; and if they did, the long-term bank manager has
the ability to seek restitution from the responsible parties.
ENVIRONMENTAL IMPACT:
The proposed purchase of mitigation credits is exempt from the requirements of the California
Environmental Quality Act (CEQA) because the proposed action does not meet the definition of a
"project" per Section 15378 ("Definitions") of the State CEQA Guidelines, and will not have any
adverse significant impact on the environment.
FISCAL IMPACT:
The cost of the wetland creation mitigation credits is $225,000 per credit. The total cost for the 5.96
acres of proposed mitigation credits from the NCHB is $1,341,000.
A total of $216,000 for the 0.96 acres in wetland mitigation credits for the Emergency Dredge project
is proposed as an appropriation from the Planned Local Drainage Area (PLDA) "B" fee revenue
account. The $1,125,000 for the additional 5.0 acres of wetland mitigation credits for future City
projects is proposed to be equally shared between the PLDA fund accounts and the General Fund
(see table below). When specific projects are brought forward in the future that utilize NCHB credits,
the project funding will include appropriate reimbursements to the PLDA and/or General Fund
accounts, as applicable.
Project Description
Agua Hedionda Emergency Channel Dredge Work
Future PLDA Projects
Future Drainage Maintenance and Non-PLDA
Projects
TOTALS
Wetland
Mitigation
Acreage
0.96
2.50
2.50
5.96
Fund Account
PLDA Area 'B'
PLDA Areas 'A', 'B', 'C', & 'D'
General Fund
Amount
$216,000
$562,500
$562,500
$1,341,000
EXHIBITS:
1. Location Map.
2. Resolution No. 2007-200 approving two agreements with Westmark Development
Corporation for the purchase of wetland mitigation credits from the North County Habitat Bank
and appropriating funds from the Planned Local Drainage Area fee accounts and the General
Fund.
Page 4
3. Mitigation Purchase Agreement and Acknowledgement Agreement with Westmark
Development Corporation for purchase of 0.96 acres of wetland mitigation credits for Agua
Hedionda Channel Emergency Dredge Project.
4. Mitigation Purchase Agreement and Acknowledgement Agreement with Westmark
Development Corporation for purchase of 5.00 acres of wetland mitigation credits for future
City projects.
5. Memo dated June 28, 2007 containing additional background information.
6. Banking Establishment Instrument regarding the Establishment, Operation and Use of the
North County Habitat Bank.
7. Email from Mike McCollum of Westmark Development Corporation dated 7/9/07
DEPARTMENT CONTACT: David Mauser, (760) 602-2739, dhaus@ci.carlsbad.ca.us
LOCATION MAP
S/7E
sm
NOT TO SCALE
VICINITY
MAP
PROJECT NAME
WORTH COUNTY HABITAT BANK SITE
EXHIBIT
1
DRAW* BY: SCOTT EVANS, CARLSBAD ENGINEERING DEPT. 4/02/07 C: \CAPITAL\VAN PESKI\WESTHARK WETLAND HmGATION.DHG
1
RESOLUTION NO. 2007-200
2
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
3 CARLSBAD, CALIFORNIA, APPROVING TWO AGREEMENTS
WITH WESTMARK DEVELOPMENT CORPORATION FOR THE
4 PURCHASE OF WETLAND MITIGATION CREDITS FROM THE
NORTH COUNTY HABITAT BANK AND APPROPRIATING
5 FUNDS FROM THE PLANNED LOCAL DRAINAGE AREA FEE
ACCOUNTS AND THE GENERAL FUND.
6
WHEREAS, on March 7, 2006, the City Council of the City of Carlsbad ratified the
7
proclamation of the existence of a local emergency due to potential flooding conditions and
8
approved a construction contract for emergency dredging of the Agua Hedionda Creek Channel;
9
and,10
WHEREAS, the U.S. Army Corps of Engineers, California Department of Fish and
Game, and the Regional Water Quality Control Board issued permits for the emergency
dredging that required mitigation for impacts to wetlands habitat; and
IO
WHEREAS, the resource agency permits require that the mitigation be in place by14
September, 2007; and,15
WHEREAS, Westmark Development Corporation has obtained approval from the16
U.S. Fish & Wildlife Service, the California Department of Fish & Game, and the U.S. Army
Corps of Engineers of a Banking Establishment Instrument regarding the Establishment,1o
iq Operation and Use of the North County Habitat Bank; and
2Q WHEREAS, a Compensatory Mitigation and Monitoring Plan has been proposed for the
21 Agua Hedionda Creek Channel Emergency Dredge project which recommends purchase of
22 0-96 acres of wetland creation within the North County Habitat Bank to meet the wetland
23 creation mitigation needs for said project; and,
24 WHEREAS, Westmark Development Corporation has made 0.96 acres worth of wetland
25 creation mitigation credits available for purchase by the City of Carlsbad to be used as required
25 mitigation for the emergency dredging of the Agua Hedionda Creek Channel; and,
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1 WHEREAS, Westmark Development Corporation has made an additional 5.00 acres
2 worth of wetland mitigation credits available for purchase by the City of Carlsbad to be used for
3 future City project wetland mitigation needs; and
4 WHEREAS, the City of Carlsbad has the need for approximately 14 acres of wetland
5 mitigation over the next five years for Capital Improvement Program and Maintenance Program
6 projects; and
7 WHEREAS, the City finds it to be in its best economic interest to purchase the additional
8 5.00 acres of wetland mitigation credits to be used for future City projects; and
9 WHEREAS, the City desires to appropriate additional funds from the Planed Local
10 Drainage Area (PLDA) fee accounts in the amount of $778,500 and the General Fund in the
11 amount of $562,500 to fund the purchase of the mitigation credits from Westmark Development
12 Corporation; and
13 WHEREAS, adequate funds exist in the PLDA and General Fund accounts.
14 NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad,
^ California, as follows:
16 1. That the above recitations are true and correct.
17 2. That the agreement with Westmark Development Corporation for the purchase of
18 0.83 acres worth of wetland mitigation credit in the North County Habitat Bank to fulfill mitigation
19 requirements of the Agua Hedionda Emergency Channel Dredging project as described in the
20 attached agreement is hereby approved.
21 3. That the agreement with Westmark Development Corporation for the purchase of
22 6.86 acres worth of wetland mitigation credit in the North County Habitat Bank as described in
23 the attached agreement is hereby approved.
24 4. That the Mayor is hereby authorized and directed to execute said agreements.
25
5. That funds in the amount of $778,500 from the PLDA fee accounts are
26 appropriated for the purchase of the wetland mitigation credits.
27 ///
28 7
1 6. That funds in the amount of $562,500 from the General Fund account are
2 appropriated for the purchase of wetland mitigation credits.
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PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council
of the City of Carlsbad on the 24th day of July, 2007, by the following vote to wit:
AYES: Council Members Kulchin, Hall, Packard and Nygaard.
NOES: None.
ABSENT: Council Member Lewis.
.AUDE A LEW/l^>Mayor
ATTEST:
FO~RRAl6lE M. \NOtb, City ^K'
/(SEAL)
Aforth County
^Habitat Bank
MITIGATION CREDIT
PURCHASE AGREEMENT AND ACKNOWLEDGMENT
THIS MITIGATION CREDIT PURCHASE AGREEMENT AND ACKNOWLEDGMENT
("Agreement") is entered into this^?? day of ^lqX*y , 2007 by and between
WESTMARK DEVELOPMENT CORPORATION, a Nfevada corporation ("Seller") and
CITY OF CARLSBAD, a municipal corporation of the State of California ("Buyer").
RECITALS
A. Pursuant to that certain Banking Establishment Instrument regarding the
Establishment, Operation and Use of the North County Habitat Bank dated May 23, 2007
(the "BEI"), by and among Westmark Development Corporation; the California Department
of Fish and Game ("CDFG"); the United States Fish and Wildlife Service ("USFWS"); the
United State Environmental Protection Agency ("USEPA"), and the United States Army
Corps of Engineers ("USACOE") (CDFG, USFWS, USEPA and USACOE are referred to
collectively hereinafter as the "Agencies"). The Agencies have acknowledged the creation of
the North County Habitat Bank (the "Mitigation Bank") and the right of Seller to sell
"Mitigation Credits" to mitigate for the loss of wetlands and habitat as provided therein.
B. Buyer desires to mitigate the loss of certain wetland/riparian or upland habitat values
on real property located in San Diego County California commonly known as Emergency
Channel Dredging for Agua Hedionda (the "Buyer's Property") to satisfy Buyer's
obligations with respect to wetland/riparian or upland habitat on Buyer's Property and to
obtain permits and approvals to develop Buyer's Property.
C. Buyer has agreed to purchase from Seller, and Seller has agreed to sell to Buyer 0.96
credits of Created Wetland/Riparian Mitigation as defined in the BEI (the "Conveyed
Credits") from the Mitigation Bank on the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the agreements and acknowledgments set forth
herein and for other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, Seller and Buyer hereby agree and acknowledge as follows:
North County Habitat Bank 03207629-609-CG1
Mitigation Credit Purchase Agreement Page 1 of 5 v.062607
1. Purchase Price. The purchase price for the 0.96 Wetland/Riparian Mitigation Credits
shall be $216,000.00. The Purchase Price shall be paid in good funds on the Closing Date.
2. Acknowledgment of Sale. On the Closing Date, Seller shall deliver a fully executed
original of the Acknowledgment of Sale of Mitigation Credits ("Acknowledgment"), in form
and content as Exhibit A attached hereto and such other documents and instruments as may
be required by any of the Agencies to evidence and recognize the transfer of the Conveyed
Credits to Buyer. Moreover, Seller agrees that to the extent such have not been provided to
Buyer at the closing, then if requested by Buyer subsequent to the closing, Seller will provide
such documents and instruments as may be required by any of the Agencies to evidence and
recognize the transfer of the Conveyed Credits within ten (10) days following Buyer's
request. The provisions of this Paragraph 2 shall survive the closing and termination of this
Agreement.
3. Closing. Buyer shall deliver to Seller this executed purchase agreement on or before
July 31,2007. Funds equal to the Purchase Price shall be delivered to Seller on or before
August 10,2007 which shall be deemed the "Closing Date". The closing shall mean the date
that the Purchase Price is delivered to Seller and the fully executed Acknowledgment of Sale
of Mitigation Credits is delivered to Buyer. Notwithstanding the foregoing, Buyer may
accelerate the Closing Date.
4. AS-IS Sale. Buyer acknowledges and agrees that: (a) it is the Buyer's sole
responsibility to determine the acceptance of the Conveyed Credits by the Agencies as
mitigation for impacts to wetland/riparian values, and any completed sale of any Conveyed
Credits shall be final; (b) the purchase and sale of the Conveyed Credits shall be made on an
"AS IS, WHERE IS, WITH ALL FAULTS" basis as provided for in the BEI; and c) no
representations or warranties have been made or are made and no responsibility has been or
is assumed by Seller or by any officer, agent, affiliate, attorney, or representative acting or
purporting to act on behalf of Seller as to (I) the mitigation value of the property conveyed to
the Agencies in establishing the Mitigation Bank; (ii) the mitigation value or mitigation
requirements of Buyer's Property, (iii) the acceptance of the Conveyed Credits by the
Agencies or any other governmental agency as mitigation for the loss of habitat values
associated with Buyer's Property, or (iv) any other fact or circumstances which might affect
the Mitigation Bank, the Buyer's Property, or the Conveyed Credits.
5. Termination. Time is of the essence in this Agreement. In the event the closing does
not occur by the Closing Date, Seller, at its election, and in its sole and absolute discretion,
by written notice to Buyer, may terminate this Agreement and neither party shall have any
further obligations hereunder except as provided in Paragraph 6 below.
6. Brokers. Buyer represents to the Seller that it has not had any other contract,
North County Habitat Bank 03207629-609-CG1
Mitigation Credit Purchase Agreement Page 2 of 5 v.062607
agreement or dealings regarding the Conveyed Credits with, nor any communication in
connection with the subject matter of this transaction through, any consultant, broker, agent,
finder or other person who can claim a right to a consultant fee, commission or finder's fee
from the Seller in connection with the sale contemplated herein. In the event that a
consultant, broker or finder makes a claim for a consultant fee or commission or finder's fee
based upon any such contract, agreement, dealings or communication, the party through
whom such claim is made shall be solely responsible for and shall indemnify, defend, and
hold harmless the other party from and against said commission or fee and all costs and
expenses (including without limitation reasonable attorneys' fees) incurred by the other party
in defending against such claim. The provisions of this Paragraph 6 shall survive the
termination of this Agreement.
7. Integration. Buyer and Seller agree that all negotiations, discussions, understandings
and agreements heretofore made between them or their respective agents or representatives
are merged in this Agreement and the Exhibit attached hereto, and this written Agreement
alone fully and completely expresses their agreement with respect to the subject matter
hereof and supersedes all prior agreements and understandings between the parties relating to
the subject matter of this Agreement. Buyer and Seller further agree that Buyer has no
responsibilities or obligations whatsoever regarding the Conveyed Credits or the BEI except
as are expressly stated in this Agreement.
8. Notices. All deposits and any notice required or permitted to be made or given under
this Agreement shall be made and delivered to the parties at the addresses set forth below
each party's respective signature. All notices shall be in writing and shall be deemed to have
been given when delivered by courier, when transmitted by facsimile (upon confirmation of
successfully completed transmission), or upon the expiration of two (2) business days after
the date of deposit of such notice in the United States mail, registered or certified mail,
postage prepaid.
9. Attorneys' Fees. This Agreement shall be governed and construed in accordance with
the laws of the State of California and interpreted as if prepared by both parties hereto. In the
event a dispute arises concerning the meaning or interpretation of any provision of this
Agreement, or in the event of any litigation arising out of or related to this Agreement, the
party not prevailing in such dispute or litigation shall pay any and all costs and expenses
incurred by the other party in establishing or defending its rights hereunder, including,
without limitation, court costs, expert witness fees, and reasonable attorneys' fees.
10. Limited Representations and Warranties. Seller is a corporation duly formed,
presently existing and in good standing under the laws of the State of Nevada, is qualified to
transact business in the State of California, and has the power and authority to own, and does
own, the Mitigation Credits, and the power and authority to consummate the sale of
North County Habitat Bank 03207629-609-CG1
Mitigation Credit Purchase Agreement Page 3 of 5 v.062607
Conveyed Credits as contemplated by this Agreement, and the person executing this
Agreement has the full authority to bind Seller. This Agreement and all instruments,
including assignment and/or conveyance documents to be executed by Seller in connection
herewith are or when delivered to Buyer will be duly authorized, executed and delivered by
Seller and will be valid, binding and enforceable obligations of Seller. Neither this
Agreement nor any instrument, including assignment and/or conveyance documents to be
executed by Seller in connection herewith does now or will hereafter constitute a breach or
default or invalidate, make inoperative or interfere with any contract, agreement, right or
interest affecting or relating in any manner to the Conveyed Credits. The Conveyed Credits
shall be assigned/conveyed to Buyer at the closing free and clear of all liens or other
encumbrances of any type, monetary or non-monetary.
11. Counterparts. This Agreement may be executed and delivered in any number of
identical counterparts, each of which so executed and delivered shall be deemed to be an
original and all of which shall constitute one and the same instrument.
North County Habitat Bank
Mitigation Credit Purchase Agreement Page 4 of 5
03207629-609-CG1
v.062607
WHEREUPON, this Agreement has been executed as of the date first-above written.
SELLER:
WESTMARK DEVELOPMENT CORPORATION, a Nevada
corporation"
NamerMaifc Rohrlick
Its: President
Westmark Development Corporation
c/o McCollum Associates
10196 Clover Ranch Dr
Sacramento, CA 95829
Telephone: (916)688-2040 Fax: (916)688-7436
Email: mccollum@mccollum.com
BUYER:
CITY OF CARLSBAD, a municipal corporation of the State of
California
By:_
Name' Claude A. "Bud'7"
Its: Mayor
Attention: Mr. David Hauser
Deputy City Engineer
Engineering Department
City of Carlsbad
1635 Faraday Avenue
Carlsbad CA 92008
Telephone: (760) 602-2739
Fax: (760)602-8562
Email: dhaus@ci.carlsbad.ca.us
North County Habitat Bank
Mitigation Credit Purchase Agreement Page 5 of 5
03207629-609-CG 1
v.062607
North County
Sank
EXHIBIT A
ACKNOWLEDGMENT OF SALE OF MITIGATION CREDITS
The undersigned seller hereby acknowledges that it
has sold and conveyed to
("Buyer"), acre(s) of Enhanced/Preserved and/or
acre(s) of Created/Restored wetland/riparian
mitigation credits from the North County Habitat Bank.
All terms of this conveyance shall be governed by the
provisions of the Mitigation Credit Purchase Agreement
and Acknowledgment between Buyer and the undersigned
dated .
Seller:
Westmark Development Corporation
c/o McCollum Associates
10196 Clover Ranch Dr
Sacramento, CA 95829
Telephone: (916) 688-2040
Fax: (916) 688-7436
Email: mccollum@mccollum.com
By:
Name: Mark Rohrlick
Its: President
Date:
Escrow Account Number 03207629-609-CG1
tyorth County
Bank
MITIGATION CREDIT
PURCHASE AGREEMENT AND ACKNOWLEDGMENT
THIS MITIGATION CREDIT PURCHASE AGREEMENT AND ACKNOWLEDGMENT
("Agreement") is entered into this^T^ day of C$itJL~-s , 2007 by and between
WESTMARK DEVELOPMENT CORPORATION, a Nevada corporation ("Seller") and
CITY OF CARLSBAD, a municipal corporation of the State of California ("Buyer").
RECITALS
A. Pursuant to that certain Banking Establishment Instrument regarding the
Establishment, Operation and Use of the North County Habitat Bank dated May 23, 2007
(the "BEI"), by and among Westmark Development Corporation; the California Department
of Fish and Game ("CDFG"); the United States Fish and Wildlife Service ("USFWS"); the
United State Environmental Protection Agency ("USEPA"), and the United States Army
Corps of Engineers ("USACOE") (CDFG, USFWS, USEPA and USACOE are referred to
collectively hereinafter as the "Agencies"). The Agencies have acknowledged the creation of
the North County Habitat Bank (the "Mitigation Bank") and the right of Seller to sell
"Mitigation Credits" to mitigate for the loss of wetlands and habitat as provided therein.
B. Buyer desires to mitigate the loss of certain wetland/riparian or upland habitat values
on real property located in San Diego County California as determined by the City and the
MBRT (the "Buyer's Property") to satisfy Buyer's obligations with respect to
wetland/riparian or upland habitat on Buyer's Property and to obtain permits and approvals to
develop Buyer's Property.
C. Buyer has agreed to purchase from Seller, and Seller has agreed to sell to Buyer 5.0
credits of created Wetland/Riparian Mitigation Credits as defined in the BEI (the "Conveyed
Credits") from the Mitigation Bank on the terms and conditions set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the agreements and acknowledgments set forth
herein and for other good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, Seller and Buyer hereby agree and acknowledge as follows:
North County Habitat Bank 03207629-609-CG1
Mitigation Credit Purchase Agreement Page 1 of 5 v.062607
1. Purchase Price. The purchase price for the 5.0 Wetland/Riparian Mitigation Credits
shall be $1,125,000.00. The Purchase Price shall be paid in good funds on the Closing Date.
2. Acknowledgment of Sale. On the Closing Date, Seller shall deliver a fully executed
original of the Acknowledgment of Sale of Mitigation Credits ("Acknowledgment"), in form
and content as Exhibit A attached hereto and such other documents and instruments as may
be required by any of the Agencies to evidence and recognize the transfer of the Conveyed
Credits to Buyer. Moreover, Seller agrees that to the extent such have not been provided to
Buyer at the closing, then if requested by Buyer subsequent to the closing, Seller will provide
such documents and instruments as may be required by any of the Agencies to evidence and
recognize the transfer of the Conveyed Credits within ten (10) days following Buyer's
request. The provisions of this Paragraph 2 shall survive the closing and termination of this
Agreement.
3. Closing. Buyer shall deliver to Seller this executed purchase agreement on or before
July 31,2007. Funds equal to the Purchase Price shall be delivered to Seller on or before
August 10,2007 which shall be deemed the "Closing Date". The closing shall mean the date
that the Purchase Price is delivered to Seller and the fully executed Acknowledgment of Sale
of Mitigation Credits is delivered to Buyer. Notwithstanding the foregoing, Buyer may
accelerate the Closing Date.
4. AS-IS Sale. Buyer acknowledges and agrees that: (a) it is the Buyer's sole
responsibility to determine the acceptance of the Conveyed Credits by the Agencies as
mitigation for impacts to wetland/riparian values, and any completed sale of any Conveyed
Credits shall be final; (b) the purchase and sale of the Conveyed Credits shall be made on an
"AS IS, WHERE IS, WITH ALL FAULTS" basis as provided for in the BEI; and c) no
representations or warranties have been .made or are made and no responsibility has been or
is assumed by Seller or by any officer, agent, affiliate, attorney, or representative acting or
purporting to act on behalf of Seller as to (I) the mitigation value of the property conveyed to
the Agencies in establishing the Mitigation Bank; (ii) the mitigation value or mitigation
requirements of Buyer's Property, (iii) the acceptance of the Conveyed Credits by the
Agencies or any other governmental agency as mitigation for the loss of habitat values
associated with Buyer's Property, or (iv) any other fact or circumstances which might affect
the Mitigation Bank, the Buyer's Property, or the Conveyed Credits.
5. Termination. Time is of the essence in this Agreement. In the event the closing does
not occur by the Closing Date, Seller, at its election, and in its sole and absolute discretion,
by written notice to Buyer, may terminate this Agreement and neither party shall have any
further obligations hereunder except as provided in Paragraph 6 below.
6. Brokers. Buyer represents to the Seller that it has not had any other contract,
North County Habitat Bank 03207629-609-CG1
Mitigation Credit Purchase Agreement Page 2 of 5 v.062607
n
agreement or dealings regarding the Conveyed Credits with, nor any communication in
connection with the subject matter of this transaction through, any consultant, broker, agent,
finder or other person who can claim a right to a consultant fee, commission or finder's fee
from the Seller in connection with the sale contemplated herein. In the event that a
consultant, broker or finder makes a claim for a consultant fee or commission or finder's fee
based upon any such contract, agreement, dealings or communication, the party through
whom such claim is made shall be solely responsible for and shall indemnify, defend, and
hold harmless the other party from and against said commission or fee and all costs and
expenses (including without limitation reasonable attorneys' fees) incurred by the other party
in defending against such claim. The provisions of this Paragraph 6 shall survive the
termination of this Agreement.
7. Integration. Buyer and Seller agree that all negotiations, discussions, understandings
and agreements heretofore made between them or their respective agents or representatives
are merged in this Agreement and the Exhibit attached hereto, and this written Agreement
alone fully and completely expresses their agreement with respect to the subject matter
hereof and supersedes all prior agreements and understandings between the parties relating to
the subject matter of this Agreement. Buyer and Seller further agree that Buyer has no
responsibilities or obligations whatsoever regarding the Conveyed Credits or the BEI except
as are expressly stated in this Agreement.
8. Notices. All deposits and any notice required or permitted to be made or given under
this Agreement shall be made and delivered to the parties at the addresses set forth below
each party's respective signature. All notices shall be in writing and shall be deemed to have
been given when delivered by courier, when transmitted by facsimile (upon confirmation of
successfully completed transmission), or upon the expiration of two (2) business days after
the date of deposit of such notice in the United States mail, registered or certified mail,
postage prepaid.
9. Attorneys' Fees. This Agreement shall be governed and construed in accordance with
the laws of the State of California and interpreted as if prepared by both parties hereto. In the
event a dispute arises concerning the meaning or interpretation of any provision of this
Agreement, or in the event of any litigation arising out of or related to this Agreement, the
party not prevailing in such dispute or litigation shall pay any and all costs and expenses
incurred by the other party in establishing or defending its rights hereunder, including,
without limitation, court costs, expert witness fees, and reasonable attorneys' fees.
10. Limited Representations and Warranties. Seller is a corporation duly formed,
presently existing and in good standing under the laws of the State of Nevada, is qualified to
transact business in the State of California, and has the power and authority to own, and does
own, the Mitigation Credits, and the power and authority to consummate the sale of
North County Habitat Bank 03207629-609-CG1
Mitigation Credit Purchase Agreement Page 3 of 5 v.062607
Conveyed Credits as contemplated by this Agreement, and the person executing this
Agreement has the full authority to bind Seller. This Agreement and all instruments,
including assignment and/or conveyance documents to be executed by Seller in connection
herewith are or when delivered to Buyer will be duly authorized, executed and delivered by
Seller and will be valid, binding and enforceable obligations of Seller. Neither this
Agreement nor any instrument, including assignment and/or conveyance documents to be
executed by Seller in connection herewith does now or will hereafter constitute a breach or
default or invalidate, make inoperative or interfere with any contract, agreement, right or
interest affecting or relating in any manner to the Conveyed Credits. The Conveyed Credits
shall be assigned/conveyed to Buyer at the closing free and clear of all liens or other
encumbrances of any type, monetary or non-monetary.
11. Counterparts. This Agreement may be executed and delivered in any number of
identical counterparts, each of which so executed and delivered shall be deemed to be an
original and all of which shall constitute one and the same instrument.
North County Habitat Bank 03207629-609-CG1
Mitigation Credit Purchase Agreement Page 4 of 5 v.062607
WHEREUPON, this Agreement has been executed as of the date first-above written.
SELLER:
WESTMARK DEVELOPMENT CORPORATION, a Nevada
corporation
ent
Westmark Development Corporation
c/o McCollum Associates
10196 Clover Ranch Dr
Sacramento, CA 95829
Telephone: (916)688-2040 Fax: (916)688-7436
Email: mccollum@mccollum.com
BUYER:
CITY OF CARLSBAD, a municipal corporation of the State of
California
Name: Claude A. "Bud
Its: Mayor
Ewis
Attention: Mr. David Hauser
Deputy City Engineer
Engineering Department
City of Carlsbad
1635 Faraday Avenue
Carlsbad CA 92008
Telephone: (760) 602-2739
Fax: (760)602-8562
Email: dhaus@ci.carlsbad.ca.us
North County Habitat Bank
Mitigation Credit Purchase Agreement Page 5 of 5
03207629-609-CG1
v.062607
North County
Habitat Bank
EXHIBIT A
ACKNOWLEDGMENT OF SALE OF MITIGATION CREDITS
The undersigned seller hereby acknowledges that it
has sold and conveyed to
("Buyer") , acre(s) of Enhanced/Preserved and/or
acre(s) of Created/Restored wetland/riparian
mitigation credits from the North County Habitat Bank.
All terms of this conveyance shall be governed by the
provisions of the Mitigation Credit Purchase Agreement
and Acknowledgment between Buyer and the undersigned
dated .
Seller:
Westmark Development Corporation
c/o McCollum Associates
10196 Clover Ranch Dr
Sacramento, CA 95829
Telephone: (916) 688-2040
Fax: (916) 688-7436
Email: mccollum@mccollum.com
By:
Name: Mark Rohrlick
Its: President
Date:
Escrow Account Number 03207629-609-CG1
2. \
r 5
MEMORANDUM
DATE: June 28, 2007
TO: Glenn Pruim, Public Works Director
FROM: David Mauser, Deputy City Engineer
RE: NORTH COUNTY HABITAT BANK
Since February 2004, Mark Rohrlick and Michael McCollum at Westmark Development
Corporation (Westmark) have been working to establish the North County Habitat Bank
(NCHB), and to obtain approvals from the various resource agencies in the Mitigation Bank
Review Team (MBRT) for a Banking Establishment Instrument (BEI) regarding the
establishment, operation and use of the NCHB. The BEI agreement was recently approved by
the U.S. Fish & Wildlife Service (USFWS), the California Department of Fish & Game (CDFG),
the U.S. Army Corps of Engineers (USAGE) and the U.S. Environmental Protection Agency
(USEPA). The Regional Water Quality Control Board (RWQCB), while not a signatory to the
BEI, has been actively involved in the creation of the NCHB, and has indicated that it will accept
mitigation credits to fulfill Section 401 Certification conditions. Westmark is now actively
marketing the mitigation credits established in the NCHB.
Wetland mitigation is required in two different forms - creation/restoration and
enhancement/preservation. Creation/restoration (USACE/CDFG) mitigation is newly created
wetland habitat made by converting land with no habitat or some other habitat into wetland
habitat. Enhancement/preservation (USACE/CDFG) mitigation is taking current degraded
wetlands habitat and enhancing it to improve its habitat value. There are a number of factors
governing required mitigation ratios, but for good quality habitat, it is common to see 2:1
creation/restoration and 1:1 enhancement/preservation ratios. The NCHB was approved for
approximately 4 acres of wetland enhancement/preservation mitigation (at a 1:1 ratio this
translates to approximately 4 acres of enhancement mitigation credits) and, 4 acres of wetland
creation/restoration mitigation (at a 3:1 ratio this translates to approximately 12 acres of creation
mitigation credits).
The City has a need for approximately 0.96 acres of wetland creation mitigation acreage to
complete the wetland creation mitigation requirement for the Agua Hedionda Channel
Emergency Dredge Project.
The asking price per acre of mitigation credit in the NCHB is $250,000. The price is the same for
both creation and enhancement wetland mitigation credits. Westmark is offering to sell
mitigation credits to the City at the discounted price of $225,000 provided we purchase in
quantity (over about five acres. See discussion below). The City's cost to create an acre of
wetland is slightly over $300,000 per acre excluding land value. Land values for non-
developable wetland property are approximately $25,000 per acre.
The NCHB is able to sell credits at a lower price per acre than the cost to create the acre
because the agencies have established policies which view established habitat as having more
value than proposed habitat. That is to say, the agencies typically require an agency to mitigate
(after the impact have occurred) at a 3:1 ratio which includes a 2:1 creation component and a
1:1 enhancement component. The theory behind this requirement is that not all the newly
created habitat will survive so additional land must be created to end up with a one for one
replacement. The additional 1:1 enhancement component is presumably needed to provide
habitat value while the new habitat is being created.
Project applicants that are able to pre-mitigate for impacts to wetland habitat need only meet a
1:1 mitigation ratio. Therefore, a pre-mitigated acre of created habitat has the same value as
two acres of new habitat creation and one acre of habitat enhancement when such mitigation
takes place after the habitat impacts occur. The establishment of a mitigation bank allows the
bank owner to recoup the cost of their per acre investment up to three times over once they
meet all agency success criteria for a five year period. The NCHB has already met its four year
success criteria and is currently seeking permission from the agencies to market the full value of
the banked credits.
We are not proposing at this time to purchase any wetland enhancement credits from the NCHB
for the Emergency Dredge project. Our estimated cost of wetland enhancement at the Lake
Calavera and other City sites is between $60,000 and $150,000 per acre depending upon the
type of enhancement required. Since the Lake Calavera site only has the ability to
accommodate approximately 0.63 acres of wetland enhancement out of the 3.54 acres of
wetland enhancement required by the agencies, the City must find an additional 2.91 acres of
enhancement elsewhere. Currently, we are exploring other options for providing the additional
enhancement requirement.
The NCHB has additional mitigation credits available which affords the City a unique opportunity
to purchase additional creation mitigation credits at a discounted price. The City has numerous
projects in the pipeline that will require wetland mitigation (see table below).
Project
Agua Hedionda and Calavera Creek Channel Dredge Project (non-
emergency work)
Miscellaneous Drainage Master Plan Projects (Future City constructed
PLDA projects)
Proposed Five-year Drainage Facility Maintenance Program
Total
Estimated Acres of
Wetland Mitigation
Required
6
5
3
14
Additional mitigation acreage may be necessary for other non-drainage City projects such as
the Vista/Carlsbad sewer line replacement along the Buena Vista Creek. The proposed Five-
year Drainage Facility Maintenance Program (DFMP) listed above includes only a fraction of the
drainage facilities requiring maintenance in the City. The total wetland mitigation needs to
implement the DFMP for all City drainage facilities are estimated to require an additional 15 to
25 acres of mitigation land.
The NCHB is located within the Coastal Zone. The California Coastal Commission (CCC)
typically requires that mitigation for impacts to wetlands within the Coastal Zone occur within the
Coastal Zone. There is very limited mitigation area available within the Coastal Zone making
the credits that much more valuable to the City.
Westmark indicated their willingness to make any remaining credits available to the City at the
discounted asking price of $225,000 per acre. Although Westmark offered the City first right of
refusal on the additional acreage, it is their intent to sell these credits as quickly as possible. For
the reasons stated above, I recommend that the City purchase a minimum of 4.0 acres of
additional mitigation credits from the NCHB for use on future City projects and maintenance
activities.
The total cost to purchase the 5.96 acres of mitigation credits at $225,000 is $1,341,000. The
purchase price for the Emergency Dredge project mitigation would be funded by PLDA fees
($216,000). It is my recommendation to equally split the purchase price for the additional 5.0
acres in mitigation credits between the PLDA Fund and the General Fund ($562,500 from each
fund).
If the City decides not to purchase the additional 5.0 acres in mitigation credits, then the cost for
the Emergency Dredge project mitigation credit purchase would be $250,000 per acre or a total
of $447,500.
Community Development Director
Finance Director
Administrative Services Director
Acting City Engineer
Planning Director
Consultant Project Engineer, Glen Van Peski
24
05/26/2016 04:48 FAX
BANK ENABLING INSTRUMENT
for the
NORTH COUNTY HABITAT BANK
Carlsbad, San Diego County, California
April 30, 2007
This Bank Enabling Instrument ("BEI") made this J$ day ofArf, 2007, regarding the
establishment, use, operation, and maintenance of the North County Mitigation/
Conservation Bank ("Bank") is made and entered into by and among Westmark
Development Corporation ("Bank Sponsor" and "Property Owner"), the Los Angeles
District of the U.S. Army Corps of Engineers ("USAGE"), Region EX of the U.S.
Environmental Protection Agency ("USEPA"), the Carlsbad field office of the U.S. Fish
& Wildlife Service ("USFWS"), and the South Coast Region (i.e., Region 5) of the
California Department of Fish & Game ("CDFG"). The state and federal agencies
named above comprise and are referred to jointly as the Mitigation Bank Review Team
("MBRT"), and the Bank Sponsor and the MBRT are hereinafter referred to jointly as
the "Parties."
Recitals
A. The Bank Sponsor is die person or entity responsible for establishing and
operating the Bank.
B. The Property Owner is the owner of real property containing approximately 1 8.7
acres (the "Property"), located just south of Palomar Airport Road in the City of
Carlsbad, San Diego County, State of California, designated Assessor's Parcel
No. 21 1-040-33. The Property is generally shown and legally described in Exhibit
A (Bank Location Maps) and in Exhibit E-l (Preliminary Title Report, Legal
Description, and Parcel Maps) attached hereto. Westmark Development
Corporation, as Bank Sponsor and Property Owner, desires to create a
mitigation/conservation bank over a 15.7-acre portion of the Property (the "Bank
Property"). The Bank Property is generally shown in Exhibit A and described in
Exhibit C (Restoration Plan).
C. The CDFG has jurisdiction over the conservation, protection, and management of
fish, wildlife; native plants, and the habitat necessary for biologically sustainable
populations of these species pursuant to Fish and Game Code sec. 1 802; and other
provisions of state law.
D. The USFWS, an agency within the United States Department of the Interior, has
jurisdiction over the conservation, protection, restoration and management offish,
wildlife, native plants, and the habitat necessary for biologically sustainable
populations of these species within the United States pursuant to the Endangered
Species Act, 16 U.S.C. §1531, etseq., the Fish and Wildlife Coordination Act, 16
U.S.C. § 661 -666c, the Fish and Wildlife Act of 1956, 16U.S.C. § 742(f), etseq.,
and other provisions of federal law.
E. The USEPA and USACE have jurisdiction over waters of the United States,
pursuant to the Clean Water Act, 33 U.S.C. § 1251 et seq. Waters of the United
States includes jurisdictional wetlands.
F. The MBRT is an interagency group which oversees the establishment, use,
operation, and maintenance of the Bank.
G. The goals and objectives for the Bank are set forth in Exhibit C (Restoration Plan)
and Exhibit D (Long Term Management Plan).
H. The Bank Property, formerly used for ranching and farming, is bisected
longitudinally by Encinas Creek, with the southeastern corner of the site sloping
up from the creek, and with portions of the site heavily infested with pampas
grass (Cortaderia selloand). The site is within the Encinas Creek floodplain and
provides groundwater recharge, filtration of surface and sub-surface flows, habitat
that supports wildlife, and sediment transport. A general baseline description of
Bank resources is provided in Exhibit H (Biological Resources Survey) and
Exhibit I (Wetland Delineation Verification Letter).
NOW, THEREFORE, in consideration of the foregoing recitals and other good and
valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the
Parties agree to the following.
I. PURPOSE AND AUTHORITIES
A. Purpose.
The purpose of this BEI is to establish guidelines and responsibilities for the
establishment, use, operation, and maintenance of the Bank to compensate, conserve, and
protect Waters of the United States and Covered Habitat. The Bank Sponsor and
Property Owner shall preserve, create, restore, and/or enhance and then manage and
maintain Waters of the United States and Covered Habitat in accordance with the
Restoration Plan and Long Term Management Plan.
B. Authorities.
The Bank is available to be used for off-site compensatory mitigation or
conservation for unavoidable impacts to waters of the United States and Covered Habitat,
governed by the following regulations, policies, and guidance.
1. Federal:
a. Clean Water Act ("CWA") (33 USC § 1251 et seq.);
b.Riv ers and Harbors Act (33 USC 403);
c. National Environmental Policy Act ("NEPA") (42 USC
§4321 etseq.);
d.Fish a nd Wildlife Coordination Act (16 USC § 661 et
seq.);
e. Endangered Species Act ("ESA") (16 USC § 1531 et
seq.), particularly including impacts to federal listed
threatened or endangered species under sections 7 and
10 of the Endangered Species Act and/or occupied
habitat;
f. Executive Order 11990, Protection of Wetlands;
Page 2 of 25 7 BEI for the North County Mitigation Bank, Carlsbad
g.E xecutive Order 11988, Floodplain Management;
h.Reg ulatory Programs of the Corps of Engineers, Final
Rule (33 CFR Parts 320-331);
i. Guidelines for Specification of Disposal Sites for
Dredged and Fill Material (40 CFR Part 230);
j. Memorandum of Agreement between the
Environmental Protection Agency and the Department
of the Army concerning the Determination of
Mitigation Under the Clean Water Act, Section 404
(b)(l) Guidelines (February 6, 1990);
k.Federal Guidance for the Establishment, Use, and
Operation of Mitigation Banks (60 F.R. 58605 et seq.)
(November 28,1995);
1. Guidance for the Establishment, Use and Operation of
Conservation Banks (United States Department of
Interior Memorandum, dated May 2, 2003); and
m. Regulatory Guidance Letter 02-2, dated December 24,
2002, titled "Guidance on Compensatory Mitigation
Projects for Aquatic Resource Impacts under the Corps
Regulatory Program Pursuant to Section 404 of the
Clean Water Act and Section 10 of the Rivers and
Harbors Act of 1899."
2. State:
a. California Environmental Quality Act ("CEQA")
(Public Resources Code Section 21000 et seq) and State
CEQA Guidelines (Tit. 14 Cal. Code Regs., Chapter 3);
b.Calif ornia Endangered Species Act ("CESA") (Fish &
Game Code Section 2050 et seq.);
c. California Natural Community Conservation Planning
("NCCP") Act (Fish & Game Code Section 2800 et
seq.);
d.Fish & Game Code Section 1600 et seq (Fish and
Wildlife Protection and Conservation); and
e. Official Policy on Conservation Banks, April 7, 1995,
by California Resources Agency and California
Environmental Protection Agency, jointly.
II. DEFINITIONS
The initially capitalized terms used and not defined elsewhere in this BEI are defined as
set forth below.
A. "Bank Closure Plan," means a plan designed to ensure that the Bank is
managed and maintained, in perpetuity, consistent with the purpose of the
Bank. The Bank Closure Plan is comprised of the Section in the Restoration
Plan entitled Bank Closure, and Section X in this BEI. The Bank Closure
Page 3 of 25 'J BEI for the North County Mitigation Bank, Carlsbad
Plan describes actions required to close the Bank following the sale of the
last authorized Credit and identifies and describes the long-term proposals
for and responsibilities of the Bank Sponsor, Property Owner, Bank
Manager, endowment holder, and beneficiaries.
B. "Bank Establishment Date" means the date when (a) this BEI is signed by
all Parties (i.e., the Effective Date of this BEI) and (b) the Conservation
Easement over the Bank Property has been recorded or the owner has
provided to CDFG an executed Conservation Easement in a form approved
by the MBRT along with all supporting documentation.
C. "Bank Manager" or "Long-Term Manager" is any person or public or
private entity responsible for managing the Bank and its habitat in perpetuity
using the annual interest payments from the Endowment Fund as capital.
The Bank Manager assumes responsibility for long-term management upon
Bank closure. The Bank Manager may become the Property Owner before
Bank closure under Section XIII.F.of this BEI.
D. "Bank Property" is a site where a specified number of acres of Waters of the
United States and Covered Habitat are created, restored, enhanced, and, in
certain circumstances, preserved. Based on the specified acreage, the Bank
accrues Credits available for compensatory mitigation in advance of
authorized impacts to similar resources. A Conservation Easement (Exhibit
E-4) will protect the Bank Property.
E. "Bank Sponsor" means any person or public or private entity responsible for
establishing and operating the Bank. At the time of Bank establishment, and
until transfer of the Bank Property under the terms of this BEI, the Property
Owner is the Bank Sponsor.
F. "BEI" means Bank Enabling Instrument, which is this document and all
Exhibits, incorporated by reference.
G. "Catastrophic Event" shall mean an event, such as a spill of hazardous or
toxic substance, the impact of a vehicle or falling aircraft, or a fire, which
has a material and detrimental impact on the quality of native vegetation,
soils, or wildlife on the Bank Property and over which the Bank Sponsor or
Property Owner has no control.
H. "CEQA" means the California Environmental Quality Act (California
Public Resources Code Sections 21000 et seq.; guidelines for
implementation at California Public Resources Code Sections 15000 et
seq.), including all regulations promulgated pursuant to that Act.
I. "CESA" means the California Endangered Species Act (California Fish and
Game Code Sections 2050 et seq.), including all regulations promulgated
pursuant to that Act.
Page 4 of 25 4 BEI for the North County Mitigation Bank, Carlsbad
J. "CNLM" means the Center for Natural Lands Management, the Long-Term
Manager of the property.
K. "Conservation Easement" means a perpetual conservation easement, as
defined by California Civil Code § 815.1, in the form of Exhibit E-4.
L. "Contingency Fund" means a fund (in a form acceptable to the MBRT)
established by the Bank Sponsor for any required remediation as outlined in
Sections V.A.2 and VIII.
M. "Covered Habitat" means: (i) riparian and wetland habitat and (ii) those
additional habitats, if any, within the Service Area(s), the loss of which the
MBRT determines can be adequately mitigated for by acquisition of Credits
from the Bank. Covered Habitat includes the CDFG Credits listed in Table
1.
N. "Credit" is a unit of measure representing the accrual of acres of created,
restored, enhanced, or preserved Waters of the US or Covered Habitat on
the Bank Property; one Credit here is equivalent to one acre or as otherwise
defined in the Restoration Plan. Credits in the Bank serve as mitigation or
conservation for agency-approved projects within the Service Area. The
minimum Credit unit that may be sold or obligated is 0.1 Credit.
O. "Endowment Deposit" is money to be deposited in the Endowment Fund in
order to fully fund the endowment principal.
P. "Endowment Fund" means an investment fund maintained in trust by the
Center for Natural Lands Management ("CNLM"). The Endowment Fund
shall be non-wasting; that is, the principal amount shall not decrease in
value through expenditure, inflation, or investment strategy, and therefore,
using an appropriate inflation adjustment, such as the Consumer Price
Index, a portion of the interest and earnings on the principal balance shall be
re-invested into the endowment principal to account for inflation. The
remaining interest and earnings on the principal balance shall be used
exclusively for the management of the Bank Property after Bank closure and
in accordance with the terms of the BEI and Management Plan.
Q. "Force Majeure" shall mean war, insurrection, riot or other civil disorders,
flood, earthquake, disease, fire, governmental restriction or the failure by
authority, or any injunction, which has a material and detrimental impact on
the Bank Property, provided, however, that: (i) a riot or other civil disorder
shall constitute an event of Force Majeure only if the event has broad
regional impacts and is not endemic to the Bank and its immediate locale;
(ii) a flood shall be considered an event of Force Majeure only if it is greater
than a presently projected 100-year flood, where "flood" refers to a runoff
event; (iii) an earthquake shall constitute an event of Force Majeure only if
the ground motion it generates at the Bank is greater than that presently
projected from an earthquake with a return period of 475 years; (iv) disease
Page 5 of 25 C BEI for the North County Mitigation Bank, Carlsbad
shall constitute an event of Force Majeure only if such event has broad
regional impact and is not endemic to the Bank and its immediate locale;
and (v) governmental restriction or the failure by any governmental agency
to issue any requisite permit or authority, or any injunction or other
enforceable order of any court of competent jurisdiction, shall not constitute
an event of Force Majeure unless there is no other feasible means of
remediation.
R. "Habitat Creation" is the establishment of wetland and/or other aquatic
resources in an area that does not provide wetland hydrology or support
wetland habitat, but will be physically modified and vegetated to do so.
S. "Habitat Enhancement" is a set of activities conducted in existing resources
which increases one or more biological function; here, enhancement will
increase the biological value of the native riparian habitat which currently
supports some native species (25 to 75 percent total native species cover)
but is otherwise infested with non-native species.
T. "Habitat Preservation" is the protection of existing habitat through
placement of a Conservation Easement and providing long-term
management funded by the Endowment Fund. Preservation may include
protection of upland areas adjacent to wetlands as necessary to ensure
protection and/or enhancement of the riparian and aquatic ecosystem.
Preservation Credits are assigned on the basis of specific values as described
in Exhibit C.
U. "Habitat Restoration" is the re-establishment of habitat resource
characteristics and functions in areas where they have ceased to exist or
exist in a substantially degraded state. Habitat Restoration on the Bank
Property shall occur through the removal of non-native species (e.g., pampas
grass). Because none of the areas occupied by pampas grass are considered
USAGE wetlands, the USAGE will consider its removal as creation. CDFG
will consider the removal of pampas grass as restoration; and when
appropriate, on a case-by-case basis, will allow the use of restoration Credits
to meet the State's no-net-loss requirement. Created/Restored wetlands will
be fully assessed as described in Exhibit C.
V. "Long-term Management Period" means the period of management
beginning after the Restoration Phase and in perpetuity pursuant to the
approved Management Plan and the Property Analysis Record defined
below.
W. "Long-term Management Plan" ("Management Plan") means the plan
developed for implementation to ensure that the Bank is managed and
maintained, in perpetuity, consistent with the purpose of the Bank, attached
as Exhibit D-2.
X. "MBRT" means Mitigation Bank Review Team, an interagency group of
Page 6 of 25 g BEIfor the North County Mitigation Bank, Carlsbad
30
federal, state and /or local agency representatives which oversee the
establishment, use, and operation of the Bank.
Y. "NCCP" is a Natural Community Conservation Plan created pursuant to
Fish and Game Code, Section 2801, et seq. An NCCP is a plan developed
in accordance with the NCCP Act, which provides comprehensive
management and conservation of multiple habitats and plant and wildlife
species, and which identifies and provides for the regional or area-wide
protection and perpetuation of natural diversity while allowing compatible
and appropriate development and growth.
Z. "Perpetuity" means an indefinite period of time; forever.
AA. "Preservation" means the protection of existing ecologically important
habitat or other ecosystem resources in perpetuity.
BB. "Property Analysis Record" ("PAR") is an analysis that, based on
assumptions it identifies, determines the amount of money to be placed in
the Endowment Fund; it also provides a schedule for funding, and for
utilizing available earnings from, the Endowment Fund. The PAR,
developed by CNLM, contains the transaction dates for payment and release
of the financial assurances and shows the amount estimated to be provided
from the Endowment Fund, shown as an annual amount for every year of
long-term management funding into the future, including at least the
minimum number of years necessary to show at least one cycle of
replacement for all capital expenditures.
CC. "Property Assessment and Warranty" means a written and signed
evaluation, legal description and depiction, and the number of acres of the
Bank Property. This Property Assessment shall describe any recorded or
unrecorded rights-of-way, recorded or unrecorded easements, and recorded
or unrecorded liens or other encumbrances that may prevent establishment
of a Conservation Easement on the Bank Property in accordance with
California Civil Code Section 815 and this BEL Plat maps depicting
encumbrances and improvements are included as part of this Property
Assessment.
DD. "Property Owner" means the legal owner of the Bank Property in fee
simple; at the time of Bank establishment, and until transfer of the Bank
Property under the terms of this BEI, the Property Owner is the Bank
Sponsor.
EE. "Remediation" means corrective measures taken to ameliorate damage to or
impact on the Bank Property or fencing around it, or non-conformance to
the Restoration Plan, Management Plan, Conservation Easement, or any
other portion of this BEI.
FF. "Restoration Phase" means the period of time prior to full funding of the
Page 7 of25 J BEI for the North County Mitigation Bank, Carlsbad
Endowment Fund plus one year for interest accrual or the time required to
meet five-year success criteria, whichever is greater. During this period, the
short-term management, monitoring, and reporting activities will be
implemented as described in the Restoration Plan.
GG. "Restoration Plan" means the document that describes the proposed
activities conducted during the Restoration Phase of the Bank to establish
the Credits. The Restoration Plan describes the creation, restoration, and
enhancement of habitat (i.e., the schedule, planting scheme, plant palette,
and monitoring procedures), the habitat establishment period, the success
criteria to obtain successful habitat establishment, monitoring to evaluate the
success, and reporting. The Restoration Plan also includes the provisions for
interim management and monitoring.
HH. "Restoration Specialist" is the person or entity, employed and directed by
the Bank Sponsor, with requisite professional credentials, to implement the
Restoration Plan.
II. "Service Area" means the geographic area(s) within which impacts that
occur to Waters of the United States or Covered Habitat may be mitigated
through the acquisition of Credits in accordance with this BEL
JJ. "Unlawful Act" shall mean the unlawful act of another and shall include an
event or series of events, such as the intentional dumping within the Bank,
or any connected watercourse, of a hazardous toxic substance, or the
discharge of such a substance by any person or entity other than the Property
Owner or Bank Sponsor in violation of a statute, ordinance, regulation or
permit, which event or series of events has a material and detrimental impact
on the water quality, native vegetation, soils, fish, or wildlife of the Bank
Property.
III. STIPULATIONS
A. Baseline Conditions. The current condition of the Bank Property is described
in the Restoration Plan (Exhibit C) and Biological Resources Survey (Exhibit
H).
B. Disclaimer. This BEI does not in any manner limit the statutory authorities or
responsibilities of the MBRT, but is, instead, an implementation of such
statutory authorities and responsibilities.
C. Exhibits and Appendices. The following exhibits, and all subsequent revisions
and addenda to the Exhibits hereto, are attachments incorporated by reference
into this BEI.
Exhibit A - Bank Location Maps
Exhibit B - Service Area Map
Exhibit C - Restoration Plan
Exhibit D - Bank Management and Operation
D-l Property Analysis Record (PAR)
Page 8 of 25 C BEI for the North County Mitigation Bank, Carlsbad
D-2 Long-Term Management Plan (Management Plan), including the Bank
Closure Plan
Exhibit E - Real Estate Records and Assurances
E-l Preliminary Title Report, Legal Description, and Parcel Maps
E-2 Bank Property Assessment and Warranty
E-3 Plat Maps
E-4 Approved-as-to-form Conservation Easement
E-5 Title Insurance policy
Exhibit F - Bank Crediting and Credit Sales
F-l Credit Table
F-2 Credit Sale Ledger
F-3 Credit Purchase Agreements
F-4 Credit Purchase Payment Receipt
Exhibit G - Phase I Environmental Site Assessment
Exhibit H - Biological Resources Survey
Exhibit I -Wetland Delineation Verification Letter
IV. EVALUATION, ACCEPTANCE, and ESTABLISHMENT OF THE BANK
Representatives of the MBRT have inspected and evaluated the Waters of the United
States and Covered Habitats on the Bank Property, and have agreed upon the assignment
of Credits based on the Bank Property's biological, chemical, and physical functions as
described in Section VI and detailed in Exhibits C and H.
A. Bank Sponsor's Performance. The Bank Sponsor agrees to perform all necessary
work, in accordance with the provisions of this BEI, to establish the 15.7 acres of
Waters of the United States and Covered Habitats, as proposed in Exhibit C, until
it is demonstrated to the satisfaction of the MBRT that the Bank complies in all
respects with all conditions contained herein. The Bank Sponsor agrees to be
responsible for all costs associated with the establishment of the Bank, including
but not limited to construction, remediation, documentation, maintenance,
management, monitoring, and reporting, until one year after the Endowment Fund
is fully funded and all success criteria are met.
B. The Bank will be considered established and Credit sales may begin only upon
completion of the following:
1. Signature of the BEI by all Parties; and
2. Recordation of the Conservation Easement or the owner has
provided to CDFG an executed Conservation Easement in a
form approved by the MBRT along with all supporting
documentation.
C. Modification of the Restoration Plan. Creation, restoration, and enhancement of
habitat on the Bank Property will be performed as described in Exhibit C, and the
Credits will become available in accordance with the schedule specified in
Section VI of this BEI. In the event that the Bank Sponsor determines that
modifications must be made in the Restoration Plan to ensure successful
establishment of habitat on the Bank Property, or in order to comply with specific
permits or other authorizations needed to establish the Bank, the Bank Sponsor
shall submit a written request for such modifications to the MBRT.
Page 9 of 25 g BEI for the North County Mitigation Bank, Carlsbad
V. FINANCIAL ASSURANCE REQUIREMENTS
A. The Bank Sponsor is responsible for providing financial assurances for all Bank
establishment, management, monitoring, and remediation. The Bank Sponsor agrees
to provide the following assurances for the work described in this BEI.
1 .Cons truction Security. Because all specified grading and related
implementation work has been completed prior to the release and sale
of Credits, no Construction Security is required.
2.Conting ency Fund. A sum of not less than $250,000 shall be deposited
in an interest-bearing escrow account to be termed "Contingency
Fund." The funds are to be used by the Bank Sponsor, or by a third
party to be designated by the USAGE and CDFG, to rectify failures, as
determined by the MBRT, by the Bank Sponsor to comply with one or
more terms of this BEI. The Contingency Fund shall be funded by
depositing 15 percent of the gross proceeds of each Credit sale into the
interest-bearing account, up to the $250,000 Contingency Fund total.
Contingency Funds shall be released to the Bank Sponsor, under the
direction of the USAGE, and in consultation with the MBRT, in
$50,000 increments based on meeting yearly success criteria, with
releases not to deplete the fund below the amount determined by the
MBRT to be necessary to rectify unforeseen events. In the event that
the remaining Contingency Funds are not used after five years from
the Bank Establishment Date, and the MBRT determines the Bank has
achieved the success criteria, the funds shall be returned to the Bank
Sponsor.
3 .L ong-term Management Endowment Fund. A sum of not less than
$499,356 will be placed in an interest-bearing escrow account to be
known as the "Endowment Fund" to be used for the in-perpetuity
management of the Bank Property. The amount to be deposited into
the Endowment Fund was calculated using a PAR. The Endowment
Fund shall be funded through the sale of Credits from the Bank, with
25 percent of the gross proceeds of each Credit sale to be deposited
into the Fund until it is fully funded. The Fund shall also meet funding
benchmarks before each new Credit release. The Bank Sponsor shall
fund any shortfall between the amount provided through Credit sales
and the benchmark to be funded through additional endowment
deposits before each new Credit release, according to the following
schedule.
a. A minimum of 25 percent of the Endowment shall be funded prior
to the second Credit release.
b. A minimum of 60 percent of the Endowment shall be funded prior
Page 10 of 25 1 Q BEI for the North County Mitigation Bank, Carlsbad
4
to the third Credit release.
c. One hundred percent of the endowment shall be flinded after three
years from the Bank Establishment Date or prior to the release of
the last Credit, whichever occurs first.
d. The Bank Sponsor shall notify each member of the MBRT of each
Endowment Deposit made, concurrent with the notification of
Credit sales in Section IX.C. of this BEL
4. After the Fund is fully funded, and at the time the Bank Property is
transferred to the Long-Term Manager, the Endowment Fund shall be
transferred to the Long-Term Manager solely for managing and
maintaining the Bank Property in perpetuity.
5. The cost of long-term management of the Bank Property may be
adjusted based on actual annual cost of maintenance that will be
provided by the Bank Sponsor in the monitoring reports. The USAGE,
CDFG, the Long Term Manager, and the Bank Sponsor must mutually
agree upon any adjustments before they are made.
VL BANK HABITAT ESTABLISHMENT ASSESSMENT METHODOLOGY,
SUCCESS CRITERIA, AND CREDIT RELEASE SCHEDULE.
A. Summary of Anticipated Credits. The Bank Sponsor will establish and/or enhance
12.85 acres of aquatic and riparian habitat in accordance with the provisions of
this BEI, and shall then maintain the Bank Property in such condition until the 5-
year success criteria have been met in accordance with the Bank Closure Plan or
until all Credits are sold, whichever is later. As presented in Table 1 and Exhibit
C, the Bank Property shall consist of a total of 15.7 acres and include conserved
habitats totaling 6.78 acres of riparian forest (includes 0.21 acre of mule fat
scrub), 1.01 acres of Diegan coastal sage scrub, 1.38 acres of sage scrub
chaparral, and 0.45 acres of non-native grassland, and created habitats totaling
6.07 acres of riparian forest. It is anticipated that a minimum of 4.0 of the 6.07
acres of creation/restoration Credits will meet the USAGE wetland definition
when the restoration is completed. Additionally, based on increased wetland
hydrology resulting from the removal of pampas grass, it is anticipated that at
least 3.0 acres of the preservation/enhancement Credits will meet the USAGE
wetland definition. All of the 6.07 acres of wetland creation/restoration Credits
and 6.78 acres of riparian enhancement Credits will meet the CDFG Waters of the
State definition. Riparian areas not considered Waters of the U.S. may, at
USAGE discretion, be given mitigation credit as vegetated buffers to Waters of
the U.S.
B. Assessment Methodology. Credits will be assigned based on the type of
mitigation (creation, restoration, enhancement, and preservation) and timing of
the mitigation implementation.
Page 11 of 25 J | BEI for the North County Mitigation Bank, Carlsbad
3$
Table 1
Mitigation Credits (acres)
Credit Type
Wetland Creation/Restoration
Enhancement Riparian (CDFG)/
Vegetated Buffer (USAGE)
Preservation
USACE and CDFG
4.0
6.78*
*(3 USACE
wetland)
CDFG
2.07
CDFG Upland
2.84
Table 2 summarizes the mitigation type and associated ratio based on meeting
success criteria for a given year in the five-year monitoring period.
Table 2
Mitigation Type
Creation
Restoration
Enhancement
Preservation
Mitigation Credit Ratio
Year T
0.4:1
0.4:1
0.4:1
0.5:1
Year 2+
0.6:1
0.6:1
0.6:1
0.5:1
Year 3+
0.8:1
0.8:1
0.8:1
0.5:1
Year 4+
0.9:1
0.9:1
0.9:1
0.5:1
Year 5+
1:1
1:1
1:1
0.5:1
Represents meeting that year's success criteria
The mitigation Credit ratio will determine mitigation needs for a given project.
For example, if a project impacts 1.0 acre of habitat, it would be required to
purchase 2.5 Credits that have met first-year success criteria (2.5 Credits x 0.4:1 =
1 acre). 1.25 Credits would need to be purchased if the third-year success criteria
had been met (1.25 Credits x 0.8:1 = 1 acre). If the Bank has met five-year
success criteria, acquisition in the Bank would result in no net loss of habitat
functions and values, and as a result 1 acre of Credit would be required for each
acre impacted. Final project mitigation ratios will be determined on a case-by-
case basis by the permitting agency(ies).
Under this methodology, the number of Credits available will be fixed at 15.7
Credits. The "value" of those Credits will be determined based on the
methodology described above. A 1:1 mitigation Credit ratio will be given for
habitats that have been fully restored and meet five-year success criteria. Because
some or all of the Credits may be sold prior to completion of the five-year
monitoring effort, the full value of the Bank may not be achieved, although the
full biological value of the Bank will be achieved, regardless, at the completion of
the five-year monitoring effort, or when five-year success criteria have been met.
Upland Credits shall be available at a 1:1 ratio for each acre of mitigation
required.
C. Success Criteria. The success criteria listed in Tables 3 and 4 shall be used to
assess project success, and may be met in less than the five-year time frame upon
the permitting agencies' approval and concurrence by the MBRT. When all
Page 12 of 25 12 BElfor the North County Mitigation Bank, Carlsbad
success criteria are met, the creation, restoration, and enhancement efforts on the
Bank Property shall be deemed complete.
Plant Species Diversity
Table 3
Milestones for Riparian Woodland
Success Criterion
Plant Species Diversity
Year
3
6
4
8
5
10
Table 4
Vegetative Success Criteria (percent)
Habitat/Parameter Year
3 4 5
Freshwater marsh
Total cover 60 70 80
Riparian forest
Total cover
Tree cover
Shrub cover
Herb cover
60
35
30
50
70
55
40
40
80
65
50
30
Mule fat scrub
Total cover
Shrub/tree cover
Herb cover
55
30
50
65
45
40
75
60
30
All habitats
Weed cover 10 /0+8/0+5/0+
There shall be zero tolerance for the most invasive species
listed by the California Invasive Plant Council (e.g.,
pampas grass).
D. Release of Habitat Creation, Restoration, and Enhancement Credits
1. Habitat Creation, Restoration, and Enhancement Credits, including both
Waters of the United States Credits and Covered Habitat Credits, shall be
released, as described below, based upon attainment of the success criteria
summarized above and more fully described in Exhibit C. No subsequent
Credit releases may occur until the prior Credit release has occurred. Credit
releases shall occur according to the following schedule.
a. 25 percent of the Credits upon the Bank Establishment Date;
b. 35 percent of the Credits upon attainment of Year Two success
criteria;
c. 20 percent of the credits upon attainment of Year Four success
criteria and recordation of the approved Conservation
Easement;
Page 13 of 25 13 BEIfor the North County Mitigation Bank, Carlsbad
2,7^j-1
d. Balance of the credits upon attainment of Year Five success
criteria.
2. Each Credit release, with the exception of the first, is subject to the Bank
Sponsor's submission of a yearly monitoring report in accordance with
Section IX. A., a site visit by the MBRT at the appropriate time of year, and
approval by the MBRT.
3. Failure to meet success criteria will reduce the number of Credits available for
release. The Bank Sponsor shall revise Table 1 accordingly, as directed by the
MBRT.
E. Upland Preservation Credit Release
All Preservation Credits shall be immediately available for release upon
establishment of the Bank.
VII. OPERATION OF THE BANK
A. Service Area. The Bank is established to provide mitigation to compensate
for impacts to Waters of the United States as well as Covered Habitat, occurring in the
cities of Oceanside, Vista, San Marcos, Carlsbad, Encinitas and the western portions of
the unincorporated portions of the County of San Diego as shown in Exhibit B.
B. Projects Eligible to Use the Bank. In general, it is agreed that projects
requiring the following mitigation for impacts within the Service Area shall typically be
eligible to use the Bank:
• Mitigation required by Nationwide 404 permits;
• Mitigation required by Individual 404 permits when the applicant has
minimized impacts to wetlands to the maximum extent practicable;
• Mitigation required by Section 1602 Agreements;
• Mitigation required by any government agency within the Service Area for
upland impacts; and
• Mitigation for other projects as deemed appropriate by the USAGE,
USEPA, USFWS, or CDFG, provided the Bank meets all requirements
applicable for the mitigation required for a particular project and that
mitigation through use of a Bank is authorized by the appropriate
authority.
C. Credit Sales
1. Credit sales by the Bank Sponsor may begin once Credits are released
pursuant to Section VI.D and E. Subject to Bank Sponsor's obligations under this
BEI, Bank Sponsor shall have the exclusive right to determine the price for any
and all Credits offered for sale or use at this Bank.
2. In no case shall the Credits sold or obligated by Bank Sponsor exceed
the total number of Credits that have been released pursuant to Section VI. D and
E.
Page 14 of 25 J 4 BEI for the North County Mitigation Bank Carlsbad
3. Decisions related to use of Credits in the Service Area (e.g.,
determination of the appropriate mitigation ratios), will be made by the
appropriate MBRT agencies on a case-by-case basis in accordance with
applicable law, regulations, and guidance.
4. The Bank Sponsor shall notify all members of the MBRT upon
completion of any Credit sale, as described in the reporting section of this BEL
D. Conditions on Debiting. Any Credits debited before achieving the five-year
success criteria shall require posting sufficient financial assurance (see V.A.2. above) to
cover contingency actions in the event of partial or total failure. Upon meeting yearly
success criteria as determined by the MBRT, the Contingency Fund shall be released to
the Sponsor according to the schedule described in Section V.A.2.
VIII. MAINTENANCE AND MONITORING OF THE BANK
A. Interim Maintenance Provisions: The Bank Sponsor and Property Owner agree to
perform all necessary work to maintain the Bank Property consistent with the
maintenance requirements articulated in the Restoration Plan until achievement of
the 5-year success criteria, full funding of the Endowment Fund for one year, and
closure of the Bank.
B. Interim Monitoring Provisions: The Bank Sponsor and Property Owner shall
perform all work necessary to monitor the Bank Property in accordance with the
monitoring procedures set forth in the Restoration Plan, activities which shall
remain in effect until achievement of the 5-year success criteria, full funding of
the Endowment Fund for one year, and closure of the Bank. Monitoring will be
carried out under the direction of a restoration specialist who will direct
maintenance activities (maintenance monitoring) and assess the progress
(technical monitoring) of the restoration effort. Maintenance monitoring will rely
on visual observations of plant establishment and growth and other site conditions
(e.g., soil stability).
C. Contingency Plans/Remedial Actions:
1. In the event the MBRT reasonably determines that portions
of the Bank Property have been damaged subsequent to the
Bank Establishment Date, and the effect of such activity has
materially impaired habitat functions and values on the Bank
Property, and neither the Bank Sponsor nor Property Owner
has reasonably restored habitat functions and values to the
damaged portions or provided the MBRT with reasonable
evidence that habitat functions and values will be restored,
the MBRT may, at its discretion, suspend Credit sales and/or
reduce the number of Credits allocated to the Bank
equivalent to the decrease in functions and values of the
Page 15 of 25 J J BEIfor the North County Mitigation Bank, Carlsbad
Bank Property.
2. The MBRT shall be notified upon discovery by any Party of
any failure to achieve the success criteria described in
Section VI.C. of this BEI. The MBRT shall require, in
writing, that the Bank Sponsor develop a remediation plan.
Within 60 days of receiving such written notification from
the MBRT, the Bank Sponsor shall develop a remediation
plan and submit it to the MBRT for review and approval. The
remediation plan will include proposed remedial actions and
a schedule within which the Bank Sponsor will implement
the actions. The Bank Sponsor shall, at Bank Sponsor's
expense, implement the necessary and appropriate remedial
actions as approved by the MBRT. All remediation efforts
and an evaluation of their effectiveness shall be incorporated
into the annual monitoring report set forth in Section IX.A. of
this BEI. In the event the Bank Sponsor or Property Owner
fails to implement such remedial actions approved by the
MBRT, the MBRT will notify the Bank Sponsor, in writing,
that the Bank Sponsor is in default and identify corrective
measures the MBRT believes to be necessary in order to cure
the default. If conditions do not improve or if they continue
to deteriorate, within one year (unless otherwise negotiated
among the Bank Sponsor, Property Owner, and the MBRT)
from the date that the specific corrective measures were first
identified in writing to the Bank Sponsor by the MBRT, a
demand on the Contingency Fund will be made by CDFG or
USAGE, as appropriate, to ensure the corrective measures are
implemented as approved by the MBRT.
3. If the MBRT determines that the Bank is operating at a
Credit deficit, the Bank Sponsor shall be notified in writing,
whereupon Credit sales and debiting of Credits will
immediately cease. The MBRT shall determine what
corrective actions are necessary to correct the Credit deficit.
Bank Sponsor shall develop and implement a remediation
plan in accordance with Section VIII.C.2. As determined by
the Chair of the MBRT, in coordination with the MBRT and
the Bank Sponsor, if conditions at the Bank Property do not
improve or if they continue to deteriorate, within one year
(unless otherwise negotiated among the Bank Sponsor,
Property Owner, and the MBRT) from the date that the
specific corrective actions were first identified in writing to
the Sponsor by the Chair of the MBRT, a demand on the
Contingency Funds and the Endowment Fund shall be made
by CDFG or the USAGE, as appropriate, to ensure corrective
Page 16 of25 J g BEI for the North County Mitigation Bank. Carlsbad
49
measures are implemented as approved by the MBRT.
4. At the request of the Bank Sponsor, the MBRT will perform
a final compliance visit to determine whether all success
criteria have been satisfied. Upon satisfaction of the success
criteria, any remaining contingency funds will be released to
the Sponsor.
D. Long-Term Management. Once the five-year success criteria in the Restoration
Plan and this BEI have been met and the Endowment Fund is fully funded for one
year, long-term management of the Bank Property shall be implemented
according to the Management Plan. The Property Owner shall be obligated to
manage the Bank Property in perpetuity to preserve its habitat and conservation
values in accordance with the terms of this BEI, the Conservation Easement, and
the Management Plan, as funded through the Endowment Fund. The Management
Plan shall provide the basis for the implementation and prioritization of the
management tasks. The Property Owner and the MBRT shall meet and confer,
upon the request of any one of them, to consider revisions to the Management
Plan to better conserve the values of the Bank Property.
E. Long Term Monitoring. Long-term monitoring shall be performed as described in
the Management Plan. The Property Owner shall be responsible for annual
reporting to the MBRT as described in Section IX of this BEI.
F. Conservation Easement Monitoring. Bank Sponsor's and Property Owner's
obligations shall include using reasonable efforts to prevent uses of the Bank
Property not permitted under this BEI or the Conservation Easement.
IX. REPORTING
A. Annual Reporting. Sponsor shall submit a report to the USAGE as Chair of the
MBRT, for distribution to the other members of the MBRT, on or before
November 15th of each year, with the first report due after the end of the first full
growing season. The annual report shall address or provide the following, as
appropriate:
1. All elements set forth in the Restoration Plan and/or Management Plan;
2. All remediation efforts and an evaluation of their effectiveness;
3. A copy of all Contingency Fund and/or Endowment Fund deposits; and
4. A record of all disbursements made from the Contingency Fund and/or the
Endowment Fund for Bank activities.
B. As-built Report. The Bank Sponsor shall submit to the USAGE, for distribution
to the other members of the MBRT, an as-built report for the Bank Property not
more than 60 days after the Effective Date of this BEL.
C. Accounting Procedure. The Bank Sponsor shall notify the MBRT upon the sale
of each and every Credit and approval of each and every additional Credit.
Sponsor shall send a full and complete updated ledger (Exhibit F-2) to each
Page 17 of 25 1 J BEI for the North County Mitigation Bank, Carlsbad
member of the MBRT within 10 days of each Credit sale.
D. Bank Sponsor and Property Owner must maintain accurate records of costs, in
accordance with Generally Accepted Accounting Principles, and shall retain said
records throughout the term of this BEL During such time, the Bank Sponsor and
Property Owner shall make said records available for review at the request of the
MBRT. In addition, Bank Sponsor and Property Owner must have accounts
audited upon request of and with results provided to the MBRT, not more than
annually. If the Property Owner becomes the holder of the Endowment Fund, the
Conservation Easement shall be amended to include an endowment and auditing
provision approved by the MBRT.
X. PROCEDURES FOR BANK CLOSURE
Once the success criteria in the Restoration Plan have been met, long term maintenance
and monitoring of the Bank Property shall be carried out according to the Management
Plan as required by Section VIII. The implementation of the Management Plan shall be
assured pursuant to the closure provisions in this BEI and in the Management Plan.
A. Bank Site and Bank Closure. The Bank shall be deemed closed, and the Sponsor's
obligations complete, upon all of the following:
1. All success criteria have been met consistent with the Restoration Plan;
2. The Bank Sponsor has implemented the Bank Closure Plan included within the
Management Plan, including the implementation of Bank closure reporting and
accounting activities;
3. All financial responsibilities have been met, including full funding of the Endowment
Fund for not less than one year; and
4. Either:
(a) The last authorized Credit has been sold or used; or
(b) The Sponsor requests bank closure by written notice to the MBRT, and MBRT
provides written approval of the closure.
5. Upon Bank closure, Credit sales shall immediately cease.
6. All responsibilities and obligations for Bank monitoring and maintenance in perpetuity
are transferred to the Property Owner upon Bank closure.
XI. BANK SPONSOR AND PROPERTY OWNER DUTIES
A. The Bank Sponsor agrees to perform all necessary work in accordance with the
provisions of this BEI.
B. The Bank Sponsor agrees to be responsible for all costs associated with the
establishment of the Bank, including but not limited to construction,
remediation, documentation, maintenance, management, monitoring, and
Page 18 of 25 J g BEI for the North County Mitigation Bank, Carlsbad
reporting, until one year after the Endowment Fund is fully funded and all
success criteria are met.
C. Real Estate Provisions. The Property Owner has recorded a Conservation
Easement on the Bank. The Conservation Easement shall preserve the Bank
Property as Waters of the United States and wildlife/riparian habitat (i.e.,
Covered Habitat) in perpetuity.
D. The Bank Sponsor agrees to submit an as-built report for the Bank to the MBRT
within 60 days after the Effective Date of this BEL The as-built report shall
include as-built drawings, with accurate maps showing the finish grades of the
Bank Property. The maps shall clearly distinguish among the preserved habitats
and the created, restored, and enhanced wetlands and Covered Habitats. The as-
built drawings and any attachments will describe in detail any deviation from
the proposal described in the Restoration Plan.
E. The Bank Sponsor or Property Owner, as appropriate, agrees to have accounts
audited using General Accepted Accounting Principles performed by a
qualified, independent accounting organization upon request of the MBRT, not
more frequently than annually, and submit the results of the audits to the
MBRT.
F. The Bank Sponsor and Property Owner shall not discharge or release to the
Bank Property, or permit others to discharge or release to the Bank Property,
any material or substance deemed hazardous or toxic under any federal, state, or
local environmental law.
G. The Property Owner shall not create any encumbrance to the title of the Bank
Property other than those set forth in Exhibit E and accounted for in the
Property Assessment in Exhibit E, and Property Owner shall not execute,
renew, or extend any lien, license, or similar interest without the prior written
consent of the MBRT.
H. Neither the Bank Sponsor nor Property Owner shall construct any structure or
engage in any activity or use of the Bank Property, including mineral
exploration, excavating, draining, dredging, or other alteration of the Bank
Property, that is not necessary for execution of the Restoration Plan without the
prior written consent of the MBRT.
I. The Bank Sponsor and Property Owner shall ensure that the Bank Property is
maintained to ensure its suitability as a Bank consistent and in accordance with
this BEI.
J. The Bank Sponsor and Property Owner shall allow, or otherwise provide for,
access to the site by all signatory Parties, as necessary, for the purpose of
inspection and compliance monitoring consistent with the terms and conditions
of this BEI. Inspecting Parties shall provide reasonable notice to the Property
Owner during normal business hours and not less than 24 hours prior to
Page 19 of 25 J g BEI for the North County Mitigation Bank, Carlsbad
inspection of the Bank Property.
K. The Bank Sponsor shall obtain all appropriate environmental documentation,
permits or other authorizations needed to establish and maintain the Bank. This
BEI does not fulfill or substitute for such authorization.
L. The Property Owner shall grant all necessary authority and shall not limit Bank
Sponsor's ability to carry out Bank Sponsor's responsibilities and obligations
under this BEI.
XII. RESPONSIBILITIES OF THE MBRT
A. The agencies represented on the MBRT agree to provide appropriate oversight
in carrying out provisions of this BEI.
B. The agencies represented on the MBRT agree to review and provide
comments on all project plans, annual monitoring reports, Credit review reports,
contingency plans, and necessary permits for the Bank in a timely manner. Comments on
the monitoring reports, Credit review reports, and contingency plans will be provided
within 60 calendar days from the date of receipt of complete submittal, except for good
cause.
C. The agencies represented on the MBRT agree to review and concur with
reports on evaluation of success criteria prior to approving Credits in the Bank.
D. The agencies represented on the MBRT shall conduct compliance inspections,
as necessary, as determined in consultation with the Bank Sponsor, to:
1. verify Credits available in the Bank;
2. confirm implementation of remedial actions;
3. recommend corrective measures (if any), until the terms and conditions
of this BEI have been determined to be fully satisfied or until all Credits have
been sold, whichever is later; and
4. inspect for any other purpose determined by the MBRT as necessary to
assure compliance with this BEI.
XIII. OTHER PROVISIONS
A. Force Majeure. The Bank Sponsor and Property Owner shall be responsible
to maintain and remediate the Bank Property except for damage or non-compliance
caused by Catastrophic Events, events of Force Majeure, or Unlawful Acts. In case of
occurrence, the Sponsor or Property Owner and MBRT shall meet to discuss the future
course of action for and management of the Bank Property and shall continue their
obligations to the extent practicable. In order for such exception to apply, Bank Sponsor
and Property Owner shall bear the burden of demonstrating:
a. that the damage or non-compliance was caused by circumstances
beyond the control of the Bank Sponsor, Property Owner, and/or any
person or entity under the direction or control of the Bank Sponsor or
Page 20 of 25 20 BEI for the North County Mitigation Bank, Carlsbad
Property Owner, including its employees, agents, contractors, and
consultants;
b. that neither the Bank Sponsor/Property Owner, nor any entity
controlled by it, including contractors and consultants, could have
reasonably foreseen and prevented such damage or non-compliance; and
c. the duration of damage or non-compliance was caused by such
circumstances beyond the Sponsor's or and Property Owner's control.
B. Dispute Resolution
1 .The Parties agree that, in the event of a dispute, the Parties shall use their best
efforts to resolve the dispute in an informal fashion through consultation and
communication involving ascending levels of management within each Party's
organization, or other forms of non-binding alternative dispute resolution mutually
acceptable to the Parties.
2. Resolution of disputes about application of this BEI as between members of the
MBRT shall be in accordance with those stated in the Federal Guidance for the
Establishment, Use, and Operation of Mitigation Banks (60 F.R. 58605 et seq.,
November 28, 1995).
C. Modification and Termination of the BEI. This BEI may be amended or
modified with the written approval of all signatory Parties. Any of the MBRT members
may terminate their participation upon written notification to all signatory Parties.
Participation of the MBRT members will terminate 30 days after written notification.
D. Specific Language in the BEI Shall Be Controlling. To the extent that specific
language in this document changes, modifies, or deletes terms and conditions contained
in those documents which the BEI incorporates by reference, and that are not legally
binding, the specific language within the BEI shall be controlling.
E. Entire Agreement. This BEI, and all exhibits, appendices, schedules, and
agreements referred to in this BEI, constitute the final, complete, and exclusive statement
of the terms of the agreement between and among the MBRT and the Bank Sponsor and
Property Owner pertaining to the Bank, and supersede all prior and contemporaneous
discussions, negotiations, understandings, or agreements of the Parties. No other
agreement, statement or promise made by the Parties that is not contained in this BEI
shall be binding or valid. No alteration or variation of this BEI shall be valid or binding
unless contained in an amendment in accordance with Section XIII.C. Each party
acknowledges that no representation, inducement, promise, or agreement, oral or
otherwise, has been made by any other Party or anyone acting on behalf of any party
unless the same has been embodied herein.
F. Transfer.
1. Transfer of Property Owner's Interests
The Property Owner shall have the right to sell or convey its interest in the
Bank Property at any time. Provided, however, that any such sale or
Page 21 of 25 2 \ BEI for the North County Mitigation Bank, Carlsbad
conveyance on or after the execution date of this BEI must be made in
accordance with this BEI and shall be subject to written concurrence by the
MBRT and Bank Sponsor. Such concurrence shall be subject to the
requirement that the transferee assumes and agrees in writing to observe and
perform all of the Property Owner's obligations pursuant to this BEI and the
Conservation Easement. From and after the date of any such sale or
conveyance made by Property Owner, the transferor shall have no further
obligations hereunder and all references to Property Owner in this BEI and
the Conservation Easement shall thereafter refer to such transferee, except
that liability for acts, omissions, or breaches occurring prior to the sale or
conveyance shall survive. Any such sale or conveyance made without the
prior written concurrence of the MBRT, may, at the discretion of the
MBRT, result in the termination of this BEI.
Transfer or assignment of the Bank Property shall be subject to the
requirement that any funds in a Contingency Fund or Long-term
Management Endowment Fund shall continue to be expended in a manner
consistent and in accordance with this BEI, the Conservation Easement, and
the Management Plan.
2. Transfer of Bank Sponsor's Interests
The Bank Sponsor may sell or convey its interest in the Bank at any time,
provided Bank Sponsor is in full compliance with all requirements of this
BEI (including all financial assurances), and subject to the prior written
approval of the MBRT. If any of the financial assurances required under
this BEI are not completely funded at the time of a sale or conveyance, then
the MBRT shall not approve such sale or conveyance unless and until either
the current Bank Sponsor, or the proposed replacement Bank Sponsor, shall
provide all required financial assurances. In addition, prior to sale or
conveyance, the Bank Sponsor shall provide to each member of the MBRT a
written agreement signed by the replacement Bank Sponsor in which the
replacement Bank Sponsor assumes and agrees to perform all of the
responsibilities and obligations of the Bank Sponsor under the BEI Any
such sale or conveyance made without the prior written concurrence of the
MBRT, may, at the discretion of the MBRT, result in the termination of this
BEI.
Transfer or assignment of the Bank Sponsor's rights and duties under this
BEI must be approved in writing by the MBRT, and shall be subject to the
requirement that any funds in a Contingency Fund or Long-term
Management Endowment Fund shall continue to be expended in a manner
consistent and in accordance with this BEI, the Conservation Easement, and
the Management Plan.
G. Reasonableness and Good Faith. Except as specifically limited elsewhere in
this BEI, whenever this BEI requires Bank Sponsor, Property Owner, or the
MBRT to give its consent or approval to any action on the part of the other,
such consent or approval shall not be unreasonably withheld. If the Bank
Page 22 of25 99 BEI for the North County Mitigation Bank, Carlsbad
Sponsor, Property Owner, or the MBRT disagrees with any determination
covered by this provision and reasonably request the reasons for that
determination, the determining party shall furnish its reason in writing and in
reasonable detail within thirty (30) days following the request.
H. Successors and Assigns. This BEI and each of its covenants and conditions
shall be binding on and shall inure to the benefit of the Parties and their
respective successors and assigns, subject to the limitations on transfer set
forth in this BEI.
I. Partial Invalidity. If a court of competent jurisdiction holds any term or
provision of this BEI to be invalid or unenforceable, in whole or in part, for
any reason, the validity and enforceability of the remaining terms and
provisions, or portions of them, shall not be affected unless an essential
purpose of this BEI would be defeated by the loss of the invalid or
unenforceable provision.
J. Notices. All notices (including requests, demands, approvals or other
communications) under this BEI shall be in writing. Each Notice the Bank
Sponsor or the MBRT desires to give to the other shall be in writing, shall
clearly identify the name of the Bank and the subject of the Notice on its first
page, and shall be personally delivered or sent by facsimile to the persons set
forth below or shall be deemed delivered five (5) days after deposit in the
United States mail, certified and postage prepaid, return receipt requested, and
addressed as follows.
MBRT Chair:
MBRT Members:
District Counsel
U.S. Army Corps of Engineers
Los Angeles District
915 Wilshire Boulevard, Room 1535
Los Angeles, California 90017-3401
FAX: 213-452-4217
Regional Manager
Department of Fish and Game Region 5
4949 Viewridge Avenue
San Diego, California 92123
FAX: 858-467-4299
Carlsbad Office Manager
U.S. Fish and Wildlife Service
6010 Hidden Valley Road
Carlsbad, California 92011
FAX: 760-431-5901
Page 23 of 25 23 BEI for the North County Mitigation Bank, Carlsbad
Director, Water Division
U.S. Environmental Protection Agency, Region 9
75 Hawthorne Street
Sacramento, California 94105
FAX: 415-744-1078
Bank Sponsor: Westmark Development Corporation
3375 Pepper Lane, No. 102
Las Vegas, Nevada 89120
Attn: John D. Lee, Esq.
FAX: 702-898-9538
The Parties agree to accept facsimile signed documents and agree to rely upon
such documents as if they bore original signatures. Each Party agrees to
provide to the other Parties, within seventy-two (72) hours after transmission
of such a facsimile, the original documents that bear the original signatures.
Either Party may change its address or fax number by giving the other Party
notice of the change in any manner permitted by this section.
K. Counterparts. This BEI may be executed in multiple counterparts, and each
such executed counterpart shall be deemed an original, all of which together
shall constitute a single executed agreement.
L. No Third Party Beneficiaries. This BEI shall not create any third party
beneficiary hereto, nor shall it authorize anyone not a party hereto to maintain
a suit for personal injuries, property damages or enforcement pursuant to the
provisions of this BEI. The duties, obligations, and responsibilities of the
Parties to this BEI with respect to third parties shall remain as otherwise
provided by law.
M. Availability of Funds. Implementation of this BEI by the MBRT is subject to
the requirements of the Anti-Deficiency Act, 31 U.S.C. § 1341, and the
availability of appropriated funds. Nothing in this BEI may be construed to
require the obligation, appropriation, or expenditure of any money from the
U.S. Treasury or the California State Treasury. No agency of the MBRT is
required under this BEI to expend any appropriated funds unless and until an
authorized official affirmatively acts to commit to such expenditures as
evidenced in writing.
XIV. EFFECTIVE DATE
This BEI shall become effective on the date of the signature by the last Party to
sign this BEI.
Page 24 of 25 24 BEI for the North County Mitigation Bank, Carlsbad
05/26/2016 04:49 FAX
IN WITNESS THEREOF, the Bank Sponsor, the State of California acting by and
through its Department of Fish and Game, the U.S. Army Corps of Engineers Los
Angeles District, The U.S. Fish and Wildlife Service, the U.S. EPA, Region IX, have
is BE1 as of the date set forth above. r
sor and Property Owner Date
RECEIVED
MAY 2 1 2007
REGULATORY BRANCHSAN
Corps of Engineers, District Engineer Date
___ District
U.S. Army Corps of Engineers
Manager, California/Nevada Office Date
U.S. Fish and Wildlife Service
Date
Region
California Department of Fish and Game
Director, Water Division
Region 9
U.S. Environmental Protection Agency
Date
Page 35 oj2)25 BElfor llw North County Mitigation Hank, Carlsb«4
05/26/2016 04:49 FAX g|004
IN WITNESS THEREOF, the Bank Sponsor, the State of California acting by and
through its Department of Fish and Game, the U.S. Army Corps of Engineers Los
Angeles District, The U.S. Fish and Wildlife Service, the U.S. EPA, Region IX, have
executed this BE1 as of the date set forth above.
Bank Sponsor and Property Owner Date
C.
Corps of Engineers, District Engineer Date
Lo% /rngzJfZ District
U.S. AnH^Corps of Engineers
Manager, California/Nevada Office Date
U.S. Fish and Wildlife Service
Date
California Department of Fish and Game
Director, Water Division Date
Region 9
U.S. Environmental Protection Agency
fas* 2! of 25 2 5 BE!for the North Coiotty Mitigation Sank. Carlsbad
05/26/2016 04:49 FAX 121005
IN WITNESS THEREOF, the Bank Sponsor, the Stale of California acting by and through its
Department of Fish and Game, the U.S. Army of Corps of Engineers Los Angeles District, the
U.S. Fish and Wildlife Service, the U.S. EPA, Region DC, have executed this BEI as of the date
set forth above.
Bank Sponsor and Property Owner Date
Corps of Engineers, District Engineer
District
U.S. Army Corps of Engineers
Date
sorrish and Wildlife Office
California Department of Fish and Game
Date
fr.
Date
Director, Water Division
Region 9
U.S. Environmental Protection Agency
Date
Pay 25 o/2S 25 BEI for the North County Mitigation Bank. Carlsbad
SIo
05/26/2016 04:50 FAX El 006
IN WITNESS THEREOF, the Bank Sponsor, the State of California acting by and
through its Department of Fish and Game, the U.S. Army Corps of Engineers Los
Angeles District, The U.S. Fish and Wildlife Service, the U.S. EPA, Region IX, have
executed this BEI as of the date set forth above.
Bank Sponsor and Property Owner
Corps of Engineers, District Engineer
District
U.S. Army Corps of Engineers
Date
Date
RECEIVED
MAY 212007
REGULATORY BRANCH
SAN DIEGO OFFICE
Manager, California/Nevada Office
U.S. Fish and Wildlife Service
Date
2?
Date
California Department of Fish and Game
Director, Wafer Division
Region 9
U.S. Environmental Protection Agency
Date
2001
Pag* 25 of'25 25 BEffor the North Comity Mitigation Bank, Carlsbad
52.
'7
From: Michael McCollum <mccollum@mccollum.com>
To: David Mauser <dhaus@ci.carlsbad.ca.us>
CC: Glen Van Peski <gvanp@gvpconsulting.com>, Mark Rohrlick <mark@westmarkde.
Date: 7/9/2007 5:59 PM
Subject: Credit Sales Before Mitigation is Needed
Attachments: F-2. Credit ledger.pdf; Final_BEI_May23-07_Executed.pdf
David:
A wetland mitigation credit purchased from the North County Habitat
Bank, it is irrevocable under the following circumstances:
1. The Bank Enabling Instrument (BEI) is executed by the Mitigation
Bank Review Team (MBRT);
2. The success criteria of created and enhanced habitat is verified by
the Corps;
3. The credit would otherwise be acceptable by the regulatory agencies
requiring such mitigation, (i.e., the impact must be in the bank service
area and the mitigation need must be consistent with the mitigation
available outlined in the BEI. The agency, if a signatory to the BEI,
cannot unreasonably withhold such approval if the criteria contained in
the BEI are followed).
The first two thresholds have been achieved. The BEI was executed on May
23, 2007 and we have officially established 3 year success criteria.
Three year success criteria fully vests the use of purchased credits
according to the release schedule in the BEI.
When the credits are purchased by the City, we will provide a receipt to
the City verifying the credits are owned by the City. We will report
this sale to the MBRT, but will not assign any of the credits to an
impact until the City informs us where and when they were used. Again,
all use of credits must be approved by the agency requiring mitigation.
Once the City informs us where the credits are used, we will then issue
an second receipt identifying the impact mitigated and report this to
the MBRT. The report to the MBRT is accomplished via an MBRT-approved
credit ledger that is debited until all the credits are used.
After the last sale of available credits, the bank will be closed. Even
if credits are not used until after the bank is closed, they are still
valid and can be used for a project (assuming they would otherwise be
authorized by the regulatory agencies), or sold. This is true even if,
for whatever reason, the habitat in the bank is damaged. It is the bank
manager's responsibility to repair any damage. Such responsibility is a
separate duty unrelated to the sale of credits.
I attached to this message a copy of the official credit sale ledger
form and a copy of the BEI.
Mike McCollum
10196 Clover Ranch Drive
Sacramento, CA 95829-6574
McCollum Associates Phone (916) 688-2040 * Fax (916) 688-7436
www.mccollum.com
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MCCOLLUM ASSOCIATES
June 28,2007
Mr. David Hauser
Deputy City Engineer
Engineering Department
City of Carlsbad
1635 Faraday Avenue
Carlsbad CA 92008
RE: North County Habitat Bank Credits Purchase
Dear Mr. Hauser:
Regarding your request to purchase 0.96 created of wetland/riparian mitigation credit at the
North County Habitat Bank at $225,000 per credit (reflecting a discount of 10% due to a
separate, additional purchase of 5 credits), to satisfy certain mitigation requirements for wildlife
impacts on the Emergency Channel Dredging for Agua Hedionda project, the following are
the terms and conditions to complete the transaction. Upon execution of the attached purchase
agreement, please remit to LandAmerica Commercial Services one check to the party and in
the amount and time specified below to:
By Mail or bv Overnight Express
Ms. Cheryl Goldbarg
Commercial Escrow Officer
LandAmerica Commercial Services
750 "B" Street, Suite 3000
San Diego, CA 92101
Phone: (619) 230-6342
Please write the escrow number on the check: 03207629-609-CG1
Westmark Development 0.96 credit @ $225,000= $ 216,000.00
Corporation
Total due on or before Aug 3,2007 $ 216,000.00
Environmental Policy Consultants
Constituent & Governmental Relations
10196 Clover Ranch Drive, Sacramento, California, 95829
Telephone (916) 688-2040 • Fax (916) 688-7436
www.mccollum.com * mccollum@mccollum.com
Mr. David Hauser
June 28,2007
Page 2
Please also execute and forward to Ms. Goldbarg two (2) original copies of the Mitigation Credit
Purchase Agreement and Acknowledgment form, enclosed, and one photocopy (or pdf document)
to:
Mr. Michael McCollum
McCollum Associates
10196 Clover Ranch Drive
Sacramento, CA 95829-6574
(916) 688-2040
mccollum@mccollum.com
Upon receipt of the specified funds, you will receive a signed copy of Exhibit A,
Acknowledgment of Sale of Conservation Credits, from Westmark Development Corporation.
This receipt will provide evidence to the wildlife agencies that you satisfied that portion of the
mitigation requirements you negotiated with the agencies.
Thank you for your interest in the North County Habitat Bank. Please call me if you have
questions.
Sine
cc:
chments: Mitigation Credit Purchase Agreement and Acknowledgment
Exhibit A, Acknowledgment of Sale of Conservation Credits
Mr. Mark Rohrlick, Westmark Development Corporation / via email
v*
f 1
MCCOLLUM ASSOCIATES
June 26,2007
Mr. David Hauser
Deputy City Engineer
Engineering Department
City of Carlsbad
1635 Faraday Avenue
Carlsbad CA 92008
RE: North County Habitat Bank Credits Purchase
Dear Mr. Hauser:
Regarding your request to purchase 5.0 credits of wetland/riparian mitigation credit(s) at the
North County Habitat Bank at $225,000 per credit (reflecting a discount of 10% due to a
purchase exceeding 4 credits), to satisfy certain mitigation requirements for wildlife impacts on
future City projects, the following are the terms and conditions to complete the transaction. Upon
execution of the attached purchase agreement, please remit to Land America Commercial
Services one check to the party and in the amount and time specified below to:
By Mail or by Overnight Express
Ms. Cheryl Goldbarg
Commercial Escrow Officer
LandAmerica Commercial Services
750 "B" Street, Suite 3000
San Diego, CA 92101
Phone: (619) 230-6342
Please write the escrow number on the check: 03207629-609-CG1
Westmark Development 5.0 credits @ $225,000= $ 1,125,000.00
Corporation
Total due on or before Aug 3,2007 $ 1,125,000.00
Environmental Policy Consultants
Constituent & Governmental Relations
10196 Clover Ranch Drive, Sacramento, California, 95829
Telephone (916) 688-2040 • Fax (916) 688-7436
www.mccollum.com * mccollum@mccollum.com
Mr. David Hauser
June 26,2007
Page 2
Please also execute and forward to Ms. Goldbarg two (2) original copies of the Mitigation Credit
Purchase Agreement and Acknowledgment form, enclosed, and one photocopy (or pdf document)
to:
Mr. Michael McCollum
McCollum Associates
10196 Clover Ranch Drive
Sacramento, CA 95829-6574
(916) 688-2040
niccollum@mccolluni.com
Upon receipt of the specified funds, you will receive a signed copy of Exhibit A,
Acknowledgment of Sale of Conservation Credits, from Westmark Development Corporation.
This receipt will provide evidence to the wildlife agencies that you satisfied that portion of the
mitigation requirements you negotiated with the agencies.
Thank you for your interest in the North County Habitat Bank. Please call me if you have
questions.
Sincere
Michael McCollum
cc:
chments: Mitigation Credit Purchase Agreement and Acknowledgment
Exhibit A, Acknowledgment of Sale of Conservation Credits
Mr. Mark Rohrlick, Westmark Development Corporation / via email
c
MITIGATION BANK MITIGATION BANK PURCHASE AGREEMENTSPURCHASE AGREEMENTS
WestmarkWestmarkDevelopment CorporationDevelopment CorporationNorth County Mitigation BankNorth County Mitigation BankResource Agency ApprovedResource Agency ApprovedBanking Establishment AgreementBanking Establishment AgreementGoverns Operation of BankGoverns Operation of BankEstablishes Number and Type of CreditsEstablishes Number and Type of CreditsSets 5Sets 5--Year Success CriteriaYear Success CriteriaRequires Security Requires Security ConstructionConstructionLong Term Maintenance Endowment FundLong Term Maintenance Endowment FundApproved forApproved forRiparian Wetland Creation CreditsRiparian Wetland Creation CreditsRiparian Wetland Enhancement CreditsRiparian Wetland Enhancement Credits
Site Location forSite Location forNorth County Habitat BankNorth County Habitat BankLegoLandCostcoPalomar Airport Road
North County Habitat BankNorth County Habitat BankMitigation Credit Purchase PriceMitigation Credit Purchase Price$250,000/acre* for Wetland Creation Credit $250,000/acre* for Wetland Creation Credit $250,000/acre* for Wetland Enhancement Credit$250,000/acre* for Wetland Enhancement Credit* $225,000/acre for purchases of 4 acres or more
Estimated CostEstimated CostCity Constructed Habitat MitigationCity Constructed Habitat Mitigation$250,000 $250,000 --$300,000/acre* for Wetland Creation$300,000/acre* for Wetland Creation$60,000 $60,000 --$150,000/acre* for Wetland Enhancement$150,000/acre* for Wetland Enhancement* Excludes Land Acquisition Costs
Purchase Request forPurchase Request forWetland Creation CreditsWetland Creation CreditsEmergency Dredge ProjectEmergency Dredge Project0.96 acres0.96 acres$216,000$216,000Future City ProjectsFuture City Projects5.0 acres5.0 acres$1,125,000$1,125,000
Mitigation Requirements forMitigation Requirements forAgua Agua HediondaHediondaChannelChannelEmergency Dredge ProjectEmergency Dredge Project0.96 Acres of Wetland Creation0.96 Acres of Wetland Creation3.54 acres of Wetland Enhancement3.54 acres of Wetland Enhancement
Near Future City Projects Potentially RequiringNear Future City Projects Potentially RequiringWetland Mitigation CreditsWetland Mitigation CreditsAgua Agua HediondaHediondaand and CalaveraCalaveraCreek Channel DredgeCreek Channel Dredge66Miscellaneous Planned Local Drainage Area ProjectsMiscellaneous Planned Local Drainage Area Projects55Proposed 5Proposed 5--Year Drainage Maintenance ProgramYear Drainage Maintenance Program33Total Future MitigationTotal Future Mitigation1414Project/ProgramAcres
Potential Risk Issues RegardingPotential Risk Issues RegardingPurchase of Credits for Future UsePurchase of Credits for Future Use““As is SaleAs is Sale””No guarantee agencies will accept use of No guarantee agencies will accept use of credits on any specific future City projectcredits on any specific future City projectCatastrophic lost of banked habitatCatastrophic lost of banked habitat
Funding for PurchaseFunding for Purchase$216,000 (0.96 acres) $216,000 (0.96 acres) PLDA Fee Revenue FundPLDA Fee Revenue Fund$1,125,000 (5.0 acres)$1,125,000 (5.0 acres)$562,000 from General Fund$562,000 from General Fund$562,000 from PLDA Fee Revenue Fund$562,000 from PLDA Fee Revenue Fund
Recommended ActionRecommended ActionAdopt Resolution No. 2007Adopt Resolution No. 2007--200 200 Approving two agreements with Approving two agreements with WestmarkWestmarkDevelopment Corporation for purchase of Development Corporation for purchase of wetland mitigation creditswetland mitigation credits0.96 acres for Emergency Dredge Project0.96 acres for Emergency Dredge Project5.0 acres for Future City Projects5.0 acres for Future City ProjectsAppropriating Funds from the PLDA Fee Appropriating Funds from the PLDA Fee Fund and General FundFund and General Fund