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HomeMy WebLinkAbout2019-05-02; El Camino Real Bluff Emergency Repair at Tamarack Avenue; Gomez, PazTo the.members oft1t l CITY COUNCIL ---oate-5}~/-l'l-eA-y cc ...:>1_ CM-i coo __ _\/ DCM-f3-)L May 2, 2019 Council Memorandum. To: i=rom: Honorable Mayor Hall and Members of the City Council Paz Gomez, Deputy City Manager, PublyJ W~rks Elaine Lukey, Chief Operations Officer ~ Via: {cityof Carlsbad Re: El Camino Real Bluff Emergency Repair at Tamarack Avenue This memorandum provides information related to the El Camino Real Bluff Emergency Repair at Tamarack Avenue (Project) and a Notice of Violation (NOV)/lnvestigative Order (10) issued by the San Diego Regional Water Quality Control Board (San Diego Water Board) on June 8, 2018 for the Project (Attachment A). For a visual representation, Attachment B includes photographs showing the pre-and post-repair conditions of the Project site. Background On Jan. 9, 2018, an intense rainfall event occurred which caused major damage to an existing roadway slope along the east side of El Camino Real, north of Tamarack Avenue. Water flowing in the typically dry stream bed, which runs generally parallel to El Camino Real, deviated from its original location and caused significant erosion on the slope at the back of a sidewalk, thereby jeopardizing the integrity of public infrastructure, including existing utility systems, a bus stop and a sidewalk along El Camino Real. On Jan. 11, 2018, city staff notified the San Diego Water Board, U.S. Fish and Wildlife Service, California Department of Fish and Wildlife, and U.S. Army Corps of Engineers (USACE) regarding site conditions and proposed a repair project. City staff also applied for required permits from the resource agencies to complete emergency repairs. The city received authorization to work from the U.S. Fish and Wildlife Service, California Department of Fish and Wildlife and USACE; however, the USACE permit was contingent upon _issuance of a Clean Water Act Section 401 Water Quality Certification (401 Certification) from the San Diego Water Board. To satisfy the USACE permit contingency, the city submitted a 401 Certification application to the San Diego Water Board on Feb. 12, 2018. With more intense rain in the forecast, major roadway slope damage occurring, and impending public health and safety concerns, the city assessed the risks to the public that would result from failed infrastructure, expedited completion of the emergency repair project and st;:ibilized the embankment to protect the public. Consequently, on June 8, 2018, the San Diego Water Board issued an NOV/10 because a 401 Certification was not issued prior to start of · construction. Public Works Branch Faraday Center 1635 Faraday Avenue I Carlsbad, CA 92008 I 760-602-2730 Memo ID #2019036 Honorable Mayor Hall and Members of the City Council May 2, 2019 Page 2 Discussion As part of the NOV /10, the San Diego Water Board requested additional information regarding the work completed at the El Camino Real slope failure, north of Tamarack Avenue. On July 9, 2018, the city provided the requested information and analyses to the San Diego Water Board. Additional information was provided via email on Sept. 11; 2018 with a technical report that was prepared by a consultant for the city. Due to the size ofthese correspondence, they are not attached to this memo, but are available at the City Clerk's office. On Nov. 2, 2018, the San Diego Water Board sent a letter asking for further clarification of the information that had been provided in the technical report. On Nov. 20, 2018, City staff and the consultant met with San Diego Water Board staff to better understand their questions and concerns. The city responded to the San Diego Water Board letter on Dec. 6, 2018. On Jan. 28, 2019, the San Diego Water Board concurred with the city's determination of 0.055 acres of Project impacts to non-wetland waters of the United States and requested that the city submit a compensatory mitigation proposal to offset the impacts associated with the emergency Project. On March 14, 2019, city staff submitted a mitigation proposal to offset the impacts to non-wetland waters of the United States and/or State associated with the emergency repair Project (see Attachment C). On March 27, 2019, the San Diego Water Board responded to the city's proposed mitigation plan requiring higher compensatory mitigation. The city submitted a letter dated April 23, 2019 with a revised mitigation proposal to the San Diego Water Board to satisfy the requirement for higher compensatory mitigation (see Attachment D). The proposed mitigation plan applies mitigation credits that the city currently holds with the North County Habitat Bank. City staff is currently awaiting final approval of the revised mitigation proposal from the San Diego Water Board. Next Steps The city continues to work with the San Diego Water Board by providing information and analyses as requested. The city has submitted a revised mitigation proposal to satisfy the requirement for higher compensatory mitigation to the San Diego Water Board and is awaiting their final approval. Once a mitigation plan is approved, city staff will submit a request to the North County Habitat Bank to deduct the necessary credits from the mitigation credits the city currently holds and will submit a certification of mitigation credit to the San Diego Water Board. The city will then provide the certification of mitigation to the USACE to satisfy the permit requirements and proceed with hydroseeding and monitoring the area. Attachments: A. Notice of Violation (NOV)/lnvestigative Order {10) issued by the San Diego Water Board for the El Camino Real Bluff Emergency Repair Project B. Photographs Showing Pre-and Post-Repair Conditions of the Project Site Honorab.le Mayor Hall and Members of the City Council May 2, 2019 Page 3 C. City of Carlsbad's Prior Mitigation Proposal to the San Diego Water Board, Dated March 14, 2019 D. City of Carlsbad's Revised Mitigation Proposal to the San Diego Water Board, Dated April 23, 2019 cc: Scott Chadwick, City Manager Celia Brewer, City Attorney Paz Gomez, Deputy City Manager, Public Works Marshall Plantz, Transpor:tation Director Amanda Guy, Deputy City Attorney James Wood, Environmental Manager Hossein Ajideh; Engineering Manager Honorable Mayor Hall and Members of the City Council May 2, 2019 Page 4 ATTACHMENT A Notice of Violation (NOV}/lnvestigative Order (10} issued by the San Diego Water Board for the El Camino Real Bluff Emergency Repair Project Water Boards Attachment A ~ EoMUNi;t G. BROWN JR. • GO\l'l:Ht#OH N,-~ MATTHa\' RODRlQUE.l l~~ SECRETARY f'OA ~ ~NVIRONMENTAL PA:QT1;91'10r.t San Diego Regional Water Quality Control Board June 8, 2018 Mr. Elaine Lukey City of Carlsbad, Public Works 1635 Faraday Ave Carlsbad, CA 92008 . In reply refer to: R9-2018-0081 :844932:ngergans Certified Mail -Return Receipt Requested Article Number: 9590 9402 2629 6336 6231 98 ' Subject: Notjce of Violation No. R9-2018-0080 and Investigative Order No. R9- 2018-0081 Related to Alleged Violations for Unauthorized Discharge of Dredged and Fill Material to Waters of the Un_ited States and or State at the El Camino Real Bluff Failure at Tamarack Avenue Project Ms. Lukey: Enclosed is Notice of Violation (NOV) No. R9-2018-0080 issued to the City of Carlsbad (City) for violations pertaining to the unauthorized discharge of dredged or fill material tc;>. waters of the United States and or State at the El Camino Real Bluff Failure Project (Project). You are directed to submit technical information addressing the subject violations, pursuant to the requirements of section 13267 of the California Water Code (Water Code) as set forth below. Notice of Violation No. R9-2018-0080 The State of California largely relies on section 401 of the federal Clean Water Act (CWA) (33 U.S.C. § 1341) to regulate discharges of dredged or fill material to waters of the United States and/or State. Section 401 requires an applicant to obtain "water quality certification" from California that the project will comply with State water quality standards before certain federal licenses or permits may be issued. The permits subject to section 401 include permits for the discharge of dredged or fill materials (CWA section 404 permits) issued by the U.S. Army Corps of Engineers (ACOE). The violations described in the NOV may potentially subject the City to further enforcement by the California Regional Water Quality Control Board, San Diego Region (San Diego Water Board), including but not limited to the following actions listed below: Other Potential Enforcement Action Options Applicable Water Code Section(s) Technical or Investigative Order Sections 13267 and '13383 Time Schedule Order Sections 13300 and 13308 Cease and Desist Order Sections 13301-13303 TOMAS MORALES, CHAIR I DAVID GIBSON, EXECUTIVE OFFICER 2375 Northside Drive, Suite 100, San Diego, California 92108-2700 J www.waterboards.ca.gov/sandiego 0 RECYCLED PAPER Mr. Elaine Lukey 10 R9-2018-0081 Cleanup and Abatement Order Page 2 June 8, 2018 Section 13304 Administrative Civil Liability Sections 13261, 13265, 13350 and13385 Referral to the Attorney General - Referral to the District Attorney - The San Diego Water Board reserves the right to take any enforcement action authorized by law. In making the determination of whether and how to proceed with further enforcement action, the San Diego Water Board will consider the severity and effect of the violation, the level of cooperation, the time it takes to correct the identified violations, and the sufficiency of the corrections. Investigative Order No. R9-2018-0081 Under the authority of Water Code section 13267, the San Diego Water Board herby directs the City to submit the following technical information by 5:00 pm on July 9, 2018. 1. A technical report including a. a description of all work completed at the site b. a determination of the area that was graded, dredged, and filled within waters of the United States and/or State in both acres and linear feet and c. the amount and type of vegetation that was cleared. 2. The dates of commencement and completion of the unauthorized work. 3. All internal and external communication records regarding this project including but not limited to correspondence about the project plans, change in project plaris, and directions regarding commencement of project. All information provided in response to this Investigative Order must include the following signed certification statement: "I certify under penalty of law that this document and all attachments were prepared under my direction or supervision in accordance with a system designed to assure that qualified personnel properly gather and evaluate the information submitted. Based on my inquiry of the person or persons who manage the system, or those persons directly responsible for gathering the information, the information submitted is, to the best of my knowledge and belief, true, accurate, and complete. I am aware that there are significant penalties for submitting false information, including the possibility of fine and imprisonment for knowing violations." The technical report and correspondence records under this Investigative Order are needed to investigate the magnitude and extent of unauthorized impacts to water quality and beneficial uses, and to inform the San Diego Water Board in making a determination on the appropriate corrective actions warranted. The burden, including costs, of these reports bears a reasonable relationship to the need for the reports and benefits to be obtained from the reports. · Mr, Elaine Lu key 10 H9-2018-0081 P~ge3 June,ff 2018 .• . ,. -· .-- · Ait reports, pla.ns;.and dJ>dµrnents required unaer'1his Investigative.Order must be prepared under the direction pf appropriately qualified professionals. A statement 6f qualifications and license numbers, if applicable, of the responsiblEl lead professional . and all professionals making significant and/or substantive contributions must be included in the report submitted. The lead professional performing the engineering and , geologic evaluations and judgements must sign and affix their professional geologist or · chtil engineer registration stamp to all plans, technical reports, or documents submitted to the San Diego Water Board. . .. . . . . Please ~Ubliiit ~Jl responses and infotmatk>ti to,Jblf NOV in electronic format via e..:mail to SanDiego@waterboards.ca.gov with the following identification numbers in the header or subject line: R9-2018-0U81 :844932:ngergans. Documents over 50 megabytes will not be accepted via e-mail and must be placed on a disc and delivered, · • to the San Diego Water Board, 2~75 Northside Drive, ~uite 100, San Diego, CA 92108. Each electronic document must be submitted as a single file, in Portable Document F 9rmat (PDF) format, and converted to text searchable format using Optical Character R¢tognition (OCR). All electronic documents must include scanned copies of all · ,~~n9ture pages; electronic signatures will not be accepted. • (for,qu,e$tlons pertaining to the subject matter, please colitaqf Niqola ~ergans.at(6•19). ·. 5z·t .. 3969:·at 619-521-3969 or nico1e.gergans@waterboards.ca.g6v. · David Barker P. E $t.ipervising WRC Engineer . .· .. . . . San·Diego Regional Water Qualify Control Board .. Enclosures:. . . ·' ·--... -· .-·-. ·._ . . ----.. Notice of Violation No. R974-0 t ~-QOBO Inspection Report · Figure 1 Mr. Elaine Lukey 10 R9-2018-0081 CC (by email with enclosures): Jonah Reenders U.S. Army Corps of Engineers Jonah. Reenders@usace .army .mil Kelly Fisher California Department of Fish and Game Kelly.Fisher@wildlife.ca.gov David Barker San Diego Water Board David.Barker@waterboards.ca.gov Eric Becker San Diego Water Board eric.becker@waterboards.ca.gov U.S. EPA, OWOW, Region 9 R9-WTR8-Mailbox@epa.gov Page4 State Water Resources Control Board, Division of Water Quality 401 Water Quality Certification and Wetlands Unit Stateboard401@waterboards.ca.gov Tech Staff Info & Use Notice of Violation No. R9-2018-0080 WDID 9000003269 Reg. Measure ID 419570 Place ID 844932 Party ID 554051 Violation ID 1043386 Investigative Order No. R9-2018-0081 June 8, 2018 Water Boards San Diego Regional Water Quality Control Board June 8, 2018 Ms. Elaine Lukey Director of Public Works City of Carlsbad 1635 Faraday Ave Carlsbad, CA 92008 NOTICE OF VIOLATION No. R9-2018-0080 Violations of Clean Water Act sections 301 and 401 and California Water Code sections 13260, 13264, and 13376 Unauthorized dredged or fill material discharges within waters of the United States and/or State at El Camino Real Bluff Failure at Tamarack Avenue In reply refer to: "ngergans:CW-844932" Certified Mail -Return Receipt Requested Article number: 9590 9402 2629 6336 6231 98 YOU ARE HEREBY NOTIFIED THAT: The City of Carlsbad (City) is in violation of Clean Water Act sections 301 and 401 , 33 U.S.C. §§ 1311 and 1341, and California Water Code (Water Code) sections 13260, 13264, and 13376. These provisions prohibit dredged or fill material discharges to waters of the United States and/or State, except in compliance with a Clean Water Act section 401 water quality certification and/or waste discharge requirements. Such violations subject th.e City to possible enforcement action by the California Regional Water Quality Control Board, San Diego Region (San Diego Water Board) including administrative enforcement orders requiring the City to cease and desist from violations ; or to clean up waste and abate existing or threatened conditions of pollution or nuisance; administrative civil liability in amounts of up to $10,000 per day per violation; referral to the State Attorney General for injunctive relief or monetary penalties; and/or, referral to the District Attorney for criminal prosecution. TOMAS MORALES., CHAIR I ' DWID GIBSOll, EXECUTIVE OFFICER 2375 Northside Drive, Suite 100, San Diego, California 92108-2700!i I www.waterboards.ca.gov/sandiego (°)' RECYCLED PAPER City of Carlsbad, Public Works NOV No. R9-2018-0080 A. Background June 8, 2018 -2 - January 25, 2018: The California Regional Water Quality Control Board, San Diego Region (San Diego Water Board) received an Emergency Notification Form for coverage under United States Army Corps of Engineers (ACOE), Regional General Permit 63 (RGP 63) from the City of Carlsbad (City) for the El Camino Real Bluff Failure Project (Project) at El Camino Real and Tamarack Ave in Carlsbad, California signed by Mr. Brandon Miles, Engineer for the City of Carlsbad. The Project proposed to repair eroded material and install rip-rap at the toe of the slope. January 29, 2018: Mr. Alan Monji of the San Diego Water Board emailed Mr. Miles with clarifying questions including a request for the contact at the ACOE managing the Project. February 5, 2018: Mr. Miles emailed Mr. Monji to notify the San Diego Water Board that Mr. Jonah Reenders at the ACOE had been assigned to the RGP 63 application. February 8, 2018: Mr. Reenders emailed Mr. Monji notifying the San Diego Water Board that the repair did not quality for coverage under RGP 63 and that the project would be enrolled under a ACOE Nationwide Permit 13 (NWP 13) for Bank Stabilization (NWP 13). Mr. Reenders had previously corresponded with Mr. Miles about the matter. In addition, Mr. Monji emailed Mr. Miles informing the City that the ACOE had determined that proposed impacts of the Project did not qualify for coverage under RGP 63 and that the Project would instead be covered under NWP 13. Mr.Monji also clarified in the email that the City was required to apply for a Clean Water Act Section 401 Water Quality Certification (section 401 Certification) for the Project as NWP 13 was not pre- certified with the State of California. February 12, 2018: Mr. Miles submitted a section 401 water quality certification application to the Sari Diego Water Board. Mr. Monji reviewed the submittal and emailed Mr. Miles to notify the City that substantial parts of the application were missing and that the City should re-submit the application with more detail and fill in all applicable sections. Mr. Monji also attached written guidance for completing the section 401 Certification application and advised the City should consider seeking assistance from one of the City's consultants. February 15, 2018: The San Diego Water Board received an updated 401 Certification application from the City that proposed placement of 200 cubic yards of rip-rap in 3 locations consisting of 60 linear feet (Figure 1 attached) to an unnamed tributary to Agua Hedionda Lagoon. March 5, 2018: The San Diego Water Board issued a letter notifying the City the application was incomplete and requesting additional information regarding the project impacts and mitigation. City' of Carlsbad, Public Works NOV No. R9-2018-0080 -3 - June 8, 2018 March 6, 2018: The City submitted additional information to the San Diego Water Board. March 22, 2018: Mr. Monji notified the City that the San Diego Water Board would not be able to issue a water quality certification in order for the City to begin work on the Project the following week. Mr. Monji also notified the City that proceeding with work without a section 401 Certification would put the City at risk of enforcement actions from the San Diego Water Board. Mr. Monji also requested a copy the ACOE conditional NWP 13 Verification for the Project. March 23, 2018: Mr. Miles emailed a copy of the ACOE conditional NWP Verification to Mr. Monji. March 29, 2018: Ms. Nicole Gergans of the San Diego Water Board reviewed the City's responses from March 6, 2018 and determined that the responses were insufficient and that the section 401 Certification application was still incomplete. Ms. Gergans sent an email to the City asking for further clarification of the City's March 6, 2018 response. Ms. Gergans also noted in the email that although the Project was not classified as an emergency, the San Diego Water Board understood the urgency of the project and was making it a priority. Prior to sending the email, Ms. Gergans spoke with Mr. Miles over the phone to assist in clarifying details of the Project in regard to compensatory mitigation. April 16, 2018: The City provided additional written responses to Ms. Gergans. April 18, 2018: Mr. Miles sent a photo exhibit of rip-rap to Ms. Gergans and requested confirmation about purchasing compensatory mitigation credits. Ms. Gergans replied to Mr. Miles noting that the San Diego Water Board does not recommended purchasing mitigation credits until the section 401 Certification is issued . Ms. Gergans did not review the attached exhibit at that time. April 20, 2018: Ms. Gergans reviewed the City's additional response from April 16, 2018 and sent a follow up email regarding further clarification of impacts and compensatory mitigation. Ms. Gergans also reviewed the City's April 18, 2018 email and attachment that contained an exhibit of rip-rap in a graded area. Ms. Gergans emailed the City asking for clarification regarding the content of the photograph of the rip-rap in a graded area. Mr. Miles confirmed that work had been performed at the location stating that the work was able to be completed without placing rip rap on the slope, but that a small amount of rip rap was added to slow velocity. Ms. Gergans asked for clarification on whether the City went forward with performing work even though a section 401 Certification had not been issued. Ms. Gergans then followed up with another email noting that the San Diego Water Board is unable to issue a section 401 Certification for unpermitted work that has already been performed. · City of Carlsbad, Public Works NOV No. R9-2018-0080 -4- June 8, 2018 On April 24, 2018: Ms. Gergans conducted an inspection of the Project site to investigate and evaluate if an unauthorized discharge of dredged or fill material had been conducted by the City. B. San Diego Water Board Alleged Violations: Dredging, filling, or excavation within surface waters constitutes a discharge of waste to waters of the United States and/or State, and prospective dischargers are required to apply for and obtain a section-401 Certification and/or waste discharge requirement from the appropriate Regional Water ,Quality Control Board. The City discharged dredged or fill material into an unnamed tributary to Agua Hedionda Lagoon, a water of the United States and/or State without first submitting a complete application and obtaining a section 401 Certification and/or waste discharge requirement. The activities of the City resulted in the unauthorized discharge of dredged or fill material _to waters of the United States and/or State in violation of sections 301 and 401 of the Clean Water Act (33 U .S.C. §§ 1311 and 1341) and Water Code sections 13260, 13264, and 13376. Observation On April 24, 2018, the San Diego Water Board conducted an inspection of the Project site and noted that that roughly 300 linear feet of the unnamed tributary had been graded, dredged, widened, and partially filled with rip rap. An inspection report is attached documenting these findings. The City of Carlsbad was aware of the requirements to obtain the appropriate permits prior to conducting dredge and fill operations and was aware of the fact that no permit had been granted by the San Diego Water Board. Nevertheless, the City elected to proceed to discharge dredged or fil-I material waste to waters of the United States and or State without obtaining a section 401 Certification and/or waste discharge requirements. Summary of Potential Enforcement Options The City may be subject to administrative civil liability pursuant to Water Code sections 13261, 13265, 13350 and 13385 for failing to obtain a section 401 Certification and/or waste discharge requirements, and for the· unauthorized discharge of dredged or fill material to waters of the United States and/or State. In addition to administrative civil liability, the City may also be subject to the following enforcement actions: Other Potential Enforcement . Applicable Water Code Options Section(s) Technical or Investigative Order Sections 13267 Cleanup and Abatement Order Section 13304 Cease and Desist Order Sections 13301-13303 Time Schedule Order Sections 13300, 13308 City of Carlsbad, Public Works NQVNo. R9-2018-0080 · :.; 5- . . . . . June a; 201ff In addition, the San OiegO Water Board may consider referring the matter to other resource agencies, referring the matter to the State Attorn~y General for injunctive relief, and/or referral to the municipal or District Attorney for criminal prosecution. The ~an Diego Water Board reserves its right to take any enforcement action(s) authorized by law. San Diego Water Board staff is available to meet with the City to discuss the allegeci' . · violations, impacts to wat?rs of the United States and/or State, and potential imposition of administrative civil liability. Please contact me at (619) 521-3364 or Eric.Becker@waterboards.ca.gov to coordinate a day and time for an in-perSon meeting ,and if you have any questions pertaining to this notice of violation. . . . Written correspondence pertaining to this notice of violation should be sent to sandiego@waterboards.ca.gov. In the subject line of any response, please include •tn gergans:CW-844932." -·~··• .. I • i ___ i" .,, ·,c: L '\_,,J~-b-12~~--- E:ric Becker, P.E. Senior Water Resources Control Engineer Wetland and Riparian Protection Unit E$B:ng Attachments: April 2ll,, 201'8 San Diego Water Board Inspection Report' Figure 1 cc: Mr.· Brandon Miles City of Carlsbad, Public Works Branond. Miles@carlsbadca .g av Mr. Jonah Reenders Army Corps of Engineers Jonah. Reenders@usace.army.mil Ms. Kelly Fisher Kelly Fisher .Kelly.fisher@wildlife.ca.gov Tech Staff Info & Use Violation ID 1043386 Inspection ID 32502212 Place JD 844932 PartvlD 554051 CALIFORNIA REGIONAL WATER QUALITY CONTROL BOARD -SAN DIEGO REGION SECTION 401 WATER QUALITY CERTIFICATION INSPECTION REPORT FACILITY: El Camino Real Bluff Failure INSPECTION DATE/TIME: 04/24/2018; 10:30AM SITE WDID No.: 9 000003269 REPRESENTATIVE($) PRESENT DURING INSPECTION: Nicole Gergans (SDRWQCB), Director of Public Works, City of Carlsbad NAME OF OWNER, AGENCY OR PARTY RESPONSIBLE FOR DISCHARGE CIWQS Place ID No.: -=-84-'-4"'""9-=-3=-2 ____ _ 1635 Farady Avenue, Carlsbad, CA 92008 OWNER MAILING ADDRESS Tamarack Ave and El Camino Real, Carlsbad, CA FACILITY ADDRESS Elaine Lukey, Director of Public Works OWNER CONTACT NAME AND PHONE# APPLICABLE WATER QUALITY LICENSING REQUIREMENTS: 0 MS4 URBAN RUNOFF REQUIREMENTS 0 CONSTRUCTION GENERAL PERMIT 0 CAL TRANS GENERAL PERMIT 0 INDUSTRIAL GENERAL PERMIT INSPECTION TYPE (Check One): 0 GENERAL OR INDIVIDUAL WASTE DISCHARGE REQUIREMENTS OR NPDES 0 GENERAL OR INDIVIDUAL WAIVER OF WASTE DISCHARGE REQUIREMENTS l8J SECTION 401 WATER QUALITY CERTIFICATION . 0 ewe SECTION 13264 0 "A" TYPE COMPLIANCE--COMPREHENSIVE INSPECTION IN WHICH SAMPLES ARE TAKEN. (EPA TYPES) I l8J "B" TYPE COMPLIANCE--A ROUTINE NONSAMPLING INSPECTION. (EPA TYPE C) 0 NONCOMPLIANCE FOLLOW-UP--INSPECTION MADE TO VERIFY CORRECTION OF A PREVIOUSLY IDENTIFIED VIOLATION. 0 ENFORCEMENT FOLLOW-UP-INSPECTION MADE TO VERIFY THAT CONDITIONS OF AN ENFORCEMENT ACTION ARE BEING MET. 0 COMPLAINT--INSPECTION MADE IN RESPONSE TO A COMPLAINT. 0 PRE-REQUIREMENT--INSPECTION MADE TO GATHER INFO. RELATIVE TO PREPARING, MODIFYING, OR RESCINDING REQUIREMENTS. 0 COMPLIANCE ASSISTANCE INSPECTION -OUTREACH INSPECTION DUE TO DISCHARGER'S REQUEST FOR COMPLIANCE ASSISTANCE. . INSPECTION FINDINGS: ___::f__ WERE VIOLATIONS NOTED DURING THIS INSPECTION? (YES/NO/PENDING SAMPLE RESULTS) CALIFORNIA REGIONAL WATER QUALITY CONTROL BOARD-SAN DIEGO REGION Facility: Inspection Date: El Camino Real Bluff Failure 04/24/2018 I. COMPLIANCE HISTORY/ PURPOSE OF INSPECTION Page 2 of 13 January 25, 2018: The California Regional Water Quality Control Board, San Diego Region (San Diego Water Board) received an Emergency Notification Form for coverage under United States Army Corps of Engineers (ACOE), Regional General Permit 63 (RGP 63) from the City of Carlsbad (City) for the El Camino Real Bluff Failure Project (Project) at El Camino Real and famarack Ave in Carlsbad, California signed by Mr. Brandon Miles, Engineer for the City of Carlsbad. The Project proposed to repair eroded material and install rip-rap at the toe of the slope. January 29, 2018: Mr. Alan Monji of the San Diego Water Board emailed Mr. Miles with clarifying questions including a request for the contact at the ACOE managing the Project. February 5, 2018: Mr. Miles emailed Mr. Monji to notify the San Diego Water Board that Mr. Jonah Reenders at the ACOE had been assigned to the RGP 63 _ application. February 8, 2018: Mr. Reenders emailed Mr. Monji notifying the San Diego Water Board that the repair did not quality for coverage under RGP 63 and that the project would be enrolled under a ACOE Natiof,lwide Permit 13 (NWP 13) for Bank Stabilization (NWP 13). Mr. Reenders had previously corresponded with Mr. Miles about the matter. In addition, Mr. Monji emailed Mr. Miles informing the City that the ACOE had determined that proposed impacts of the Project did .not qualify for coverage under RGP 63 and that the Project would instead be covered under NWP 13. Mr.Monji also clarified in the email that the City was required to apply for a Clean Water Act Section 401 Water Quality Certification (section 401 Certification) for the. Project as NWP 13 was not pre- certified with the State of California. February 12, 2018: Mr. Miles submitted a section 401 water quality certification application to the San Diego Water Board. Mr. Monji reviewed the submittal and emailed Mr. Miles to notify the City that substantial parts of the application were missing and that the City should re-submit the application with more detail and fill in all applicable sections. Mr. Monji also attached written guidance for completing the section 401 Certification application and advised the City should consider seeking assistance from one of the City's consultants. February 15, 2018: The San Diego Water Board received an updated 401 Certification application from the City that proposed piacement of 200 cubic yards of rip-rap in 3 locations consisting of 60 linear feet (Figure 1 attached) to an unnamed tributary to Agua Hedioilda Lagoon. March 5, 2018: The San Diego Water Board issued a letter notifying the City the application was incomplete and requesting additional information regarding the project impacts and mitigation. March 6, 2018: The City submitted additional information to the San Diego Water Board. CALIFORNIA REGIONAL WATER QUALITY CONTROL BOARD-SAN DIEGO REGION Facility: Inspection Date: El Camino Real Bluff Failure 04/24/2018 Page 3 of 13 March 22, 2018: Mr. Monji notified the City that the San Diego Water Board would not be able to issue a water quality certification in order for the City to begin work on the Project the following week. Mr. Monji also notified the City that proceeding with work . without a section 401 Certification would put the City at risk of enforcement actions from the San Diego Water Board. Mr. Monji also requested a copy the ACOE conditional NWP 13 Verification for the Project. March 23, 2018: Mr. Miles emailed a copy of the ACOE conditional NWP Verification to Mr. Monji. March 29, 2018: Ms. Nicole Gergans of the San Diego Water Board reviewed the City's responses from March 6, 2018 and determined that the responses were insufficient and that the section 401 Certification application was still incomplete. Ms. Gergans sent an email to the City asking for further clarification of the City's March 6, 2018 response. Ms. Gergans also noted in the email that although the Project was not classified as an emergency, the San Diego Water Board understood the urgency of the project and was making it a priority. Prior to sending the email, Ms. Gergans spoke with Mr. Miles over the phone to assist in clarifying details of the Project in regard to compensatory mitigation . April 16, 2018: The City provided additional written responses to Ms. Gergans. April 18, 2018: Mr. Miles sent a photo exhibit of rip-rap to Ms. Gergans and requested confirmation about purchasing compensatory mitigation credits. Ms. Gergans replied to Mr. Miles noting that the San Diego Water Board does not recommended purchasing mitigation credits until the section 401 Certification is issued. Ms. Gergans did not review the attached exhibit at that time. April 20, 2018: Ms. Gergans reviewed the City's additional response from April 16, 2018 and sent a follow up email regarding further·clarification of impacts and compensatory mitigation. Ms. Gergans also reviewed the City's April 18, 2018 email and attachment that contained an exhibit of rip-rap in a graded area: Ms. Gergans emailed the City asking for clarification regarding the content of the photograph of the rip-rap in a graded area. Mr. Miles confirmed that work had been performed at the location stating that the work was able to be completed without placing rip rap on the slope, but that a small amount of rip rap was added to slow velocity. Ms. Gergans asked for clarification on whether the City went forward with performing work even though a section 401 Certification had not been iss.ued. Ms. Gergans then followed up with another email noting that the San Diego Water Board is unable to issue a section 401 Certification for unpermitted work that has already been performed. On April 24, 2018: Ms. Gergans conducted an inspection of the Project site to investigate and evaluate if an unauthorized discharge of dredged or fill material had been conducted by the City. CALIFORNIA REGIONAL WATER QUALITY CONTROL BOARD-SAN DIEGO REGION Facility: Inspection Date: II. FINDINGS El Camino Real Bluff Failure 04/24/2018 Page 4 of 13 1. At approximately 10:30 AM on April 24, 2018, San Diego Water Board inspector Ms. Gergaris arrived at the Site. 2. Ms. Gergans inspected the Site and took photographs to document the areas in which unauthorized fill and impacts to waters of the United States and/or State · had occurred. 3. · Ms. Gergans observed that the proposed project impacts detailed in Figure 1 (attached) of the February 15, 2018 application submittalwere not completed according to proposed plans. Instead a different project with much larger impacts was already completed at the site. Rather than placing rip rap in the locations shown in Figure 1, roughly 300 linear feet of stream was graded, straightened, and widened (Photos 2, 3, 6, 7, and 8). The area immediately downstream of where the work occurred shows channel conditions that are in a natural state compared to the impacted area in Photos 11-14. Loose rip-rap was placed as partial check dams in three locations rather than as stabilization along the banks near the roadway as proposed (Photos 1,3,4, 5, 9, and 10). All vegetation with the exception of a few large trees had been cleared from the stream and surrounding area and the area showed evidence of recent cuttings .Photos 14 and 15. 4. San Diego Water Board staff did not verify the exact footprint of the unauthorized fill. However, the impact appears to have occurred over roughly 300 linear feet in (contiguous) stream length. In some places the area of grading appeared to up to 30 feet wide from top of bank to top of bank (Photo 3). 5. The current stream conditions have been altered causing erosion (Photo 5). The rip-rap installed in the stream could cause further erosion and bank . destabilization by redirecting flows. No erosion or sediment control Best Management Practices have been installed at the site (Photos 2-6). 6. The City of Carlsbad was aware of the requirements to obtain a 401 Certification permits, and was aware of the fact that no 401 Certification had been issued by the San Diego Water Board. Nevertheless, the City elected to proceed to discharge dredge and fill waste to Waters of the United States and or State without a 401 certification and/or Waste Discharge Requirements. 7. The unauthorized dredge and discharge of fill into an unnamed tributary are illegal discharges of waste to waters of the United States and/or State in violation of Water Code sections 13260 and 13376 and waste discharge prohibitions contained in the Basin Plan. CALIFORNIA REGIONAL WATER QUALITY CONTROL BOARD-SAN DIEGO REGION Page 5 of 13 Facility: Inspection Date: El Camino Real Bluff Failure 04/24/2018 Photographs Photo 1-The area showing the first check dam at the most upstream point where impacts occurred. Facing west. Photo 2-Graded area (with equipment tracks) between the first and second partial check dam with no erosion or sediment control Best Management Practices (BMPs): CALIFORNIA REGIONAL WATER QUALITY CONTROL BOARD-SAN DIEGO REGION Facility: Inspection Date: El Camino Real Bluff Failure 04/24/2018 Page 6 of 13 Areas showing placement of rip rap and grading at second check darn is shown below in photos 3, 4-, 5, and 6. Photo 5 also demonstrates downstream erosion. =-.;. ~ . ·-.. -.:::-~ • .,_-;/;, ··L_ -· -~·-. . . Photo 3 Photo 4 CALIFORNIA REGIONAL WATER QUALITY CONTROL BOARD-SAN DIEGO REGION Facility: Inspection Date: Photo 5 Photo 6 El Camino Real Bluff Failure 04/24/2018 Page 7 of 13 CALIFORNIA REGIONAL WATER QUALITY CONTROL BOARD-SAN DIEGO REGION Facility: Inspection Date: El Camino Real Bluff Failure 04/24/2018 Page 8 of 13 Area showing stream widening and equipment tracks near the second check dam is shown below in Photos 7 and 8. Photo 7 Photo 8 CALIFORNIA REGIONAL WATER QUALITY CONTROL BOARD-SAN DIEGO REGION Facility: Inspection Date: El Camino Real Bluff Failure 04/24/2018 Page 9 of 13 Area showing where new rip rap was placed at outlet and the surrounding area raded is shown below in Photos 9 and 10. Photo 9 Photo 10. CALIFORNIA REGIONAL WATER QUALITY CONTROL BOARD-SAN DIEGO REGION Facility: Inspection Date: El Camino Real Bluff Failure 04/24/2018 Page 10 of 13 The unimpacted area directly downstream from the impacted area is shown below in Photos 11 and 12 below Photo 11 CALIFORNIA REGIONAL WATER QUALITY CONTROL BOARD-SAN DIEGO REGION Facility: Inspection Date: El Camino Real Bluff Failure 04/24/2018 Page 11 of 13 8. Below Photos 13 and 14 show the area directly above and below location in the stream where the grading ended. A sudden change in bank cross section can cause erosion, downcutting, sedimentation, and geomorphological changes downstream. Photos 13/14 . CAUFORNIA REGIONAL WATER QUALITY CONTROL BO,\Rt>-$.AN DIEGO REGION • _ .. Pag~ 12of13 Facilityt Inspection bate: E:1 Camino Real Bluff Failure .04/24/2018 _ An example of ah area in which vegetation was tecentlyrenioved is shbWil befoW . fr1 Photo 15. · · .-. ~: .. ~ Photo 15 IIL RECOMMENDATIONS . . 1. City· of Carlsbad needs to determine the typ'e; extent, an_cl quantity of impacts from the illegal fill in waters of the United $fates and/or State. impacts shall be reported in both area and in linear feet. 2. City of Carlsbad needs to evaluate the feasibility Qfrestoring the site to original conditions. and provide compensatory mitigation to offset any irreparable impacts. IV. SIGNATURE SECTION Nicole Gergarts . · STA.FF INSPECTOR . Eric Becker REVIEWEP-BY SUPERVISOR SIGNATURE~ . _gi__._. \~L-- SIGNATURE 4/24/2018 ·-· · INSPECTION DATE 6/8/2018 DATE ii! :::, "' u: .,'.. z w ::;; :,: u ~ <( LOCATION C fl.t',NQRE.41. ""''"' I TYPICAL SECTION Norrost'ALE LEGEND DESCRIPTION IH1I ¼ -TON AND Yz-TON RIP RAP, INTERMIXED '----. M/RAF1 FABRIC a-lANNEL APPROXIMME WAIIIHY 200 C.Y. LOCATION B NOIES (D liff'I.Ac::f&1SOOGFlllfflQIICHANNEL (2) IHsrAU. Roa< 5ltft" PIIOIEt~ ¼ -Y2 rot1. @WsrAlill!IWIF'.48'ffl: © CQ'Ul\'ACltlfl' ro 11! fl£Sf'(WSIB(£ ftlff IWNr~ srASUrr OF DlSlli'm ROADWAY tl\ltffiG EX~VA110N AND l'tACDIDff OF RIP RAP. LOCATION A REVISION DESCRIPTION DATE INTIAl. tllHERN'l'RtlVAt OAlt !INITIAL CITY,.,l'ROVAl,. \ SI.UEI" • zo' "AS BUILT" RC£__ EXP----DAlE INSPECTOR ~ [SHffil CITY OF CARLSBAD l'"ms I L1..J mANSPORTATION DEPARTMENT 1 EL CAMINO REAL RIP RAP REPAIR RIPRlr.P REPAIR AND DETAILS l'"'"·-1[ ctit<D BY: __ RVWD BY: PR~CT ND. 6622 ]CJ Honorable Mayor Hall and Members of the City Council May 2, 2019 Page 5 ATTACHMENT B Photographs Showing Pre-and Post-Repair Conditions of the Project Site Honorable Mayor Hall and Members of the City Council May 2, 2019 Page 6 Photo la: View of the southern end of the ephemeral drainage pre-grading, facing northwest - Photograph taken on March 28, 2018 Photo lb: View of the southern end of the ephemeral drainage post-grading, facing northwest - Photograph taken on November 29, 2018 Honorable Mayor Hall and Members of the City Council May 2, 2019 Page 7 Photo2a: View of the southern end of ephemeral drainage pre-grading, facing south - Photograph taken on March 15, 2018 Photo 2b: View of the southern end of the ephemeral drainage post-grading, facing south - Photograph taken on April 10,.2018 Honorable Mayor Hall and Members of the City Council May 2; 2019 Page 8 Photo 3a: View of an eroded section of the drainage pre-grading, facing southwest - Photograph taken on January 11, 2018 Photo 3b: View of the southern end of the ephemeral drainage post-grading, facing west - Photograph taken on April 10, 2018 Honorable Mayor Hall and Members of the City Council April 26, 2019 Page 9 ATTACHMENT C City of Carlsbad's Prior Mitigation Proposal to the San Diego Water Board, Dated March 14, 2019 C City of Carlsbad March 14, 2019 Mr. David Barker Supervising Water Resources Control Engineer Attn: Ms. Nicole Gergans California Regional Water Quality Control Board San Diego Region 2375 Northside Drive, Suite 100 San Diego, CA 92108 RE: R9-2018-0081:8449l2:ngergans Attachment( www.carlsbadca.gov Notice of Violation (NOV) No. R9-2018-0080 and Investigative Order (10) No. R9-2018-0081 In response to the Nov. 2, 2018 letter from the San Diego Regional Water Quality Control Board (San Diego Water Board) regarding the subject NOV and 10 for the El Camino Real Bluff Emergency Repair at Tamarack Avenue (Project}, the City · of Carlsbad (city) submitted a technical report dated Dec. 6, 2018 assessing the permanent impact to non-wetland waters of the United States and/or State associated with the emergency Project. On Jan. 28, 2019, the city received an email from the San Diego Water Board concurring with the city's determination of 0.055 acres of permanent impacts to non-wetland waters of the United States and/or State resulting from emergency repair activities. The San Diego Water Board also requested that the city provide a compensatory mitigation proposal to offset the permanent impact to non- wetland waters of the United States and/or State. In response to the San Diego Water Board's Jan. 28, 2019 email, the city obtained services from LSA Associates, Inc. and Mccollum Associates to determine appropriate mitigation measures to satisfy the San Diego Water Board. As further described below, the city's proposal utilizes created/restored wetland habitat from the North County Habitat Bank (NCHB) to offset the impact to non-wetland waters of the United States and/or State resulting from the Project. The proposal reflects a 10:1 mitigation ratio that requfres 0.55 acres of mitigation to offset the 0.055 acres of impact. At our Nov. 20, 2018 meeting, the San Diego Water Board and the city discussed the possibility of applying an 8:1 mitigation ratio when wetland mitigation is utilized (due to the higher value of wetland mitigation); however, in the interest of resolving this matter as quickly as possible, the city proposes applying a 10:1 wetland mitigation ratio when the proposed created/restored mitigation at the NCHB is used. The city's proposal applies mitigation credits that it currently holds with the NCHB. In 2007, the city purchased the equivalent of 1.67 acres of created/restored wetland/rip;:irian mitigation credits from the NCHB at a price of $1;125,000. For your reference, copies of the purchase agreement and subsequent amendment are attached as Attachments 1 and 2, respectively. To establish the bank, the property owner, Westmark, entered into a Bank Enabling Instrument (BEi) with the resource agencies in 2007 (Attachment 3). The U.S. Fish & Wildlife Service, California Department of Fish & Game, U.S. Army Corps of Engineers, and U.S. Environmental Protection Agency approved the establishment, use, operation and maintenance of the NCHB. The city acknowledges that the San Diego Water Board was not a signatory to the BEi for the NCHB; however, it is the city's understanding that the San Diego Water Board was involved in the creation of the NCHB and has indicated that it may accept mitigation credits to fulfill Section 401 Certification conditions (as stated in the 2007 internal memorandum included in the city Agenda Bill #19110, 07 /24/04, presented in Attachment 4). According to the NCHB, it has sold credits for over 20 permit actions, and at least 15 of them had a certification requirement that the San Diego Water Board deemed to have been met by the credits purchased frorri the NCHB. The city can facilitate further discussion with the · NCHB, if necessary, regarding evaluation of the city's mitigation credits. Mr. David Barker, Supervising Water Resources Control Engineer March 14, 2019 Page 2 The city's 1.67 banked acres of created/restored wetlands, which have met the five-year success criteria, are worth three times more. thari equivalent acreage that has not yet undergone mitigation (creation/restoration) activities. As· shown in the BEi for the NCHB (Table 2, page 12 of the BEi included as Attachment 3), the full value bf credits will .not be obtained until the five-year success criteria have been met. Any use of credits prior to that time would result in a lower value prorated by year due to a temporal loss of habitat. As described in a 2007 internal city memorandum presented as Attachment 4, agencies typically require mitigation (after the impact has occurred) at a 3:1 ratio to capture a 2:1 creation component and a 1:1 enhancement component. The theory behind this requirement is that not all newly created habitat will survive, so additional land must be created to end up with one for one replacement. Therefore; 0.55 acres of mitigation for the Project would translate to 0.183 of the city's banked acres (0.55 acres/3:1 = 0.183 acres). The city has attached a draft acknowledgment of sale of mitigation credits as presented in Attachment 5. Once approved by the San Diego Water Board, the city will offset Project impacts with 0.55 acres of wetland mitigation (utilizing a 10:1 ratio for 0.055 acres of permanent impacts to non-wetland waters of the United States and/or Sta~e), which translates to 0.183 acres of banked created/restored wetland mitigation habitat. This is equivalent to $123,750 of mitigation land in accordance with the 2007 purchase agreement. I certify under penalty of law that this document and all attachments were prepared under my direction or supervision in accordance with a system designed to assure that qualified personnel properly gather and evaluate the information submitted. Based oli my inquiry of the person or persons who manage the system, or those persons directly respcins1ble for gathering the information, the information submitted is, to the bestof my knowledge and belief, true, accurate, and complete. I anJ aware that there are significant penalties for submitting false information, including the possibility of fihe and imprisonment for knowing violations. Please let us know if we can provide any additional information or Support. We are eager to work with the San Diego Water Board to resolve this m13tter as expeditiously as possible, Tha1,1k you. Sincerely, ~Z.:::c, BE Public Works Direct Cc: Eric Becker, SeniorWater Resources Control Engineer Scott Chadwick, City Manager Elaine Lu key, Chief Operations Officer Amanda Guy, Deputy City Attorney Marshall Plantz, Transportation Director James Wood, Environmental Manager Hossein Ajideh, Engineering Manager Brandon Miles, Associate Engineer Attathilielits: 1. 2_007 Mitigation Credit Purchase Agreement and Acknowledgement for the NCHB 2. 2009 Amended Mitigation Credit Purchase Option Agreement and Acknowledgement for the NCHB 3. 2007 Bank Enabling Instrument for the NCHB 4. 2007 City lnternai Memorandum 5. Qraft Acknowledgment ofSale of Mitigation Credits from NCH (_ City of Carlsbad ATTACHMENT 1 www.carlsbadca.gov 2007 MITIGATION CREDIT PURCHASE AGREEMENT AND ACKNOWLEDGMENT FOR THE NCHB Attachment 1 e{or,fh County ~~~r .: Habitat Bank MITIGATION CREDIT PURCHASE AGREEMENT AND ACKNOWLEDGMENT nns MITIGATION CREDIT PURCHASE AGREEMENT AND ACKNOWLEDGMENT ("Agreement") is entered into this,;:n-t day of~ , 2007 by and between WESTMARK DEVELOPMENT CORPORA TI N~vada 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 Mitigation Credit Purchase Agreement Page I of5 03207629-609-CG I v.062607 I (p 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, Sdler 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 Mitigation Credit Purchase Agreement Page 2 ofS 03207629-609-CGI v.062607 (7 ···--·--···-···----~-------------- 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 Agree~ent. 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 Mitigation Credit Purchase Agreement Page 3 of5 03207629-609-CG I 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 willbe 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 ofS 03207629-609-CG I v.062607 WHEREUPON, this Agreement has been executed as of the date first-above written. SELLER: WESTMARK DEVELOPMENT CORPORATION, a Nevada 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: -,..,.---------"s;:-----,'1--f"---r-------N am e: Claude A. "Bud" 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 of5 · 03207629-609-CG I v.062607 orth 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: d>~ Name: Mark Rohrlick ~~ Its: President ~ ~~ Date: Escrow Account Number 03207629-609-CGJ 2. I ( City of Carlsbad ATTACHMENT 2 www.carlsbadca.gov 2009 AMENDED MITIGATION CREDIT PURCHASE OPTION AGREEMENT AND ACKNOWLEDGMENT FOR THE NCHB · Attachment 2 MlTIGATJ:ON CR,EDIT PURCHASE OPTION AGREEMENT AND ACKNOWLEDGMENT THIS :MITIGATION CREDIT PURCHASE OPTlON AGREE1\i1EN'l' ANI) ACKNOWLEDGMENT (" Agre~eilt")js entered into this @+'day of &cft1f3f4.:., 2009 by and l>etween WESTMARK DEVELOPMENT CORPORATION, a Nevada corporation ("Seller") and CITY OFCARLSB:Al), a municipal corporatiqn ofthe State of California ("Buyer"). RECITAL$ A. Pursuant to that certain Banking Establishment Instrument regarding the Establishment, Operati<m and Use 9f the North County Habitat Bank dat.ed May 23, 2007 (the "BEI"), by and arno11g Westmark Development Corporation;.the CaHfoini.a D~artment of Fish and Grune; the United States Fish and. Wildlife Service; the United States Environmental Protection Agency, and the United States Army Corps of Engineers (r~erred to collectively hereinafter as the "Agenqies11), the Agencies have acknowledged the creation of the North County Habitat Batik (the "Mitigation Bank") and the right of Seller to $ell "Mitigation Credits'; to mitigate for the loss of wetlands and habitat as provided therefil B. I3uyer desires to mitigate the loss of certain wetland/riparian or upland habitat values on real property located in San Pieg◊ County California com.rrionly k:nown as Emergency Chalilltl Dredging for Agua. Hedionda Creek (the "Buyer's Property") to satisfy Buyer's obligations with respect to wetland/riparian or upland habitat on Buyers 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 1.138 credits of Unit~ States Army Corps of Engineers/California Departine11t. ofFislt and Grune E_nhanc~ Wetland/Riparµm Mitigation and 2.422 credits of California Department of Fish and Game Enhanced Wetland/Riparian Mitigatiqn as defined in.the BEI (the "Conveyed Credits") from the Mitigation Bank on the teMs and conditions set forth herein, 3.56 Credits equal 3.56 acres of Wetland/Riparian Enhancement D. Buyer acknowledges that Buyer understood and concurred that Buyer's previous purchase of S.O credits of created Wetland/Rip~ian Mitigation Credits represented 1.67 acres North County Habitat Ba.nk Mitigation Credit Purchase Agreement page 1 of5 03207629-609--CG1 v.10()309 of U.S. Anny Corps of Engineers and California Department of Fish and Game created/restored mitigation habitat consistent with the BEI. 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: 1. Purchase Price. The purchase price for the 1.138 credits of United States Army Corps of Engineers/California Department of Fish and Game Enhanced Wttland/Riparian Mitigation and 2.422 credits of California Department of Fish and Game Enhanced W etlaod/Riparian Mitigation shaU be $150,000.00. The Purchase Price shall be paid in good funds on the Closing Date. These terms shall expire if this contract is not executed on or before October 30, 2009. 2. Acknowledgment of Sale. Ort the Closing Date, Seller shall deliver a fully executed original of the Acknowledgment of Sale of Mitigation Credits (11 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, th.en 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. Acknowledgement. By signing this Agreement, Buyer acknowledges that Buyer understood and concurred that Buyer's previous purchase of 5.0 credits of created Wetland/Riparian Mitigation Credits represented 1. 67 acres of U.S. Army Corps of Engineers and California Department of Fish and Game created/restored mitigation habitat 4. Option Period. On the date Buyer presents such Agreement to the Seller, such action shall constitute Buyer. entering into an Option Period for purchase of the 1.138 credits of United States Army Corps of Engineers/California Department of Fish and Game · Enhanced Wetland/Riparian Mitigation and 2.422 credits of California Department of Fish and Game Enhanced W etland!Riparian Mitigation for a period of 60 days. On or before the 60th day of said Option, Buyer shall deliver funds equal to the Purchase Price to Seller. If Buyer f.ails to deliver the Purchase Price to Seller by the 60th day of the Option Period, and this Agreement is not amended to the contrary, this Agreement shall be null and void. 5. Closing. The date of delivery of the Purchase Price shall be deemed the "Closing Datei•. The closing shall mean the date that the Purchase Price is delivered to Seller and the Nortll County Habitat Bank Mitigation Credit Purchase Agreement Page 2of5 03207(;29-609-CG1 v.100309 fully .executed Acknowledgment of Sale of :rvfitigatiort Credits is delivered to Buyer. Notwithstanding the foregoing, Buyer may accelerate the Closing Date . . 6. AS-IS Sale. Buyer acknowledges and agrees that (a) it is the Buyer's sole responsibility to detennine the acceptance of the Conveyed Credits by the Agencies i=ts mitigation for impacts to wetland/riparian values, and any completed .sale of any Conveyed Credits sbali be final; (b) the purc~se and sale of the Conyey(;)d Credits shall be made on an ''ASIS, WHERE iS, wtra AlL FAULTS" basis as provided for in the BEi; and c) no representations or warranties have been made or :ate made and no responsibility has been ot . is assumed by Seller or by any officer, agent, affiliate, attorney, or representative acti,ng or purporting to act on behalf of Seller as to (l) the mitigation value of the property conveyed to the Agencies in establishing the Mitigation Bank; (ii} the mitigation value ot mitigation requirementsofBuyer's l;lroperty, (iii) theaccepta:nceofthe Conveyed Cr~its by the Agencies or any other governmental agency as mitigation for the loss of habitat values associated with Buyer's Property~ or (iv) any othet fact or circumstanc.es which might affect the :Mitigation Bank, the Buyer's Property, or the Conveyed Credits. 7. 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 AgreeIIlent and neither party shall have any further obligations hereunder. except as provided in Paragraph 8 below. 8. Brokers. Buyer represents to the Seller that it has not had any other contract, ;,tgreement or dealings regarding the Conveyed Credits with, n◊t any communicatio11. in connection with the subject matter ofthls transaction through, any (;onsultant, broker, agent, finder cir other person who ~n claim a right to a consultant foe, commission or finder's fee from ihe Seller in connection with the sale cor1templatl:ld herein. In the event that a consu1t&nt. broker or find.er makes a claim for a consultant fee or commission or finder;s fee based µpon any such contract, ~greement, dealings or communication, th~ party through whom such claim is made :Shall be solely responsible for and shalt indemnify; defend, and hold harmless the other party from and against said con:unission or fee and all costs ~d exp~es (inch1ding without limitation reasonable attorneys' fees) incurred by the other party in defending against such cla.4n, The provisioil.$ of this Paragraph 8 shall survive the termination of this Agreement. 9: Integration. Buyer and Seller agree that all negotiations, discussions, understandings and agreements heretofore made ~tween.them ot their respective agents or representatives are merged in this Agreement anci the .Exhibit attached hereto, and this written Agreement alone fully and complcetely expresses their agreement with respect to the subject matter hereof and supersedes ali prior agreements and understandings between the parties relating to the subject matter of this Agreement. Buyer and Seller further agree that Buyer has no North Co.unty Habitat Bank Mitigation·credit Purchase Agreement Page 3 of5 03207629-609-CGl ii.100309 responsibilities ·or obligations whatsoever regarding the Conveyed Credits ot the BEI except as are expressly stated in this Agreement. 10. 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 shaH 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. 11. Attorneys' Fees. This Agre~ent shall be governed and construed in a4XOrdance with the laws of the State of California l'J,nd 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 expens~ incurred by the other party in establishing or defending its rights hereunder, including, withoutlimitation, court costs, expert witness fees; and r¢asonable attorneys' fees. 12. · 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 Califomia, and has the power and authority to own, and does own, the Mitigation Credits, and the power and authority to consummate the sale of Conveyed Credits as contemplated by this Agr:eement; and the person executing this Agreenient has the full auth<Xity to b~nd Seller. l'his Agreement and all inst.n,unents, including assignment and/or conveyance documents tobe executed by Seller in connection herewith are or when delivered to Buyer will be dµly authorized, executed and d,elivered by Seller and will be valid, binding and enforceable obligations of Seller; Neither this Agreement nor any instrument, including assignmeilt and/or conveyance dociµnents 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, tight 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 encwnbrances of any type, monetary or non-monetary. 13. Counterparts. This Agreement may be executed and delivered in any number of identical counterparts, each of wWch so executed and delivered shall be deemed to be an original and all of which shall constitute one and th.e same instrument North County Habitat Bank Mitigation Cret:lil Purchase Agreement Page 4 of5 03207629-809-CG1 v.100309 \\THEREUPON, tbi~A,greementhas been executed as of the date first-above written. ~ELLEK North County 1:ia.bitat Bank Wesimark Development Corporation c/oMcCollum Associates 10196 Clover :14itch Dr Sacramento, CA 95829 Telephone: (916) 688-2040 Fax: (916) 688-7436 Email: mccolium@mccollum.com · BUYER: Attention: :M:r. David ~user Deputy City Engineer Engineering Department City of Carlsbad 1635 Faraday Avenue Carlsbad CA 92008 · Telephone: (760) 602~2739 Fax: (760) 602-8562 , Email: david.ha:user@carlsbadca.gov Mitigation Credit Purchase Agreement Page 5 ofS 03207629-609-CG.1 v.100309 (_ City of Carlsbad ATTACHMENT 3 2007 BANK ENABLING INSTRUMENT FOR THE NCHB www.carlsbadca.gov 05/26/2016 04:48 FAX Attachment 3 ). BANK ENABLING INSTRUMENT . for the NORm COUNTY HABITAT BANK Carlsbad, San Diego County, California April 30, 2007 This Bank Enabling Instrument ("BEI'1 made this J:1_ day ofM 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. Anny Corps of Engineers ("USACE"), Region IX 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 (1: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 the person or entity responsible for establishing and operating the Bank. B. The Property Owner is the owner of real property containing approximately 18. 7 · acres (the ."Property''), located just south of Palomar Airport Road in tbc City of Carlsbad, San Diego County. State of California. designated Assessor's Parcel No. 211-040-33. The Property is generally shown and legally descnoed in Exhibit A (Bank Location Maps) and in Exhibit E-1 (Preliminary Title Report, Legal Description, and Parcel Maps) attached hereto. Wes1mark Development Corporation, as Bllllk 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 Exlu"bit C (Restoration Plan). C. The CDFO 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. 1802; and other provisions of state law. D. The USFWS, an agency within the United s•s 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, et seq., the Fish and.Wildlife Coordination Act., 16 U.S.C. §.66l-666c, the Fish and Wildfife Act1>f 1956, 16 U.S.C. § 742(t), et seq., and other provisions of federal law. E. The USEPA and USACE have jurisdiction o\le:r waters of the l.Jnited States, pursuant to the Cle.an Water Act, 33 i,.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 fanning, is bisected longitudinally by Encinas Creek, with the southeastern comer of the site sloping up from the creek, and with portions of the site heavily infested with pampas grass (Cortaderia selloana). 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 AUIBORITIES 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: Page2of25 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 et seq.); 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; 2 BE! 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 P.R. 58605 et seq.) (November 28, 1995); l. 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 omia Endangered Species Act ("CESA") (Fish & Game Code Section 2050 et seq.); c. California Natural Community Conservation Planning ("NCCP") Act (Fish & Ganie Code Section 2800 et seq.); cl.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. Il. 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 Page3of25 3 BEIJor the North Caunty 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-tenn 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 oi- 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.ofthis BEL 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. Page4of25 4 BE/for the North County Mitigation Bank, Carlsbad ---·-~-· _._.. ______ .....,, ________ ••-•~--~r ..... ~,_'<",•f•••··"'••P~~-' ... ..., ....... -,_, •,.,---,.._.,..,._, P8 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. 0 . "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 sha11 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 11 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 of25 5 BE/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 USACE wetlands, the USACE 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 6of25 6 BE/for the North County Mitigation Bank, Carlsbad ·---·-· -·-·---------··""""'·· ,jlllt -"""' -~-·· . -··-·. - ----·~··~-4 ,-•• --------~-·-·--•-.. , ........ -'--~-~-~-- 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, &nd 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 ori the Bank Property in accordaµce 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 untirtransfer 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 o/25 7 BE/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-tenn 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. ID. 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-1 Property Analysis Record (PAR) Page 8 of25 8 . ···~·-••··~ ... ~ .... -,.,.,,_-·.-11.1! ..... _, ...... _., ____ , __ "-~---·-• . BEi for the North County Mitigation Bank, Carlsbad 32 D-2 Long-Term Management Plan (Management Plan), including the Bank Closure Plan Exhibit E -Real Estate Records and Assurances E-1 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-1 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: I. 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 BEL 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. Page9of25 9 BE/ for the North County Mitigation Bank, Carlsbad -,...--~·-- V. FINANCIAL ASSURANCE REQUlREMENTS 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 BEL Page/0of25 I.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 USACE and CDFG, to rectify failures, as determined by the_ MBRT, by the Bank Sponsor to comply with one or more terms of this BEL 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 releas_ed to the Bank Sponsor, under the direction of the USA CE, 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 of25 percent ofth~ Endowment shall be funded prior to the second Credit release. b. A minimum of 60 percent of the Endowment s_hall be funded prior 10 BE/for the North County Mitigation Bank, Carlsbad 34 to the third Credit release. c. One hundred percent of the endowment shall be funded 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 BEi. 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 oflong-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 USACE, CDFG, the Long Term Manager, and the Banlc Sponsor must mutually agree upon any adjustments before they are made. VI. BANK HABITAT ESTABLISHMENT ASSESSMENT METHODOLOGY, SUCCESS CRITERIA, AND CREDIT RELEASE SCHEDULE. A. Summary of Anticipated Credits. The Banlc 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 B,ank Closure Plan or until all Credits are sold, whichever is later. As presented in Table l and Exhibit C, the Bank Property shall consist of a total of l 5. 7 acres and include conserved habitats totaling 6.78 acres of riparian forest (includes 0.21 acre of mule fat scrub), 1.01 acres ofDiegan 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 ofriparian forest. It is anticipated that a minimum of 4.0 of the 6.07 acres of creation/restoration Credits will meet the USACE 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 USACE wetland definition. All of the 6.07 acres of wetland creation/restoration Credits and 6.78 acres ofriparian enhancement Credits will meet the CDFG Waters of the State definition. Riparian areas not considered Waters of the U.S. may, at USACE 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 o/25 , 11 BE/for the North County Mitigation Bank, Carlsbad ~-.. -to-~. --·- Table 1 Miti~ation Credits (acres) Credit Type USACE and CDFG CDFG CDFG Upland Wetland Creation/Restoration 4.0 2.07 Enhancement Riparian (CDFG)/ 6.78* Vegetated Buffer (USACE) *(3 USACE wetland) Preservation 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 Mitigation Credit Ratio Year 1+ Year2+ Year3+ Year 4+ Years+ Creation 0.4:1 0.6:1 0.8:1 0.9:1 1:1 Restoration 0.4:l 0.6:l 0.8:I 0.9:1 1:1 Enhancement 0.4:1 0.6:1 0.8:I o~9:I 1:1 Preservation 0.5:1 0.5:1 0.5:1 0.5:1 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 I 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 I: 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 pennitting agencies' approval and concurrence by the MBRT. When all Page 12 o/25 12 BEi for the North County Mitigation Bank, Carlsbad --'-'""'_'..,··--------------· -~--'--~~-·· success criteria are met, the creation, restoration, and enhancement efforts on the Bank Property shall be deemed complete. '{able 3 Plant S ecies Diversi Milestones for Ri arian Woodland Success Criterion Year 3 4 5 Plant S ecies Diversi 6 8 10 Table 4 Ve2etative Success Criteria (percent) Habitat/Parameter Year 3 4 5 Freshwater marsh Total cover 60 70 80 Riparian forest Total cover 60 70 80 Tree cover 35 55 65 Shrub cover 30 40 50 Herb cover 50 40 30 Mule fat scrub Total cover 55 65 75 Shrub/tree cover 30 45 60 Herb cover 50 40 30 All habitats Weed cover 10; o+ 8; o+ 5 Io+ + 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, basedupon 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 Page 13 of25 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; 13 BEi for the North Counly Mitigation Bank, Carlsbad _________ ......,.. __ ~-------·--~--···---~-~4•~<f+~---,'!• .. ·"--·•---·--•"'·"' .. .,, ________ = 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 USACE, 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 I . 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 14of25 14 BEi for the North County Mitigation Bank, Carlsbad ----~"···-~-.... -,~--·-•-··t•"'--······-•··· ..... --·------_.,..,.,....._,-,.,.--....... 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 BEI. 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 MBR T, 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: Page 15 o/25 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 15 BEI for the North County Mitigation Bank, Carlsbad ~--------➔, ,..._.,...._ • ..,.~...,,.........-...... -·--·-·· ,. . .................. _ .. _ » __ ...... ··--~·-· ....... , ...... --·-~-------- Pagel6of25 ---------·----····•-----·--··-- 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 BEL 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 MBR1) 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 USACE, 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 USACE, as appropriate, to ensure corrective . 16 BE! for the North County Mitigation Bank, Carlsbad 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 Banlc 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 BEL 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 USACE 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 ful] 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 Banlc Sponsor shall submit to the USACE, 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 Banlc 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 17of2:S 17 BEJ for the North County Mitigation Bank, Carlsbad 41 .... ,,--.....:.~•-------------~,:----·••·••·~••.-~----~---_,.......-~-···-•··--........ " .................... .,.➔ ...... ,.---~-.... ..... __, ....... : • 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: I. 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 agi:ees 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 Page18of25 18 BE/for the North County Mitigation Bank, Carlsbad l/2 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 hi:tbitat (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 sha11 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 BEL 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 BEL Inspecting Parties shall provide reasonable notice to the Property Owner during normal business hours and not less than 24 hours prior to Page 19of25 19 BEifor the North County Mitigation Bank, Carlsbad .... ..,..~ .. ----~--"·"-...... ·-·-.. -•.11-... -....... -----· .,.. __ , ____ ........... _...... .... L/3 inspection of the Bank Property. K. The Bank Sponsor shall obtain all appropriate environmental documentation, pennits 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. RESPONSIBil,ITIES 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 ali project plans, annual monitoring reports, Credit review reports, contingency plans, and n~cessary pennits 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 succe~s 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 t_his BEi. XITL 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: Page20of25 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 20 BE/for the North County Mitigation Bank. Carlsbad ---------------------•--·---·~¼ _,.,_y~ -' • """""--~•«"••-•---•----•--,..•-· ---~- 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 l . 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 communkation 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 BEL 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 anyom: acting on behalf of any party unless the same has been embodied herein. F. Transfer. Page 21 o/25' 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 21 BEifor 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 ofthe 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 BEL 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 Page22of25 22 BEi for the North County Mitigation Banfc, Carlsbad ·•·•----·-•'-_..,_, . .,.,._,~~~...,.,.,--------·~---~-•~-· •· .,, ... • •·••-·----,.....--..-.,.,, .. ,.,_ . .._ _ . ..,.,.~~k->··•-<•.•--.-~---------•._-............. __.f"r• • 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 BEL 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 shaH be deemed delivered five (5) days after deposit in the United States mail, certified and postage prepaid, return receipt requested, and addressed as follows. MBRTChair: MBRT Members: Page23of25 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 A venue San Diego, California 92123 FAX: 858-467-4299 Carlsbad Office Manager U.S. Fish and Wildlife Service 60 IO Hidden Valley Road Carlsbad, California 92011 FAX: 760-431-5901 23 BEi for the North County Mitigation Bank, Carlsbad L/7 Bank Sponsor: Director, Water Division U.S. Environmental Protection Agency, Region 9 75 Hawthorne Street Sacramento, California 94105 FAX: 415-744-1078 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 sucl;i 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 unle~s 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 BEL Page24of25 24 BEi for the North County Mitigation Bank, Carlsbad 05/28/2018 04:49 FAX f4J 003 lN 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 .l,X, have ..,,e-iitec!U2'd"'bi's BET as of the date set forth above. ~ · Corps of Engineers, District Engineer District ::-=------U.S. Anny Corps of 6ngineers Manager, California/Nevada Office U.S. Fish and ildlife Service cgional Manager 3a,JH: '-'otiL Region California Department offish and Game Director, Water Division Region 9 U.S. Environmental Protection Agency Pag,;2Jojl~ Date Date Date Date 25 RECEIVED MAY 21 2007 REGULATORY BRANCH r SAN 01lGO OFl"lCI! B£1 far ,1,., North Caunry Mitigtlllon &:nk, Car/sl:x,4 .·• '. -~-~---~--.-·•·······-·······-·---·----- 05/26/2016 04:49 FAX IN WITNESS THEREOF, the Bank Sponsor, the State ofCalifomia acting by and ~./ through its Department ofFish and Game, the U.S. Army Corps ofEngineers Los Angeles District, The U.S. Fish and Wildlife Service, the U.S. EPA, Region IX, have c:xccuted this BEi as of the date set forth above. Banlc Sponsor and Property Owner Date k-.://~~ .LCo! &c.ibrPs.h~r-S--'1,... 0 7 r' Corps of Engineers, District Engineer Date l..t:, s. 4 m•· i::'/r:$: · District U.S . .Arm(corps of Engineers Manager, Califomia/Nevada Office Date U.S. Fish and 1ldlife Service \_./ Regional ger 1:1 ~ Z..J Date 6wli:: let!< Rei:i California Department of Fish and Game Director. Water Division Date Region9 U.S. Environmental Protection Agency Pagw2SoflS 25 6E{for tk Nord, CQlftfy Miription $an1t. Carltbatl l4]004 ., .. ..., .. ___ --. ··"-~ . ---.. ...._ _____ ·----'---., .. ~-.. -··-~ .......,., ... _______ .,.,, . ·-_,.,i..,..,,.,_,_ 50 {_ City of Carlsbad ATTACHMENT 4 2007 CITY INTERNAL MEMORANDUM www.carlsbadca.gov DATE: TO: FROM: RE: MEMORANDUM June 28, 2007 Glenn Pruim, Public Works Director "'· _ ;1~ David Hauser, Deputy City Engineer UJl/1 NORTH COUNTY HABITAT BANK Attachment 4 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 (USACE) 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 approximately12 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 valu_e 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 th!:l 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 add_itional creation mitigation credits at a discounted price. The City has numerous projects in the pipeline that will require wetland mitigation (see table below). Estimated Acres of Project Wetland Mitigation Required Agua Hedionda and Calavera Creek Channel Dredge Project (non-6 emerqency work) Miscellaneous Drainage Master Plan Projects (Future City constructed 5 PLDA projects) Proposed Five-year Drainaqe Facility Maintenance Proqram 3 Total 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 cred_its 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 fs 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. C Community Development Director Finance Director Administrative Services Director Acting City Engineer Planning Director Consultant Project Engineer, Glen Van Peski 24 (_ City of Carlsbad ATTACHMENT 5 www.carlsbadca.gov \ DRAFT ACKNOWLEDGMENT OF SALE OF MITIGATION CREDITS FROM THE NCHB Attachment 5 EXHIBIT A ACKNOWLEDGMENT OF SALE OF MITIGATION CREDITS The undersigned seller hereby acknowledges that it has debited O .183 created/restored wetland/riparian Credit from the North County Habitat Bank to offset impacts resulting from the CITY OF CARLSBAD El Camino Real Bluff Failure at Tamarack Avenue -Notice of Violation No. R9-2018-0080 project. This Credit is debited from the total 1.67 Credits held in reserve by the CITY OF CARLSBAD for future use. The Seller shall update the official North County Habitat Bank ledger reflecting -this conveyance and provide the updated ledger to the Mitigation Bank Review Team. All terms of this conveyance shall be governed by the provisions of the Mitigation Credit Purchase Agreement and Acknowledgment between Buyer and the Bank Sponsor, Westmark Development Corporation, dated July 27, 2007, and amended on October 20, 2009. By: North County Habitat Bank c/o Mccollum Associates 8336 Alpine Laurel Way Sacramento, CA 95829 Telephone: (916) 688-2040 Fax: (916) 688-7436 Email: mccollum@mccollum.com Name: Michael Mccollum Date: March 12, 2019 . Honorable Mayor Hall and Members of the City Council April 26, 2019 Page 10 ATTACHMENT D City of Carlsbad's Revised Mitigation Proposal to the San Diego Water Board, Dated April 23, 2019 (_ City of Cai-lsbad April. 23, 2019 Mr. David Barl<er Supervislng Water Resources Control Engineer Attn: Ms. Nicole Gergans California Regional Water Quality Control Board San Diego Region 2375 Northsic{e Drive, Suite 100 Sari Diego, CA 9210~ RE: R9-2018-0081:844932:ng~rgahs Attachment D www.carlsbadca.gov Notice of Violation (NOV) No. R9-201&~ooso and Investigative Ord~r (10) No .. R9-2018-0081 In response to the March 27, 2019 emailfrom the Sari Diego Regional Water Quality Control Board (San Diego Water Board) regarding the compensatory mitigation proposal ($ul;lrnitted on March 141 20i9} for the El Camino Real Bluff Emergency R<,mair at Tc!mcirack.Avenue (Project); t,h:e City of Carisl:>ad (city) is submitting the attached drc~ft Acknowledgment of Sale of Mitigation Credits (Attachment 1), c\S a revised mitigation p~oposal to offsetthe permanent impact to non-wetland waters ofthe United States and/or State. The city's revised mitigation propc,sal utilizes created/restoredwetland credits from the North Co!-inty Hc!bitat Bank (NCHB) to offset the irnpact resulting from the Projec,t.As required: by:the San Diego Water Board, the revised proposal applies 0..55 wetland mitigation credits reflecting a 10:1 m.itigation ratio to offset the 0.055 acres ofimpact Once approved by the San Diego Water Board~ the city will provide the final Acknowledgment of Sale of Mitigation Credits from the NCHB. This proposal supersedes. the city's prior proposal, as described in the dty's letter, dated March 14, 2019 {Att,<;1chment2}. Thatl.etter also provided an overview of the communiciltions between dty staff and the sa·n Diego Water Board related to this subject. I c;ertify under penalty oflaw that this dociJment and c!II attachments were prepared \.Hider my directronor supervision in accordance with a system designed to assure tbat qµ_alffied personnel properly gather and evaluate the information submitted. Based c:>n my inqUiry of the person or persons. who manage the system, or those persons directly responsible for gathering the information, the information sqbmhted is, tp the best of my knowledge and belief, true, accurate, and complete. I am aware that there are significant penalties for submitting false information, including the possibility of fine and imprisonment for knowing Violations. Please let me know if we can provide any aclditlonal information or support at paz.gomez@carlsbadca.gov or 760-602- 2751. We are eager to work with the San Diego Water Board to resolve this ma~ter as expeditiously as possible. Thank you. Attachments: 1. btaft AcknowlE!pgmentofSale of Mitigation Credits from the NCHB (Revised) 2. city of Car.lsbacJ's Prior Mitigation Propo~al, d<;1ted 1\/lclrch 14, 2019 c;c: Eric Becker, Senior Water Resources Control Engineer Scott Chadwick; City Manilger Mr. David Barker; Supervising Water Resources Control Engineer April 23, 2019 Page 2 Elaine Lukey, Chief Operations Officer Amanda Guy, Deputy City Attorney Marshall Plantz, Transportation Director James Wood, Envi.ronmental Manager Hossein Ajideh, Engineering Manager Brandon Miles, Associate Engineer M_r". David Barker~ Super:vising Water Resources Control Engineer- April 23, 2019 Pi;ige3 ATTACHMENT 1 DRAFT ACKNOWLEDGMENT'OF SALE OF MITIGATION CREDITS FROM THE NtHB Attachrnent 1 . 01:th County I . tl:~·Habltat Bank ___ ff; EXHIBIT A ACKNOWLED~NT Of SALE OF MITIGATION CREDITS The undersigned seller her eby acknowledges that it has debited 0.550 created/restored wetland/riparian Credit from the North County Habitat Bank to offset irrtpacts resulting from the CITY OF CARLSBAD El Camino Real Bluff Failure at Tamara.ck Avenue -Notice of Violation No. R9-2018-0080 project. This Credit is debited from the total 1.67 Credits held in reserve by the CITY OF CARLSBAD for future us.e. The Seller shall update the official North County Habitat Bank ledger reflecting this conveyance and provide the updated ledger to the Mitigation Bank Review Team. All terms of this conveyance shall be governed by the provisions of the Mitigation Credit l?urchase Agreement and Acknowledgment between Buyer and . the Bank Sponsor, Westmark Development Corporation, dated July 27, 2007, and amended on October 20, 2009 .. By: North County Habitat Bank c/o McColl-µrn Associates 8336 Alpine Li:;1.urel Way Sacramento, CA 95829 Telephone: (916) 688-2040 Fax: (916) 688-7436 Email: rnccollum@mccollum.com Name: Michael McCollum Date: April 11, 2019 Mr. David Barker, Supervising Water Resources Control Engineer April 23, 2019 Page4 All"ACHMENT 2 CITY OF CARLSBAD'S PRIOR MITIGATION PROPOSAL, PATED MARCH :l4,: 2019 ( City of Carlsbad March 14, 2019 Mr. David Barker Supervising Water Resources Control Engineer Attn: Ms. Nicole Gergaris California Regional Water Quality Control Board San Dlego Region 2375 Northside Drive, Suite 100 San Diego, CA 92108 RE: R9-2018-0081:844932:ngergans Attachm~nt 2 ww_w.carlsbadca.gov Notice of Violation (NOV) No. R9-2018-0080 and Investigative Order (10) No. R9-2018-0081 · In response to the Nov. 2, 2018 letter from the San Diego Regional Water Quality Control Board (San Diego Water Board) regarding the subject NOV and 10 for the El Camino Real Bluff Emergency Repair at Tamarack Avenue (Project), the City of Carlsbad (city) submitted a technical report dated Dec. 6, 2018 assessing the permanent impatt to non-wetl<!hd waters of the United States and/or State associated with the emergency Project. On Jan. 28, 2019, the city received an email from the San Diego Water Board concurring with the city's determination of 0.055 acres .of p.ermanent impacts to rion-wetlandwaters of the United States and/or State resulting from emergency repair activities. The Sari Diego Water Board also requested that the city provide a compensatory mitigation proposal to offset the permanent impact to non- wetland waters of the United States and/or State. In response to the San Diego Water Board's Jan. 28, 2019 email, the city obtained services from LSA Associates, Inc. and Mccollum Associates to determine appropriate mitigation measures to satisfy the San Diego Water Board. As further described below, the city's proposal utilizes created/restored wetland habitat from the North County Habitat Bank (NCHB) to offset the impact to non-wetland waters of the United States and/or State resulting from the Project. The proposal reflects a 10;1 mitigation ratio that requires 0.55 acres of mitigation to offset the 0.055 acres bf impact. At our Nov. 20, 2018 meeting, the San Diego Water Board and the city discussed the possibility ofapplying art 8:1 mitigation ratio when wetland mitigation is uti.lized (due to the higher value of wetland mitigation); however, ln the interest of resolving this matter as quickly as possible, the city proposes applying a 10:1 wetland mitigation ratio when the proposed created/restored mitigation at the NCHB is used. The city's proposal applies mitigation credits that it currently holds with the NCHB. In 2007, the city purchased the equivalent of 1.67 acres of created/restored Wetland/riparian mitigation credits from the NCHB at a price of $1,125,000. For your reference, copies of the purchase agreement and subsequent ame11dm.ent are attached as Attachments 1 ~nd 2, respectively. To establish the bank, the property owner; Westmark, entered into a Bank Enabling Instrument (BEi) With the resource agencies in 2007 (Attachment 3). The U.S. Fish & Wildlife Service, Caiifornia Department of Fish & Game, U.S. Army Corps of Engineers, and U.S. Environmental Protection Agency approved the establishment, use, operation and main.teilahce of the NCHB. The city acknqwledges that the San Diego Water Board was not a signatory to the BEi for the NCHB; hoWE!ver; it is the city's understanding thatthe San Diego Water Board was involved Jn the creation of the NCHB and has indicated that it may accept mitigation credits to fulfill Section 401 Certification conditions (as stated in the 2007 internal memorandum included in the city A~enda Bill. #19ilO, 07 /24/04, presented in Attachment 4). According to the NCHB, it has sold credits for over 20 permit actions, and at least 15 of them had a certification requirement that the San Diego Water Board deemed to have been met by the credits pwchased from the NCHB, The city can faciHtate further discussion with the NCHB, if necessary, regarding evaluation of the city's mitigation credits. Mr. David Barker, Supervising Water Resources Control}ngineer Matc:h 14, 2019 Page 2 The citis 1.67 qar'lked acres c:if c:.reated/restored weticfnds,which. have met the five-year success criteria, are worth three times more than equivalent acreage that has not y~tundergcme mitigati~n (creation/restbratioh) ac:trvitie$. A.s :Shoy,rij in the HEJf9rthe NCHB (Table 2, page 12 of the S~! included-as Atta~hment3), the full value of credits win.not be obt~ined until the fJve-year success critetiahave been met, Any use of credits priqr fothat time would result in a lower vaJue prorated by year due to:a ternpocal loss of habitat. A~ cle;cribed in a 2007 internal city memorandum presented as Att,,rchrfu~.ht 4, a'gencies typically teqi.ifre mitigation (after tlieimpact has occurred) at a 3:1 ratio to capture a 2:1 'creatidri component and a 1:1 enhancement component. The theory behind this requirement is that not all newly created habitat will survive, so additional land mtJst be created to end up with one for one replacement. Therefore, 0.55 c1cres of mitigation for the Project would translate to 0.183 of the city's banked acres (0.55 acres/3:1 = 0.183 acres).· The city has attached a draft acknowledgrnent of iale of mitigation ¢re~its, as presented,fn Atta_chrnent 5. Once approved by the spr; Diego \Nater Board, the city will offset Project impacts with 0 . .55 acres ofwetl~nd mitigii:tfon (utilizing a 10:1 ratio forb:05,5 acres of permanent impacts to non-wetland. wa~ers ofthe Unit1=d States and/or State), whicb tranil11tes to Q;183-acres of banked created/restored Wetland rnitigatiori habitat. This is equivalent to $123,750 or mitigation land in.accordance with the 2007 purchase agreement. I certify under penalty oflaw that this docurnentar1daH attachments were prepared ur'lder 111y direction or supervisiOn in accordance with a systern designed to assure tnatgualtfied personMlproperlygather and evaiuate the information submitted. Based onmy i'hqutry of the person or persons who managethe syst~m, or those persons directly responsible for gathering the information, the ilifom:iation su·bmitted is, to the best of my knowledge and belief, true, accurate, and complete. I am aware that there are significant penalties for submitting fc!lse information, inctu:ding the possibiUty offine and imprisonment for knowing violatfon,s. PieaseJet us knqw if we can provide any aciditional information or suppon;; We are eager to workwiththe San Diego WaterB~ard to. resolve thi? mc1tter as expedjtioti,sly as possible. Thahk you. · Sincerely,· ' ' c_f)~ Paz 6'liez, PE, CEMfiHE Pubfic Works DirecttK. Ct:. Erk Becker, Senior Water Resources Coritr.ol Engineer Scott Chadwick, City Manag~r Elaine Lu key, Chief Operations Officer A.rna.nda Guy, Deputy City Attorney M~rshali Plantz, Transportation Director James Wood, Environmental Manager Hossein Ajtd~h, Engineering Manager ~randoh Miles, Associate Engineer Attachments: 1. 2007 Mitigation Credit Purchase Agreement .and Acknowledgement for the NCH B 2'. 20()9 Amended Mitigation Credit Pur~hase OptioriAg:ieement and Acl~nowtedge~ent for the NCHB S, 20Q7 Bank Enabling Instrument for the NCHB 4; 2007 City Internal Memorandu.m 5. Draft Acknowledgment of Sale of IVlitigation Credits from f\JCH {_ City of Catlsbad ATTACHMENT1 www.carlsbadca.gov 2007 MITIGATION CREDIT PURCHASE AGREEMENT AND ACKNOWLEDGMENT FOR THE NCHB Attachment 1 • North County ,,, -.,. . ('.. ..:Habitat Bank . ~::"' MITIGATION CREI)IJ:' PURClli\SE AGREEMENT AND ACKNOWLEDGMENT THIS MITIGATION CRE:Ott PURCHASE AGREEMENT ANO ACKNOWLEDGMENT (';Agreement';) is entered into this :l.7-t.. day of~~ .. , 2007'by ~d between. · WESTMARK DEVELOPMENT CORPORATI · .· ··, a .. ·. evada corporat1on ("Seller") an:d CITY OF CARLSBAD, a municipal corporation of the St~te of California (''Buyer"} RECITAJ'.,.S A. Pursuant to that certain Banking Estab1ishinent. Instrument regarding the Establishment, Operation and Use of the North Co@fyHabitat Bank dated May 23, 2007 (the 11BEI"); by.and amcmg Westmark Development Corporation; the California Department of Fish and Gaine("CDFG';); the UiiitedStafes'Fishaµd,Wildli:feSetvice ("USFWS.ii); the United State Environmental Protection Agency (''USEPA"), and the United States Anny Corps of Engineers ("USACOE''){CDFG, USFWS, USEPA and USACOE are referred to colfectively hereinafter as the "Agencies"). the Agencies have acknowledged the creation of the North County Habitat Bank (the "Mitigation Biu)k") and the right ofSeller to sell HMitigation Credits" to nii.tigate forthe loss of wetlands and habitat as provided therein. B. Buyer deSites to mitigate the loss ofcenaj.o: wetland/riparian or upland habitat values onreaJ property iocated in San D1e_go County California as detei:mined by the City ~d the .1\IBRT (the i•Buyei,;s J>roperfy"}to s~tisfy Buyer'.s obligations withrespect to wetlai.1d/riparian or UIJ.laii4 'habitat on I3qyer's Property and to obtain permits and approvals to develop Buyer's Property. C. :Eluyer l1as agreed tri purchase ;frqm Sellet,,)ihd Seller has agreed to sell to Buyer 5.0 credits of created Wethinci/Ripai:ian Mitigation Ci:ecijts as de:fuied in the BEi ( the '' Conveyed Crc:::dits") fromthe Mitigation Bank on the terms and conditions set forth herein. AGREEMENt NOW~ THEREFOW; in conside:i:ation ofthe agreements and acknowledgment$ .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 ac}fn.owledge as follows: North County Habitat Bank l\fitigatioh Cfeillt Purchase Agreeme\li Page i of.? 03207629-/iO!isCG'l v.06~607 1. Purchase Price. The purchase price for the S.O Wetland/Riparian Mitigation Credits shall be $1,125,000.00. The Purchase Price shall he paid in good funds on the Closing Date. 2. Aclmowledgment of Sale. On the Closing Date, Seller shaU deliver a fully executed original ofthe Acknowledgment of Sale of Mitigation Credits (" Acknowledgment"), in form and content as Exhibit A attached. hereto and such other docwnents 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 subseqilentto the closing, Seller will provide such documents and instruments as. may be required by ari.y of the Agencies to evidence and recognize the transfef qf the Conveyed Credits within ten (iO) 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 Pnce 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 ofMitigation Credits is delivered to Buyer. Notwithstanding the foregoing, Buyer may accelerate the Closing Pate. 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 a:ny completed sale :of any Conveyed Credits shall be final; (b) the purchase and sale of the Conveyed Credits shall be made on an "ASIS, WHERE IS, WITH ALL FAULTS" basis as provided for in the BEi; and c) no represert.tations or warranties .have been made or are 1m1cie and no re.sponsibility has been or is assumed by Seller or by any officer, agent, a.ffiliate; attorney, or representative acting or purporting to act on behalf of Seller as to (I) the mitigation vaiue ofthe 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 C.redits by the Agencies or any other governmental agency as ntltigatiort for the loss of habitat values associated with Buyer's Property, or (iv) any other fact or circumstances which might affect the Mitigation Banlc, the Buyer's Property, or the Conveyed Credjts, 5. Termination. Time is of the essence in this Agreement, In the event the closing does not occur by the Closing Date; Seller, at it.s election, and in its sole and absolute discretion, by written notice to Buyer, may termirn1te 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 Mitigati~n Credit Purchase Agreement Page 2 of 5 .. 03207629i609-CGI v.062607 (7 ····-------·-· --,--~---........, ____ ..,....., ____ ...,.... agreement or dealings regarding the Conveyed Credits with, nor any comimmication in connection with the subj~ctmattet of this transaction through, arty Consultant; brok:er, agent, -finder or other person who can c:::lai.m a, dghtto a copsultililt fee, commission or finder's foe from the Seller fu connection with the sale. conwmplated herein, In the event that a consultant~ broker or finder in.akes a claiih for a consultant fee ot conii:ni~sion drfiridel s fee based upon ail:y such. co:ntract; agreement, dealings or coillllluqication, the party through whQm such ¢faint is made shall be, solely .i;esponsil:;Ie for and shall i'ndein.iiify, defend; and hold harmless th~ other party from and against said commission or fee and all costs, and expenses (inclucling withoutlimitation reasonable attorneys' fees) incurred by the other party in ciefondihg against such claim; The provisions ofthis Paragraph 6 shall sutvive the · tenriinatfon ofthis Ag:i;eement. · 7. · Integration. Buyer and Seller agree that all negotiations, discussions, understandings and agreements heretofore made between them pr their respective agents or re_presemati:v.es are merged in this Agreement and the E.xbibit atuiched hereto, and this written Agreement alorie 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 Iil.atter of this Agreement. )3uyet and Seller further a&ree that Buyer has no responsibilities or obligations whatsoever reg1;1.rding the Conveyed Credits orthe BEI except as are expressly stated in this Agreement. 8. Notices .. All deposits an,d anyrtotlce teqttlre4 or permitted tq he made ot given1JDder this Agreement shall be made and delivered to the parties at the addresses set forth below each party's tespective signature. All notices shall be; in writing and shallbe tleerried to have. been given when.delivered by courier~ when transmitted by facsimile (upon corifumation of successfully completed transmission), orupon t:he expiration of two (2) business qays after the date of deposit of such notice in the United States in.ail, 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. hi the event a dispute arises concerning the meaning or interpretation of any provision of this Agreement, or in the event of any litigation arising. outof or related to thiS Agreement, the party not prevailing DI such dispute or litigation shall pay any and ali costs and expenses incurred by tne other party in establishlilg or defend~g its rights hereunder, including, without limitation, cowt costs, expert witness fees, and re~onable attorneys' fees . · 10. Limited Representations,artd. Warranties. Seller is a corporation duly formed, presently existing and in good standing Q.11der the laws ofth,e State of Nevada, is qualified to transact business in the State of California, and ha:s the power and authority to own, ancl does own, the Mitigation Credits, and the power and authority to consumniate the sale of North County Habitat Bank Mitigation Cred.it Purchase Agreement .,--· ~'--.---· -. P~g~J of$ 03+.07629,609-CG I v:()62601 ------.----·-···••·· •· ........... - 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, execµted 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 hereaftl;jr constitute a breach or default or invalidate; malce inoperative or interfere with any contract, agreement, right ot interest affecting or relating in any manner to the Conveyed Credits. Tp.e 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 rton.:m<>netary. 11. Counterparts. This Agreement may be executed and delivered in any number of identical counterparts, each of which so executed and delivered sh.all be deemed to be. an origin1:1l and all of which shall constitute one and the same instrument. North County Habitat Bank Mitigation Ctedit Purchase Agreement Page4pf~ 03207629-609--CG 1 v.062607 ~~-~•··-·' WHEREUPON, this Agreement has been executed ll$ of the date first-above written. North County Habitat Bank SELLER: WESTMARK DEVELOPMENT CORPORATION, aNevada. WestmarkDevelopmertt Corporation c/o McColltunAssociates: lO 196 Clover Ranch I)r Sacram.t;nto, CA 95829 Telephone: (916}688-2040 Fax: (916) 688-'7436 . Email; mccollum@Illccollum;COID BUYER: CITY dF CARLSBAD,arounicipal corporation of the State of California By:~_..--,-',--'---,-"'-:::-71--,r---1---------'-- Name: Cleiude A "llµd'' Its; Mayor Attention.: Mr. David Hauser Deputy City Engineer Engineering Department City of Carlsbad 1635 Faraday Avenue Cru;lsbad CA 92008 .. Telephone: (760) 602-2739 Fax: (760) 602-8562 Email:. dhaus@ci.carlsbad.ca,us Mitigation Credit Purchase Agreement Page5of5 !)3207629-609~CG l y,062607 d.0 .orth County ·-Habitat Bank EXHIJaXT 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 unciersigned dated Seller:. Westmark Development Corporation c/b Mccollum Associates 10196 Clover Rarith Dr Sacrament,o, CA 95829 Telephone: (916) 688-:-2040 Fax: (916) 688-7436 Email: mccollum@mccollum.com By: ~4, Name: Mark Rohrlick ;♦,A Its: President f~ Pate: ""J" Escrow Account Number 03207.629-609-CGJ •"-•--'•..._,...;,_l~-------------.. -d ...... ,--.~.....,.,.. ____ .. ,.•--t . . ~-\?...,: •• • ••• . 2. I ( City of Carlsbad ATTACHMENT 2 www.carlsbadca.gov 2009 AMENDED MITIGATION CREDIT l>URCHASE OPTION AGREEMENT AND ACKNOWLEDGMENT FOR THE NCHB Attachment 2 MiTIGATJ;ON CREDIT PURCHASE OPTION AGREEMENT AND ACKNOWLEDGMENT TIDS :MITIGATION CREDIT PURCHASE OPTION AGREEMENT AND ACKNOWLEDGMENT ("Agre~ent") is entered into this :ro-:ft\day of &c:R1m--. 2009 by and between WES1MARKDEVELOPMENT 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 Developineot Corporation; the California Deparµnent of Fish and Game; the United States Fish and Wildlife Service; the United States Environmental Protection Agency, and the United States Anny Corps of Engineers (referred to collectively hereinafter as the 11 Agencies11), theAgen:cies have acknQwledged the creation of the North County Habitat Bank (the "Mitigation Bank") and the right of Seller fo sell "Mitigation Credits" to mitigate for the loss of wetlands and habitat as provided thereilt 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 Creek (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 a_greed to sell to Buyer 1.138 credi~ of Unit~ States Army Corps of Engineers/California Department ofFisb and Game Enhanced Wetland/Riparian Mitigation and 2.422 credits of California I)epartment of Fish and Ga~e Enhanced Wetland/R.iparian Mitigation a.s defined in the BEI (the "Conveyed Credits11) from the Mitigation Bank on the tenns and conditions set forth herein. 3.56 Credits equal 3.56 acres of Wetland/Riparian Enhancement D. Buyer a~ikilowledges that Buyer understood and concurred that Buyer's previous purchase of 5.0 credits of created Wetland/Riparian Mitigation Credits represented 1.67 acres North County .Habitat Bank Mitip~n Credit Purchase Agreem;,nt Page tots 03207629-609-CG1 · v.100309 ofU.S.. Army Corps ofEngm.eers and California Department of Fish and ~e created/restored. mitigatio:n habitat 6Qnsistent with the BEL AGREEMENT .. NOW, THEREFORE., in consideration of the agreements and· ~lfuowledgments set forth herein andfpr other good arid 11llluab,le con~ideration; the receipt and~ufl:i(:foncy of which is · hereby acknowledged, Seller and Buyer hereby agree and acknowledge as folfows: · ):. :Purcq!JSe.Prk:e. The pwcllase pri~ for th¢ l.13$ credits: oUJnit(!d $UJ.(es A.rmy Corps of :Eilgin~rs/C~ornia Dtp~rtm_ent pfFish a°'d G-aD1e Eiil:lanced W ttla,nd/Jliparian Mitigatibn and 2.422 C(~dits ofCalifontla I>eparttn~to-.f'.Fi:sh anll Qame Enp.aijced Wetland/Riparian I\ilitigation shall be $150;000.00~ The l'utchase Price shall be paid in good funds-on the Closing DaJe. These tenns shall expire if this_ 1;:onttact is not execqred on or before October 30, 20()9. · 2; Acknowledgment of Sale. · Qrt the Closing Date, SeUer shA1I detiver a fully executed original of the Acknowledgment of Sitle of lv.fitigation Credits ("Acknowledgment"), in form and content as Exhibit A:attached het¢to and such other docu:ments an:d fustrum~ts as may be required by apy of the Agencies to evid¢nQe ap.d recognize the transfer of the Conveyed Credits-to Buyer. Iv.fot~ver, Sella-agrees that t(> the ~xtent such have llQ~ been.provided to Buyer· at the clmiing, 1hen if requested by Buyet $Ul>sequentto the closing, Selierwill provide such documents and instruments as ntay be reqtrired by any of the Agenci~ to evidence and recognize the transfer of the Conveyoo Cri;ldits within ten (1 O) days following Buyer's request. The ptovi~ions of this Paragraph 2 shallsurvive the closlrtg and tern,iination of this Agreement. 3. -Acknowledgement. By sigping tlris Agre¢ment Buyer ackuowledg.es that Buyer understoocl and con.curted thatBuyer;s previous purchase of 5. 0 credits: of created · Wetland/Riparian: 1\.fitigation Crl'ldits represented 1.67 acres of U:S. Army Corps ~ Engineers and California Departnient·of Fish and _Game cI'eated/restored mitigation. habitat 4. OptionfedQd On the date Buyer presents such A~ent to. the Seller; such action shall constitute :Buy~ entering into an Option Period for purchase of the l.1?8 credits of United States Army Corps of Engineers/California Department of Fish and G-mne Enhaµced W~tlanll/.Riparian l\Jitigaiti~n and 2.422 credits of California Department of Fi~4 and Ganie Enhanced Wetland/Riparian Mitigati<>n fora period of 60 days. Onorbefore the 60th day ofsaid Optio~ Buyer shall deliver funds equal to the Pur~e Pcice to Seller. If Buyer f.ails t(} deliver the Purchase Price :to SeU~ by the 60th day of the Option Period, and this Agr¢emerit is not amended to th¢ cotitra.ty; this Agreement shall be null. 4rtd VQjd. 5, Closing; 'f:he d;:tte of delivery of the Purchase Price shall he deemed the ''Closing Date". The closing $hall mean the date that the Purchase Price is delivfll'ed to Seller and the North County Habitat Bank ~itigation Credit P1.1~chase Agr~ement Page2of5 03207629°$09-GGi v.100309 fully executed Aclmowledgment of Sale ofM:itigation Credits is delivered to Buyer. Notwithstanding the foregoing, Buyer may accelerate the Closing Date . . 6, AS~IS Sale. Buyer acknowledges and agrees tha,t: (a} it is th1;d~uyer's sole responsibility to detennine the acceptance ofthe Coriveyed·Credits by the Agencie~ as mitigation for impacts to wetland/riparian values, and any completed· sale of any Conveyed Credits shall be finat (b) the purchase and sale of the Conveyed Credits shall be ma.de on an "AS IS, WHERE IS, WITH AU, FAULTS" basis as provided for in the BEI; an\! c) n9 representations or warranties have been made or areniade 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 fo (I) the lllitigation yalue of the property conveyed to the Agencies in establishing the Mitigation Bank; (ii} the mitigation value or mitigation requirements oflfoyer'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. 7. Tennin.ation. Time is of the essence in this Agtument In the event the closing does not occur by the Closing Date, Seller, at its ~Jection. and in its sole and absolute discretion. by written notice to .Buyer, may terminate tbis Agreement and neither party shall have any further obligations hereunder except ·as provided in Paragraph 8 below. 8. Brokers. Buyer represents to the Seller that it has not had any other co.Iitrap.t, agreement.or dealings regarding the Conveyed Credits with, nor any communication in connection wi~ the subject matter of this tnmsaction 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 cqnn.ection with 1he sale contemplat~d herein. In the event that a · consultant, broker or finder makes a cl!!lm for a consultant fee or commissfon or fin4er's fee based upon any such coi,.tract, agree~nt, dealings or communication, the party througl), whom such claim is made shall be solely responsible for and shall indemnify, defend, <!lld hold harmless the other party from and against said commission or fee ('!lldall costs and expenses (including without limitation reasonable attorneys' fees) incurred by the other party in defending against such claim. The provisions of this Paragraph 8 shall survive the termination of this Agreement., · · · · · 9. integration. Buyer and Seller agree that all rtegotiations, discussions, understandings and agreements heretofore made between them or then; respective agents or representatives are merged in tl:us Agreement and the E,mibit attached hel'.eto, and this written Agreement alone folly and completely e~presses theitagreetnent with respect to the subject matter hereof and supersedes all prio:r agreen1ents and understandings between the parties relating to the subject matter of this Agreement. Buyer and Seller further agree that Buyer has no North· County Habitat Ban~ Mitigation Credit Purchase Agreement Page 3 of 5 03207629-609-CG1 · v.100309 resj:,Qnsibilitiesor obligatlons whatsoever regarding the Conveyed Credits or the BEI except as are expressly stated in this Agreement. . 1 O. No:tiqes. All deppsii$ a:114 any notice requJi:ed 9f perfrlitte4 to Pe made.qr given, @dt;r this Agteenie,ht sh~ll he made-and deliver¢<), to the parties attheaddtesse.s set fottb below each pi;rty's respective signatufe. AU notices .shall be in writing amf s~all be dooined to have beeri given when delivered by courie1\ when trailsmitted by facsimile (upon confirmation of successfully completed transmission), or upon the mq,irati:on of two (2) business days after the date of deposit of such notice in the United States maiL registered or certified mail, postage prepaid. 11. Attorneys' Fees, This Agreenient shall be governed and coiistrued in apcotdanc:e wi.th th~ iaws of the State of Califr,mia and interpreted as if prepai;ed by both parties her~o; In the event a di$pute atjses concei:ning the me1t4il'lgor interpretation ofanyprovision·oftjiis Agteement; 9r in the event of any litigation arising out of 6t related to this Agreement, the party not prevailing in such dispute or litigation shall pay any and all costs and expenses 1ncurred by the other party in establishing or defending its rights hereunder, including, withoutlimitation, court costs, expert witri~s fees, and reasonable attorneys' fees. 12. ·L1mited Representations and Warranties, Seller 111 a corporation dajyforriled, presently existing and in good standing under the laws of the Stltf) of:1-teyada, is qualified to trans.act busihess 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 Conveyed Credits as oontempfo.ted by this Agreement, and the person ekecuting this Ag{~ent has the full authority to bind Seller. This Agreement and all 111struments, including assignment and/or conveyance documents to be executed by Sellei:: in connection herewith are or when delivered to Buyer will be duly authorized., executed and delivered by Seller anq will be valid, binding and enforceable obligations of Seller. Neither this Agreementnor 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 invaliqate, make inoperative or interfer~ with any contract, agreement, right or interest affe(?tlng· or relating in any maruier tp the Conveyed Credits. The Conveyed Credits: shall be assigned/conveyed to Buyer at the closing free and clear of all liens or other ertcwnbrances of any type, monet<J.ry or non-monetary. 13. Counterparts. This Agreement may be executi;d and deliveredi'riany nuli.1her of identical counterparts, ~chofwhrch so executed and delivf?redshallbe·deetned to be.an original and ail o:f whichshali constitute one and,the same instrutn.ent North Couf!fy Habitat Bank fy'liHgajlo.n Credit Purchase Agreement Page 4 ofS 03207629-609°CG1 · · v,100Jil!i WHEREUPON, this Agreement has been executed as of the date first-above written. SELLER: WES ii ... , ~""'::,!--~EVELOPMENT C01'PORATI0:N, a Nevada J.3y: __ ___,. ___ .,, ____ -_-_______ ~ Name: '"-!;!''~><Vu It.s: President W¢stmarl<: Development Corporation c/o McCollui:n Assqciates 10196 Clover Ranch D_r Sacramento, CA 95829 Telephone: (916) 688~2040 Fax: (916) 688-7436 Email: mccollum@mccollum.com · BUYER: ClTY OF CARLSBAD, a municipal corporation of e--Stat.e of California/'') _ • _ _ __ //; . .I c// By, / ~4~/;;)l,ufc-w,e~ Naml (e1at'cfe A "Bud(, Lewis JI C717t./ (.; Its: Mayor Attention: Mr. David Hauser Deputy City Engipeer · Engineering Depanment City of Carlsbad 1635 Faraday Avenu~ Carlsbad CA 92008 Telephone: (760) 602-2739 Fax: (760) 602-8562 Email: david.hauser@carlsbadca.gov !forth County· Ha_bitatBank Mitigalion_~reclit Purchase Agreemeni Page SofS 03207629-609-CG 1 · · ·v.100309 ( City of Carlsbad ATTACHMENT 3 2()07 BANK ENABLING INSTRLIMENTFOR THE. NCl:iB www:carlsbadca.gov 05/26/2016 04:48 FAX BANK ENABLING INSTRUMENT forthe : NORTH COUNTY HABITAT BANI(. Carlsbad, San Diego County, California April 30, 2007 Attachment 3 This Bank Enabling Instrument ("BEi') made, this Z1._ day ofM 2007, rega.i:ding the establishment, use, operation, and maintena11ce of the North County Mitigation/ Conservation Bank (''Banki is made and entered into by and among Westm~k Development Corporation (''Bank Sponsor" 1U1d "Property Owner''), the Los Angeles District of the U.S. Anny·Corps of Engineers ("USACB''), Region IX of the U.S. Environmental Protection Agency ("USEPA"), the Carlsbad field office of the U.S. Fish & Wildlife Service ("USf'WS''), iµid the Sou.th 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 8~ Review Team ("MBRT''), and the Bank Sponsor and the MBRT are hereinafter referr~d to jointly as the "Parties." Recitals A. The Bank Sponsor is the person or entity responsible for establishing and operating the Bank. · . B. The Property Owner is the owner of real property containing approJCim$el;y 18. 7' acres (the ."Property"), located just south of Palomar Airport Road in the City of Carlsbad, San Dieso County. State of California, designated Assessor's P.ucel No. 211..040-33, The Property is generally ~own and legally desen'bed in Exhibit A (Bank Location Maps) and in ExhibitB~l (Preliminary Title Report, Legal Description, and ParcelMaps) attached hereto. Westmark Development Corporation, as 8nnk Sponsor and Property Owner, desires to create a mitigatloo/conservatiQn 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 Exlu'bit C (Restoration Plan). . . C. The CDFG has Jurisdiction over the conservation, protection. and management of fish, wildlife~ native plants, and the habl~t necessary for biologically su$U.inable populations of these species pursuant to Fish and Game Code sec. 1802; and other provisions ofstau,law. D. The USFWS. an agency within the United States Department of the Interior, has jurisdiction over the conservatio~ protect(on, restoration and management offish, wildlife, native plallts, and the habitat.necessary for bf6logi:cally sustainable populations of~se species within the United States pursuant to the Endangemt Species Act, 16 u.s.c. § 153 t, et seq., the Fish and· Wildlife Coordination Act, 16 U.S.C. §.66U$~6c, the Fish and Wildlife Act of 1956, 16·U.S.C. § 742(f), etseq., and other provisions of federal law. . · · · E. The USEPA and USACE have Jurisdiction O\ler waters oftbe Uni~ States; pursuant to the Clean Water Act, 33 p.s.c. § 1251 et seq. W~ters ofthe United S1a1es includ~ jurisdictional wetlands. , ,...,,.,,,...,.._, ___ .,...,.,....,._,...,.._,,--~..:.......: 1 ......... -~,...--•-·-·, ... -· .... _, __ . -~~.,,. -. 0':0.-...... c"'· ~---..,.....-------••.q~· ___ , __ ,_.,_. F. The MBRT is. an interagericy group which oversees the establishment, use~ operation. and maintenance of the Bank. G. The goals lllld objectives for the Bank are set forth in Exhibit G (Restoration Plan) aqd ExhibitD (Long Term Mimagemerit Plap) •. H. The Bank Property;fonnedy usedforranching andfarming, is bisected longitudfuaUy by Encinas Creek, with the southea~tein cornerof the site sloping up from the creek; aric1 w:ith portions of the site heavily infested with pampas grass (Cortil<ieriqselloana). 'fhe sit:¢ is.within tbe. Encinas Creek floodplain and provides groundwater recharge, filtration of surface and ,suhcsurface. flows, habitat that supports wildiifo, and sedmient fr~port. A general b~eline description of Bank r~sources is provided :m Exhibit H (Biologi¢al Resources Survey) and Exhibit I (Wetland Delineation VedficatipnLetter). NOW, THEREFORE; in consideration of the foregoing recitals anci other good and valuable consideraticm, the receipt and sufti~iency ofwhlch is hereby acknowledged, the Parties agree to the following. I. PURPOSE AND AUmOR.ITIES A. Purpose. 'The purpose of this BEI isto establish· guidelines and responsibilities for the establishment, use, operatiot;1, and 1naintena:nc~ of the Bank to compensate, conserve, and protect Waters of the United States and Covered:Habitat. The Ba11k Sppnsor and Property Owner shall preserve, create;restore, and/or enµanpe and then manage and rilarntairt Waters of the United States and Covered llabitat in accordance with the Restoration Plan and Long TermM:anagementPlan. B. Authorities. The Bank is available to be used for off--site compensatory mitigation of conservation for unavoidable im:p~cts to waters of the Uhited States and Covered Habitat, governed by the foI!owing tegulationsi policies, and guidance. 1 .. Federal: Page2of25 a. Clean Water Act {'1CW A"} (33 USC § 1251 et seq:); b.Riv ers andJfarbors Act 03 USC 403).; . c. National Environmental Policy Act (''NEPA") ( 42 USC § 4321 et seq.); · · d.Fisha nc:1WildlifeCool'dinationAct(I6 USC §661 et seq.); e. Endangered Species Act ("ESA'') (16 USC§ 1531 et seq.), partkularly including impacts to federal listed threatened or en:dangered,species under sections 7 and lO of the Endangered Species Act and/or occupied habitat; f. Executive Order 11990, Protection ofWetlancls; 2 BEifor the North County Mitigatio11 Bank, Carlsbad J6 ·""""'·'"""'""·.,!~··-"I_."".-'_....,.., ___ .,...,, ___ ,, __ ""'··--"~·-·,....., __ ~~-,.,..-~~~~--.......... _...,.,_. ·,---~· ... ~ .;.,,, .... ;-~-.. ~. -~~ ...... ~-.;,_; ..... ~, g,E xecutive Order 11988, Floodplain Management; hJ~_eg ulatory Programs of the Corps of Engineers; Final Rule (33 CFRParts 320~331); i. Guidelines for Specification of Disposal Sites for I;>redged and Fill Material (40 CPR Part 230); j. Memorandilm of Agreement between the E1wironmental 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); L Guid.mce for the EstablishmeIJ.t, 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 8l. Ga,me Code Section 2800 et seq.}; . cl.Fish & Ganie Code Section 1600 et seq (Fish .md Wildlife Protection and Conservation}; and e. Official Policy on Conservation Batiks, April 7, 1995, by California Resources Agency and California Environmental Protection Agency, jointly. Il. DEFINITION$ The initially capitalized tenns used and not defined elsewhere in this BEI are defined as set forth below. A. ".Bank Closure Pfart;" 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 BEL The Bank Closure Page3of25 3 BE/for the North County Mitigalion-Ba11k, Carlsbad Plan 4.escJ:'ibe.s actions-required to close the Bank following the sale of the last a11thonzed Credit and identifies ati.d. qescribes the long-term proposals for an:4 responsibiJities of the Bank Sponsor, l'roperty Owner, Bank Mt;1.Q.ager1 endowmentbolder; and.bene:fici~ies. B. . ''Bank Establishment Date" means the date when (i:t) this BEl 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 th~ MBRT along with all supporting qocumentation. C-. ''Bl311k:.Manager'' or "Long•Term ManMer" is any person or public or private entity responsible for managing tlieBank and 'it.s habitat in perpetuity using the anriQal iiltetestp~yments,from the EndownieritFund as capital. The Bank Manager ai,sumes responsibiUty for l011g-term managem.ent upon Bank clostJ.n::, 'I'he Bank Manager may become the Property Owner before Bank closure under Section XIII.F.ofthis BEL D, ''Bank: Property"is a site where a specified number ofacies qf Waters ofthe Unit¢d States and Covered Habitat ate created, restored, enhanced, an,d, in certain circumstances, preserve& Based on the specified acreage, the Bank accrues Credits available fot compensatory mitigation in advance of authorized impacts to similar resources. A Conservation Easement (Exhib1t E~~n will protect the Bajtlc 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 umier the terms of this BEI, the Property Owner is the Bank Sponsor. · · F. ".BEi'~ i:J:lean~ Bank ,Eil!'!,blitig Instrument, which i~ thjs document ancl ail Exhibits, incorporated by reference. Ct "Ca4\strophicEvent'; shall mean an event, such as a spill ofhazarcf()us Qr ioxic substance,. the inipact of a: vehicle or falling aircraft, or a fire, which has a rnatyrhd 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 cqntrol. · H, ''CEQA'' means the Cafifornia Enviro~ental Quality Act (C~lifom(a: Publfo Resource~. Code Sections 21000 .et seq.; guidelines fqr in1pfementation at California Public R~souiees Code Sections l5000 et seq;), including all reFilllations promulgated pursuant to that Act. I. "CESA'' tnt;ians the California Endaiigered Species Act (California Fish and . Game Code Secfiorts 2050 et seq.); includirig llU regulations promu.Igated pursuantto tliat Act. · · · · 4 BE!Jor ihe-North Courlly Mitigation Bcmt, 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.l, in the form of Exhibit E-4. L. "Contingency Fund" ~eans a fund (in a form. acceptable to the MBR1) established by the Bank Sponsor for any required remediation as outlined in Sections V.A.2 and ViIL 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.Habitatincludes the CDFG Credits listed in Table l. N. "Credif' 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 0 . "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 L~ds Management ("CNLM"). The Ertdowment Fund shall be non-wasting; that is, the principal amount shall notdecrease in value through expenditure, inflation~ or investment strategy, and therefore, using an appropriate inflation a~justment, such as the Consumer Price Index, a por:tion of the interestand earnings on the principal balance shall be re-invested into the endow¢ent principal to account for inflation. The remaining int1::rest and earnings on the principal balance, shall be used exclusivelyfor 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, insurtection, riot or other civil disorders, flood, earthquake, disease, fite, governmental restriction or the failure by authority, or any fajunctitm, which has a material and detrimental impact on the Bank Property; provided, however, that: (i) a riot or 0th.er civU 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 ofForce MaJew-e only if it is greater than a presently projected I oo~year flood, where "flood" refers to a runoff event; (iii) an earthquake shall constitute an event of Force Majem:e only if the ground motion it generates at the Bank is greateL than that presently projected from an earthquake with a return period of 475 years; {iv) disease 5 BEffor the North County Mitigation Banli.. Cqr/sbt1d .·,_, .... ~ ..... --· ---,..----~----,--.;., __ .. , .. ,~~---·, __ , . ---· •. --~-· .. ,._ .. ,., .. , ✓~-~--.,., _ __, ___ _ shall constitute .in event of Force Majeure only if such event has broad regional impact arrd is not end.emic to the Bank and its immediate locale; and (v) governmental restdction or the failure by any governmental agency fo issue any requisite permilor authority, or any injunction or other · enforceable order ofany court of competent jurisdiction, shall not constitute an event of Force Majeure unless there is no other feasible means of remediation, - R. "IIabitat Creation" is the establishment of wetland• an:d/ot other aquatic resources in an area that does not provide wetland hyiliofogy or support wetland habitat, blitwill be physically modified and vege.tated to do so, S. · "Habitat falhan:cern:ent" is a set pfactivities conducted in existing resources · which increases one or mote biologica1 function; here, enhancement will increase the biological value of the native riparian habitat which currently supports some native species (25 fo 75 perc~rtt total native species cover) but is otherwise infested with non-native species. · T. "Habitat Preservation'' is the protection of existing habitat thiough- placern:ent of11 Conservation Easement and providing_ Jong-tenn managemenJ ftinded by the Endqwmertt Fund. Preservation may include protection of upland areas adjacent to wetlands as necessary to ensure protection aiid/or enhancement of the riparian and aquatic ecosystem. Preservation Credits ate assigned on the basis of specific values as described in Exhib1t C. U. ''Habitat Restoration'' is there-establishment of habitat resource cha~a:ctetisti~s and functions in areas where they have.ceased to exist or e1Cist iri a supstantially degraded state. Habitat Restoration on the Bank Property shall occur through the removal of non,-native 'Species( e.g., pa]Jipas grass). Because none of the titeas occupied by pampas grass are considered · USACE wetlands; the USACE 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 nieetthe State's no-net-loss requirement. Created/Restored wetlands will be fully assessed as described in Exhibit C. V. ''Long-termManagementPeriod" 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 befoW; W. "Lon:g,.terrn: Management Plan" ("Management Plan'}means the plan developed fotimplementation to ensure that the Bank is map.aged and maintained, ln perpetuity, consistent with the purpose ofthe Bank, attached as Exhibit D.,;2, X. ''MBRT' rn:eansivlitigation Bank Review Team, an interagency group of Page60J2s 6 BE/for.the.North County Mitigation Bank,, Carisliail 30 -~--... ~ ~-·,-• • -~---,-·~--• ....,. · .. ·0 ~-0.0 · _.....__ . .,., --· ...... ~"-'-'m· ,..... ;..,· =· --· -.,. · ..••.•.. federal, state and /or local agency representatives which oversee the establishment; use, and operation of the Bank. Y'. "NCCP" is a Natural Commm1ity Conservation Plan created pursuant to Fi.!;h atld Game Code; Section 2801, et seq. AnNCCP isa 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 Bcppropriate 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. I3B. "Property Analysis Record" (''PAA'') is an analysis that, based on assumptions it identifies, determines the amount of money to be placed in the Endowment Fund; it aJso provides a schedule for funding, and for · utilizing available earnings from, the Endowment Fund. The PAR, developed by CNLM, contains the transaction dates for paytrient and release of the financial assurances and shows the amount estimated to be provided front the Endowment Fund, shown as an annualamount 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 eviiluatlon, legal description an,d depiction, and the number of acres of the Bank Property. This Prqperty Assessment shall describe any recorded or unrecorded rights-of-way, recorded or unrecorded easements, and recorded or unrecorded liens or other encw,nbrances that may prevent establishment of a Conservation Easement on the Bank Property in accorqance with California Civil Code Section 815 and this BEI. Plat ml:lps 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 ofBank e~tablishmeht, 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 Pagelo/25 7 BE/for the North C(}un!yMitigation Bank, Carlsbad Endowment Fund plus one year for interest accrual or the time required to meet five~year success criteria,wb,icheVer 1s greater. Dutjrtg this:period; the short~tenn l11.anageihent, monitoring, and reporting activities will be im:p1errieIJfod as descrit>ed in the R~toration Plan. GG. "Restoration :elan" meansthe documentthat describestbe ptoposeq activities conducted du{ing the Restoti:itiort Phase of the; Bank to establish the Credits; The Restoration Pl!iti describes the creatiqn, restoration, and enhancement ofhabiti:it (i.e., the schedule, planting scheme; pla,rit P?lette, and monitoring procedures), the,habitat establishment period; the s1,1ecess criteria to obtain successful habitat establishment, monitoring to evaluate the success1 and reporting. The Restoration Plan also includes the provisions for int;erim management and monitoring. HH. "Restoration Specialist" is the person or entity,. employe~. and directed by the. Bank Sponsor; with req11isite ptofossional crederttiafsi to implement the Restoration Plan, · IL ''Service Area'; means the geo:graphic.area(s) within which iinpacts·that occur to Waters of the United .States or Covered Habitat may be mitigated through the acquisiticm of Credits ili accordance ,vith this BEI. JJ. 1'UnlawfulAct'' shall mean the unlawful actofanother and shalUiicludean event or series of events, such as the intentional dumping within the Bank, or any connected waterrourse; of a hazardous toxic substance, or the · discharge ofsuch a substance by any person or entity other than the Property Owner or Hanle Sponsor in violation of a statute, ordinance, regulation or permit, which event or series pf events has a material and detrimental impact 0.11 Qle water qttality; native vegetation, soils, fish, or wildlife of the Bank Property. · · ill. STIPULATIONS A. Baseline Cqnditions. The currerit condition of the Bank Property is described in the Restoration Pian, (Exhibit C) anci 8iok1gi'cal Resources Sqrvey (Exhibit H). . B. Disclaimer. This BEI does not fu imy maimer limit the statutory authorities or responsibilities of the· MBR:T, but is, instead, an implementation of such statutory authorities and responsibilities, · C. Exhibits and Appendices. The following exhibits, and all subsequent revisions and acldenda to the Exhibits hereto, ate attachments incorporated by reference foto this :SEI . . Exhibit A ~ Bank '.LocatiCln l\faps Exhibit B -S~rvice Area Map · JiJxliihlt C-: Restoratio1tPla11 Exhibit D -Bank Ma11agement and Operation D-1 Property ~alysis Record (PAR) Page8of25 8 BEi for the Norlh Co.rinty Mitigq,tiim Bank, Carlsbad D-2 Lcmg-Tetm Management Plan (Management Plan), including the Bank Closure Plan Exhibit E -Real Estate Records .and Assurari¢es E-1 Preliminary Title Report, Leg~I nescription, a11d Parcel M:aps E-2 Bank Property Assessment and Warranty E-3 Plat Maps . E-4 Approved-as-to-form Conservation Easement E-S '{itle Insurance policy Exhibit F -Bank Crediting and Credit Sales F-1 Credit Table F-2 Credit Sale Leclger F-3 CreditP:urchase Agreements F-4 Credit Purchase Payment Receipt _ Exhibit G -Phase I Environmental Site Assessment Exhibit H -BiologicalResources Survey Exhibitl-Wetiand 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. 'fhe Bank Sponsor agrees to perform all necessary work, in accordance with the prqvisfons of this BEi, to establish t.he 15. 7 acres of Waters of the United States and Covered Habitats; as proposed in Exhibit C, until it is demonstrated to tlie satisfaction ofthe MBRT that the Bank complies in all respects with all conditions con~il?-ed hei:ein. The Bank Sponsor agrees to be responsible for all costs associated with the establishment of the Barut, including but not limited to construction, remediation, documentation, maintenance, management, monitoring, and reporting, until one year after the Eri~owment Fund is fully funded and all success criteria are met. · , B. The Bank will be considered established and Cr.edit sales may begin only upon completion of the following: 1. Signature of the BEi by all Parties; and 2. Recordation of the Cons.ervation Easement or the owner has provided to CDFG an executed Conservation Easement in a fonn approved by the MBRT along with all supporting documentation. · C. Modification of the Restoration Plan. Cteaticiil, restoration, and enh&ncement of habitat on the Bank Property will be perfo:nned as described in Exhibit C, and the Credits will become available in accordance with the schedule specified in Section VI of this BEL In the everit 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 Spons,or sfaill sµbmit a written request for such modifications to the MBRT. Pi:lge9of2S 9 BEJ for the North County Mitiiation Bank, Carlsbad .. ·--~--~-~-.-,.·.--·-.. , q .... ~.--~--:~---~--__ ?_ ... .__ ............... __ v; FINANCIAL A$SURANCE REQl'.Jlru;MENTS A. The Bank Sponsor i$ responsible for proyfding financial assurances for all :Bank establishment, management, monitoring, andretnediation. The Bank Sponsor agrees to provide the following assurances for the work described in this BEi.. Page10of2$. I.Cons . tructionSecurity. Because ~l sp¢dfied gradingand related implementation work has been completed pnotto the release and sale ofCredJts, no Construction Security is requited. 2:Conting ency Fund. A s1.1111 of110tless th:aq $250,()00 shall be deposited in ap. interest;.bearing escrow account to be te~ed "Contingency Fund.'; Toe furtds aretp be used by the Bank Sponsor, orby a third paity to be designated by the USACE and CDFG, to rectify failures, as determined by the MBRT, by the Bank Sponsor to comply with one or more terms of this BEL 'TJ;ie Contingency Fund shall be funded by depositing 15 p·ercent of the gross proceeds of each Credit sale into the interest~bearing account, up.fo tlle $250,000 Contingency Fl.ind total. ContingencyF@ds shall be released to the Bank Sponsor, under the direction of the USACE, and irtcoJJ:sultation with the MBRT, in $50;000 iri¢remeilts based on meeting yearly success criteria, with releases nono deplete the fund below the amount determined by the MBlff to be necessary to rectify unforeseen events. In the eveht that the rem,ainihg Contingency Funds are not used after five years from the Bank Esm.blis)liile.ntDate, !llld the MBRT determines the Bank has achieved the success criteria; the funds shall be returned to the Ba~ Sponsor. 3 .L orig-term Management Endowment Fund. Asumof hot less than $499,3$6 will be placed in an iilterest~bearing escrow account to be known as the ''Endowment Fund'' to be used for t_he fa,..perpetuity management of the. Batik Property. · The amount to be deposited into the EndowmentFund was calculated using a PAR The Endowment Funcl 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 f\mded. The Fund shall also :meet funding he~chmarks before each .new Credit release. The Bank Sponsor shall fund any shortfall betwe.en 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 shaU be funded prior 10 BEi for th.e Not th County Mitigaifon Bank, Carlsbad to the third Credit release. c. One hunp.red percent of the endowment shall be funded after three years from the Bank Establishment Date or prior to the release of the iast Credit, whichever occurs first. d. The Bank Sponsor shall notify each member of the l\ffiRTof each Endowment Deposit made, concurrent with the notification of Credit sales in Section IX.C. of this BE!. 4. After the Fund is fully funded, and. at the time the Bank Property is ttansferred to the Long-Temi Manager, the Endowment Fund shall be transferred to the Long-Temi Manager solely for managing and maintamingthe Bank Property in perpetuity. 5. The cost of fong-tenn management of the Bank Property may be adjusted based on actual annual cost of ma,intenance that will be provided by the Bank Sponsor in the monitoring reports, The USACE, CDFG, theLong Tenn Manager, and the Baruc Sponsor must mutually agree upon any adjustments before they are made. VI. BANK HABITAT ESTABLISHMENT ASSESSMENT MEfflODOLOGY, SUCCESS CRITERIA, AND CREDIT RELEASE SCHEDULE. A. Summary ofAnticipated 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 conditi<m until the 5- year success criteria have been met in accordance with the Bank Closure Plan or untii all Credits are sold, whichever is later. As presented in Table l 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 ofDiegancoastal sage scrub, 1.38 acres of sage scrub chaparral, and 0.45 acres of non-native grassland, and created habitats totaling 6.07 acres ofriparian forest. It is anticipated that a minimum of 4.0 of the 6.07 acres of creation/restoration Credits will meet the USA CE 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 USACE 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 conside:r;ed Waters of the U.S. may, at USACE 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, re~toratfoh, enhancement, and preservation) and timing of the mitigation implementa,tion. · Page JI o/25 11 BE/far. the North County Mitigation Bank. Carl~bad ~ .......... ~. ---~------..~......,..,.. . ., ~-~-,__. _____ ...,,. ____ _., .. .,.,~-·• .+"'-.. , .. --:+ ... ·---. ... ~ ··-.. -.. ,J~-,--.,_,,-. ·-----~-·--··-·· _ .. ",_,...,.----,,.. :·-·•-··-_ .. -~. -.•. .. 'rabfol . Mitil!atioil Credits (acres) ·. . Credit Type USACE and CDFG CDFG · CDFG Uplattd Wetland Creation/Restoration 4.0 2.07 Enhanc.emeiit Riparian (CDFG)f 6.78* Vegetated Buffer (DSACE) *(:3 USACE . wetl.md} Preservatfon. 2.84 Table 2 summatizes the mitigation type arid associated ratio based on meeting success criteria for a given year in the five-:yeat 111onitoring period. Table2 Mitigation Type . Mitigation Credit R,a,tfo Years+ Creation , 0.4:L 0.6:l 0.8:l 0.9:l. 1:l Restoration OA:l 0;6: 1 0.8:1 0.9-:1 . 1:1 Enhancement 0.4: 1 0"6:1 . 0.8:1 0,9:1 1:1 Preservation 0.5~1 0.5:l 05:1 . 0.5:1. +Represents meeting that year's SQcces~ criteria The mitigation Credittatio will determine mitigation n~eds fdr a: given project For example, if a project impacts LO acre of habitat, it would be: required to: purchase 2.5 Credits that have met first-year success criteria (25 Credits x OA: I == l acre). 1.25 Credits would need to be purchased if the third-year success criteria hadbeen~met (1.25 Credits x 0.8:l = 1 acre) .. I:f'the Bank has met five-yel:ll" success criteria, acquisition in the Bank would result in no net loss of habitat functions and values; and as a result l acre of Credit would be required for each acre irnpactecl Final project mitigation ratios will be detennined on a case-by- case basis by the permitting agency(ies). . . Under this methodology, the number of Credits available will be fi.xed at 15. 7 Credits, The ''value" ofthose CreqitS will be 4etermined based on the friethodoJoigy described above. A 1 :1 mitigation Credit ratio will be given for habitats thathave been fully restored and meet five-year success crhetia. Because sorne 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, althoughthe fuli biological value of the Bank will be achieved, regardless, at the completion of the five-yetlf monitoring effort; or when five~year su<;qess criteria have been met. Upland Credits shall be available ii.t ~ 1: l 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 thah the five-year time fra:me upon the pennitting agencies' approval and concutrence by the MBRT. When ali · Pagel2of25 BElfor the Ni/r/h Ci/unij, MiHgationBank, Carlsbad success criteria are met, th,e creation, restoration, and enhancement efforts on the Bank Property shall be deemed complete. Table3 Plant Species Diversity Milestones (or Riparian Woodland Success Criterion Year 3 I 4 I 5 , Plant Species Diversity 6 I 8 I 10 Table4 Ve2etative Success Criteria (percent) Hab(tat/Parameter Year 3 4 5 Freshwater marsh Totalcover 60 70 80 Riparian forest Total cover 60 70 80 Tree cover 35 55 65 Shrub cover 30 40 50 Herb cover 50 40 30 Mule fat scrub Total cover 55 65 75 Shrub/tree cover 30 45 60 Herb cover 50 40 30 All habitats Weed cover 1010+ s Io+ 5/0+ + There shall be zero tolerance for the most invasive species. listed by the California Invasive Plant Council (e.g., pampas grass). P. Release. of Habitat Creation, Restoration, and Enhancemet1t Credits 1. Habitat Creation, Restoration; and Enhancement Credits, including both Waters of the United Staies CrecUts and Covered Habitat Credits, shall be released, as described below, based upon attairnnent of the success criteria Summarized above and more fully described in Exhibit C. No subsequent Credit releases may o.ccur until the prior Credit release has occurred. Credit releases·shall occur according to the following schedule. Page.13of25 a. 25 percent ofth,e 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 Foux success criteria andrecordation ofthe approv¢d Conservation Easement; BE/for the No~th County Mitigation Bank. Carlsbad 37 d. Bahmce of the Credits upon attaiinnent of Year Five su,ccess criterla. 2. Each Credit release, with tb,e exception of the first; is s:ubji;:ct to the 13a:ilk Sponsor's s11bmi$sion ofa yearly monitoring report iii accordance with Sectfon IX. A., ii. site visit by the MBRT atthe apprq):)tiate thne of yeari 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 tne MBRT. E. Upland Preservation Credit Release All Preservation Cre.dit~ shall be immecHateiy available for reiease upon establishment of the Bi!nk. 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 Coveredl:ii1hitat, occurring in the cities of Oceanside, Vista,, San Marcos, Carlsbad, Encinitas attd the western portions of theunipcorporated portions oftheCounty pf San Diego as shown inExlµbit B.· B. Projects Eligible to Use the 13ank, In general, it is agreed that projects requiring the following tnittgatiort for impacts within the Service Area shall typically be eligible to use the Bank: · · · • Mitigation reqµired by Nationwide 404 permits; • M1tigatfon requited by Individual 404permits vv.hen the applicant has mi11irnized 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 USACE, USEPA,, l]SFWS, or CDFG, provided tqe Bank meets all requirements applicable for the mitigation required for a paiticular project and that mitigationthrough use ofa Bank is authorized by theapprop:date airthotft:y. · · C. Credit Sales I. Credit sales by the BanJc Sponsor may begin once Credit~ are released putsuantto Section VLD and E·. Subjectto B!lilk Sponsor's obligations under this BEI; Bank Sponsor shall have th~ exclusive rfght to determine the price for any and all Credits offered for sale or use at this Bank. · 2. Th no case shall the Credits sold or obligated by Ban.le Sponsorexceed the total number of Credits that have been released pursuant to Section VI. D and E, Pagei4oJij 14 BElfortheNorth 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 MBRTagencies on a case-by-case basis in accordance with applicable law, regulations, and guidance, 4. The Bank Sponsor shail notify all members of tl:ie MBRT upon completion of any Credit sale, as described ii1 the reporting section of this BEI. 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 FW1d sha:ll be released to , the Sponsor according to the schedule described ih Section V .A.2. VIII. MAINTENANCE AND MONITORING OF l1lE 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 Ba:nk. 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 ofthe5-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 obi;ervations of plant establishment and growth and other site conditions (e.g., soil stability). C. Contingency Plans/Remedial Actions: Page 15.ofZ5 1.. In the event the MBRT reasonably detennines' 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 hijbitat functions and values will be restored, the MBRT may, at its discretion, suspend Credit S!:l,les and/or reduce the number of Credits aJiocated to the Bank equivalent to the decrease fo functions and values of the 15 BEifor the North Count)! Mitigation Bank; Carlsl/dd Page,-16ojiS .. ··------------'--"--------·-·---······-. B an1c Property. . 2. The MBRT shall be notified qpon discovery by any Party of any failure to achieve the success criteria described m SectionVI.C. ofthis BEl. TheMBRTshalltequire, in writing, tliat the Bank Sponsor develop a t~m~ation plan .. Within 60 days of receiving such written 11otification from the MB.RT., the Barik Sponsor shall develop itremediation plan au:d subnrit it to the MBR'r foi-teview and approval. The remediation pl;m w~ll in¢lude proposed' rt;medial actions and a schedule within which th_e Bank Sponsor will implement tll.e acti_Qns, The Ba.pk Sponsor shall, at Banlc Sponsor's expense, implement the necessary and appropriate remedial actions as approved PY theMBRJ\ All remediation efforts ;md an evaluation of their effeqtivertess shall be incorpori,,ted into the annual monitoring report set forth i11 Section IX.A. of thtS,BEI. fu the event the BaQ!c Sponsor or Property Owner fails to implementsuchremedialactions approved by the :MBRT, the MBRT will notify the Bank Sponsor, in writing, that the Bl:li:Ik Sponsor is ll1 defaµlt and identify corrective measures the MBRT beii¢ves,to be necessary in order to cure the default if conditiolis' do not improve or if they continue to de_teriorate, witl.rln one year (unless, otherwise negotiated among the Bimk Spon$or, Property· Owner, aIJd the MBRT) from the date that the specific corrective mea:sqres were first identified in writing to the Banlc Sponsor by the. MBRT, a dem4nd on the Contingency Fund will be made by CDFG or USACE, as appropriate, to ensure the corrective m.easure.s. are implemented as approved by the MBRT. 3. Jf the MBRT determinesthat.$.e Bi!-nlds operating ata Gtedit deficit, the Bank Spop.sot shall be notified: in writing, whereupon Credit sales and debiting: of Credits.will irri,inediately cease. The:MBRT shaU determine what cotrectiye actions are necessary to co1.t.etf the Credit deficit. . BankSpons_or shall develop and iinpll;lmenta remediation pl,a:n in accordance with: Section VIIIJp,:. A,s detennined by the Chair oftheJvIBRT,'in coordination With:tlte MBRT and - the BarikSponso:r, if conditions at the Bau:k..Properiy dp 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 tha~ the specific corrective actions, were first identified in writing to the Sponsor by the .chair of t,he M13RT,. a: demand on the Contingency Funcis and die Endowment Fun.cl shall be made by CDFG or th~ lJSA,CE, a.s appropriate; to ~ns.ure corrective 16 BEi for the Nbrth Cqlinty Mitiga_tion11ank; Carlsbad 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 succ.ess criteria, any remaining contingency funds will be released to the Sponsor. p. Long-Term Management. Once the five-year success criteria in the Restoration Pian and this BEi have been met and the Endowment Fund is fully fµnded for one year, long-tenn management of the Bank Property.shall be implemented according to the Management Plan. The Property Owner shall be obligated to manage the Bank Property iti perpetuity to preserve its habitat and conservation values in accordance with the terms of this BE!, 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 ofany one of them, to con~ider revisions to the Management Plan to better conserve the values of the Bank Property. E. Long Terin Monitoring. Long-tenn 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 BE{. R Conservation Easement Monitoring. Bank Sponsor's and Property Owner's obligations shall include u~ingreaso1,1able 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 USA CE as Chair of the MBRT, for distribution to the other members of the MBRT, on or before November lfh of each year; with the first report due after the end of the first full growing sea~on. The annual report shall address or provide the following, a$ appropril:ite: I; 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 ofall disbursements mac:Je from the Contingency Fund and/or the · Endowment Fund for Bank activities. B. As-built Report. The Bank Sponsor shall snbmit to the USACE, for distribution to the other members of the MBRT, an as-built report for the Bank Property ~ot more than 60 days after the Effective Date of this BEi.. 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 PageiJof25 17 BE/for the North Counly Mitigation Bank, Carisbrid 41 member of the MBRT wi.thin lO days of each Credit sale. D. Bank SponSOr and Properly Owner rtrµst maintain accurate records of costs, in accordance with Geµetally Acc~pted Accou11ting Principles, and shall retain said records' tJ:rroughoutthe term ofthi!l. BEi. During such tune, the :aartk Sponsqr and Prop¢i:fy Owner shall make said records ava:ilab,le for review at the, request ofthe MBRT. In addition, Bank Sponsor and Property Owner n,mst have acc.ounts <'!-u.dited upon request of and with results provided to the MBRT, not more than. a,nnually. If the Property Owner becomes the holc:ler o:(tbe Endowment Furt4 the Conserv.i.ticin ER!i¢inent shall be amended to include an endowment and aucliting provision approved ·by the MBRT, X. I?ROCEl)T.JRES J.?OR BANI< CLOSURE Once the success cdteria in theResto~atiort 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. Tile Bank shall be deemed closed, and the Sponsor's . obligatfons complete, upon ali of the following: 1. Ali succ:ess criteria have been m:et consistent with the Restora:tioµ Plan; 2. Th¢ l3~nl( Spcnisor bas Mpleltiented tbe Ba:nk Closµr~:Plan included within the Maoage:tneJJt Plan, including the imPiementation ofBartk closure reporting and accounting activities; · 3. All financi'al responsibilities haye been met, llicluding full filncling of the .Endowment Fund for not less than one year; a:nd · 4. Either: . (a) The last authorized Credit has been sold or used; or (P) The Sponsor requests bank closµte by written notice, to'the MBRT, and :MBRT provides written approval ofthe closure. 5. lJpPri Barik-clos1,1re, Credit sales shijll immediately cease. 6. All responsibilities and qbligati'ons for Bank IJ1onitoring and m,ai,nten:ance in perpetuity are transferred to the Property owner uponBank closure; · · · XI. BANI{ SPONSORANDPR0¥EltTY OWNER DUTIES A. The Bartk Sp.onsor agrees to perform all necessarywork in accordance with the provisions of this BE!. . B. The Bank SpoI1Sor agrees.to be responsible for all costs-associated With the establishment ofthe Bank, including hµt not limited to construction, remedfotion~ documentation, maintenance, rnahagement, rnonitoting, and Page/8oji5 18 BE[for tlie North Countj, Mitigation /Jqn/i, Ca;-/iliad . . l/ 2 --··-·,.......,___.:.--..---.•'· .& ...... -._•--~\-~ --~-,~-.-·...;...,...,.,.· ~· ........ -- reporting, untifone 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 theBan.k to the MBRT within 60 days after the Effective Date ofthis BEI. The. as-built report shall include as-built drawings, with accurate maps showing the fmish grades of the Bank Property, The maps shall clearly distinguish arriong the preserved habitats and the created, restored, and enhanced wetlands and Covered Habitats. The as- built dn1wings 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 ofthe.MBRT, not more frequently t.han annuaUy, anci submit the resultsofthe audits to the MBRT. F. The Bank Sponsor anci 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 itJ Exhibit E, and Property Owner shall not execute, renew, or exteM any lien, license, or similar interest without the prior written consent of the l\1BRT, H. Neither the Bank Sponsor nor Property Owner shall construct any structure or engage in any activity or use of the B;mkProperty. 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 J>roperty is maintained to ensure its suitability as a Bank consistent and in accordance with this BEL 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 andwmpliance monftoring consistent with the terms and conditions of this BEL Inspecting Parties shall provide reasonable notice to the Property Owner during normal business hours and not less than 24 hours prior to Pase /9of25 19 BElforthe North County Mitigation Bank, Carlsbad L/3 •··--.. _.~--.,--.. --·--·--------•l"--•----"-e----~-.-.. -· ,;s-y ......... inspection of the Bank Property. K. The Ba.nk Sportsors~all obtain all appropriate enviroiuliental docui;nentatioh, pertnits or other authoriiatiCJns needed to establish and maintain the Bank. This BEI does not fulfill or substitute for such authoriza,tion. L. The Propeey Owner shall grant all necessary authority and shall not Hrriit Bank Sponsor's 1,ibUity tQ carry .put Bank Sponsor's responsibilities and· ob ligations under this BEI. · · · XII. RESPONSIBILfPES QF THE MBRT A. The agencies represet,:ted on the MBRT agree to provkfe, ~pproptiate oversight in carrying out prcMsforis of this BET. · B. The agencies represented on the MBRT agree to rev1ew and provide· comments on all project plans, ariAlial monitoring reports, Credit review reports, contingency plans, and necessary pertnits for the Bank in a timely mariner. 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, ag!mcies represented onthe• M.BRT agree to review and concijr with reports on. evaltuitfon of success criteria prior to approving Credits in the Bank. p ; T.he agencies represe,nted on the MBRT shall conduct compliance inspections, as i::te.ces$ary, as determined in consultation with t.he Bank Sponsor, to.: 1. verify Credits available in 1:b,e: :S:anlq 2 .. confirm Implementaticm of remedial actions~ 3. recommend corrective meaS1,1res (if any), until the temis and conditions of this BEJhave been determined to be fully satisfied or until all Credits have been sold, whichever is later; and 4. inspect for any other purpose detelniined by the MBRT as necessary to assu.re compliance with this BEL XlII. QTIIER PROViSIONS A. Force Majeure; The Bank Spons()r and Property Owner .shall be responsible to maintain arid remediate the Bank Property except for damage or non~compliartce caused by Cittastrophic Eyents; events ofForce Majeure, orlJnlawful Acts, :in case of occurrencei the Sponsor or Property Own.er and MBRT shall meet to dis¢uss the ~ture course of action for and management ofthe 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: · ··· Pagt20of2S a. that the damage or non-compliance was caused by circumstances beyond the control pf the Bank Sponsor, Property Owner, and/or any person or entity under the direction or control of the Hanle Sponsor or 20-BE/for the North County Mitigation Bank, CarJ~fi,ad . ,··:··_....,.,. ___ . Property Owner, including its employees, agents, contractors, and consultants; b. thatn.eitherthe Bank Sponsor/Property Owner, nor any entity controlled by it, including contractors ;:md consultants, could have reasonably foreseen and prevented such damage or non-compliance; and c. the duration of damage or nm;1-c;ompliance was caused by such circllnlstances beyond the Sponsor's or and Property Owner's control. :a. 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 tnanageme:nt within each Party's organization, or other forms ofnon-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 ofthe BEL This BEI may be amencled or modified with the written approval of all signatory Parties. Any of the MBRT members may terminate their participation upon written notification to ail signatory Parties. Participation of the MBRT members will tenninate 30 days after written notification. D. Specific Langt1age in the BElShall Be Contr6Uirtg. To the extentthat 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. ThisJrnI, and all .exhibits, appendice$, schedules, and agreements referred to 'in this BEl, constitµte the final; complete, arid exclusive statement of the terms of the agreement between and among the MBRT and theBankSponsor and Property Owner pertaining to the Bank, and supersede all prior and contemporaneous _ discussions, negotiations, undetsta11dings, or agreements of the Parties; No other agreement, statement or promise made by the Parties that is not contairt.ed irt this BEI shall be binding or valid. No alteration or variationofthis BEI shall be valid or binding unk:ss contained.in an ame_ndmelit in accordance with Section XIII.C. Each party acknowledges that no representation, inducement, promise, or agreement, otal or otherwise, has been made by any other Party Qr anyone acting on behalf of any party unless, the same has been embodied herein. F. Transfer. Pagel] ofi5 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 21 JJEJ/or the North Co_untyMitigation Bank, Carl;had conveyance on or after the execution date pf this BEI. must be made in accordance with this BEl and shall be sµbject to written concurrence by the :MBRT and Bank Sp◊I'!.$01\ Such concurrence shall be subject to the reqtikement that the frans°feree as$umes 1µ1d agrees in Writing to observe and perfonn all of the Property owner's Qbligations pursuant to this BEl and the Conservation Easement. From and attet' the date of any such sale or conveyance made by Property Owriel'.~ tl~e transferor shall have no further obligations hereunder arid all references to Property Owner in this BEI and the Conservation Easementshall thereafter refer to. sµch transferee, except . that liabJHfy for acts;, omissions, Qr pt.e~ches occurring prior to·the sale or conveyance shall survive. Any such sale or conveyance made without the prfor written concurrence of the MBRT, may, at the discretion of the MBRT, result in the tenninationofthis BEi. Transfer or-assignment ofthe Bank Property shall be subject to the requirement thatany funds in a Contingency Fund or Long-term Man·agem:eii.t Ertdownient Fund shall cqhtirtueto be expend~d in a: manner consis~entand inaccordance with this BEI, the Conservation Easement, and the Management Plan. ·. 2. Transfer of Bank Sponsor's Interests The Bank Sponsor Iriay ~eU or c;onyey it$ .interest iri the; Bank at any tiine, ptovict:ed Bank Sponsor is jtt ii.ill. coniplfance with all requirements of this BEi (incl~ding ail financi,al assurances), and subject to the prior written approval of the MBRT, ff !Illy of the :qnandal assurances reqµired uncier this: B,EI are not completely funded at thetime of a sale. or conveyance, then the. MBRT shall not approve such sale or conveyan~e unless and untH either the,cortertt_Bank Sponsor, ortheproposecJ replacement Bank Sponsor, shall provide all required fuianaia:l assurances. In addition, priorto sale or conveyancel the;Bari.k Sponsor shall provide to each member of the MBRT a written agreement signed by the replacement Bank Sponsor in which the replacement Bank Spqrtsor assumes and agrees to perform all of the responsibilftfos and obligations of the Bank Sponsor under the BEI · Any such sale or ccmveyarn;:e· m~de withotitfhe prior written concurrence 0f the MBRT, may, at the cl,isci;-etton of t&e MBRT; result in the termination of this BEI. Transfet or assigillllent of the Bank Sponsor's rights a.p.d duties. under this BEl must _he approved in writing by the MBRT, and shalt be subject to the requirement that any funds in a Contingency Fund or Long-term · . Management Endowment Fund shall continue to be,eX:perided :in a m~pner consisten,t an,cl in accordance with this BEI, the Conservation Easement, and the Management Plan. · · · · G. Reasona:blen~ssand Go,od'Faith. Exceptas spedfically limited elsewhere in this BE!~ whenever t4is BEirequites Bafik Sponsor, Property Owner1 or the MBRT to give. its corisentor approvcl.!. to any action on the part. of the other, such c_onsent or approval shall not be unreasonably withheld"' If the Bank Page12ofi5 22 !$El for the Nor:th Coimiy MiiigatiolJ Bank. Carlsbad ., Sponsor, Property Owner, orthe· 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 foUowingthe request. H. Successors and Assigns, This BEi and each ofits coyenants and conditions shall be 1:>inding on and shall inure to the benefit ofthe Parties and tb¢ir respective successors and assigns, subject to the limitations on transfer set forth ih this BEL I. Partial Iilvalidity. 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 riot 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 shal1 be in writing. Each Notice th_e Bank Sponsor or the MBRT desires to give to the other shajl be in writing, shall clearly identify the name of the B&nk 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) <;lays after deposit in the United States mail, certified and postage prepaid, return receipt requested, and addressed as follows. MBRTChair: :MBRt Members: District Counsel U.S. Anny Corps of Engineers Los Angeles District 915 Wilshire Boulevard, Room 1535 Los Angeles, California 90017-J40l FAX: 213-452-4217 Region~J Manager Department of Fish and Game Region 5 4949 Viewridge Avenue San Diego, California 92123_ FAX; 858467-4299 Carlsbad Office Manager U.S. Fish and Wildlife Service 6010 Hidden Valley Road Carlsbad, California 92011 FAX: 760-431-5901 Page 23 o/25 · 23 BEifor 1he.North County Mitigation Bank, Carlsbaef 47 Bank Sponsor: Direc,:tor, WaterPivision U.S. Envirolimental Protection Agengy, Region 9 · 75 Hawthorne Street · Sacr~ento, California 94105 FAX: 415-744-1078 West:J:nark Developrtieilt Corporatfon · 3375 Pepper Lane, No. 102 Las Vegas, Nevada 89120 Attn: John D. Lee; Esq. FAX: 704-898-.9538 The Parties agi:ee to accept facsimile signed docutne11ts art<:l c:tgree to rely upon such documents as if they bore·oi:igirial signatures;. Each Party agrees to provide to the other Parties, within seventy~two (72) hours a.fter transmission of such a facsittrile~ the original documents that bear the .original signatures. Either Party may change its address ot r!'t:ll: number by gj,vh1g the other Pruty notfoe,ofthe change in any.manner permitted by this section. K. Counterparts. This BEI may be executed in m,1.1,Itiple counterparts, and each such executed counterpart shall be deemed an origina:i, all ofwhich t9getl:\et shall constitute a single executed agreement. · L, No Third Party Beneficiaries. This BEI shall not create apy third' party beneficiary hereto. nor shall it authori,Ze anyone not a:party heretffto maintain a Stilt for personal injuries, property damages or enfotcetn~nt ptirsmmt to the provisions of this BEi. The duties, obligations> and re~pot1sibiiities of the Parties to t}lis BEi with respect to third parties shall remain as otherwise provided by law. M. Availability of Furtds. Implementation of this. BEi by the MBRT is subJectto the requirements of the Anti-Deficiency Act; 31 U.$.C. § 1341, and the . avai1abilhy ofappropriated funds. Nothing in this BEi may be c.onstrued to require the obligation, appropriation, 9r expenditure Of any money from the U.S. Treasury or the California State TreaSi.lzy. No agency of the MBRT is required underthis BEI to expend any appropriated funds u11less and until an authorized official affirmativeiy a:cts to commit to such expenditures a:s evidenced in writing, XiV. EFFECTIVED,ATE This BEi shall become eff~tiye on, the date ofthe sign.attire by the last Party to sign this B'.EI. Pagei4(l/i5 24 BEifor thdvorth CounOf Mitigation BtiJJk, Carlsbad qa 05/26/2016 04:49 FAX fa! 003 IN WITNESS THEREOF,the Bank Sponsor, the State of California acting by and through its Oeparir.nent of Fish and Game; the U.S. Army Corps of Engineers Los Angeles District, The U.S. Fish and Wii<ilife Service; the U.S. EPA, Region 1:X, have . · s BEJ as of the date set forth above. i ~ ::-: Corps of Engineers, District Engineer __ __; ___ District U.S. Anny Corps of Engineers Manager, Cal_ifomia/N~vada Office · U.S. Fish and ildlife Service cgional Manager ~'.J):I: ~' Region California Department of Fish and Game Director, Water Division Region9 U.S. E:nvitonmeRtal Protection Agency Page 2$. of25 $//~ /-;?Afr Date~/ Date Date Date RECEIVED .. MAY 212007 REGULATOR'( BRANCH t-SAN Ot~GO OF'l"'fC~ · ~. . 2:5 B!l/ar.1/,e Nor/Ir County MiligaJ/on.Jlttnk, C,,,kl!M Ll'f . ff"'.----- ···•-.•··-·-·. ~-........,-~--'------·--··--•-. ··--· ------ 05/26/2016 04: 49 FAX iN WITNESS THE~OF, the Bank Spon~or; the State ofC!llifomia acting by and ~, im.ough its Department of Fish and Game, tlte U;S. Amty Corps of Engineers tos Angel~rDfsttiet, The U,S. Fish and Wildlife Service, the µ.s. EPA, Regi!>il fX, have executed this :eEi as of the date settorth above, · · · Bank Sponsor imd;Prdperty Owner Date ~~~r ~-'1~0/ r"-Corps of' Engiµeers, :District Engineer Date L-o 5 /?;,;;,~)"~· l)istrict U'8~ Aim(Corps of Engineer~ Manager; Califomia/Nevada Offic.e . Date U.S. Fish 1111d . . ildllfe Service 1!~ Z..J Date · OirectQr; Watet Divisfoh Date · Reglon9 u;s. Environmental Protection Agency i .:• ~ l'QJJl.2!of2S 25 @004 50 .----...........,.......,;· . -""'"·. ~ ---. (city of Carlsbad ATTACHMENT 4 2007 CITY INTERNAL MEMORANDUM www.carlsbadca.gov DATE; TO: FROM: RE: MEMORANDUM June28, W07 Qle~n Pruim, PublicW.o:ks Dir~ctor ~ •.• A/ David Hauser, Deputy City, Engineer ~ NORTH COUNTVHAE3fTAT BANK Attachnieht 4 Since February 2004, Mark Rohrlick and Michael McCollum at Westhiar.k Development CorporatiOn (Westmark} have been working to establish the North County Habitat Bank (NCHB), and to obtain approvals-from the various resource agencies in the Mitigation Bank Review Team (MBRT) for a Banking Establishment Instrument ($El) regarding the establishment, operation and use of the NCHB, The BEi agreement was recently approved by · the U.S; Fish & Wildlife Service (USFWS), the Caiiforriia Department of Fish & Game (CDFG); the u .. s. Army Corps of Engineers (USACE) arid the U.S. i:nvin;inrnental Protection Agency (USEPA). The Regional Water Quality Control Board (RWQCB), while not a signatory to the BEl; has been actively involved in the creation of the NCHB, and has indicated that it will accept mitigation cr~dits to · fulfiJI Section 401 Certification conditions. Westmark is now actively mar~etlng the mitigation creJ;l1ts established in the NCHB. \/Vetlatid mitigation is required in two different forms ...;. creation/testoration and ~nhaocement/preservation. Creation/restoration (USACE/CDFG) mi_tigailo:n is newly created wetlancj h'abita.t made. by converting land with no habitat or some. other llabifat into wetland h?tbitat. Enhancement/preservation. (USACE/CDFG) mitigation is taking current degraded w~tfands h;;ibitat. and enhancing it to improve its habitat valu~. There are a hµmber of factors governing required rnitigation ratios, but for goqd quality habitat, it is common to · see 2:1 creation/restoration ahd 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 tp approximately 4 acres of enhancement mitigation credits) and; 4 acres of w.etl,md creation/restoration mitigation (at a 3: 1 ratio this translates to approximately12 acres of creation mitigation credits}. . . . The City has a need fc:>r approximately 0.96 acres of w~tland creation rhitigatton acreage to complete the wetland creation mitigation requirement for the Agua Hedionda Channel Emergency Dr~dge Project . - The asking price per acre df mitigation credit in the NCHB is $150,000. Tl:le pr.ice is fqe same, for both creation ?tlid enhancement Wetl~nd mitigation credits. Westmark is -offeril'lg lo -· .sell mitig,ation credits to the City at the di~counted . price of $225,000 providt$d we purchase in quantity (over about five ~cres, See discussion beloVil). The City's cost to create an acre of wetl,md is slightly over $300,0.0Q per a9re ex~lucUhg I.and value. Land va[Ues for non- developable wetland property are approximately $25,000 per acre. The NCHB is able to sell credits at a lower price per acre th.an the cos.t to create the acre because the agencies have established policies Which view established habitat as h~ving mote .. -•-.·-·-.. ... ·-•----··--·--·---------------·-- valt,1e than proposed habitat. That is to say, the agencies typically require ah 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 VV'ith a ohe for one repiacement. The additionai 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 aU 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 $nhancement credits from the NCHB for the Emergency· Dredge project. Our estimated cost of wetland enhancement at th~ Lake Galavera 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 accommoclate 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. Currentfy, 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 addJtiohal creation mitigation credits at a discounted price. The City has numerous projects in the pipeline that will require wetland mitigation (see table below). Estimated Acres of Project Wetland Mitigation Required Agua Hedionda and Calavera Creek. Channel Dredge Project (non-6' emerqency work} Miscellaneous Drainage Master Plan Projects (Future City constructed_ 5 PLDA oroiects) Proposed Five-Vear Drainaqe FacilitY Maintenance Prociram :3 Total 14 Additiona_l mitigation acreage rnay be necessary for other non-dr{:linage City.projects such as the Vista/Carlsbad sewer lin~ replacement along the Buena Vista Creek. The proposed Five- year Drainage Facility Maintenance Program (DFMP} listed above includes only~ .fraction of the drainage facilities requiring maintenance in the City. The total wetland mitigation needs to · implement the DFMPforalt City drainage facilities are estimated to require an c3dditional 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 i.rnpacts 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 remajning credits availa,ble to th~ City at the discounted asking price of $225,000 per acre. Although Westmark offered the City first right of , refusal oh the additional acreage; if is their int¢nt to sellthese credits. as quickly as possible. For the reasons stated above, i recommend that the City purchase ,a minkrtum of' 4.0 acres of additionpl mitigc1tion credits from the NCHB for use on future City projects and maintenance adivities. · · · · The total c<ist to purchase the 5.96 acres of mitig,ation credits at $225,000 is $1 ;341,000. The pur~hase price for the ~mergency Dredge project mitigation would be funded PY PLOA fees ($216!000). It is my re~Otiliflen'dation to equally split th,e purchase prit-e for the ad~itional $.o acres in mitigation credits between the PLPA Fund and tqe General Fund ($562,500 from each ~~ . If the City decides not to purchase the additional 5.0 acres in mitigation. credits, th'en the cost for the Emergency Dredge ph'lject mitigation credit purchase would be $250;000 per acre or a tota.1 of$447,500. · · · · C Community Developme:nt Dfrector Finance Director . Administrative Services Director Acting City Engineer Planning Director Consultant Project Engineer, Glen Van Peski ( City of Carlsbad ATTACHMENT 5 www.carlsbadca.gov DRAFT ACKNOWLEDGMENT OF SALE OF MITIGATION CREDITS FROM THE NCHB · Attachment 5 EXH:CBIT ~ ACKNOWLEDGMENT OF SALE OF MITIGATION CREDITS The undE?rsigned seller hereby ackriowledges that. it ha$ debi bed O .183. created/r~stored wetland/:r.iparian Credit from the North County Habitat Bcank to offset impacts repulting from the CITY OF CARLSBAD El Camino Real Biuff Failure at Tamara.ck Avenue -Notice of Violation No. R9-2018-0080 project. This Credit is debited from the total .1. 67 Credi ts held in reserve by. the (:TTY OF CARLSBAD f,or future 1,1se. '['he Seller shall update the official North County Habitat Bank ledger reflecting this conveyance and provide the updated ledger to the Mitigation Bank Review Team. All terms of this conveyance shall be governed by .the provisions of the Mi tigati,on Cr~dit Purchase Agreement and Acknowledgment between Buyer and the Bank Sponsor; Westmark Development Corporation,. dated July 27, 2007, and amended on October ZO, 2009. By: North County Habitat Bank c/o McCollum Associates 8336 P..:lpin.e I,,aurel Way Sacramento, CA 95829 Telephone: (916) 688·~2040 Fax: (916} 68~-7436 E.rna:il: mccollum@rriccollum.com Name: Michael M.ctbllum Date-: March 121 2•019 ----