Liaison Council Meeting May 1, 2006

Welcome Meeting purpose: Present Draft Biennial Budget Project load projections Discuss Tri-Party MOA amendments Obtain Liaison Council input/thoughts on draft MOA amendments

Meeting process: Biennial Budget Presentation Questions MOA Amendments Presentation Liaison Council Input/Thoughts Captured

December 14, 2005 Liaison Council Meeting EEP Planning Cycle: Dec 05/Jan06 Coastal RFPs Feb-Mar 06 Operational Strategic Plan Mar 06 Second wave FDP RFPs Apr 06-Jun 06 Award of Oct 05 RFPs Mar-Apr 06 Biennial Budget Jul 06- Aug 06 First wave SFY 07 RFPs Aug-Sep 06 Annual Report

Business Model: Continuous Improvement Evaluate existing assets Calculate the net remaining need Design strategies to satisfy need Contract work Evaluate progress/ quality Make adjustments Assemble requests for mitigation

Impact Projections (Time Frames) 7 -Year NCDOT TIP 7 Years 2 3 4 1 5 6 7 2006 7-Year NCDOT TIP Impact Projections 6 Years 3 months July 2005 Feb 2006 Oct 2011 EEP Receipt of Impacts Feb 2006 2006 7-Year NCDOT TIP Mitigation Permit Projections April 2011 5 Years 3 months Effective Mitigation Projection Projected date that last TIP project may be permitted

SFY 07/08 Biennial Budget Breakdown Admin= $11.2 M Restoration= $115.7 M HQP= $29.8 M Proj. Dev.= $3.5 M Total $160.2 * Based on MOA schedules

Implementation Programmed (two years) Breakdown $115.6 M $ 73.6 M FDP (64%) $ 42.0 M DBB (36%)

HQP $29.7 M budget $25.1 M land Projected to be compete QTR1 SFY 07/08 Completes land transactions on options Titles Surveys Legal fees HB 933

Project Development $3.5 M Includes Cost to complete 13 active WS plans Initiate 4 new WS plans Initiate 6 abbreviated WS plans

Historical & Projected 2005 2006 2007

Budget Questions?

“We have had a productive transition and are still learning how to make EEP work better” Secretary Bill Ross Address to the Liaison Council December 14, 2005

Tri-party MOA: Core principles and goals remain the same Necessity for amendments Section adjustments

Tri-party MOA- What is not changing Advance mitigation based on impact prediction 1:1 restoration to replace lost functions (preservation will not be used as sole method of mitigation) Concerted effort to effectively restore and replace lost aquatic functions Clean Water Act standards for no net loss

Necessity for MOA amendments Technical adjustments to original assumptions Impact projections not far enough in advance Clarification of responsibilities Complexity of metrics and reporting To align processes and timing

MOA adjustment themes Challenging CUs and alternative mitigation Accountability Flexibility Sequencing and communication between EEP-DOT-USACE Compliance metrics

Amendment Sections: IV.F VI. B. 4 VI. B. 6 X

Section IV.F Why: Build some level of flexibility What: NCDOT ability to propose to use alternatives- in-lieu fee program, other Discussion: Means and methods for DOT to propose alternative mitigation when/if NCDENR is unable to provide

Section VI.B.4 Why: to clarify responsibilities What: A clear definition of who USACE holds accountable for mitigation at what points in time Discussion: To clearly define that EEP is responsible party at time of permit decision,

Section VI.B.6 Why: To align processes and timing What: A clear definition of sequencing DOT requests and EEP acceptance for mitigation to ensure that mitigation delivery is in the correct timing with permit requirements and a protocol to address unanticipated impacts. Discussions: Centering around USACE developing protocol

Section X Why: Complexity What: To develop a clear and concise definition and metrics for evaluating compliance, reporting, and directing the program Discussion: USACE proposes metrics that are compatible with proposed CFRs and simplifies the reporting system.

MOA Timeline Technical Issues Years Allowed to Complete Construction From Moment Impact Data Delivered 1 2 3 4 5 Transition Period Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 Date Impact Projections Received 5 months to complete Watershed Planning, Site Identification, Acquisition, Design, and Construction

MOA Timeline Technical Issues Years To Complete Acquisition in MOA From Moment Impact Data Delivered -4 -3 -2 -1 1 2 3 Transition Period Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Year 12 Year 13 Year 14 Year 15 -3 Years 7 months Date Impact Projections Received

USACE Amendment Process: Continue discussions between USACE, DOT and EEP Develop proposed draft amendment document Public comment

Liaison Council Questions/Input May 1, 2006

Progress Report End of Transition Compliance Other ILF programs Buffer Nutrient offset Fund Reports

Data Sources End of Transition Report Annual Report for FY 2004-2005 www.nceep.net – follow links to Publications page

End of Transition Compliance - Overall Streams = 98.70% Wetlands = 95.04% Highest level of compliance ever for NC’s ILF Programs Includes 5:1 return of HQ Preservation Permits for which 1:1 restoration has not been provided remain covered by 10:1 preservation WL – majority of non-compliance in CAT03 Illustrates increase in compliance levels Compliance increasing while demand increasing

EOT Compliance - Streams Gross assets illustrate that we’re advancing mitigation prior to impact Looking ahead

EOT Status - Wetlands Here we have significantly more assets because DOT had built some large mitigation sites that were transferred into EEP – still shows progress toward advancement

High Quality Preservation Eco-region Stream Feet Riverine Wetland Acres Non-Riverine Wetland Acres Central Piedmont 324,093.00 160.82 34.30 Northern Inner Coastal Plain 50,901.00 645.50 0.00 Northern Mountains 130,530.00 Northern Outer Coastal Plain 11,819.00 305.00 250.00 Southern Inner Coastal Plain 154,660.00 4,000.00 Southern Mountains 247,096.00 30.00 Southern Outer Coastal Plain 5,015.00 116.00 1,034.00 Southern Piedmont 116,434.00 1,477.30 TOTAL ALL ECO-REGIONS: 1,041,358.00 6,734.62 1,318.30

Project Delivery Mechanisms – current contracts Full Delivery Contract value = $87,082,559 Design-Bid-Build Contract value = $39,612,933 Use of full-delivery to get mitigation in advance

Questions??

On the horizon: MOA adjustments Expansion of nutrient offset Cost study – possible fee revisions GARVEE bonds Building Information Management System More training of construction contractors

Reports www.nceep.net Quarterly Reports Annual Report End of Transition Report www.nceep.net

Biennial Budget Steps Determine need based on new impact projections Cash flow projections on active contracts Assemble document on two-year schedule (cash flow) Submit to DOT

Phase 1- Determine New Program Requirements Receive and analyze DOT impact forecasts Compare impact forecasts with assets produced Calculate net-remaining need consistent with MOA timelines Design strategies to implement projects

Phase 2- Determine cost to complete active work Compile active contracts and agreements Determine remaining contract value Determine anticipated cash flow Place projections into biennial/quarterly projection

Phase 3- Combine active and new starts Assemble data in format as required under the two-party Administration Implementation DBB FDP HQP Project Development (Watershed plans)

Phase 4- Submit biennial budget to DOT

Key points about EEP Major administrative duties: manage funds contract administration (Q/A) strategic planning programming work reporting leverage resources addressing compliance/new rules and regulations proposing strategies based on new science emerging technology

Key points about EEP Outsource majority of work, rely heavily on the private sector for production Design, Bid, Build Full Delivery Land Owner Contacts Watershed planning Monitoring Coordination and Guidance Program Assessment and Consistency Group Partnerships