Processes and Lessons

 Provide compensation for stream or wetland impacts permitted under the Virginia Water Protection Permit Program (VWPP)  Credits derived from stream or wetland restoration, enhancement, preservation; upland buffer restoration and preservation  Credits sold on open market

Sponsor prepares Prospectus Monthly IRT meeting Site visit to review conditionsProspectus is public noticed Initial evaluation letter MBI development and signature

Site protection, Financial assurancesInitial credit release Construction and MonitoringCredit releasesClosure and Long Term Management

 DEQ and Corps are “Co-Chairs”  Other members of IRT: EPA, FWS, NOAA, DGIF, DCR, DOF, VMRC, localities  IRT develops template documents and guidance used for banks and ILFs  IRT meets monthly  IRT strives for consensus but Chairs make final decision  Dispute resolution processes established

 Provides… Sponsor identification General information on project Maps of location, topos, aerials, draft site design Land ownership information Service Area Site selection factors Feasibility issues (threats to site, locality zoning/plans, known encumbrances

 Sponsor is responsible party for bank  If Sponsor is LLC, Company, or other, IRT must insure that representative has ability to sign for LLC  Review of Operating Agreements  Sponsor must be registered with SCC if company

 Mitigation Banking Instrument (MBI) is a ‘contract’ between Sponsor, DEQ, and Corps  Outline credit creation, monitoring requirements, success criteria, reporting requirements, Long Term Management, financial assurances, credit release schedule, closure procedures.

 Area in which a bank can sell credits  Limited by SWCL  Same or adjacent subbasin (8 digit HU) within same river watershed  IRT may also limit based on physiographic province or other factors to ensure similar resources and consistency

 Sponsor does not need to own land but must have sufficient interest in property  Fee simple ownership is preferred  Sponsor must have easement if not owned Allow access for Sponsor, IRT, and Long Term Steward Allow construction and repair activities Transfers all rights for sale of credits derived from eased land to Sponsor

 If land owner is LLC, Company, or other, IRT must insure that representative has ability to sign for LLC  Review of Operating Agreements  Title search and title insurance determine encumbrances and other interests (utility easements, separated resource rights)

 Required by State Law and federal reg  Sites must be protected in perpetuity  Deed Restriction Uses template language Restricts activities Must be recorded with locality Runs with the land  Conservation Easement Restricts activities Must be recorded with locality Runs with the land

 Additional credit given if conservation easement is held by third-party non- profit in accordance with Virginia Conservation Easement Act or Virginia Open Space Act (State agencies including Virginia Outdoor Foundation)  Provides additional protection

 Four financial assurances for each site Initial Credit Release Monitoring and Maintenance Catastrophic Events Long Term Management  Accepted Types: Escrow Accounts, Bonds, Letters of Credit, Casualty Insurance  Managed by escrow agent per MBI and escrow agreement

 Initial Credit Release 15% credits released prior to construction FA ensures compensation is built or can be purchased elsewhere Typically bond, LOC, or fully funded escrow  Monitoring and Maintenance % of each credit sale proceed put into escrow account Ensures money available for yearly monitoring and maintenance 1/10 of fund released each year

 Catastrophic Events % of each credit sale proceed put into escrow account % based on complexity of project Released only when catastrophic event occurs  Long Term Management Amount based on complexity of project, site conditions, complexity of Long Term Management needs. Either % of credit sales or payment plan Released to Long Term Steward yearly and when maintenance activities occur

 Based on goals of the project  Clear, quantitative criteria  Wetland criteria based on hydrology, vegetative success, hydric soil development  Stream criteria based on stability of stream  Buffer criteria based on stem density, herbaceous cover, vigor

 400 stems per acre until 30% canopy cover  60+% herbaceous cover  No more than 5% invasive species cover  Goal to develop a diverse native forest

 Based on the activity conducted  Correlate with Success Criteria  10 year monitoring period  Additional years added if success is not met by 10 th year

 Reports required each monitoring year  Requirements correlate with Success Criteria and monitoring requirements  Reports include maintenance activities for the year and a description of success  Due date in MBI  Credit releases based on results of monitoring report and outcome of site visits

 15% initial credit release (‘seed’ money) Must be built within 1 full growing season  Wetland credits released upon success  Stream credits released yearly based on success and bankfull events  10% of each type of credit is withheld until Year 5

 Releases by formal letter  Credit releases and sales recorded on ledger  Ledgers available to public on Corps- sponsored website

 Regulatory In-lieu fee and Bank Information Tracking System  Map of all approved, proposed, terminated, and closed banks in VA  POC information  Ledger  Service Area  Cyber Repository Monitoring Reports Credit release letters

 Sponsor is default Long Term Steward  Money for Long Term Management provided by LTM Fund  LTM Plan outlines requirements, typically including: General monitoring Site protect from trash and trespass Defense of easement Fence, gate, road repair Yearly report preparation

 Ensures consistency  Allows project-specific modifications  Eliminates the need for legal review on most projects  Proponents submit redlined documents highlighting changes from template  Speeds up document review

 Mitigation Banking Instrument  Deed Restriction  Escrow Agreement  Long Term Management Plan  Other documents could use templates: Letters of Credit/Bonds Monitoring Reports Conservation easements

 Provide public with clear expectations  Provide consistency  Provide IRT with support for decisions  Examples: Mitigation Dos and Don’ts Site Selection Criteria Wetland Mitigation Design Recommendations Unified Stream Methodology (crediting)

Data as of April 2011

 Interagency Review Team provide diverse agency review and participation  DEQ Co-Chair of IRT  Site protection important  Goals of project drive success criteria  Financial assurances  Long Term Management  Templates and Guidance Docs provide consistency