DALEY RANCH CONSERVATION BANK CREDIT PURCHASE APPLICATION. CREDIT TYPE NUMBER LOCATION OF PROJECT Chaparral / Coastal Sage Scrub

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1 CITY OF ESCONDIDO Planning Division 201 North Broadway Escondido, CA (760) Fax: (760) FOR INTERNAL USE ONLY Case No: Date Submitted: Planner: Related Cases: PURCHASER: Name (Print): Contact Person: Address: City, State, Zip: Contact Phone: Signature: DALEY RANCH CONSERVATION BANK CREDIT PURCHASE APPLICATION SITE INFORMATION: Property Address: Assessor's Parcel Number(s): Size: Public Agency Requiring Mitigation: Project File Number: Number and Type of Credits Requested: CREDIT TYPE NUMBER LOCATION OF PROJECT Chaparral / Coastal Sage Scrub Escondido Coast Live Oak Woodland Unincorporated County Englemann Oak Woodland Other Municipality Non-Native Grassland Water Dependent Habitat Total Has this project been approved by: Local Jurisdiction (Name): Calif. Dept. of Fish & Game: U.S. Fish & Wildlife Service: U.S. Army Corps of Engineers: BRIEF PROJECT DESCRIPTION: Fax: COMMENTS: (Rev. 10/07)

2 REQUESTS TO PURCHASE CREDITS FROM THE DALEY RANCH CONSERVATION BANK Credit sales are governed by Section 4 of the Conservation Bank Implementation Agreement for the Daley Ranch Conservation Bank, dated January 23, An Information Packet provides answers to the most frequently asked questions. The City Council has adopted a sales price for each type of credit (see brochure). The minimum transaction is $1,000, regardless of the number of credits purchased. Special Considerations Procedures Water Dependent Habitat credits are reserved for City Capital Improvement Projects, unless authorized by the City Council. Water Dependent Habitat credits are generally not suitable as the total mitigation for wetland impacts, since the credits are for preserved habitat, not created or enhanced wetlands, and hence would not meet the federal "no net loss" policy. Additionally, these credits may not satisfy mitigation requirements triggered by an ACOE permit, since no wetland delineation was done for Daley Ranch. Non-native grassland sales are reserved for development projects within the City. Projects outside the City may be able to substitute CSS credits for Non-native Grassland mitigation as a higher value habitat type, subject to approval of the local jurisdiction. Coastal Sage Scrub credits are not considered occupied by the California gnatcatcher. Purchasers are encouraged to contact the local jurisdiction, California Department of Fish and Game (CDFG), U. S. Fish and Wildlife Service (USFWS), and Army Corps of Engineers (ACOE) if appropriate, to verify that the requested credits will be acceptable mitigation for the purchaser's intended project. The City does not "reserve" credits for private development projects. 1. Full price purchases are processed administratively by the Planning Division upon submittal of a complete Application Form. The City Council shall consider all requests to purchase for less than the asking price; for example, requests to purchase a large number of credits at a reduced rate may be considered. Staff monitors the availability of remaining credits and provides periodic reports to the City Council. 2. Staff prepares the Purchase Agreement and provides two copies to the applicant. A copy of the sample agreement is attached. The applicant executes two notarized copies of the purchase agreement, and submits both to the Planning Division for signature by the City Attorney and Director of Community Development along with full payment. Checks are made payable to the City of Escondido. 3. When the signed agreements and payment have been submitted, and upon request, the City will prepare a letter to the applicant or agency documenting the transaction. One signed agreement is mailed to the applicant and the other original is forwarded to the City Clerk for retention. 4. The City maintains a ledger and provides annual notification to CDFG and USFWS regarding all purchase transactions. (Rev. 10/07)

3 ABOUT DALEY RANCH... This 3,058-acre property, previously frequented by Native Californians of the Kumeyaay and other local tribes, is heavily covered with a variety of threatened and endangered species. There are thousands of acres of chaparral and Coastal Sage Scrub, several large stands of Coast Live Oak and Englemann Oak, wetlands and non-native grasslands. A number of rare and endangered species, such as the San Diego horned lizard live in this type of habitat. Each of our 2,842 Conservation Credits equates to an acre of mitigation land. The existing approval of the state and federal Resource Agencies and the on-going land management responsibility of the City of Escondido make the Daley Ranch Conservation Bank a valuable source for mitigation requirements of both public and private development projects. We would be happy to discuss with you the mitigation needs of your development project, and the applicability of the Daley Ranch Conservation Bank Credits to your particular mitigation requirements. CITY OF ESCONDIDO 201 N. BROADWAY ESCONDIDO, CA Conservation Bank... Providing Conservation Credits to satisfy the environmental mitigation requirements of development projects throughout all of western San Diego County.

4 ABOUT THE CONSERVATION BANK... ABOUT THE CONSERVATION CREDITS... The State of California Department of Fish & Game (CDFG) and the U.S. Fish & Wildlife Service (USFWS) have approved the Daley Ranch Conservation Bank s Credits for either in-kind or outof-kind mitigation for public and private development projects within western San Diego County. This Credit Area extends from the Pacific Ocean to the inland mountain ranges, from the Mexico border to Riverside County. The eligibility of a development project for use of Daley Ranch Conservation Credits is determined by the Resource Agencies (CDFG & USFWS) and the local jurisdiction on a case by case basis during the environmental review process for each project. For development projects located within a Habitat Conservation Plan (HCP), the Plan s mitigation requirements will control the number and type of Credits required for mitigation; for projects not located within an HCP area, the Resource Agencies will determine the number and type of Credits required. The City of Escondido owns and manages the Daley Ranch Conservation Bank. Within the Conservation Bank there are 2,842 Conservation Credits approved for use as mitigation of five categories of species and habitat. The categories of Conservation Credits, and their asking prices are: Chaparral and Coastal Sage Scrub (2,252 Credits): Coast Live Oak Woodland (156 Credits): Englemann Oak Woodland (84 Credits): *Water Dependent Habitat (18 Credits): *Non-native Grasslands (332 Credits): *Water dependant habitat and non-native grassland credits are reserved for development projects within the City of Escondido. Credit prices are all-inclusive, including all continuing management and restoration expenses. After your purchase of Conservation Credits required for your project, you will have no additional costs for on-going mitigation lands management. For further information please call: Barbara Redlitz, Assistant Planning Director bredlitz@escondido.org (760) or Darren Parker City of Escondido Assistant Planner dparker@escondido.org (760) $15,000 per Credit $20,000 per Credit $20,000 per Credit $20,500 per Credit $15,000 per Credit

5 CITY OF ESCONDIDO DALEY RANCH CONSERVATION BANK CREDIT PURCHASE AGREEMENT AND ACKNOWLEDGEMENT This Daley Ranch Conservation Bank Credit Purchase Agreement and Acknowledgement ( Agreement ) is made this day of, 20. Between: And: CITY OF ESCONDIDO a Municipal Corporation 201 N. Broadway Escondido, California Attn: Jonathan Brindle, Director of Community Development ("City") (Name) (Address) ATTN: (Contact Person) (Phone Number) ( Purchaser ) The purpose of this Agreement is to establish the terms and conditions for the sale and transfer of Conservation Bank credits from the Daley Ranch Conservation Bank. The City and Purchaser are to be referred to jointly as Parties. RECITALS A. The CITY entered into a Conservation Bank Implementation Agreement for the Daley Ranch Conservation Bank ( Conservation Bank Agreement ) in January 1997 with the California Department of Fish and Game (CDFG) and the U. S. Fish and Wildlife Service (USFWS). The purpose of the Conservation Bank Agreement was to establish terms and conditions for establishing a conservation bank on property owned by the City to be known as the Daley Ranch Conservation Bank. B. The Conservation Bank Agreement provides for conservation in perpetuity of certain portions of the Daley Ranch property, the use of such land as mitigation under specified circumstances, and the sale of Conservation Bank credits to third parties ( Credit Purchasers ) in need of such mitigation. C. The City has exclusive right to independently determine the price for any and all of its credits offered for sale or conveyance to a Credit purchaser. Credit purchasers are entitled to sell credits to other Credit purchasers and have the exclusive right to independently determine the price for any and all of its credits subsequently offered for sale or conveyance.

6 D. The Conservation Bank Agreement requires each Credit purchaser to execute a Conservation Credit Purchase Agreement and Acknowledgement which shall evidence the transfer of the applicable credits and the development project to which the credits apply, and shall recite that any subsequent transactions shall be reported by the Credit purchaser to the City. E. Credit Purchaser has requested to purchase (Insert number and type of credits) Credits from the Daley Ranch Conservation Bank, intended as mitigation for (Insert name of project and brief project description), located (Insert brief project location, address or APN, and jurisdiction). F. On November 16, 2005, the City Council authorized the administrative approval of the full price purchase of credits from the Daley Ranch Conservation Bank at a price per credit of (Insert price per credit) for (Insert type of credit) Credits. The total purchase price for (Insert number and type of credits) is (Insert total price). The City Council further authorized the execution of all purchase agreements on behalf of the City. G. The City Council further authorized the execution of all purchase agreements on behalf of the City. H. Credit Purchaser and City desire to enter into this Agreement to set forth the terms and conditions pursuant to which the Credit purchase will be implemented. AGREEMENT 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 hereby agree as follows: 1. Compensation. It has been determined to be in the CITY'S best interest to sell (Insert number and type of credits) Credits from the Daley Ranch Conservation Bank to Purchaser, at a purchase price of (Insert price per credit) per credit, for a total purchase price of (Insert total purchase price).and Credit Purchaser shall pay said amount upon execution of this Agreement. 2. Effective Date. The effective date of the credit transaction shall be the date upon which this Agreement is fully executed and payment to City is made. 3. Ledger. City will maintain a database for purposes of tracking the conveyance of credits to Credit Purchasers and the application of credits to development projects ( Ledger ). City will report all credit transactions within its knowledge to CDFG and USFWS as required by the Conservation Bank Implementation Agreement for the Daley Ranch Conservation Bank. 4. Credit Purchaser Responsibility. Credit Purchaser agrees to comply with all terms of the Conservation Bank Implementation Agreement for the Daley Ranch Conservation Bank, including registration of the Credit acquisition with the City, which registration shall consist of providing City with a notarized statement of the Credit transaction parties indicating: (i) the name of the person/entity receiving the credits; (ii) the number of credits sold; (iii) the effective date of the transfer; S:templates/Daley Ranch Credit Purchase Agreement 2 Rev. 04/26/2007

7 (iv) the name of the development project to which the credits have been or will be applied; and (v) the date of the application of the credits to the project. 5. Credit Verification. Purchaser shall be solely responsible for verifying both the ownership of the credits it is purchasing and the status of the credits with respect to the application to a development project. 6. Transfer of Credits. Purchaser agrees to execute a Conservation Credit and Purchase Agreement and Acknowledgement identical to this document with any successor Credit Purchasers (i) which shall evidence the transfer of the applicable credits and the development project to which the credits apply, if any is then known, and (ii) which shall recite that the subject transaction and that any subsequent transaction shall be reported by the Credit Purchaser to City in the form set forth in Section 4 above within 10 days of the transaction, so that City may enter the transaction in the Ledger. Credit Purchaser hereby indemnifies and agrees to hold harmless from any damage which may occur to City as a direct result of Credit Purchaser s failure to notify the City of and subsequent transfers of which Credit Purchaser is aware. 7. Costs and Attorney's Fees. In the event that legal action is required to enforce the terms and conditions of this Agreement, the prevailing party will be entitled to reasonable attorneys' fees and costs. 8. Severability. The invalidity in whole or in part of any provision of this Agreement will not void or affect the validity of any other provisions of this Agreement. 9. Provisions Cumulative. The foregoing provisions are cumulative and in addition to and not in limitation of any other rights or remedies available to the City. 10. Notices to Parties. Any statements, communications or notices to be provided pursuant to this Agreement must be sent to the attention of the persons indicated below. Each party agrees to promptly send notice of any changes of this information to the other party, at the address first above written. IN WITNESS WHEREOF, the parties below are authorized to act on behalf of their organizations, and have executed this Agreement as of the date set forth below. CITY OF ESCONDIDO: Date: Signature Jonathan Brindle, Director of Community Development Department or Division Head Name & Title S:templates/Daley Ranch Credit Purchase Agreement 3 Rev. 04/26/2007

8 Date: PURCHASER: Signature Name & Title (please print) APPROVED AS TO FORM: OFFICE OF THE CITY ATTORNEY JEFFREY R. EPP, City Attorney (The above signature must be notarized) By: S:templates/Daley Ranch Credit Purchase Agreement 4 Rev. 04/26/2007

9 DALEY RANCH MITIGATION BANK Information Packet 1. Q: What is mitigation? A: Often, the development of a property requires the removal of resources that must be replaced in accordance with State and Federal Laws. Mitigation is a general term for the measures necessary to offset a particular impact. Biological mitigation measures can involve retention, on or off-site replacement, or the purchase of existing resources in an approved mitigation bank. 2. Q: What is a Mitigation Bank? A: In some cases, required mitigation cannot occur on the same site as a proposed impact. A mitigation bank is an area that regulatory agencies accept as an appropriate replacement site. Once established, it is maintained in perpetuity. Mitigation banks can either be privately or publicly owned. Once established, "credits" may be marketed to property owners seeking mitigation opportunities. 3. Q: What are the benefits of Mitigation Banks? A: Mitigation Banks serve several useful functions. They assist in the protection of sensitive and endangered species and contribute towards a regional open space system while providing a relatively simple way for landowners to obtain value for their property. Mitigation banks provide a viable alternative to the current practice of requiring piecemeal mitigation for individual development impacts, and are more successful in achieving protection of the plant and animal resources since their design is based on sound biological principals. Mitigation banks can help implement a regional conservation program by providing a funding source for a preserve system, and can simplify the regulatory process for the development of property containing sensitive and endangered species. 4. Q: What types of biological resources require replacement/mitigation? A: Both the State of California and Federal Government maintain lists of plants and animals that are Threatened and Endangered. Agency consultation is required before these resources can be impacted. It should be noted that impacts to resources are not always approved. However, when impacts are permitted, mitigation is generally required. Additionally, Rare and Sensitive species, wetlands and streamcourses are regulated and typically require mitigation. 5. Q: What is the difference between Endangered, Threatened, and Sensitive Species? A: An endangered species is "any species which is in danger of extinction throughout all or a significant portion of its range." A threatened species is one which is "likely to become an endangered species within the foreseeable future throughout all or a significant portion of its range." Both endangered and threatened species enjoy the protection of State and/or Federal Endangered Species Acts. Consultation with the affected agencies is a requirement to ensure that any proposed action or project will not jeopardize the continued existence of any endangered species or threatened species or result in the destruction or adverse modification of lands determined to be critical habitat. Extensive documentation and mitigation are often involved. Sensitive species refers generically to other species of concern which are being studied to determine whether they warrant

10 listing; they do not enjoy the same level of State and Federal Agency protection. However, impacts to sensitive species must be addressed through the environmental review process, and can also lead to the need for extensive documentation and mitigation. 6. Q: Are there any known endangered, sensitive, or threatened species in Escondido? A: Yes. At least four plant species are listed by the State and twenty-two species are now being considered for listing by the Federal Government. Four animal species are now listed by the State and/or Federal Government. Thirty-five animal species are now being considered for some sort of listing at either the Federal or State levels. 7. Q: Which Agencies are involved with the establishment of mitigation banks? A: The California Department of Fish and Game must approve mitigation banks established to mitigate resources under their discretion while the U.S. Fish and Wildlife Service must approve banks intended to mitigate federally regulated resources. Some banks, like Daley Ranch, are of joint interest. 8. Q: Why is Daley Ranch suitable as a Mitigation Bank? A: Daley Ranch has long been cited by the state and federal resource agencies as a prime site for habitat conservation, primarily for three reasons: its size, location and variety of habitat types. The property consists of over 3,000 acres of relatively undisturbed native and natural habitat, and is one of the few remaining large undeveloped properties in North San Diego County. Due to its topography and location at the eastern portion of the City, Daley Ranch is adjacent to largely undeveloped properties, and complements the open space areas around Dixon Lake. A wide variety of plant and animal species occur on the property, and the streamcourses and valleys provide wildlife corridors linking to adjacent properties. 9. Q: What types of uses can occur within a mitigation bank? A: Typically, mitigation banks are preserved solely as open space for habitat purposes. Active use is generally restricted to limited hiking trails. The Daley Ranch mitigation bank is unique since it allows other public recreational uses in defined areas, such as camping, bicycling, horseback riding, picnic areas, swimming pools, youth camp activities, a retreat center, an interpretive center, and organized special athletic events. Flexibility is granted to the City to determine the type of public recreational uses which are appropriate within defined areas. Additionally, approximately 13 acres along Valley Center Road excluded from the mitigation bank are available for future use as deemed appropriate by the City, and provide additional opportunity for recreational uses such as an equestrian staging area. 10. Q: Are hiking trails allowed within the conservation area? A: Yes. Hiking on designated roads and trails are allowed in all parts of the mitigation bank. Over 15 miles of roads and trails currently exist, and additional ones may be allowable upon consultation with the resource agencies. Additionally, bicycling and horseback riding on designated trails are also allowed throughout the property. 11. Q: What type of habitat credits are involved? A: A total of approximately 2,800 credits exist within the Daley Ranch Conservation Bank. Habitat types are grouped into Oak Woodlands, Sage Scrub and Chaparral, Wetlands

11 and Riparian, and Grassland categories. Additional amounts of credit could also be generated by habitat restoration and construction. 12. Q: Would the City lose the bank in the event of a fire? A: No. Discussions with the agencies indicate that fire would not affect the status of the bank. Fire is considered part of the natural cycle. 13. Q: What is the going rate for mitigation land? A: Prices range from $15,000 to $20,500 per acre. 14. Q: Who can use the "credits" in the Daley Ranch Mitigation Bank? A: Credits are sold on the open market to either developers or other public agencies in San Diego County. They are also used to mitigate impacts caused by City projects. Daley Ranch is not eligible to mitigate certain coastal species or occupied California Gnatcatcher habitat. 15. Q: Who administers the Daley Ranch Mitigation Bank? A: The City of Escondido administers the Daley Ranch Mitigation Bank. The role of the Department of Fish and Game and U.S. Fish and Wildlife Service is limited to reviewing annual biological monitoring reports and land-use requests that require consultation. Monitoring of mitigation credit sales are part of the City's administrative responsibilities. 16. Q: What are the costs associated to the City for maintaining the mitigation bank? A: Direct costs include securing the site, biological monitoring, restoration of habitat in the event of damage, patrolling the site, and monitoring the sale of habitat credits. Annual maintenance costs are approximately $80, Q: What mechanisms are established to finance maintenance costs? A: Portions of habitat credit sales are placed into both an endowment and restoration fund. Ultimately, interest from the endowment fund principle is anticipated to defray all, or at least a significant portion, of the maintenance costs. The restoration fund would be available to finance habitat restoration in the event of damage. 18. Q: Who controls the activities within Daley Ranch? A: The City of Escondido controls activities on site in accordance with parameters coordinated with the State Department of Fish and Game and U.S. Fish and Wildlife Service. Areas are divided into three use areas. Area 1 is an active park use area, Area 2 is a natural park area, while Area 3 is a Conservation area. Each has its own list of uses that the City permits outright. Additional uses could be established upon consultation with the Department of Fish and Game and U.S. Fish and Wildlife Service. 19. Q: What is the Multiple Habitat Conservation Plan? A: The MHCP stands for the Multiple Habitat Conservation Program. It is being coordinated by the San Diego Association of Governments. It is a comprehensive, multi-species habitat planning effort involving all North San Diego County cities and the County of San Diego. Its goal is to plan for the habitat needs of the California Gnatcatcher as well as more than ninety other species. In addition to keeping the California Gnatcatcher off the

12 endangered species list, the MHCP will keep other species from being listed in the future. In order to implement the MHCP, Escondido will adopt its Subarea Plan that establishes focused planning areas and mitigation procedures. 20. Q: Is the establishment of a mitigation bank required by the MHCP? A: No. The establishment of a mitigation bank is not a requirement of the MHCP per se; it is one tool available to implement and finance the plan.