Section 1: The West Eugene Wetlands Mitigation Banking Program

A. The City of Eugene, whether by itself or in conjunction with other governmental and non-governmental entities, may operate the West Eugene Wetlands Mitigation Banking Program (the "Mitigation Banking Program" or the "Program").

B. The primary goal of the Mitigation Banking Program (and of the individual mitigation bank sites to be created through the Program) shall be to implement that portion of the Plan related to the creation and use of mitigation credits. The Plan's goals, objectives and policies, which are incorporated herein by this reference, shall guide the City's operation of the Mitigation Banking Program, subject only to the more specific standards and criteria adopted through (a) this Agreement, (b) ACE's approval of the Alternate Permitting Process, (c) DSL's approval of the Wetlands Conservation Plan, and (d) Eugene's and Lane County's implementing ordinances.

C. The objectives of the Mitigation Banking Program shall be:

1. Restore, enhance, create and preserve wetlands in the West Eugene area, thereby developing wetlands mitigation credits which can be sold to compensate for wetlands impacts on qualified properties

2. Prioritize sites for establishment of wetlands mitigation banks

3. Develop conceptual plans for establishment of mitigation bank at a particular pre-approved site

4 After ACE approval of conceptual plan, undertake work at site

5. Following completion of project, obtain from ACE certification of mitigation credits

6. Monitor, maintain, and where necessary, undertake remedial action at mitigation sites

7 Sell mitigation credits to persons developing impacted properties which are on list of approved properties

8. Provide mitigation services to private parties, when requested, for a fee which fully covers all of the Program's costs in making such services available

9. Assume responsibility for a private mitigation bank site, for a fee which will cover all of the Program's costs to fully monitor the site, and where necessary, to undertake remedial activities at the site

D. A Wetlands Executive Team (the "WET") shall provide policy direction to Eugene on the operation of the Mitigation Banking Program. The WET shall consist of Eugene, the Bureau of Land Management ("BLM") and The Nature Conservancy ("TNC"), until such time as the composition changes pursuant to the Memorandum of Understanding (the "MOU") agreed to by Eugene, BLM and TNC, a copy of which is attached hereto as Exhibit 3. The policy direction provided by WET shall be subject to the constraints (the standards, criteria and policies) adopted by, or incorporated into, this Agreement.

E. The Parties, with the exception of Eugene, the BLM and TNC, shall constitute a Technical Advisory Committee (the "TAC"). Within the budgetary and other resource limitations of the TAC's members, the TAC shall provide advice to Eugene and WET as requested.

F. Eugene shall provide the day-today administration of the Mitigation Bank Program. The Program shall be funded through an expendable trust fund (the "Trust Fund") to be established by Eugene.

1. All monies and assets of the Program shall be placed in the Trust Fund. Assets can include acquired property (including property interests such as easements). Monies include cash obtained from the sale of credits (whether advance credits, concurrent credits, or in-lieu-fee (post-mitigation) credits), as well as grants, donations, and contributions from governmental and non-governmental entities.

2. All funds and assets in the Trust Fund shall be used to carry out the obligations created by this Agreement Those obligations include funding mitigation bank projects (including costs/expenses of Eugene staff); monitoring, maintenance and remediation of mitigation banks; and other Eugene expenses related to implementation of this Agreement (including preparation of reports, accounting of mitigation credits).

3. If funds and assets in the Trust Fund are insufficient to fully implement all of the objectives and requirements of this Agreement, Eugene shall seek additional funding. Nothing in this Agreement, however, shall require Eugene to expend funds other than those funds belonging to the Trust Fund, or to incur staff or other costs except to the extent funds are available from the Trust Fund to pay for those costs.