Larry, 

Drafts of the 1999 and 2000 annual reports for your CESA MOU are attached 
for  
your use (Wordperfect). There are two outstanding issues regarding the 1999  
report. After speaking with Ed Attanasio, it appears that the Letter of  
Credit issued in 1999 may have expired in 2000 without habitat being  
purchased. This letter of credit either needs to be reestablished or habitat  
needs to be purchased to offset these disturbances. In addition, I do not  
have a copy of evidence that the Coles Levee credits were purchased (for the  
one Coles Levee project in 1999). 

Regarding habitat compensation: 1) Credits can be purchased from Coles 
Levee.  
They must be purchased at Coles Levee for projects on the preserve. For  
outside projects, CDFG and USFWS must approve purchase of these credits on  
case-by-case. 2) Credits can be purchased from Kern Water Bank. Again, USFWS  
and CDFG must concur that credits at Kern Water Bank are appropriate  
compensation for projects on a case-by-case basis. 

Your other source of credits is tied to the land around the NCL gas plant.  
However, as you may have seen by the letter from CDFG that I faxed, EOTT  
still has some negotiating to do with CDFG to put this option in place. Gary  
and I met with CDFG in December regarding this issue. They would like some  
kind of MOU between the parties. At the time, Gary did not think that the 
MOU  
could be completed and signed before Rogas was to begin and decided to work  
on the MOU to cover subsequent projects. 

May I suggest purchasing the needed compensation credits at the same time as  
the Rogas credits are purchased. With Kern Water Bank, there is a $5000 
admin  
fee each time credits are purchased. I don't know what the current charge is  
a Coles Levee. 

Please call me if you have any questions. 

Randi McCormick 
Bio Resources Consulting
 - 99cesa.ZIP