R2009-03 AUTHORIZING AGREEMENT WITH AGRICULTURAL WATERSHED INSTITUTE

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' Mr. Keith Alexander, City of Decatur—January 8,2009—Page 2 WORK TO BE PERFORMED WITH CITY FINANCIAL SUPPORT The City of Decatur funds provided in accordance with this agreement, along with grants and contributions from the Lumpkin Foundation and other sources, will be used by AWI to advance elements of the roadmap that help to protect Lake Decatur and provide economic development benefits to the City. AWI will begin the formation of a"local bioenergy system", comparable to the existing local food system. This approach will help to accelerate introduction of perennial grasses on the landsca.pe and ensure that the transition to cellulosic bioenergy enhances water quality, ecosystem health, and the local economy. Specifically, AWI will use City of Decatur funds to: 1. Assist local farmers and landowners that want to begin growing energy grasses. This will include workshops, field days, fact sheets, web sites and other educational activities for prospective growers. AWI plans to coordinate an energy grass education area at the 2009 Farm Progress Show. In addition to technical assistance, AWI and our partners will provide financial and in-kind support for establishing energy grasses. AWI will work with the Macon County Soil and Water Conservation District to implement the Big and Long Creek subwatershed project, which includes harvestable filter strips designed to protect Lake Decatur. 2. Develop and demonstrate landscape design cancepts. Production of energy grasses involves synergies and trade-offs between multiple objectives. AWI will convene a Landscape Design Learning Group to address questions of what to grow, where and how to grow it in order to produce energy feedstock, protect water quality, and achieve other conservation objectives. AWI and our partners will develop and test planning techniques to identify optimal locations for energy grasses. We will pursue grant funding opportunities for watershed-scale R&D projects. 3. Develop markets for energy grasses �nd related benefits. The most likely near- term mazkets for fuel made from energy grasses are home or commercial heating systems and industrial or utility boilers. AWI will work with businesses, entrepreneurs, and investors to assess options and we will conduct tests and demonstration projects on the most suitable options. AWI will work with appropriate agencies to identify and pwsue biomass-related economic development opportunities such as local manufacturing of equipment to make and use grass fuel. Economic viability of energy grasses may depend on placing a value on environmental benefits derived from their production and use. For example, adoption of policies to address climate change could enhance the economics of bioenergy systems that signi�cantly reduce CO2 emissions by increasing the value of carbon credits. The Initiative will include pilot tests of "green payment" mechanisms for greenhouse gas reduction, water quality, and other conservation benefits. It is understood and agreed by the parties that bioenergy technology, public policy and programs, and economic circumstances are likely to evolve rapidly during the term of this agreement. AWI, in consultation with the City and other stakeholders and experts, will monitor developments and may make adjustments within the general scope of work as set forth herein to respond to challenges and pursue opportunities that may arise. No formal amendment of this agreement will be necessary for such mid-cowse adjustments unless, at the discretion of the City, they represent a significant change to the scope of work. Any proposed change in the City financial support, as set forth in the following section, will require an amendment to this agreement.