HomeMy WebLinkAbout2020-04-14; City Council; Resolution 2020-063RESOLUTION NO. 2020-063
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD,
CALIFORNIA, AUTHORIZING THE AWARD OF THE REMAINING FUND
BALANCE OF THE FLOWER FIELDS FUND GRANT PROGRAM, CURRENTLY AT
$891,708, TO THE FLOWER FIELDS AT CARLSBAD RANCH, DISSOLVING THE
FLOWER FIELDS FUND GRANT PROGRAM, AND RESCINDING CITY COUNCIL
POLICY NO. 85.
WHEREAS, the Flower Fields of Carlsbad Ranch is located at 5704 Paseo Del Norte and for
several decades has been one of the most unique attractions in Carlsbad drawing more than 100,000
visitors annually to its SO-acres of beautiful ranunculus flowers; and
WHEREAS, the Flower Fields of Carlsbad Ranch predominately operates and is open to the
public during the flowering season, which runs from March pt through May 15th, when it receives
most of its revenues from visitors' services and cut flowers that support the farming operations; and
WHEREAS, Governor Newsom's Executive Order N-33-20 and the Order of the County of San
Diego Health Officer, among other directives, limited public and private gatherings, required social
distancing and the closure of all non-essential services during the COVID-19 pandemic; and
WHEREAS, in response to the orders, CB Ranch Enterprises, the operator of the Flower Fields of
Carlsbad Ranch, officially closed their operations effective March 9, 2020, and they expect to remain
closed for the duration of the flowering season; and,
WHEREAS, CB Ranch Enterprises has stated that this closure will result in an estimated financial
loss of roughly $2. 7 million in operations this year, exhausting cash reserves and current operating lines
of credit; and
WHEREAS, CB Ranch Enterprises is requesting an emergency grant for the remaining funds
available in the Flower Fields Fund Grant Program, which is currently $891,708, to help fund those
activities and services described in the letter dated April 6, 2020 (Attachment 1), which CB Ranch
Enterprises claims are necessary to ensure a flowering season next year; and
WHEREAS, the City Council finds that the activities being funded comply with the provisions set
forth under California Public Resources Code §30171.5(b)(4) and City Council Policy No. 85 in that the
proposed activities meet the public purpose of preserving, enhancing or ensuring the ongoing
commercial viability of the Carlsbad Flower Fields.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as
follows:
1. That the above recitations are true and correct and are each incorporated by reference.
2. That the Deputy City Manager, Administrative Services is hereby authorized and
directed to appropriate and disburse the remaining cash balance plus all interest earned
during the month of March 2020 in the Flower Fields Grant Program Special Revenue
Fund, which is currently $891,708, to CB Ranch Enterprises.
April 14, 2020 Item #7 Page 4 of 53
3. That the Flower Fields Fund Grant Program be dissolved.
4. That City Council Policy No. 85 be rescinded.
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council of the City of
Carlsbad on the 14th day of April 2020, by the following vote, to wit:
AYES: Hall, Blackburn, Bhat-Patel, Schumacher
NAYS: None.
ABSENT: None.
MATT HALL, Mayor
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~ARBARA ENGLESON, City Clerk
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April 14, 2020 Item #7 Page 5 of 53
ATTACHMENT 1Jeff Murphy Director of Community Development City of Carlsbad 1635 Faraday Carlsbad 92008 Dear Mr. Murphy: RE: Description of Project Flower Fields Emergency Grant April 6, 2020 Pursuant to your request the following is submitted to further define the specific project for which we request emergency funding. We also include a brief article highlighting the impact of Covid-19 on the cut flower industry generally and the Flower Fields specifically. We initiated our request for an emergency grant with a summary of the entire economic needs and intended use for sustaining The Flower Fields™ through the impact of the Covid-19 Emergency. This request is made in the context of a $2.7million loss from the collapse of cut flower sales and prohibition on visitors. The project for which the grant will be used is support of the field floral farming. 1. Use of Funds. An emergency grant of $892,000 will support direct farm expenses set forth on the attached from March 1 to September 30, 2020 ($1,019,000). Combined with other funding we intend to obtain it will support the farming cycle until we begin to receive significant revenue from cut sales and visitors March 1, 2021. The Grant will permit farming operations to continue while additional operating funds are identified. With these funds, the Flower Fields operation can survive, and we believe thrive as the Covid-19 impact dissipates. 1. The costs reflect the farming activities necessary to complete this cycle, prepare the fields for the next farming cycle beginning in September with the main block planting. 2. Most of the expenses are self-explanatory with the maintenance of the remaining crop managed to provide some opportunity for sales of cut flowers in late April and May if distribution channels reopen. 3. Costs associated with harvesting bulbs are included. Bulb sales are generally uncertain, but if they are realized it will be in fall-winter with online/mail order sales so no proceeds will be available to support the farming operations during the project period. 7220 AVENIDA ENCINAS SUITE 204 • CARLSBAD, CA 92011 TELEPHONE (760) 930-9123 FAX (760) 431-9020 WWW.THEFLOWERFIELDS.COM April 14, 2020Item #7 Page 6 of 53
4. March, April, and May costs reflect the reduction from business plan as the sale
of cut flowers collapsed, and costs associated with harvest (and revenues) have
been eliminated. Field maintenance has also been reduced reflecting the early
termination of fields normally left in bloom for visitors.
2. Potential Sources of Funding. As summarized in our request, we have exhausted our
reserves, and have fully utilized our lines of credit. We are looking at every potential
source of funding available. These include the following:
a. Paycheck Protection SBA loans. We will request the maximum possible. We
believe we will qualify, but timing and criteria are uncertain.
b. Long term financing of our existing lines of credit. We have proposed to our
lender converting our current lines of credit into a long-term loan. This is in
addition to the next item, a request for a new operating line of credit.
c. 2020-21 Operating Lines of credit. We have requested our lender to provide us
with a line of credit for our operations next year. We believe that with the
infusion of the grant funding, there is a reasonable likelihood of obtaining both a
new line and long-term financing.
d. Other programs. We are watching with the Farm Bureau Federation potential
specialty crop funding which may become available.
Fundamental to our representation to all potential lenders is the emergency grant
support from the City of Carlsbad. This funding in hand will give us the resources
necessary to sustain field production while we are working out other lending
possibilities and identifying any grants or other sources of financing.
Chri · op' er Calkins
Pre ~nt, CB Ranch Enterprises
April 14, 2020 Item #7 Page 7 of 53
I A B C D E F G H I J K L M
1 CB RANCH ENTERPRISES
2 FLOWER FIELDS -2020
3 PROJECTED FARMING EXPENSES
4
5 Proj Proj Proj Proj Proj Proj Proj 3/2020 -9/2020
6 FARMING DIVISION Mar-20 Apr-20 Mav-20 Jun-20 Jul-20 Aua-20 Sep-20 Total
7
8 FARMING EXPENSES:
9
10 Pesticides/Fertilizer 15,200 15 200 15,200 10 200 22,600 31 ,000 122,900 232 300
11 Weedina Labor 12 600 12 100 12,100 3,600 900 2,000 3 500 46 800
12 Field Prep 1,200 1 900 6,800 16,900 3 900 11 ,200 17,000 58,900
13 lrriaate 5 000 5 000 4 700 3 800 8 600 8,900 11 ,200 47 200
14 Pest Control 3,300 2 900 1,200 700 100 800 900 9 900
15 Diaaina Labor 700 800 8,500 16,100 13,000 2,100 800 42,000
16 Gradina Labor 0 0 0 800 30 200 4,200 0 35 200
17 Seedina Labor 3,700 1 200 6 900 5 900 5 400 0 0 23 100
18 Plantina (400\ 0 0 2,200 0 0 2,000 3,800
19 Misc. Labor 19 000 19 000 8 800 11 900 14 300 12 200 9 100 94 300
20 Payroll Taxes 8 000 8 000 7 000 4400 7 300 3 100 3,400 41 ,200
21 Worker's Compensation 3 500 3 500 3 400 3 500 3 900 4 100 4 000 25 900
22 Emplovee Benefits 1 900 2 800 4,200 7,000 2 000 1,600 3,900 23 400
23 Supplies 6,000 7 900 9 000 9 800 1 300 6,500 10,400 50 900
24 Gas & Oil 100 2,000 2,000 2,000 1,800 3,500 3,300 14,700
25 Eauipment Leasina 3 600 3 600 7 000 4 900 4 000 3 600 3,600 30,300
26 Licenses & Taxes 0 2 400 0 0 2100 100 0 4,600
27 Repairs & Maintenance 2 000 8 000 3 700 4 800 1 300 3,400 2 100 25 300
28 Teleohone 0 300 100 200 100 0 200 900
29 Miscellaneous/General 2 700 700 400 200 200 500 800 5 500
30 Utilities 0 0 0 0 0 0 0 0
31 Water 14,000 0 25,000 10,800 6 700 19 900 21 ,100 97 500
32 Outside Services 1,200 3 000 3 600 1 900 1 800 2,600 1,900 16 000
33 Manac ement Fee 12 500 12 500 12,500 12 500 12 500 12,500 12,500 87 500
34 Rent 241 241 241 241 200 200 200 1 564
35 Other 0 0 0 0 0 0 0 0
36
37 Total Farming Expenses 116,041 113,041 142,341 134,341 144,200 134,000 234,800 1,018,764
38
39
40
41
James R. Bornemann 2020 Forecast -Farming costs March 2020 -Sept 2020 1 of 1 4/6/2020 10:16 AM April 14, 2020 Item #7 Page 8 of 53